EU aid to start as trickle

THE EUROPEAN Union's executive commission has earmarked 25 billion euros to 10 candidate countries including Slovakia for 2004 to 2006.
But the proposed aid package to farmers will begin at only 25 per cent of the amount existing EU members currently receive. The aid would increase over a 10-year period until it reaches the same level that member countries enjoy.
Around half of all EU spending goes to its 40 billion euros per year farm budget.

THE EUROPEAN Union's executive commission has earmarked 25 billion euros to 10 candidate countries including Slovakia for 2004 to 2006.

But the proposed aid package to farmers will begin at only 25 per cent of the amount existing EU members currently receive. The aid would increase over a 10-year period until it reaches the same level that member countries enjoy.

Around half of all EU spending goes to its 40 billion euros per year farm budget.

A 20-page document released by the commission says: "The request for immediately granting direct payments at the same level as that applicable in the EU at the time of accession should not be followed.

"It would appear more appropriate to set the starting level at which direct payments would be granted for 2004 at a rate equivalent to 25 per cent of the present system. The transition should proceed over a period of 10 years."

The commission says that giving candidate countries direct Common Agricultural Policy (CAP) payments would not encourage reform of their agricultural sectors.

"There is a significant risk that necessary restructuring would be slowed or even stopped, creating a durable vicious circle of low productivity, low standards and high hidden unemployment.

"Excessive cash injections through direct payments in favour of specific segments of one professional group would risk creating considerable income disparities and social distortions in rural societies."

The 25 billion euros designated for development by the commission will be drawn from the EU's Regional Development Fund. The money amounts to an average of 2.5 per cent of the proposed new members' gross domestic product (GDP), and is capped at four per cent of their GDP.

The commission says it wants to ensure the candidate countries are able to use the funds appropriately, and that the administrative structures needed to handle and distribute the aid are in place.

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