DATE=1/31/01

TYPE=CORRESPONDENT REPORT

NUMBER=2-272042

TITLE=E-U / MAD COW (L-ONLY)

BYLINE=ROGER WILKISON

DATELINE=BRUSSELS

CONTENT=

VOICED AT:

INTRO: The European Union (E-U) says it has an extra 900 million dollars to devote to the fight against mad cow disease but that, if things get worse, there will be no more funds available. VOA correspondent Roger Wilkison reports the Union's executive commission says the weak euro/dollar exchange rate has freed up part of the cash it can devote to the continent's beef crisis.

TEXT: The European Union's Budget Commissioner, Michaele Schreyer, says she will not have to ask the bloc's 15 member governments for more money to conduct tests on cattle and destroy those that are not tested. She says the money will come from a one-point-one billion dollar budget surplus from last year. A little over one fifth of that has to cover any future exchange rate fluctuations. So, Ms. Schreyer told reporters through an interpreter Wednesday, the surplus will be eaten up by measures to fight bovine spongiform encephalopathy, or BSE, as mad cow disease is also known.

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If any further demands are made on the budget, because of the BSE crisis, well, quite simply, that means that measures will have to be funded by making savings elsewhere.

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A consumer panic over the brain-wasting animal disease and its human equivalent has seen beef prices tumble in most E-U countries. Most of the money the E-U is freeing up in a last ditch effort to bolster the beef market will be devoted to buying and destroying cattle over 30 months of age.

/// OPT //// The E-U's agricultural budget which includes subsidies and support programs accounts for more than half of the bloc's annual 73 billion dollars in outlays. Member governments have put a cap on E-U agricultural spending and are reluctant to free up any additional cash of their own to cope with the mad cow crisis.

The budget commissioner says the money she now has available comes from paper savings caused by the decline of the euro's value vis-a-vis the dollar. /// END OPT ///

If beef consumption and prices continue to decrease and cause farmers to suffer further financial problems, additional measures to deal with the crisis may be necessary. Ms. Schreyer says other parts of the E-U farm budget may have to be cut in that case. But she favors reducing the oversupply of beef on the European market to stabilize prices. And she suggests that farmers move out of beef production and into other areas. (Signed)

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