by Giles Merritt
It has still to spark much media attention, but a no-holds-barred political tussle is playing out in Brussels that will determine the health and wealth of rural Europe for decades to come.
The European Commission is planning to merge the Common Agricultural Policy and the EU’s cohesion funds. Its idea is to whittle down peripheral costs and create a mega-fund for farming and regional development. A bold plan, it is unleashing storms of protest from concerned interest groups. So far, though, it has barely registered in the public consciousness.
The mega-fund under discussion in the complex negotiations on the next Multi-annual Financial Framework (MFF) has been set at €865bn, getting on for half the EU’s 2028-34 budget. That is, in fact, a cutback, because the CAP and regional support from the cohesion funds have each accounted for a third of EU spending. Their combined two-thirds would be reduced to rather less than half of the next budget’s €2tn.
In her State of the Union autumn address to the European Parliament, Ursula von der Leyen emphasised defence and competitiveness as top priorities. The commission’s thinking on farm and regional spending is that merging them would streamline them both and produce cost-saving synergies.
The emptying out of rural Europe is accelerating, and presents governments with economic and political problems that they ignore at their peril.
But only the Brussels commission seems to favour the idea. The very powerful Copa-Cogeca umbrella organisation representing farmers and cooperatives says the most recent CAP reform proposals are “unacceptable” and has begun to hold disruptive public protests. Tractor blockades may soon return to Europe’s major cities.
The paring back of support for the EU’s poorest regions is also challenged on financial grounds; growing rural poverty is highlighting failed regional development policies. The emptying out of rural Europe is accelerating, and presents governments with economic and political problems that they ignore at their peril.
Throwing more money to combat regional ‘desertification’ may not be the answer. Research in Germany challenges the effectiveness of development finance, arguing that each euro spent through the EU’s cohesion policies generates little more than an additional euro in economic growth. Commission officials disagree, and stress that cohesion has to be evaluated in the long term. They believe the pay-offs will triple by 2043.
The report from the universities of Munster and Göttingen notes that these EU funds go chiefly into construction and real estate, and warns that when cohesion spending stops, private investment around it will soon collapse. The €392bn that went into regional development in the 2021-27 EU budget is to be cut to €218bn* , so there could be a ripple effect that might badly disrupt investment in the most impoverished parts of Europe.
Few policymakers contest the urgent need to re-arm Europe and boost productivity by finally completing the EU single market. The issue is whether or not targeting Europe’s mostly rural regions risks creating an equally damaging crisis that brings populist parties to power.
The wellbeing of the regions is crucial to Europe’s integration – or disintegration.
Almost a third of the EU’s population of around 450 million presently lives in the countryside, but that proportion is forecast to halve to 16% by mid-century. Smallholding farmers threatened with bankruptcy by mounting difficulties will join the exodus of younger people seeking jobs and a better life in cities. Agriculture and agri-foods employ 30 million Europeans and are the backbone of rural communities. They are liable to be hit hard when farm support and regional development are trimmed.
Populism is already rife in rural Europe and in smaller towns, and is gaining momentum. An EU report in 2020 warned “people in rural areas are significantly more likely to vote for anti-EU parties”, and four years later, elections to the European Parliament saw over a quarter of MEPs elected from hard-right parties.
Analyses of the populists’ appeal have been coming thick and fast, and outside Europe’s larger cities point to very understandable resentments. Rural voters from the Baltic republics to central and eastern Europe and the so-called ‘Club Med’ in the south are turning their backs on the EU. They no longer see it as a solution to their misfortunes.
How much money the EU can spare for under-privileged rural Europe – and how it could spend it more effectively – are questions that demand speedy answers if a European MAGA is to be avoided. As in the United States, this is a battle that will also be fought out through social media and mass communication.
A first step would be for the commission to turn its spotlight onto the 80% of the EU’s land mass that isn’t urban. Over the next two decades, today’s economic stagnation will turn into a full-blown crisis. The absence of 70 million people from small towns and rural communities promises to wreak havoc.
In its wide-ranging new ‘Foresight Report 2025’, the commission pinpoints areas for empowering the EU if Europe is to thrive amid turbulence and uncertainty. Apart from a sentence or two on the ‘geography of discontent’, it pays scant attention to regions. Yet the well-being of the regions is crucial to Europe’s integration – or disintegration. Neglecting them risks being an error of strategic magnitude the EU would deeply rue if it led to “an ever-looser union”.
*Published first on friendsofeurope.org
By: N. Peter Kramer