AGENDA 2000: FINANCE COUNCIL TALKS SHUDDER TO A HALT.

Summary:The Agenda 2000 budget reform negotiations came to a standstill during the February 8 Council of EU Finance Ministers. At the end of the meeting, Oskar Lafontaine, the German Finance Minister, could do no more than note the Presidency's conclusion, as the Ministers had failed to reach an agreement on approving a joint text. The Ministers were unable to stand on a formal footing to specify a financial framework for the Farm Ministers, who are due, during a marathon session starting on February 22, to put the finishing touches to the Agenda 2000 CAP reform package. "Our colleagues do not have a free hand", Mr Lafontaine was anxious to stress. A conclave of Foreign Ministers is due to be held on February 21, on the eve of the next General Affairs Council, so as to try to refocus the debates ahead of the special Summit on February 26 in Bonn.

The main blame for the setback in the talks can be laid at the door of Oskar Lafontaine, who failed, as President of the Council meeting, to stick to the agenda scheduled by COREPER (Member States' Permanent Representatives to the EU), which proposed homing in on just three key questions during the Ministerial debates (farm spending, structural spending and own resources), already identified during the latest General Affairs Council (see European Report No 2378). In the final analysis, the debate turned out to be a bit of a free-for-all, allowing the Finance Ministers to make necessarily controversial digressions at this still uncertain stage of the talks. Nonetheless, the Council provided an opportunity for confirmation to be given to the majority support that emerged, at the latest General Affairs Council, in favour of stabilising spending over the 2000-2006 period covered by the medium-term financial perspective in Agenda 2000. France and the Netherlands even put a figure on the overall maximum annual level of EU spending: Euro 85.5 billion. However, a minority of Member States, spearheaded by Spain, are still opposed to this idea and have not changed their minds. The disagreement takes different forms depending on whether the Ministers are considering farm or structural spending.

On the agricultural front, countries least inclined to cap farm expenditure applauded the Presidency's proposals for a multiannual programming of seven times Euro 40.5 billion, which is the level of spending in 1999, plus a small supplement of 100 million. The United Kingdom and the Netherlands believe there has to be...