Payee and payer, but the CAP
policy will become even more
expensive when Europe expands

The talks in Luxembourg are expected to continue down to the wire, possibly extending towards the weekend in a bid to break slightly ahead of another tough talk constitution summit in Greece next week.
  
France, the Common Agricultural Policy's (CAP) biggest beneficiary, and Germany, its chief paymaster, have sought to narrow their differences as part of efforts to secure a deal among the whole 15-member Union.

French Prime Minister Jean-Pierre Raffarin said the two European giants are largely in accord on the CAP's future. French "positions were to a great extent shared by Germany," he said in Paris.
  
Expensive policy

The CAP, which gobbles up nearly half all EU spending, is blamed for encouraging massive overproduction that ends up being dumped on poorer countries' markets.

Farmer’s subsidies are not related to how much food they produce.
  
CAP reform is seen by Brussels as essential if the EU is to be able to present a strong negotiating position at the World Trade Organisation's current round of liberalisation talks.
  
The European Commission, the EU's executive arm, wants to cut all links between direct subsidies for farmers and their production levels.

Earlier, the EU's current Greek presidency in a bid to bridge the gap between the different camps offered a compromise on the Commission’s agenda.

Compromise rejected

The latest proposal suggests partly uncoupling direct aid from production levels.

Instead, farmers would receive direct income support. Production subsidies would be capped and their level would depend on the extent to which farmers respect environmental, animal welfare and food safety laws.
  
Cash saved from reduced direct subsidies would be diverted to rural development programmes, including a new farm advisory system to help boost quality production
  

The next few days may make or
break the enlarging EU family

French Agriculture Minister Herve Gaymard said the proposal did not go far enough to secure a compromise, and expressed doubts that the talks could conclude before the end of the week.
  
But he said a new proposal could be worked out on Thursday when individual EU countries enter tripartite talks with Greek Minister of Agriculture Giorgios Drys and European Agriculture Commissioner Franz Fischler.
     
Constitutional battle

The forum drafting a constitution for an enlarged European Union aims to complete the bulk of its draft text on Friday and present it to EU leaders at a summit next week in Greece.
   
Valery Giscard d'Estaing, head of the Convention on the Future of Europe, hopes the document will put an end to frequent revisions of the EU's treaties and serve the EU for 50 years. EU leaders will have the final say on the constitution.
   
German Chancellor Gerhard Schroeder said after talks with French President Jacques Chirac in Berlin last Tuesday that the two countries were determined to support the proposals of the Convention on the Future of Europe "without reservation".

Smaller state concerns

The latest draft includes a full-time president and foreign minister for the EU - though most changes would be delayed for several years.

It also contains a proposal intended as a compromise with smaller member states which fear the new posts will facilitate a power grab by the larger countries.

According to this, the EU's executive body - the European Commission - will continue to represent every EU country though only some of the commissioners will have a vote at any one time.

But the commission voiced concerns that the new constitution would neutralise its powers, reducing it to what one commissioner described as a "college of eunuchs".