What pushed Prime Minister Giorgia Meloni to grant the green light to the Mercosur agreement was an economic promise made by the European Union. After months of doubts, Palazzo Chigi seems to want to embrace the project dear to Ursula Von der Leyen (and disliked by Emmanuel Macron’s France). The signal of détente came after the President of the European Commission Ursula von der Leyen proposed an advance allocation of 45 billion euros starting from 2028 for the agricultural sector.
The 45 billion euros to obtain Italy’s yes
The turning point came yesterday, when von der Leyen sent a letter to the Presidency of the Council and to the President of the European Parliament Roberta Metsola, in what many observers define as a true act of political choreography. The leader of the European executive proposed more funds immediately to support the agricultural sector and explains: “To ensure that additional resources are available, starting from 2028, to respond to the needs of farmers and rural communities, I propose that Member States, when submitting their initial plan, have access to up to two thirds of the amount normally available for the mid-term review” of the Common Agricultural Policy. As specified in the letter, Brussels intends to modify its budget proposal for the period 2028-2034 to allow farmers early access to around 45 billion euros, a measure which adds to other reforms to support the European agricultural industry.
The 45 billion euros will be mobilized immediately to support farmers, which will be added to the 6.3 billion to address difficulties and stabilize agricultural markets. The letter also reminds us that thanks to the loans from the Catalyst Europe program, overall resources could increase up to 63 billion. This €45 billion allocation is not part of a new package: the sum comes from an existing reserve in the budget, but governments can now allocate it to farmers in advance, before it is reallocated during subsequent budget negotiations.
The green light expected on January 9th
Meloni therefore put aside the many doubts that for months, together with the French president, she opposed the free trade agreement between EU countries with Argentina, Brazil, Paraguay and Uruguay for fear of unequal competition for European agricultural production. The agreement, which had fueled protests by European farmers, is expected to increase European exports of cars, machinery and chemicals to Latin America.
Who gains (and who loses) from Mercosur
In exchange, South America’s agricultural powerhouses will gain greater access to European markets for their food products. The move by the president of the EU Commission to strengthen and bring forward the arrival of funds linked to the CAP (Common Agricultural Policy) was welcomed by Meloni and should guarantee the green light for the Mercosur agreement, expected on 9 January. If the green light comes from the 27, next week the president of the Commission could fly to Latin America for the signing of Mercosur, which has been postponed several times due to Italy’s outright refusal.
