Business & Economics
EU Offers €45 Billion in Early CAP Funds to Sway Italy Ahead of Mercosur Vote
Between 6–7 January 2026, Ursula von der Leyen pledged to unlock €45 billion of the 2028-34 farm budget to placate EU agriculture ministers and secure Italy’s decisive vote at the 9 January qualified-majority ballot on the 25-year-old EU-Mercosur trade pact.
Focusing Facts
- The Commission plan front-loads two-thirds of the CAP mid-term reserve—€45 billion—and complements it with a €6.3 billion market-crisis fund for farmers.
- With France, Poland and Hungary opposed, Italy’s 60 million-strong population makes it the swing state whose stance will determine whether the deal attains the 65 % population threshold required under EU qualified-majority voting.
- Von der Leyen has scheduled a 12 January signing trip to Paraguay if ambassadors approve the agreement, which would remove duties on 90 % of EU exports and create a 700 million-person free-trade area.
Context
Brussels is repeating an old script: in 1992 the MacSharry reforms used CAP money to buy political consent for the Maastricht Treaty; today, the Commission again deploys farm subsidies as lubricant for a grand integration project. The maneuver reflects two longer arcs—a century-long struggle between free-trade advocates and protected agriculture inside Europe, and the post-2020 trend of blocs seeking strategic autonomy from both Washington’s tariffs and Beijing’s market power. Whether the €45 billion sweetener passes or not, it signals that ever-tighter EU budgets are being treated as negotiable chips in geopolitical deals, a precedent that could re-shape subsidy politics for decades. On a 100-year horizon the vote may mark a pivot where Europe opts for larger extra-Atlantic supply chains, echoing NAFTA’s 1994 creation of a continental market; if it fails, it will underscore the durability of agricultural veto players first seen in the 1880s grain tariff wars—and suggest that the EU’s internal contradictions still outweigh global trade ambitions.
Perspectives
Pro-deal, EU-commission-aligned outlets
Reuters, Euronews, DT News — Present the Mercosur pact as a landmark free-trade zone on the verge of signature that will boost EU exports and strategic autonomy after 25 years of talks. Downplay farmers’ and environmental objections, echoing Brussels’ incentive to claim an economic win and emphasising optimistic timelines.
Irish farmer-oriented national media and officials
RTE, Irish Times — Argue the agreement threatens Irish beef producers because cheaper South American imports face looser standards, so Ireland should maintain ‘grave concerns’. Elevate domestic agricultural interests, potentially overstating regulatory gaps while giving scant attention to wider EU strategic benefits.
Brussels policy-insider publications
POLITICO, EurActiv — Cast the deal’s fate as hinging on CAP budget sweeteners to win over Italy and France, framing it chiefly as an EU power-balancing exercise. By dramatizing internal bargaining and budget reshuffles, they may underplay substantive trade or environmental merits to fit a narrative of political intrigue.