ECONOMY

EU countryside projects to get 77.56 bln euros over next five years

BRUSSELS (Reuters) – The EU’s 25 governments will receive 77.66 billion euros ($98.82 billion) over the next seven years to fund projects for preserving and improving Europe’s countryside, the bloc’s executive Commission said on Tuesday. Under the tortuous 2007-2013 budget deal hammered out by EU leaders at a summit last December, spending for rural development was set at 69.75 billion euros for the EU-25 plus Bulgaria and Romania, in theory due to join the EU in 2007. The final amount for the EU-25 includes 28.54 billion euros that must be spent on poorer areas. It does not yet include rural subsidies for the two Balkan newcomers whose countryside funding has still to be finalized. Deductions are included for the Commission’s administrative expenses and there are also additions for cash that will be channeled from farmers’ direct payments into rural development projects in a process called modulation. The EU’s 2007-13 rural cash is divided up according to the historical amounts paid to national governments in the past, although countries’ specific needs and situations have also been taken into account, leading to some small national top-ups. Poland will receive by far the largest amount, 13.23 billion euros, over the seven-year period. Italy comes second with 8.29 billion, while Germany is set to receive 8.11 billion euros. «Rural development funds can be used to increase the competitiveness of the agrifood and forestry sectors and are a vital element in supporting environmental projects in the countryside,» EU Agriculture Commissioner Mariann Fischer Boel said in a statement. «But this money can also be used outside of the traditional farming industry, to help create new jobs and new businesses in rural areas,» she said. Annual rural subsidies are worth between a quarter and a fifth of the EU’s mammoth farm policy of some 44 billion euros a year, in itself close to half the bloc’s entire budget. The bulk goes on subsidizing agricultural production and exports. Rural areas cover 90 percent of the EU’s territory and are home to about half its population. At the moment, under the 2003 reform, countries channel 4 percent of their direct payments to farmers into rural development projects via modulation. That level rises to its ceiling of 5 percent next year.