EU wants guarantees, Poland wants funds

by Paul Shockley

"(We) want to have a strong guarantee that they will be able to handle funds when Poland enters the European Union" The European Commission's (EC) enlargement director last week played down concerns that Poland does not have the administrative capacity to handle much-needed regional funds and agricultural subsidies.
"They do not have to be ready until the end of the year (when we) want to have a strong guarantee that they will be able to handle funds when Poland enters the European Union," Eneko Landaburu, EC general director for enlargement, told a press conference last week.The EC, according to a confidential Brussels report obtained by local press, has been internally critical of Polish preparations to handle and distribute funds, pointing to the new government's decision to merge the Regional Development Ministry into a department of the Economy Ministry, as well as alleged failures by Poland to show that administrative reorganizations in 1999 comply with EU standards.
At issue for Poland is the still unknown share of direct farming subsidies and regional funds, intended to remedy disparities in income and unemployment. According to estimates, Poland could get from €2.8 billion-€4.2 billion in agriculture funds and €9.4 billion in structural funds after accession in 2004.Ewa Haczyk, spokeswoman for the Foreign Ministry's Committee on European Integration (KIE), said Poland is still drafting plans on how to handle EU money, and has some €52 million in Phare support for that purpose.
"We're confident we'll be ready," Haczyk said, declining to reveal details.
The EC's Landaburu, meanwhile, was in Warsaw last week for talks with Polish officials ahead of the anticipated Jan. 30 release of the EC's framework for financing expansion of the political and economic bloc. Landaburu was tight-lipped about Poland's agriculture allotment but most expect the EU will seek to phase in the subsidies over a seven to 10-year period, meaning candidate country farmers would initially receive one quarter of the aid distributed to their member-nation counterparts.
Resolution of the politically charged direct aid issue comes as France and Germany prepare for parliamentary elections this year. "The member countries (believe) that subsidies were introduced as compensation for price reductions on agricultural products, and see no possibility for granting them to Polish farmers, or for other candidate countries," Landaburu said.
Danuta Hübner, KIE secretary, insists Poland hasn't given up on the issue. "We continue to negotiate for full subsidies, but if it's not possible, we're planning to concentrate on indirect subsidies and structural funds." she said.
The EC said last week it would release details Jan. 30 of a pension scheme design to fund early retirement for farmers in new member states. Such a scheme would help consolidate eastern-nation farm sectors, the EU said.In other open negotiation areas, KIE's Haczyk said Poland expects to close the free movement of capital chapter - which includes the contentious land sales issue - by March. The EC is still in talks with Poland on the sale of land to foreigners, trying to pin down a protection period of anywhere from seven to 12 years before EU companies could purchase domestic farmland or forests.
"We're waiting for the Agriculture Ministry to take a stand on the method of counting land lease periods for foreign farmers," Hübner said, referring to foreigners who already own farmland in Poland, and possible retroactive land lease periods.
Haczyk said the home and justice chapter, in which EU seeks tighter border controls, should soon follow.
"Budget and taxation will still be very difficult, but we believe all (chapters will) be closed this year," she said.