Reaping the Benefits of the Upcoming European Parliament Elections
The European Parliament elections in May 2019 will prove a key moment for EU democracy because the European Parliament is fundamental in the decision-making process for EU legislation and policy making, together with the Council. Remarkably, voter turn-out decreased to 40% in 2014 (EU average), with some countries even reporting below 20%. Key topics for the European Parliament to decide upon are: the Common Agricultural Policy, the EU budget, and trade agreements with third countries.
What’s happening in Brussels and the European Parliament?
Because of the turmoil surrounding the Brexit process1, one could almost forget that there are various other relevant dossiers currently on the table in the EU that impact the European F&A sector. To mention a few: the reform of the Common Agricultural Policy (CAP) post-2020, the negotiations for the Multi-Annual Financial Framework (or simply put, the EU budget), ongoing trade negotiations with third countries or blocs, such as Mercosur and the Directive regarding unfair trading practices in the food supply chain.
The key decision-makers in the bloc nowadays are the Council of Ministers and the European Parliament (EP). However, if you ask the average EU citizen about the importance of the EP, the answer might be that the institute has little significance for them. Yet, ever since the establishment of the European Parliament in 1958, its powers have gradually grown, from an advisory role to one as co-legislator (a result of the Lisbon Treaty in 2009). Besides its legislative power, the EP also has a key role in deciding on key positions, such as the European Commission, which is a key driver for EU policy.
Remarkably, voter turn-out during the past decades has decreased from 60% in 1980 to approximately 40% in 2014, with some countries even reporting numbers below 20%. Taking into account the key role of the European Parliament within the functioning of the EU, and the growing popular discontent across the bloc, it is clear that the May 2019 EP elections will be a key political event.
Link between agriculture and the EU is obvious
EU spending on agriculture is a significant part of the EU common budget. In 2018, 37% of the EUR 160bn budget was spent on the CAP. The split of the 59bn CAP funds is as follows: EUR 42bn for income support payments, EUR 14bn for rural development, and EUR 3bn for market support measures. The proposed EU budget for 2021-2027 allocates EUR 365bn to the CAP, which corresponds to 28% of the total budget. The amounts per country vary significantly, with France as the biggest recipient at EUR 62bn for the period (see Figure 1). The Council and EP will decide upon the budget proposal.
In order to shed light on key issues in the run up to the EP elections next May, RaboResearch will be publishing a number of reports on the topic in the coming months. Key topics will be the rise of anti-establishment parties and the impact the new EP may have on F&A, trade agreements and climate policy. The first report in the series is available here. Future reports on the EP elections will be available on economics.rabobank.com
Figure 1: Proposed allocation of CAP budget by member state (2021-2027)
Source: European Commission, Rabobank 2018
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1 For an overview of the foreseen impact of the draft Brexit deal and the accompanying political declaration on food and agribusiness companies in Europe, please see our recent report.
