European Union farm export subsidies will not be abolished but they must be reformed, EU Trade Commissioner Peter Mandelson said today.
Farm subsidies under the bloc's Common Agricultural Policy (CAP) are at the heart of a European dispute over a long-term budget that has pitted Britain against France and Germany.
Mr Mandelson, speaking two days after Britain assumed the six-month presidency of a bloc that is facing financial paralysis and political uncertainty, said of the CAP:
“I don't think we want to see it dismantled and it won't be,” he told BBC Television. “It serves very real key European as well as international needs, but it is not going to remain the same.“
“It has changed. It is undergoing reform and it will undergo more reform because that's what the public demands, that's what international interest demands. It's also what our budget demands,” he added.
EU budget negotiations collapsed at a summit in Brussels last month after London refused to give up any of its annual rebate from the bloc's coffers without a guarantee from Paris to support an overhaul of farm export subsidies.
The failure to agree a budget compounded a political crisis after French and Dutch voters rejected a constitution for an enlarged bloc of 25 members.
Some commentators have suggested German opposition to overhauling the CAP and to wider budgetary and economic reform could soften if Chancellor Gerhard Schroeder is voted out of office.