19 Jul 2016
EUROPEAN COMMISSION DAILY NEWS – 19 JULYBrussels Daily
European Commission outlines new support package worth €500 million for European farmers
The European Commission yesterday presented a new package of measures worth €500 million from EU funds to support farmers in the face of ongoing market difficulties, particularly on the dairy market. This comprehensive support package is further evidence of the Commission’s continued commitment to the agricultural sector across the EU. The measures were presented to yesterday’s Council of EU Agriculture Ministers by Commissioner for Agriculture and Rural Development, Phil Hogan: “Our ultimate goal is to see the much needed recovery of prices paid to farmers, so that they may make a living from their work and continue to provide safe, high quality food for citizens, as well as their contribution to rural areas and rural jobs and the provision of public goods.” The package contains three main elements: an EU-wide scheme to incentivise a reduction in milk production (€150 million), conditional adjustment aid to be defined and implemented at Member State level (€350 million), and a range of technical measures. The precise details of all the different measures will be finalised in the coming weeks, in consultation with Member State experts. The budget implications of the proposed measures will be incorporated in an amending letter to the draft budget 2017 in the autumn. A full press release is available here.
The economic outlook after the UK referendum: Commission publishes a first assessment for euro area and the EU
The UK ‘leave’ vote on 23 June has led to increased uncertainty, financial market volatility and abrupt exchange rate movements. Today, the European Commission’s Directorate General for Economic and Financial Affairs publishes a first assessment of the economic outlook for the euro area and the EU after the UK referendum. First results were already presented and discussed in last week’s Eurogroup meeting. A prolonged period of uncertainty could influence the modest recovery in the European economy by dampening investment and consumption. The study is not an economic forecast. The Commission is due to update its next economic forecast in November 2016. To illustrate the potential effects, the Commission has analysed two scenarios, a ‘mild’ and a ‘severe’. Ahead of the UK referendum, the latest available data pointed to expected GDP growth in the euro area of 1.7% (EU28 1.8%) in both 2016 and 2017. Following the referendum, growth in the euro area would moderate to 1.5%-1.6% in 2016 and to 1.3%-1.5% in 2017, according to both scenarios. Although the depreciation of the pound sterling mitigates the economic fallout for the UK, the analysis suggests that the UK economy is likely to be more severely affected, with a GDP loss of 1% to 2.75% by 2017. Growth in the other 27 Member States would slow from an expected 1.9% in 2016 to 1.7%-1.8% and from 1.8% to 1.4%-1.7% in 2017. Neither of the analysed scenarios contains assumptions on the shape of any future agreement between the UK and the EU.
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