The Eurozone Crisis and “More” and “Less” Europe Revisited: Could CAP reform be brought into play?

Prof. Peter Lindseth

My last postspeculated on how the political conflicts surrounding the Eurozone crisis could result in both “more” and “less” Europe at the same time—“more” to contain the crisis and achieve stabilization; “less” to compensate resistant Member States whose increasingly Eurosceptical publics would like to see, in exchange, some tangible curtailing of other parts of supranational authority.

My speculations for the most part ran to the institutional—increased roles for national parliaments, a new European subsidiarity court (a “European Conflicts Tribunal”), and the like. Obviously the politics of the situation remain highly fluid, with Slovenian governments falling and Slovakian coalition partners apparently refusing to fall into line behind their government, just to name a few instances. Predicting in advance what deals will be needed to overcome the many hurdles the crisis will throw up is undoubtedly difficult. Small countries might be susceptible to pressure from big ones, pure and simple. But what can we expect of the back-and-forth among the bigger member states themselves?  If, for example, European (and particularly French) banks need recapitalization or perhaps even help from some kind of European TARP program, might this strengthen the hand of those who seek reconsideration of other big-ticket items in overall supranational spending in Europe?

The biggest-ticket item of them all is the common agricultural policy (CAP), which accounts for 40% of the EU’s €130 billion annual budget.  Reports out of Brussels last week were that the UK and Polish agriculture ministers, Jim Paice and Marek Sawicki, issued a joint call for a “modernization of European agriculture” in the face of intense French opposition. In normal circumstances we might regard this call as just another step in a long, drawn out battle over the CAP.  But does the Eurozone crisis change that calculus?

The last thing that Nicholas Sarkozy, nor any French politician for that matter, wants to be seen as doing is sacrificing the interests of French farmers to save French bankers.  The tendency of French farmers to large-scale and often violent protests in defense of their interests might make recent Greek, Italian, or Spanish protests look mild by comparison. (Incidentally, this propensity has given rise to some interesting case-law in the European Court of Justice on the responsibility of a member state for private actors interfering with the free movement of goods: see, e.g., case C-265/95, Commission v. France, 1997 E.C.R. I-06959.)

Regardless of possible French political hesitancy, the timing of the UK-Polish joint call comes at an intriguing time, in view of particular French vulnerabilities in the Eurozone crisis. Consider also that the finance ministers of the BRIC countries—Brazil, Russia, India, and China—met last week in Washington on how they might also assist in resolving the Eurozone crisis.  One of their possible quid pro quos was reportedly “greater trade openness in areas like agriculture,” which may well add to the pressure on France for concessions on CAP reform.

The trick in this game will be to negotiate real French concessions on CAP while nevertheless avoiding raising the ire of French farmers. Before simply saying “good luck with that” (an understandable first impulse), I’m left wondering whether the acute crisis of the Eurozone, and the possible vulnerabilities of the French banking sector, might mean that France could be more willing to visit the question of CAP reform for the benefit of all concerned. I wouldn’t begin to speculate on how such a deal might take shape in its actual details. But I’d love to here from readers on whether the Eurozone crisis could, in their view, have any impact on the prospects for CAP reform, and if not, why not.

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