EU plans cash help for farmers to overcome French resistance to Mercosur deal

What’s more, a similar compensation fund for the Mercosur deal was already floated by former EU Trade Commissioner Phil Hogan in 2019.

At the time, when Brussels thought it was close to finalizing the deal with South America, Hogan claimed he had secured “€1 billion in financial support and common market organization support in the event of a market disturbance” resulting from the trade agreement.

The EU could set up such a compensation fund under its existing budget, although this may be challenging as there is little appetite among EU countries to reopen the current budget deal.

An easier solution would be to establish the fund within the new multi-annual EU budget from 2028. Talks on the budget are expected to start next year.

It’s unclear, though, whether the fund would ultimately be needed, as the deal on the table already seeks to address the concerns of farmers, for example by setting a quota on beef imports.

Instead it could help placate concerns about the agreement, similar to the Brexit adjustment reserve in 2021, which was ultimately little used.

Hans von der Burchard reported from Berlin and Giorgio Leali from Paris. Camille Gijs and Bartosz Brzeziński contributed reporting from Brussels, and Judith Chetrit contributed reporting from Paris.