Brussels plans 'dramatic' overhaul of CAP

The European Commission is planning a radical overhaul of the Common Agricultural Policy. The CAP currently costs European taxpayers £30 billion.

In the midst of an attack on the controversial EU farm subsidy regime from Tony Blair, Brussels is attempting to reassert its political leadership of the 25-member trading bloc by putting on the table proposals which could dramatically alter the CAP.

The Commission is floating the possibility of using its upcoming CAP review process to reduce farm subsidy payments to individual farmers. To replace this, the Commission proposes to increase payments for regional rural development.

The move, revealed by well-placed Agriculture Commission sources, could transform the subsidy regime and raise the economic prosperity of Europe's countryside. It could see the EU partner national governments and regions to channel grants. If approved, money will flow east to the poorest part of Europe .

The reform will appeal to the British government's agenda and could ultimately enable a UK government to offer up its £3bn rebate. Number 10 last night reiterated its demand for 'reform of the CAP to be part of overall Budget reform' but said it would not happen overnight.

France will inevitably fight the proposals, though some analysts believe that once President Chirac leaves office wider reform will be possible.

The Commission is also considering limiting the maximum CAP payment to €300,000. This was previously rejected by Germany and Britain. UK opposition to this appears to undermine its CAP reform credentials.

The CAP review negotiations begin in 2008. EU agriculture subsidies have come under attack from Britain after European leaders failed to agree a budget framework last month.

The majority of EU farm subsidies are handed out to the richest farmers. Not only does it mean that surplus food is dumped on the world market, reducing prices, but the CAP works against smaller agriculture businesses.

EU splashes out to sell us the Euro

Despite losing referendums in France and Holland the EU's higher echelons have a comeback plan: to promote the single currency, writes Martin Jay in Brussels.

The Commission has already started to spend at least €16 million (£10.7m). According to a confidential report, there are now plans to increase this budget. The move follows indications from the European Central Bank in June that poor growth in eurozone countries could be partly attributed to the single currency.

The campaign is targeted at the Danes and Swedes as well as Brits, who are particularly singled out as they 'have a very low knowledge of the euro'.