Cyprus under the Common Agricultural Policy: The Impact Effect

In: Journal of economic studies, Band 19, Heft 6

Abstract

Cyprus has recently applied for full membership of the European
Community (EC). As a member of the Community, Cyprus will experience
economic (political) costs and benefits. Examines the static costs and
benefits for Cyprus′s national income from the application of the Common
Agricultural Policy (CAP). The CAP will cause two types of income
transfers between Cyprus and the rest of the EC: transfers through the
Community′s budget; and direct income transfers from Cyprus′s consumers
to the Community′s producers and vice versa in the form of higher
prices. Using data for 1986 and 1987, demonstrates that Cyprus will have
positive budgetary gains and net direct income transfers from Cypriot
consumers to EC producers. The latter outweigh the former and the total
outcome is a loss for Cyprus′s national income.