EU enlargement terms 'set in stone,' economists say

Poland will have no choice but to accept the terms offered by the European Union on direct payments to farmers, economists and analysts said last week, following a visit to the Sejm by Franz Fischler, the European Commission's agriculture chief. Fischler indicated that the EU would not likely budge on its plan to phase in farmers' payments starting at 25% of the level that current members receive, prompting jeers and whistles from deputies who represent farmers' group. The groups want full subsidies from day one of Poland's membership in the bloc, expected in 2004. "Joining the EU is, of course, not hell, as some prophets of doom and gloom claim; but it is also not heaven," Fischler said. Analysts said the agricultural industry would be forced to swallow some of the more bitter terms of enlargement and that an agreement on the issue would be reached following the national elections in Germany on Sept. 22 and the local elections in Poland on Oct. 27. The final round of negotiations on EU enlargement will be held in December in Copenhagen. "There will be no major changes," said Janusz Reiter, the president of the Center for International Relations in Warsaw. "It's just a question of how to sell the solution. I believe that the government needs some sort of symbolic concession from the EU." Analysts said there was little room to maneuver on the issue of direct farm subsidies since the EU's budget is already set. The only room for compromise, they said, is on output quotas.

The 25% agricultural subsidies are basically "set in stone," said Krzysztof Rybiński, the chief economist at Bank Przemysłowo-Handlowy PBK. Rybiński also said that the Peasants Party (PSL), the coalition member of the Democratic Left Alliance (SLD)-led government, would have to use whatever concessions Poland wins on quotas as a gambit to win over farmers' acceptance of direct payments. But analysts and businesspeople declined to speculate on how the output quota concessions might take shape. "From my point of view, the quotas are much more important," said Jerzy Majchrzak, the spokesman of Sokołów, a meat producer and processor and the biggest publicly traded food company on the Warsaw Stock Exchange. Majchrzak added that he did not yet have enough information on output quota concessions to make further comment. In the meantime, though, for all the debate on agricultural subsidies, observers said that the true starting gun for negotiations had yet to be fired. "No one expected any breakthroughs until after the German elections and Polish local elections," Rybiński said. And while analysts said that the outcome of the elections in Germany and Poland matter little to the accession talks, negotiators are still waiting for them to finish before starting to bargain hard. "The (EC) does not want to commit to anything just yet," Rybiński said. He added that there's no room for the (EC) to compromise at present since neither German Chancellor Gerhard Schröder nor his opponent, Bavarian Premier Edmund Stoiber, who are both running for the chancellor's office in the elections, don't want to make any changes.