Muckspreader 16 june 03

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The Beloved Leader may not have told Gordon Brown, but thanks to a clever plan being hatched between France and Germany over farm subsidies, he is now in serious danger of losing rather a large sum of money: namely Britain's EU budget rebate, worth £3 billion a year. The start of this plot came about with the penny dropping in Brussels that, when central European countries such as Poland enter the EU next May, even the limited subsidies they have been promised for their millions of farmers will be enough to reduce the EU to bankruptcy.

The response of agriculture commissioner Frans Fischler was to launch a desperate bid to to hold down runaway spending on the common agricultural policy, currently running at £30 billion or half the entire EU budget. Top of his agenda was the need to end those 'production subsidies' which encourage farmers to over-produce by giving them cash for whatever they grow. This would also provide a solution to the impatience of the World Trade Organisation at how the EU continues to dump vast quantities of subsidised food at knock-down prices on the world market, inflicting untold damage on the economies of scores of countries, ranging from Senegal to Australia. Unless the EU comes up with a remedy for this scandal by the next WTO talks in September, many poorer countries plan to walk out in disgust.

Predictably, the French were outraged, Having set up the CAP in the first place primarily as a benefit system for their own farmers, they were determined to sabotage Fischler's plans. There was no way they were willing to accept the loss of a fruit machine which gives their farmers far more than anyone else in the EU, mainly at the expense of German and UK taxpayers. But for a while Fischler's scheme seemed to be winning a dangerous amount of support, not least from Germany and Britain. Suddenly, however, came the shock news that France and Germany had joined forces to block the Fischler plan. The explanation was a classic EU stitch-up. The Germans had become so desperate for French support in blocking a directive which would have challenged the powers of its regional governments over German industry, that they agreed in return to make a complete U-turn on farm policy.

So far as the WTO and the third world are concerned, the French couldn't care less. If this leads in September to the EU being again accused of screwing up the world economy by dumping its surpluses, so be it. What really matters to the French and the Germans is that they have found a pot of gold to pay for those subsidies to the Poles and other eastern European farmers without breaking the EU bank. All they need, for the years after 2006, is another £3 billion a year, And, bingo!, they have found it. Constant references in the agenda of recent EU meetings to 'budget control' is code for the fact that, come what may, France and Germany will insist on an end to that UK budget rebate, negotiated through years of acrimonious argument by Mrs Thatcher. With backing from President Prodi, they are now determined Mr Blair must hand it over. After all, he would not like to be put in the dock as the man who blocked 'enlargement'. Gordon Brown will not be best pleased at having to cough up another £3 billion a year. But to keep Britain 'at the heart of Europe', what a small price to pay!