EU’s new members pose both challenge and risk for Greece

The EU’s farming policy is facing a new challenge as 10 new countries join its ranks with a total of 100 million people, whose average purchasing power, however, is about one-third that of the existing EU population. Cultivated land in the EU will increase by 60 million hectares, bringing the total to 200 million hectares. More than 22 percent of these countries’ workers, that is 9.5 million people, are employed in the farming sector, meaning that the current percentage of 5 percent, or 8.2 million people, will almost double. Greece’s farming sector will, of course, be affected by enlargement since the EU budget will not be increased – structural problems in the new member states will require funds. The Brussels Council agreed there will be no redistribution of funds before 2006. Between 2007 and 2013, new members will gradually receive up to 100 percent of only direct subsidies, while outlay for the CAP will rise by 1 percent annually in nominal prices. According to the European Commission, these adjustments will lead to a 5 percent reduction in total agricultural subsidies for old EU member states by 2013. However, most products from new member states, apart from sheep and tobacco, do not compete with Greek ones; the CAP intermediate review will be ready in the next few months, bringing changes to the usual form of income offsets through rural development and agricultural environment programs.

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