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European Union

EU Nations Agree On Adding 10 New Members From 2004

European heads of government reached agreement at the EU summit on a formula for enlarging the EU to encompass 10 new member states beginning in 2004. The deal, was based on a  Franco-German  bilateral deal to set the ceiling on farm spending (excluding rural development) at 2006 levels and agreed to phasing-in of direct agricultural payments to new member states to begin in 2004. According to the U.S. Department of Agriculture (USDA), EU heads of government agreed that between 2007 and 2013, the overall ceiling for the Common Agricultural Policy (CAP) market support expenditure (first pillar) will be no more than one percent per annum higher than the 2006 level.  This means that the budget for market support measures for the expanded EU (25 nations) will be just over 45 billion euros in 2006 and total around 48.6 billion by 2013.  The rural development (pillar two) budget, however, is not capped, offering the possibility of significant expansion. 

In return for no cut in the budget, the 15 member states agreed that direct support payments for the new members will be phased in over 10 years at the rate originally proposed by the Commission. The phase-in of direct payments to candidate countries will start at 25 percent in 2004, moving to 30 percent in 2005 then 35 percent in 2006.  Thereafter, direct aids would rise to 100 percent of the EU level over the next seven years.