This morning, we started the European Council by celebrating 30 years of the European Economic Area. Of course, the EEA has at its core the Single Market. And both the European Union and our three partners benefit from the seamless trade relationship that we have. And the bonds the EU and the EEA share together are not only bonds of trade and economic benefits but of friendship, trust and solidarity. It was good to recall how important our strong relationship was when there was the global pandemic. We included the EEA countries in our distribution of life-saving vaccines. But it was also good to hear, for example, how Norway stepped up when Putin cut us off the gas and the energy crisis started. Norway immediately stepped in by providing more pipeline gas to the European Union. So it was a real pleasure to welcome the Prime Ministers of Iceland, Lichtenstein and Norway and mark the depth of our relationship.
We then moved on from the EEA celebration to our Euro Summit. First of all, I want to congratulate the Belgian Presidency on getting the reform of our economic governance framework over the finish line. This is the most comprehensive reform of our governance model to date. We need to gradually reduce public debt and at the same time invest massively in the economy of the future. So, we need to implement the new rules as of next year because private investors are attentive to the state of public finances, they are waiting for a very clear signal. And we know that we will need to mobilise much more private investments to reach our competitiveness objectives. Finally, we need to make sure our companies, and especially our start-ups, can find the capital they need here in Europe for their investments. We know that too many are lured to capital markets outside of the EU because of the fragmentation of our banking sector and capital markets. So, we must finally complete the Banking Union and we need a deep and liquid Capital Markets Union.
Lastly, let me focus on agriculture. Our farmers work incredibly hard to put best quality food on our tables. But we also know that they face challenges and burdens, be it the instability on the global markets and thus on also the European food markets provoked by conflicts and war, be it the enormous effects of climate change, the floods, wildfires and droughts, or be it the efforts that are required for farmers to play their part in protecting our environment. They are legitimately concerned about their future. We listened and we have acted at the European level. And we have acted in short-term, mid- and long-term measures. In the short term, let me emphasise three actions that are already decided. First, we have taken first measures to reduce administrative burden. Second, we have made it easier for farmers to avoid penalties when they are not in a position to meet CAP requirements, for legitimate reasons. It means basically, for example, when you have an extreme weather phenomenon, a 'force majeure', that it is much easier for farmers to be exempted from the requirements, because if your field is flooded you cannot work on your field. Third, farmers tell me that they are sometimes forced to sell their products below production costs, and that is completely unacceptable. So we aim to strengthen their negotiating power. To start, we will very soon set up an observatory to create more transparency on issues such as production costs, the margins across the food value chain and all the steps in between and where the increase of renumeration or benefits is to be found.
In addition, last week, we proposed more flexibility on how to meet the important environmental conditions that are embedded in our Common Agricultural Policy. These are the so-called famous GAEC. And we proposed to exempt small farms – small farms are if you have less than 10 hectares – from related controls and penalties. And less than 10 hectares, which is not a lot, concerns approximately 65% of all our farmers, while it only covers 10% of the land. So a big reduction of administrative burden for farmers, while maintaining environmental goals. All of this will help ensure predictability for our farmers, I therefore now call on Member States to adopt our proposals next month.
As I said, we are also acting for the mid and long term. We are working on addressing the most systemic challenges for our farmers, as I have described earlier. We want to improve their position in the agrifood chain and their negotiating power concerning their remuneration so that they are in a better place. And here too, Ministers will discuss our proposals on this already next week.
Finally, for the mid and long term, we are looking forward to the first recommendations of our Strategic Dialogue on the Future of Agriculture in the European Union. These recommendations will then feed into the work of the next Commission. In short, Europe is doing its part. Now Member States must do their part as well. This means making full use of the new flexibilities, not imposing more administrative burden and swiftly adopting the proposals.
