Deja-vu All Over Again

On Tuesday afternoon, European Union farm ministers will assemble in Luxembourg to discuss ambitious proposals for overhauling the common agricultural policy. As before, the French will be against, the Brits will be in favour, and the Commission will battle desperately to save as much at it can from the original reform package.

There will be a briefing here and a briefing there, there will be late nights and early mornings, and the sandwiches served in the bar of the Council building on Luxembourg's windswept and charmless plateau de Kirchberg will be as dry and overpriced as ever.

In short, everything will be exactly like it was last week, when the ministers met in a first and ultimately fruitless attempt to hammer out a compromise. The talks were eventually broken off at 11.30pm on Thursday night, after member states realised they were still too far apart in their views.

Part of the problem is that the original scenario - according to which the Commission would buy off a sufficient number of member states through small bribes and isolate France - has hit the buffers. France, in a last-minute tactical masterstroke, last week managed to bring Germany on its side.

This now means that the CAP's biggest beneficiary - France -and its biggest contributor - Germany - have formed a formidable alliance determined to water down the reform plans. Coupled to the fact that a rather impressive number of states were already unhappy about the thrust of the proposals, the Franco-German deal will make it fiendishly difficult for Franz Fischler, EU farm commissioner and the architect of the package, to push through his ideas.

Berlin and Paris have given the thumbs down to three of his most important suggestions. First, they are resisting plans to cut cereal and milk prices - a move which Mr Fischler insists is crucial to finance further reforms and to bring European prices closer into line with those on the world market. The latter is particularly important in the context of the Doha world trade round, where agriculture in general - and the EU's policies in particular - are seen as a major obstacle to reaching a settlement.

Secondly, the Franco-German axis is saying no to lowering payments to big and medium-sized farms, again an important step to fund future reforms.

But most worryingly, the two countries are adamant that they want to keep about half of all direct payments to farmers linked to their output. Breaking that link was the cornerstone of Mr Fischler's reform plan. This would have allowed farmers to tailor output to demand, thus reducing incentives for overproduction and the need to dump surpluses on to world markets.

Production-linked subsidies are one of the most trade-distorting ways of dishing out farm aid, and cutting back on such payments is seen as crucial to placate the EU's trading partners in the trade round. Mr Fischler had wanted to shift virtually all direct payments away from production-linked subsidies, but it now looks as if he will have to swallow considerable exceptions.

He has already warned that a half-baked reform will give the European little joy in the current World Trade Organisation negotiations, where the EU will only be able to press its agenda if it shows it can move on agriculture.

But the most interesting political question concerns Germany's motivation in siding with the French. Renate K?nast, the German farm minister, is a member of the environmentalist Green party and had for the past three years been preaching the virtues of reform. Moreover, Germany has probably more to gain than any other country from a successful conclusion of the Doha round - with faltering domestic consumption and weak growth, the country is badly in need of the stimulus that could arise from further trade liberalisation.

So why did they do it? Diplomats say there has been a deal between Paris and Berlin: Germany would support French opposition to farm reform in return for French backing in Chancellor Gerhard Schr?der's long-running battle to fend off a European takeover directive.

Others say the Germans were not as reform-minded as they presented themselves in public. Germany has, for example, a disproportionally large number of big farms - especially in the former east Germany - so fighting cuts to these farmers' payments makes sense.

Then there is, of course, the question of the broader Franco-German alliance. Mr Schr?der has always been keen to keep the two countries' alliance alive and kicking, and has in the past shown a willingness to sacrifice German interests on the Franco-German altar. In addition, the chancellor is not known to be hugely interested in agricultural policy in the first place. So why fall out with President Jacques Chirac over the intricacies of EU farm reform, when his opposite number in the Elys?e Palace was so keen on diluting the proposals?

Mr Fischler had always seen the danger that the German might cave in - and had urged Mr Schr?der to stand firm in the run up to last week's meeting. To no avail.

When he faces the 15 EU farm ministers later on Tuesday, Mr Fischler knows he faces an uphill struggle.