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GTAP Resources: Resource Display

GTAP Resource #2343

"Future Enlargements of the European Union: Budget constraints and CAP reforms"
by Lind, Kim Martin and Henrik Zobbe

Since its inception the Common Agricultural Policy (CAP) has been closely related to the budget of the European Community. Being a common policy the CAP is financed through the principle of financial solidarity, where the budget plays a significant role in ensuring a certain degree of integration among EU countries as well as playing a part in making compromises with regard to EU policy agreements. An important element of the budget is its role as a driver for policy reform. This is certainly true for the CAP where increasing budget costs in the late 1970s and early 1980s triggered the CAP reform process. Since the early 1990s the integration of East and Central European countries has had a significant influence on the budget debate, hence pressure for further CAP reform.

This paper analyse the implications for the EU budget with special regard to the CAP created by potential future enlargements. Specifically, we test the hypothesis that the newly enlargement with Bulgaria and Rumania as well as expected future enlargements including Croatia, Ukraine, Belarus and Turkey will result in substantial pressure on the EU budget forcing either a radical reform of the CAP or a deep fundamental financial crisis between EU-25.

In order to analyze different scenarios a baseline projection will be constructed under the assumption that all future enlargements will take place under an status quo CAP together with a projection based on the estimated developments of various member countries budget costs and benefits This baseline is then compared to a number of different scenarios which will include: Enlargements with individual or sub groups of candidate countries, different CAP reform possibilities, and potential budget consequences for EU-25 member countries. These results will be discussed in the perspective of the political economy of the EU budget and thereby bring some insights in understanding the relationship between enlargements, budget and CAP reforms.

Resource Details (Export Citation) GTAP Keywords
Category: GTAP Application
Status: Not published
Date: 2007
Created: Lind, K. (4/13/2007)
Updated: Batta, G. (5/2/2007)
Visits: 1,991
- Domestic policy analysis
- Agricultural policies
- The GTAP Data Base and extensions
- Baseline development
- European Union

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