New challenge to EU farm policy

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BRUSSELS - Parts of the Common Agricultural Policy must be scrapped if the European Union is to avoid ruining Central Europe's exporters, the EU commission heard yesterday, writes Andrew Marshall.

Some of the EU's most cherished policies will have to change as it tackles the challenge to its east, a special seminar was told. Regional funds will also have to be scaled down and aid policies rethought, a review submitted to the meeting suggests. Though no action is to be taken immediately, the seminar is likely to shape policy-making this year.

It shows that as it formulates a 'pre-accession' strategy for Central and Eastern Europe, the commission is going to confront massive rows that dwarf current spats.

The commission considered a report put together by Sir Leon Brittan, responsible for external economic affairs, Hans van den Broek, external political affairs, and Henning Christophersen, economics. A two-and-a-half hour meeting discussed economics, security, trade, agriculture and technical assistance.

The EU now subsidises agricultural exports to Central Europe and this may have to stop. Several countries in the region are potentially keenly competitive food exporters but if the EU dumps subsidised produce it will damage them. Competition laws in the region must be harmonised with those of the EU, the review suggests, and the states helped to co-ordinate their own affairs.

Technical assistance must be turned into cash for infrastructure projects and assistance in attracting investment, the paper indicates. The EU should play a tougher role in the European Bank for Reconstruction and Development, the London institution that channels investment. And central Europe must be brought into all relevant economic institutions.

Mr Christophersen indicated elements of the new approach in a speech in Prague on Tuesday, saying that he believed negotiations would begin in 1997. Hungary will apply for membership on 1 April, a statement from Budapest said yesterday, and Poland is likely to follow.