Political scientists: It is good that the EU has agreed on a budget, but direct payments to farmers are not effective

EU leaders agree to assist coronavirus-affected countries out of a total of € 750 billion lent to the Euro Fund. Of this, 390 billion. The other part will be provided in the form of loans.

EU leaders also approved an EU budget of more than € 1 trillion for 2021-2027. Read about its most important points for Lithuania here.

A historic agreement?

According to Lino Kojala, Director of the Center for Eastern European Studies (RESC), it is important that an agreement is finally reached.

“If the near-record meeting had ended without result, it would have sent a very bad signal both to markets and to the political level that European leaders cannot agree even in the face of the crisis.”

<...> While 750 billion. It is undoubtedly a very significant project, but it is likely to debate a lot about how the process of European integration itself changes qualitatively. ‘ 15 minutes L. Kojala said.

French President Emmanuel Macron spoke of a “historic day for Europe” and assured that the final package was “a historic change for our Europe and the eurozone”.

German Chancellor Angela Merkel told reporters that she was “very satisfied” with the deal and was relieved.

Berlin and Paris initially proposed to provide $ 500 billion in subsidies. This was opposed by four “economies”: Austria, Denmark, the Netherlands and Sweden. Finally, Austrian Chancellor Sebastian Kurz announced on Twitter that this was a “good result” for the EU and his country.

According to Ramūnas Vilpišauskas, a professor at the Vilnius University Institute for International Relations and Political Science (VU TSPMI), this agreement is important in terms of the amount of money and the recently used financial mechanisms, even if they are unique.

“The fact that an agreement has been reached shows that EU leaders can still find a compromise and not veto internal politics in what is considered important to the interests of the EU as a whole and its own countries.

On the other hand, the fact that the negotiations have been so complex and prolonged is mainly a matter of internal policy. And the fact that in many countries their leaders have to think about their political opponents, “said the political scientist, adding that the EU’s problems have been heavily politicized in some countries since 2010.

Inefficient payments to farmers.

The total amount of European support for Lithuania in the new financial perspective is 1.7 billion. higher than in 2014-2020.

After meeting on Facebook, President Gitan Nauseda wrote about “good solutions” that “will provide our citizens with jobs, a clean environment and a response to climate change.”

“We must take advantage of this great opportunity to make a qualitative leap in our society, economy, agriculture and other sectors,” wrote the head of state.

According to R. Vilpišauskas, the relationship between countries and the EU budget can be evaluated in several ways.

“The simplest thing is if the country pays more to the EU budget or receives from it. In this case, Lithuania will continue to receive more than paying. In general, the amount that Lithuania can expect is increasing, despite a decrease in cohesion financing. ” 15 minutes he said.

The political scientist points out that what matters is not the amounts received, but how the funds will be used. According to him, the focus should be on subsidies, not loans.

Furthermore, although there is a lot of talk at the EU and Lithuanian level about innovation, almost a third of the new trillion financial perspective goes to payments to farmers.

“Most importantly, these funds contribute to long-term economic growth, not the well-being of individual interest groups, such as direct payments to farmers. They are simply benefits to a specific group in society, and therefore in the opinion of many analysts, they are the funds that provide the least benefit to all EU countries, ”said R. Vilpišauskas.

Direct payments to farmers are said to have been a “historical relic” since the creation of the European Economic Community, when the goal was to ensure that food shortages were not felt after the war.

“The most convenient and profitable way to invest EU funds in areas that create European added value. These include, in particular, the functioning of the single market, transport or energy connections, and general protection of external borders. <...>

Financing agriculture has been considered inefficient and socially unfair. The compromise reached tonight finally reduced the amounts for research in some of the modern areas, such as health problems, that arose during the current crisis, “said R. Vilpišauskas.

Direct payments to Lithuanian farmers are expected to increase from the current € 177 per hectare to € 200 in 2022. Thereafter, profits are expected to increase slightly each year according to a complex formula that approximates the average of the European Union. There is a condition that in 2027 the minimum payment will be 215 euros per hectare.

The problems did not go away

Long negotiations were also hampered by the Western proposal to link the allocation of funds to the rule of law. Member states like Poland and Hungary, accused of violating the principle, strongly opposed the proposal.

According to L. Kojala, it was probably decided that this issue requires more detailed consideration.

“We are likely to return to this issue in the future. The current negotiations have been so complex and so far-reaching that the additional difference that could undermine the entire agreement, I mean the definition of how to perceive the rule of law, who would that assessment, how that assessment would be reflected in the final aid allocations, was too complicated.

However, I think the issue will certainly not go away and will be on the political agenda fairly soon. ” 15 minutes L. Kojala said.

A group of leaders, led by Merkel and Latvian Prime Minister Krišjanis Karinis, worked on a plan that would allow most EU governments to block payments to members for violating the rule of law.

In Brussels, G. Nausėda said he did not agree to link the allocation of funds to the principle of the rule of law.

“But you would probably think that such a position and such an approach is not correct. Because today we may be seeing these countries (Poland and Hungary – ed.), But potentially such a matter of the rule of law can arise at any time in any country of the European Union, including the countries of the old democracy, “said G. Nausėda .

The final agreement states that the European Council “emphasizes the importance of respecting the rule of law”.

The agreement has not yet been approved by the European Parliament, which will soon meet in plenary session.