Not daring to provoke the wrath of the farmers, the Greek government is rapidly painting itself into a corner by coming up against the European Commission’s proposals for reform of the Common Agricultural Policy (CAP).

A Cabinet meeting yesterday discussed the issue of CAP reform and the more pressing issue of what to do with subsidies to cotton farmers. It was estimated that a decision made on Wednesday by the European Commission on Greece’s cotton production for the 2001-2002 season, would mean shorting payments to farmers by some 89 million euros compared to the sum promised by Agriculture Minister Giorgos Drys.

Despite the fact that the government is struggling to produce a budget surplus to fulfill its engagements toward the European Union, it wants to cover this 89-million-euro shortfall from the budget. This, however, requires the approval of the EU Council of Agriculture Ministers which is by no means guaranteed. Simitis told Drys to bargain hard for approval at the Council’s next session on September 24. However, according to sources, it is doubtful that the matter will even be on the meeting’s agenda. The government is desperate for a solution ahead of October’s local government elections.

Simitis’s statement to reporters after the Cabinet meeting combined rejection of the main points of the Commission’s interim reform proposals — which he inaccurately said would not affect subsidies before 2006, while the proposals specifically target the period before 2006 — with assurances that subsidies would continue as is.

Simitis specifically called for “subsidies connected to production,” while the Commission wants to unfetter subsidies from production. He objected to the Commission’s idea for a partial re-nationalization of subsidies and declared that Greece would oppose cuts in EU aid for the benefit of new EU members. “Greece believes that enlargement must be supported by new resources because reducing available resources is against our interests,” he said.