BRUSSELS — Ursula von der Leyen wanted her next EU budget to have a rainy-day fund in case of war, pandemic or competition from other world powers. Instead, the European Commission president is already raiding it to pay off farmers and nail down the Mercosur trade deal.

National leaders — including those of Mercosur holdouts France and Italy — have rushed to claim credit for the offer to free up €45 billion for Common Agricultural Policy spending years ahead of schedule. Budget analysts and diplomats, however, called it a major step back from the Commission chief’s initial ambition to help the bloc spend more nimbly in response to global chaos.

The concession is part of an attempt to make the EU-Mercosur deal palatable for the bloc’s farmers, who fear their products will be undercut by Latin American exports.

The sense of urgency was on full display Wednesday as agriculture ministers made their way to Brussels through snowfall and travel disruption for an extraordinary meeting called in response to last month’s farmer protest in the EU capital.

Inside, the exchanges followed a familiar script. Praise for farmers was paired with assurances they had been heard, alongside repeated references to safeguards, support measures and flexibility built into the EU’s draft budget.

Yet farmers, in early reactions, seemed less than impressed. In a statement, the Irish Farmers Association said von der Leyen’s proposal “smacks of desperation.”

Trading away the budget

The European Commission’s additional money for farmers isn’t new — it’s been brought forward from an existing rainy day fund in the EU budget proposal, which is still being negotiated and will only come into force in 2028.

The Commission set aside a financial buffer to tackle unforeseen emergencies during the mid-term review of the budget in 2030 in an attempt to make the EU’s common cash pot less rigid than it currently is.

In order to lock in France and Italy’s support for the Mercosur trade deal, the Commission on Tuesday offered countries the possibility of immediately handing over €45 billion from that cash pot to farmers.

Trade Commissioner Maroš Šefčovič said after the ministers’ meeting that the concessions were part of a broader effort to secure backing for the Mercosur deal, which he described as “the biggest free-trade agreement we have negotiated.” Brussels, he added, had gone “further than ever before” with safeguards to address agriculture fears.

“We listened to the concerns of farmers and rural communities, and we acted,” Agriculture Commissioner Christophe Hansen said, arguing that the proposed €45 billion could be mobilized as soon as the next EU budget begins in 2028.

While this will significantly increase the EU’s agricultural funding in the short term, it will empty the EU’s crisis fund further down the line.

“Farmers are taking all the remaining flexibility in the budget,” said Eulalia Rubio, a senior fellow at the Jacques Delors Center think tank, noting that it will eat up EU spending on other areas. 

The Commission is showing “its willingness to accept that member states use all flexibility in favor of agriculture [and] not in favor of cohesion [funding to poorer regions]” or other priorities, she said.

In a further concession to farmers, the Commission also pointed to a vaguely defined “rural target” worth €48 billion, floated late last year to keep the European Parliament on side during budget talks, as a pot that could be used first and foremost for agriculture.

“This comes at the expense of one of the key features of the reform — flexibility,” said an EU diplomat. 

Clamoring for credit

Von der Leyen could be encouraged by the initial reactions from capitals: National leaders claimed victory, presenting it as a trophy they had personally scored for their farmers. French President Emmanuel Macron credited his “constant commitment to [France’s] farmers” for the win, while Greek Prime Minister Kyriakos Mitsotakis said it “shows Greece’s voice in Europe is heard more loudly and more clearly.” 

And with Rome set to cast the tie-breaking vote on a Mercosur measure Friday, Italian Agriculture Minister Francesco Lollobrigida called the “good news” evidence of “the seriousness of the work carried out by Italy.”

Not all ministers were quite so quick to celebrate. Speaking after the extraordinary meeting, Spanish Agriculture Minister Luis Planas described the €45 billion offer as “an interesting and important step forward,” but added that, evidently, discussions on the future CAP were far from over. 

Farm lobbyists were more guarded in their praise, however. For Luc Vernet, secretary-general at Farm Europe, the move is “potentially an improvement.” 

Vernet zeroed in on the fact that von der Leyen’s offers are merely optional for capitals, “not an obligation” to hand over the cash to farmers.

In his view that could lead to disparate outcomes around the bloc, depending on the success that farmers enjoy in negotiating with their governments, “further undermining the C [Common] of the CAP.”

Ultimately, without new funding pots, farmers don’t see much to cheer at this point. 

“Bringing forward €45bn that has already been promised to Member States isn’t the same as an additional €45bn,” said the Irish Farmers Association.

Nektaria Stamouli contributed reporting from Athens. 

This article has been updated.