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Post-Brexit: France blasts proposed cuts to EU farm funding

The French government has slammed proposed cuts to EU farm funding under a draft post-Brexit budget as "unacceptable".

Post-Brexit: France blasts proposed cuts to EU farm funding
Farmers plow a field on April, 2018 near the town of Saverdun, southern France. Photo: AFP
Under the planned budget unveiled by the European Commission, funding for farmers across the bloc via the politically sensitive Common Agricultural Policy (CAP) would fall by around five percent.
   
Paris has historically defended the single largest area of EU spending, a huge help to the politically influential but economically struggling French agricultural sector.
   
“Such a drastic, massive and blind cut is simply unimaginable,” a statement from the agriculture ministry said, adding that France “will not accept any decrease in direct income for farmers”.
   
The proposed reduction would create an “unprecedented risk” for French farms, it added.
   
French President Emmanuel Macron opened the door to changes to the CAP in a landmark speech on Europe in Paris last September when he said it needed to be reformed.
   
The French government supports “a modernisation and a simplification of the CAP” which would protect farmers from price volatility as well as helping them adapt to and fight climate change”, the ministry said.
   
French farmers are the biggest beneficiaries from the CAP.
 
Photo: AFP   
 
The draft budget was unveiled by European Commission chief Jean-Claude Juncker for the seven years after 2019 when Britain is expected to leave the 28-member European Union.
   
The proposals are the first stage in what promises to be hard-fought negotiations between the remaining members of the bloc.
   
The European Commission also risked a clash with eastern former Soviet-bloc countries such as Poland and Hungary over proposals to cut funds for states that violate democratic freedoms.
   
European Commission chief Jean-Claude Juncker insisted the budget plan for 2021-2027 was a “reasonable and responsible” way to fill a hole left by Britain's departure, and to fund new priorities including defence.
   
“We made a choice to go forward and that requires a modern, simplified more flexible budget,” Juncker told the European Parliament.
   
The departure of Britain, a net contributor, in 2019 leaves the bloc with what Juncker says is a 15-billion euro gap in its accounts.
   
EU Budget Commissioner Guenther Oettinger said countries would pay 1.114 percent of their annual gross domestic product under the plans, up from one percent in the current 2014-2020 multi-year budget worth 1.0 trillion euros.
   
The budget must be approved unanimously by all remaining 27 EU states, and by the European Parliament. Oettinger called for it to be agreed on by the time EU leaders hold their first post-Brexit summit in Romania in May 2019.
 
'Rule of law'
 
Meanwhile the European Commission proposed a seven-percent cut to so-called cohesion funds, the biggest beneficiaries of which are former Soviet bloc states in eastern Europe. It corrected an earlier figure of five percent.
   
Far more controversially, it also proposed for the first time to “suspend, reduce or restrict access” to funds for member states that breach the rule of law.
 
Warsaw, along with Budapest, has been at loggerheads with Brussels over democratic standards and their refusal to accept refugees.
   
Juncker said the commission is “proposing a new mechanism that will allow for the protection of the budget linked to risks arising from deficiencies in the rule of law.”
   
Poland reacted warily to the idea.
   
“There can be no space for arbitrariness,” Poland's deputy European affairs minister Konrad Szymanski said in a statement.
   
But Szymanski, reflecting his government's recent bid to resolve its two-year standoff with Brussels, said Warsaw did not see the proposals as “confrontational”.
   
Brussels wants to spend more on the digital economy, research, defence and protection for the bloc's borders against mass migration, including what one European source says is a quintupling of the border force Frontex to nearly 6,000 people.
   
Taxes on carbon emissions, plastic waste, and corporations could also contribute 22 billion euros annually, or 12 percent of total budget revenue, the commission said.

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EUROPEAN UNION

The Euro celebrates its 20th anniversary

The euro on Saturday marked 20 years since people began to use the single European currency, overcoming initial doubts, price concerns and a debt crisis to spread across the region.

The Euro celebrates its 20th anniversary
The Euro is projected onto the walls of the European Central Bank in Brussels. Photo: Daniel Rolund/AFP

European Commission chief Ursula von der Leyen called the euro “a true symbol for the strength of Europe” while European Central Bank President Christine Lagarde described it as “a beacon of stability and solidity around the world”.

Euro banknotes and coins came into circulation in 12 countries on January 1, 2002, greeted by a mix of enthusiasm and scepticism from citizens who had to trade in their Deutsche marks, French francs, pesetas and liras.

The euro is now used by 340 million people in 19 nations, from Ireland to Germany to Slovakia. Bulgaria, Croatia and Romania are next in line to join the eurozone — though people are divided over the benefits of abandoning their national currencies.

European Council President Charles Michel argued it was necessary to leverage the euro to back up the EU’s goals of fighting climate change and leading on digital innovation. He added that it was “vital” work on a banking union and a capital markets
union be completed.

The idea of creating the euro first emerged in the 1970s as a way to deepen European integration, make trade simpler between member nations and give the continent a currency to compete with the mighty US dollar.

Officials credit the euro with helping Europe avoid economic catastrophe during the coronavirus pandemic.

“Clearly, Europe and the euro have become inseparable,” Lagarde wrote in a blog post. “For young Europeans… it must be almost impossible to imagine Europe without it.”

In the euro’s initial days, consumers were concerned it caused prices to rise as countries converted to the new currency. Though some products — such as coffee at cafes — slightly increased as businesses rounded up their conversions, official statistics have shown that the euro has brought more stable inflation.

Dearer goods have not increased in price, and even dropped in some cases. Nevertheless, the belief that the euro has made everything more expensive persists.

New look

The red, blue and orange banknotes were designed to look the same everywhere, with illustrations of generic Gothic, Romanesque and Renaissance architecture to ensure no country was represented over the others.

In December, the ECB said the bills were ready for a makeover, announcing a design and consultation process with help from the public. A decision is expected in 2024.

“After 20 years, it’s time to review the look of our banknotes to make them more relatable to Europeans of all ages and backgrounds,” Lagarde said.

Euro banknotes are “here to stay”, she said, although the ECB is also considering creating a digital euro in step with other central banks around the globe.

While the dollar still reigns supreme across the globe, the euro is now the world’s second most-used currency, accounting for 20 percent of global foreign exchange reserves compared to 60 percent for the US greenback.

Von der Leyen, in a video statement, said: “We are the biggest player in the world trade and nearly half of this trade takes place in euros.”

‘Valuable lessons’

The eurozone faced an existential threat a decade ago when it was rocked by a debt crisis that began in Greece and spread to other countries. Greece, Ireland, Portugal, Spain and Cyprus were saved through bailouts in return for austerity measures, and the euro stepped back from the brink.

Members of the Eurogroup of finance ministers said in a joint article they learned “valuable lessons” from that experience that enabled their euro-using nations to swiftly respond to fall-out from the coronavirus pandemic.

As the Covid crisis savaged economies, EU countries rolled out huge stimulus programmes while the ECB deployed a huge bond-buying scheme to keep borrowing costs low.

Yanis Varoufakis, now leader of the DiEM 25 party who resigned as Greek finance minister during the debt crisis, remains a sharp critic of the euro. Varoufakis told the Democracy in Europe Movement 25 website that the euro may seem to make sense in calm periods because borrowing costs are lower and there are no exchange rates.

But retaining a nation’s currency is like “automobile assurance,” he said, as people do not know its value until there is a road accident. In fact, he charged, the euro increases the risk of having an accident.

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