Officials from Berlin have indicated that they are keen to keep contributions by countries to the overall budget of the EU to no more than 1% of national income.
A meeting took place last week to discuss the next Multi-annual Financial Framework (MFF), which is the EU’s seven-year budget running from 2021 to 2027.
Due to the UK exiting the EU, the budget looks set to be cut and that will have a knock-on effect on the CAP budget. To counter this, some countries, including Ireland, have proposed increasing their contributions.
The European Commission has proposed setting the limit at 1.114%. Countries giving more to the EU than they receive, such as Sweden, Denmark, Austria and the Netherlands, were supportive of this position.
It would translate to a 5% cut to the CAP budget. In this scenario, Ireland’s CAP budget of €1.2bn would be cut by approximately €60m.
In a bid to avoid cuts to the farm policy, the European Parliament has proposed a contribution of 1.3% of national income to plug the gap left by the UK. Countries such as Poland and France were critical of any cuts to CAP.
A compromise of 1.06% has been proposed by the Finnish presidency of the European Council, which is made up of heads of state and government ministers.
There had been hopes that a deal on the seven-year budget could be achieved among EU leaders by the end of the year. However, disagreements around contribution levels and continued Brexit uncertainty means a deal is seemingly unlikely before 2020.
Without an agreed budget, progress on designing the next CAP will continue to be slow.
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