Business & Economics
EU Secures Italy’s Yes with €45 B Farm Sweetener, Clearing Path to Sign Mercosur Pact
After receiving a European Commission pledge of early access to €45 billion in farm funds, Rome switched from blocking to backing the EU-Mercosur trade agreement ahead of a decisive Council vote this Friday.
Focusing Facts
- Prime Minister Giorgia Meloni confirmed Italy will vote “yes” at the 10 Jan Council ambassadors meeting, reversing the country’s 14 Dec veto.
- Commission letter dated 6 Jan offers farmers accelerated access to €45 billion from the 2028-34 Common Agricultural Policy budget.
- If the Council majority is secured, von der Leyen plans to sign the deal in Paraguay on 12 Jan 2026.
Context
Brussels has often bought peace with restive farmers—think of the 1962 launch of the CAP or the 1992 MacSharry reforms that traded subsidies for market opening—but tying a €45 billion cheque to a single trade vote smacks of the 2016 CETA side-payments to Wallonia on steroids. Like the 1823 Monroe Doctrine, Washington’s new “Donroe Doctrine” signals U.S. unease when outsiders court Latin America; Europe’s push therefore tests a two-century-old sphere-of-influence reflex while echoing the EU’s post-Cold-War pattern of using trade pacts (1999 Mexico, 2011 Korea, 2021 UK) to hedge against super-power tariffs and Chinese supply risk. Whether farmers’ anger or U.S. pressure derails ratification, the moment matters: securing the world’s largest tariff-cutting zone would lock Europe more tightly into South American commodity and mineral chains for decades—possibly shaping food, climate, and geopolitical alignments well into the 22nd century.
Perspectives
European Commission and pro-trade mainstream/business media
e.g., Reuters, POLITICO — Portrays the pact as a strategic necessity that will deliver the EU’s biggest tariff cuts, bolster exporters hit by U.S. tariffs and lessen China-related supply risks, urging quick signature despite last-minute drama. Stresses macro-economic and geopolitical gains while skimming over environmental and farm-sector downsides, reflecting the Commission’s mandate to expand trade and the outlets’ business-oriented readership.
Farmers’ unions and agriculture-focused coverage
French, Irish, Polish farming groups highlighted by EurActiv, Cyprus Mail — Warn that Mercosur will flood Europe with cheap beef, sugar and other goods, threatening livelihoods and fuelling road-blocking protests from Paris to Warsaw. Emphasises worst-case price-drop scenarios and plays on rural discontent to pressure governments, while largely ignoring broader consumer benefits or export opportunities for other EU sectors.
Hesitant agricultural heavyweights now edging toward a deal after budget sweeteners (Italy, Ireland) covered by RFI and Irish Independent
Hesitant agricultural heavyweights now edging toward a deal after budget sweeteners (Italy, Ireland) covered by RFI and Irish Independent — Accept the agreement once Brussels promises fast-tracked €45 billion farm support, framing it as a ‘significant step forward’ that safeguards domestic agriculture while unlocking trade gains. Positions financial concessions as proof of success for their tough bargaining, downplaying remaining structural competition issues and shifting costs onto the wider EU budget.