Opinion of the Economic and Social Committee on the 'Proposal for a Council Regulation (EC) on Community support for pre-accession measures for agriculture and rural development in the applicant countries of central and eastern Europe in the pre-accession period'
Date: 1999-01-27
Institutions: European Economic and Social Committee
Subjects: Central and Eastern Europe, ESC opinion, EU aid, accession to the European Union, aid to agriculture, development aid

12.4.1999

EN

Official Journal of the European Communities

C 101/71

Opinion of the Economic and Social Committee on the ‘Proposal for a Council Regulation
(EC) on Community support for pre-accession measures for agriculture and rural development
in the applicant countries of central and eastern Europe in the pre-accession period’ (1)

(1999/C 101/16)

On 24 April 1998 the Council decided to consult the Economic and Social Committee, under
Article 198 of the Treaty establishing the European Community, on the above-mentioned
proposal.

The Section for External Relations, which was responsible for preparing the Committee’s
work on the subject, adopted its opinion on 17 December 1998. The rapporteur was Mr Kienle.

At its 360th plenary session (meeting of 27 January 1999), the Economic and Social Committee
adopted the following opinion by 59 votes to one with two abstentions.

1.

Introduction

1.1.
At its meeting held in Cardiff on 15 and 16 June
1998 the European Council welcomed the progress
made since the Luxembourg Summit in preparing for
enlargement. It also called for rapid progress to be
in particular,
made in accession partnerships and,
acknowledged the importance of
the agricultural,
environmental and transport priorities laid down within
the framework of these partnerships.

— improving structures for quality, veterinary and

plant-health controls,

— agricultural production methods designed to protect
the environment and maintain the countryside,

— the setting up of producer groups,

— the renovation and development of villages and the
protection and conservation of the rural heritage,

— the establishment and updating of land registers,

1.2.
Under Agenda 2000, ECU 3 billion are to be paid
out annually from the year 2000 to the ten CEEC
applicant countries. This pre-accession aid breaks down
as follows:

— the development of rural infrastructure,

— the management of water resources,

— forestry, including afforestation.

— ECU 1,5 billion of Phare funds

— ECU 1 billion of structural aid, particularly for the

environment and transport (ISPA)

— ECU 500 million for agriculture (SAPARD).

1.3.
The Phare programme, which has hitherto sup-
ported the transition of central and eastern European
countries to a market economy,
is therefore to be
continued. The new pre-accession aid instruments,
namely structural and agricultural aid, should help
pre-accession adjustments and more especially make it
possible for the applicant countries to take on board the
‘acquis communautaire’.

1.4.
Pre-accession aid for agriculture aims to ensure
respect for the priorities of the reformed CAP, i.e. it will
be allotted first and foremost to the restructuring and
modernization of agricultural production and to the
processing and marketing of foodstuffs, the actual focus
of attention varying from country to country. Support
under Article 2 of the proposed Regulation will include
the following measures:

— investments in agricultural holdings,

— improving the processing and marketing of agricul-

tural and fishery products,

1.5.
Community support will be in the form of
multiannual programmes established in accordance with
the guidelines and principles of operational programmes
already existing under the EU’s structural policy.

According to the proposal set out in Agenda
1.6.
2000, pre-accession aid for agriculture and rural areas
(ECU 500 million at constant 1997 prices) is to be funded
by the EAGGF Guarantee Section.

2. General comments

2.1.
In this opinion the Economic and Social Com-
mittee reaffirms its commitment to the eastward enlarge-
ment of the European Union, regarding it as an unique,
historic opportunity to bring together the peoples of
Europe within a common European home. Of particular
relevance to discussions about pre-accession aid for
agriculture and rural development are the following
opinions, which have already been adopted by the
Committee:

— The own-initiative opinion on the implications for
CAP of the accession of countries of central and
eastern Europe (Rapporteur: Mr Bastian), CES
1505/96 (2)

(1) OJ C 150, 16.5.1998, p. 14.

(2) OJ C 75, 10.3.1997.

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Official Journal of the European Communities

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— The own-initiative opinion on the agricultural
aspects of ‘Agenda 2000’ (Rapporteur: Mr Bastian),
CES 1396/97 (1)

— The own-initiative opinion on reinforcing the pre-
accession strategy (Rapporteur: Mr Hamro-Drotz),
CES 456/98 (2).

the fact

2.2. We must never lose sight of
that
agriculture plays an extremely important role in the ten
applicant countries. This is true both of agriculture’s
share in GDP and of the proportion of those employed
in agriculture. According to the Commission, 22,5 % of
the CEEC’s entire workforce is employed in agriculture,
whereas the equivalent figure in EU-15 is only about
5,1 %. However,
in all 15 EU Member States, the
proportion of those employed in agriculture in earlier
times was much higher than it is today. This illustrates
the fact that reforms in CEEC agriculture and rural
areas are wrought with difficulties, especially since
there are extremely limited opportunities for alternative
employment in rural areas. There, it is also common
knowledge that a large number of farms, for example in
Poland, hardly produce anything for the market and
have extremely low incomes.

2.3. Only now, after years of deep crisis following
the 1989/1990 reforms, is agriculture in most CEEC
starting to gradually recover. The latest report on the
situation and future prospects for development in the
CEEC, drawn up by the European Commission’s DG
VI on 2 October 1998, paints a stark picture of the
serious weaknesses of agricultural structures in the
CEEC and the considerable difficulties applicant
countries are having in reforming their agricultural and
food industries.

2.3.1.
It has become particularly clear that carrying
out land reforms and privatization merely ‘on paper’ is
not enough. The CEEC will now be expected to make
much greater efforts themselves to definitively sort
out ownership rights, restructure holdings and create
workable land and property markets. Nor can they
afford to slacken their efforts to radically modernize
sectors upstream and downstream of agriculture proper.
Last but not least, similarly strenuous efforts are also
needed to take on board the ‘acquis communautaire’,
set up market organizations, create distribution net-
works and build up the necessary administrative mechan-
isms.

2.4.
The Committee by and large accepts the argu-
ments presented in the draft Regulation in favour of
pre-accession Community support for agriculture and
rural development.

2.5.
The Committee notes however that the views it
expressed earlier — namely that it will take much longer
to secure an upturn in agriculture in the applicant
countries than was previously envisaged by the European
Commission — have proved to be justified.

(1) OJ C 73, 9.3.1998.
(2) OJ C 157, 25.5.1998.

2.6.
Because of this, the question of whether fulfil-
ment of the 1993 ‘Copenhagen criteria’ should be a
pre-requisite for EU membership needs to be addressed
with great urgency. The Committee is convinced that
over hasty admission would inevitably have devastating
consequences for employment in rural areas. Tran-
sitional periods will therefore be needed before the CAP
can be fully taken on board.

2.7.
The Committee is firmly convinced that, however
desirable, the list of measures proposed in Article 2 of
the draft Regulation is much too comprehensive given
the limited funding available.
It creates the false
impression of a bonanza about to be enjoyed by the
CEEC, whilst automatically increasing the danger of the
misallocation of funds or leading to the EU being
perceived once more by beneficiaries as an adminis-
tration that imposes ‘diktats’, thereby reducing the
prospects of success. We would recall here the unfortu-
nate experiences CEEC have already had with foreign
consultancy firms.

The Committee

therefore urgently

2.7.1.
rec-
ommends that support be much more carefully targeted
at CEEC preparations to take on board the ‘acquis
communautaire’, and hence the CAP, whilst there should
also be a clearer distinction between pre-accession aid
(ISPA, SAPARD) and the Phare programme.

2.8.
The Committee is delighted that close cooper-
ation with economic and social partners is being planned
at all stages — from the planning and implementation
of measures, including their financing, right through to
the assessment of results. The important thing here is to
draw lessons from previous experiences, which have to
some extent been disappointing, particularly within the
framework of the Phare programme. Pluralistic societal
structures have only emerged slowly so far in the
interest groups are often
CEEC whilst agricultural
under-developed, poorly organized or caught up in
in-fighting.

The Committee is therefore all the more keen
2.8.1.
to see top priority given to human resources, with
particular attention focused on the strengthening of
stakeholders in society. Intensive social dialogue, primar-
ily between socio-economic partners, is a sine qua non
if the changes introduced in the CEEC are to be
economically successful and socially acceptable. The
setting up of dynamic and sufficiently representative
organizations should also be an important objective.
The Committee also feels that greater importance should
be given to setting up and cultivating partnerships
between towns and villages in western and eastern
Europe and to promoting training exchanges for young
people starting out in employment.

2.8.2.
Because of its own experience and remit, the
Committee sees itself as an ideal forum for an intensive
exchange of ideas and experiences, particularly in the
early stages of the programmes. Use here should also be
made of the ESC’s Joint Advisory Committees — both

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Official Journal of the European Communities

C 101/73

those already in existence and those in the process of
being set up.

2.9.
The Committee has on many occasions expressed
its support for the principle of pre-accession aid for
agriculture in the applicant countries. Whilst well aware
that Community efforts are no more than a back-up for
action taken at national level, and can never replace the
efforts of the applicant countries themselves, there is
now growing concern that the ECU 500 million to be
earmarked annually for all ten CEEC applicants is
downright inadequate.

Brussels, 27 January 1999.

that

2.10.
the
The Committee would point out
numbers of those employed in agriculture in the CEEC
will fall dramatically in the next few years. The cost of
providing urgently needed jobs and social protection,
however, far exceeds the available resources of the
common agricultural policy. The Committee therefore
reiterates its proposal that, in addition to Phare, ISPA
and SAPARD, a stand-alone fund financed largely from
the EU budget be set up to cover the pre-accession
period. Given current political discussions about a
possible freezing of the EU budget, the Committee
would point out that such action would inevitably
have a serious impact on the proposed pre-accession
programmes.

The President

of the Economic and Social Committee

Beatrice RANGONI MACHIAVELLI

Opinion of the Economic and Social Committee on:

— the ‘Proposal for a Council Directive amending Directive 77/388/EEC as regards the rules

governing the right to deduct Value Added Tax’, and

— the ‘Proposal for a Council Regulation (EC) on verification measures relating to the
refund system and administrative cooperation measures necessary for the application of
directive 98/xxx/EC’ (1)

(1999/C 101/17)

On 27 July 1998 the Council decided to consult the Economic and Social Committee, under
Article 99 of the Treaty establishing the European Community, on the above-mentioned
proposals.

The Section for Economic and Monetary Union and Economic and Social Cohesion, which
was responsible for preparing the Committee’s work on the subject, adopted its opinion on
15 December 1998. The rapporteur was Mr Walker.

At its 360th plenary session (meeting of 28 January 1999) the Economic and Social Committee
adopted the following opinion by 99 votes to eight, with five abstentions.

1.

Introduction

1.1.
As a result of the changes made to the common
VAT system by the transitional arrangements, it was
possible to eliminate, on 1 January 1993, the checks and
administrative procedures prior to or on crossing an
internal border of the European Union, while safeguard-
ing to the maximum the Member States’ discretion for

(1) OJ C 219, 15.7.1998, pp. 16-20.

determining their national VAT systems, in particular
by retaining a large number of options and powers in
the Directive.

1.1.1. However, the abolition of physical barriers
placed greater emphasis on the intangible obstacles to
trans-national activities faced by businesses.

1.2.
The wide variety of rules for determining the
place where a transaction is taxed and, consequently,
the place where the tax is deducted or refunded, and the