Postwar: A History of Europe Since 1945

by Tony Judt

the EEC’s notorious Common Agricultural Policy (CAP), inaugurated in 1962 and formalized in 1970 after a decade of negotiations. As fixed European prices rose, all of Europe’s food production became too expensive to compete on the world market. Efficient Dutch dairy combines were no better off than small and unproductive German farms, since all were now subject to a common pricing structure. In the course of the 1960s the EEC devoted its energies to forging a set of practices and regulations designed to address this problem. Target prices would be established for all food items. EEC external tariffs would then bring the cost of imported agricultural products up to these levels—which were typically keyed to the highest priced and least efficient producers in the Community. Each year, the EEC would henceforth buy up all its members’ surplus agricultural output, at figures 5–7 percent below the ‘target’ prices. It would then clear the surplus by subsidizing its re-sale outside the Common Market at below-EU prices. This manifestly inefficient proceeding was the result of some very old-fashioned horse-trading. Germany’s small farms needed heavy subsidies to remain in business. French and Italian farmers were not especially high-priced, but no-one dared instruct them to restrict production, much less require that they take a market price for their goods. Instead each country gave its farmers what they wanted, passing the cost along in part to urban consumers but above all to tax...