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58) points out that as with high-income member states with many small scale farms that were often located in mountainous or Arctic regions, Finland and Austria were more inclined to uphold Rural Development and agri-environmental policies rather than coupled direct payments which favoured larger scale producers. Figure 9: Relative importance of subsidies to farmers 25.0 22.7 20.0 15.0 10.0 6.7 7.9 8.1 8.7 9.3 9.4 1.7 1.9 2.2 2.6 2.8 2.9 3.2 3.2 3.2 3.4 3.5 3.6 3.8 3.9 4.1 4.3 4.7 4.8 4.9 5.0 5.1 5.0 0.0 Finland Ireland Slovakia Slovenia Latvia Greece Austria Lithuania Luxembourg Estonia Czech Republic Sweden Bulgaria Portugal Hungary Poland United Kingdom France Germany Spain EU27 Romania Belgium Cyprus Denmark Malta Italy Netherlands Note: Higher value indicates higher efficiency and less dependence of subsidies. Calculated by dividing average farm total output (FADN code SE131) with average direct payment (less taxes and excluding investments) (FADN code SE605). This measure actually slightly underestimates subsidy dependence since part of the value of total output is inflated by border protection and export subsidies. Source: Author’s calculations based on Farm Accountancy Data Network (the data shows the post enlargement situation, but it is unlikely that these figures changed dramatically in a few years). Of particular interest, however, is the domestic politics of Germany. While the German chief negotiator was the same as in 1999, several changes had taken place in German domestic politics since the previous reform of the CAP. There had been a public outcry over the Bovine spongiform encephalopathy (BSE) crisis in 2000 (Deutsche Welle 2001) and the new 14 14 While it can be argued that the wide spread of Bovine spongiform encephalopathy (BSE) was, at least partially, caused by the industrialized farming that the CAP had nurtured, it would be difficult to support counterfactual claims with regard to the BSE impact under a different, hypothetical, CAP. Therefore, from a theoretical perspective, the BSE crisis should be seen as a good example of an exogenous shock that destabilized games, eventually, at all three levels. 46