Will Eastern Enlargement Force the EU to Fundamentally Reform its Common Agricultural Policy (CAP)?

Abstract

With a share of almost 50 per cent in the EU's budget the Common Agricultural Policy (CAP) is clearly the single most important EU policy. From its inception in the late 1950ies it has also been its most controversial for being hugely protectionist and essentially command-and-control in nature (in the words of The Economist: "An expensive way to create surpluses, high food prices, environmental damage and harm to poor third-world farmers"). Neither intense international pressure nor several internal attempts to reform it (the CAP had triggered several severe budgetary crises in the EU), however, were successful so far. On May 1, 2004, eight central and eastern European countries (CEC-8) plus Cyprus and Malta, will join the EU; by 2008, Bulgaria and Romania are scheduled to follow. Their accession will present the CAP with its biggest challenge yet. While in the 15 current member states (EU-15) agriculture is a quantité négligeable (GNP share: 2.0 per cent; employment share: 4.3 per cent), it is of major economic importance to the newcomers (GNP share: 5.1. per cent; employment share: 21.4 (!) per cent). As a result, Eastern enlargement will create both a poorer and more agriculturally oriented EU. Against this backdrop we will estimate whether Eastern enlargement is likely to increase the pressure for a fundamental CAP reform.