Memorandum submitted by the German Federal
Ministry of Consumer Protection
AGRICULTURE AND EU ENLARGEMENT
1. The accession of 10 states, eight of
which had been within the Soviet sphere of influence until 1989,
to the EU and thus to the common agricultural policy poses great
challenges for the current EU Member States as well as for the
new Member States (NMS). This integration process comes at a time
when the common agricultural policy has to be reformed under the
pressure of increasing budgetary problems and global pressures
of competition. The simultaneity of integration, reform and transformation
requires solutions for which only a few months or years at best
are available in each case.
2. Most analyses on the impact of the accession
of 10 NMS start from the assumption that these states stand to
benefit more from accession than the current EU-15. The following
benefits of accession are mentioned: stability (of economic activities
and prices), predictability, clear rules of the game, modernisation
and financial resources. In the past decade already, the GDP in
the NMS has increased by 4.5% on an annual average, thus exceeding
the average of the EU-15 by 2.5 percentage points.
3. Yet, this growth has only provided weak
impulses for the EU-15 which is primarily due to the minor scope
of national economies in the NMS: the GDPs of the NMS, taking
the exchange rates as the basis, only amount to 5% of the GDP
of the EU-15. Even if purchasing power parity were taken as the
basis, they would only total 10%. Forecasts of a 0.5% GDP growth
for the EU-15 as a result of the accessions in the coming decade
predominantly ensue from the effects of migration and competition
and, to a lesser extent, to trade. In the process, this positive
trend will be more pronounced in the neighbouring countries of
the NMS, ie Germany, Austria and the Scandinavian countries (+
2 to 3% growth of GDP).
4. The Vienna Institute for International
Economic Studies assumed in its latest analysis (November 2003)
that the forthcoming enlargement would proceed "harmonically
and without any shocks". The larger annual economic growth
of the NMS (2 percentage points annually) would persist in the
years to come. A quick offsetting of the different price level,
falling short of the EU average by 50% in the NMS (except for
Slovenia), could not be anticipated.
5. A STUDY ISSUED
BY THE
EUROPEAN COMMISSION
FORECASTS THE
FOLLOWING TRENDS:
— The long-term strengths of the accession
countries lie in a specialisation in the field of crop production,
the strengths of the EU agricultural sector in the field of animal
production. While the required funds are lacking for investments
into animal production, adjustments in crop production are implemented
more rapidly.
— The study reckons with a decline
in competitive capacity of pigmeat production in the accession
countries as a result of the adoption of the common agricultural
policy. The fact that the prevailing small-scale farming structures
are mostly unable to finance investments that would increase profitability
also contributes to this.
— Milk and beef production in the accession
countries will gain from integration into the common agricultural
policy. The expected rise in producer prices for milk and beef
as well as the cattle premiums will have a positive impact on
profitability. A large number of micro-dairy cattle farms is expected
to abandon production in the years to come. Increasing specialisation
can also be expected in dairy cattle husbandry.
— EU enlargement will have a more positive
impact on poultrymeat production in the accession countries than
on pigmeat production since prices for poultrymeat in the accession
countries are more competitive than in the EU-15. Demand for poultrymeat
is also showing an upward trend, though imports have gone up as
well.
6. Today already, the EU exports more agricultural
and food produce to the accession countries than it receives from
them. Among the EU Member States, Germany is the key trading partner
of the Central and Eastern European accession countries.
7. Experts assume that the accession-related
growth impulses will boost consumer income in the accession countries,
thus resulting in more money being spent on foodstuffs. This will
benefit suppliers of higher-value products, above all, who are
frequently still burdened with import taxes when importing into
the accession countries.
8. FIELDS WHERE
SUPPORT IS
POSSIBLE AND
REQUIRED:
— Germany will continue to make every
effort in the years to come to assist the NMS under the EU pre-accession
instruments and bilaterally in the integration into the EU. Some
of the experience gained after reunification from the harmonisation
of the farming sector in the new Federal Länder with EU requirements
will be helpful in this respect.
— From accession to the end of 2006,
the EU will provide a special "transitional facility"
that is to assist in moving forward with institution-building
in the new MS. Corresponding projects will focus, inter alia,
on:
— administering elements of the
common internal market,
— administrative structures to
ensure food safety,
— management and control agencies
for agriculture and rural development (including IACS).
— "Twinning projects between
public administrations" of the old and new MS are expressly
envisaged for corresponding measures.
9. The action plans announced by the EU
for a "Wider Europe" and the associated "New neighbourhood
initiative" play a major role. These NMS, after all, are
vitally interested in excellent relations with their eastern neighbours
and especially in types of constructive cooperation in the border
regions. Yet, the EU as a whole is at the same time interested
in seeing the security standard, provided for by the Schengen
Agreement, also being guaranteed at the new eastern border of
the EU. The European Commission will, therefore, suggest neighbourhood
programmes for 2004 to 2006 as an initial step, followed by the
"Single neighbourhood instrument" from 2007.
German Federal Ministry of Consumer Protection
January 2004
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