CAP Health Check deal
Further progress has been made in the direction of strengthening Pillar 2 payments which emphasise environmental protection. Indeed, this move has upset the NFU: NFU . However, this is not a fundamental reform of the CAP, but nor was it meant to be. For that we will have to wait at least until 2013.
In any case with economic crisis hitting Europe the attentions of its leaders is focused elsewhere. Industrial policy is making a comeback, particularly in France and Italy. In so far as payments to bail out firms in difficulty become fashionable once again, aid to farmers looks less exceptional and less open to criticism. A quote from Silvio Berlusconi about says it all: 'State aid, which until yesterday was considered a sin, is now absolutely essential.' So much for the internal market.
Industrial policy was, of course, as big a disaster as farm policy: it just didn't last as long. The least efficient firms went out of business eventually and those that were left were able to compete in normal economic conditions.
We will provide more analysis over the coming weeks.