Some watering down of the Fischer Boel wine reform proposals was inevitable but Chris Losh believes that too much ground has been given to the powerful Mediterranean lobby. Nevertheless, even in their diluted state the reforms could represent a new beginning for the European wine industry provided - and here's the rub - they are properly implemented.

Mariann Fischer Boel would, I suspect, get on reasonably well with Margaret Thatcher. Given that the former is the European commissioner for Agriculture, and the latter was one of the most stridently anti-European leaders of the past 50 years, this is saying something. But I suspect, on current evidence, they would have plenty in common.

Thatcher, of course, famously took on the British trades unions, who were stifling progress and strangling the country in order to protect their own short-term interests. For the British trades unions of 30 years ago, read any wine institution that would attempt to defend the current lamentable status quo in the European wine sector.

Everyone knows that the current situation - Europe over-producing to the tune of around 40m hls of wine a year - cannot continue.

A situation where producers make wine that nobody wants, are bailed out by distillation subsidies from Brussels, then set fire to municipal buildings because the subsidies aren't high enough is an economic model so warped and nonsensical that it defies satire.

And it is hugely to Fischer Boel's credit that she has had the courage to take on the task of reforming the sector and the vested interests within it.

A year ago, her vision was clear and got more or less to the heart of the problem. Simply leaving the industry to the Darwinian law of the market was, given the EU's social responsibilities, not an option.

Instead, they would do the next best thing: encourage the thousands of struggling growers to leave the sector and do something else, by means of incentives and use money previously spent on propping them up to help the successful producers promote their products abroad. It was as close as the EU ever gets to being meritocratic and market-driven.

A year ago, journalists left the outline briefing with feelings of optimism and scepticism in more or less equal measure. Great ideas, we thought. They'll never get them through. But in fact they've done slightly better than we hoped.

Most importantly, the key principle of reducing the vast unwanted flow of table wine remains. And the fact that the French, Italians and Spanish - the main contributors to the European wine lake - have voiced grave concerns about this shows that Fischer Boel's proposals are on the right lines.

Particularly gratifying is the thought that the ostrich tendency won't be able to do anything about it. The proposals are, admittedly, still due for final negotiation, but will be passed by qualified majority voting, with no member states possessing a right of veto. And in an EU of 27 member states, any opposition from the big three is likely to fall on deaf ears.

And quite right, too. In fact, too much ground has already been given to the powerful Mediterranean lobby. To promote "subsidiarity", the majority of the EU's wine budget is being allocated at a national level, with the EU giving vast sums to member states to divvy out as they see fit. Over 60% of the total budget is going to member states - and 80% of that to France, Italy and Spain.

Arguably the more latitude national governments and wine institutions are given in allocating these monies, given that they are often beholden to powerful agricultural lobbies, the more chance that the effectiveness of the reforms will be diluted. It may be cynical to imagine that some of these funds will still be used effectively to pay off failing growers but history presents compelling ammunition for the sceptics.

Secondly, there's the issue of the Single Farm Payments (SFPs). These are the 'decoupled payments' (i.e. related to land area, not to production) that are commonplace across European farming but have never applied to the wine industry.

Not only are they being handed out gratis as an added incentive to anyone who grubs up a vineyard, but as I understand it, every wine grower is now eligible to apply for them.

In June last year, Fischer-Boel dismissed such decoupled payments as "difficult to apply to the wine sector" and (probably) "too small to be effective", and they were never part of the original proposal.

Yet a year later, this expensive irrelevance has materialised, and, along with the halving of the proposed grub-up area from 400,000ha to 200,000ha, evidence of the kind of horse-trading Fischer Boel has had to engage in.

SFPs are clearly paradoxical in the context of these reforms. At a time when production subsidies are being removed and the EU is dismissing crisis distillation payments as an "old market management tool", the idea of paying people for simply having land - one of the bluntest and least quality-driven tools at the EU's disposal - is an obvious sop to the growers' lobbies.

And an expensive one at that. The current payments are not huge at around EUR300/ha but once granted they are, short of the grower turning his arable land into a theme park, there for life. They're as big a commitment as they are unnecessary.

Worse, as it stands, there's nothing to stop a grower from taking the generous one-off grub-up hand-out, followed by SFP payments every year for six years, then replanting with grapes once planting restrictions are lifted in 2013.

Given that the grape growers of Europe are being offered money to pull up unprofitable vineyards, more money for doing nothing and still more money for reconverting them to something that might actually earn them a crust, quite what the French, Spanish and Italians have to complain about I don't know.

This proposed legislation is not, as the French, Spanish and Italians seem to think, a step in the wrong direction. Rather, the concern is that in order to advance at all it has had to jettison much of the clear-sighted logic that made it good in the first place. Rigour has been replaced with fudge.

Life in Brussels was ever thus, however, and even in their diluted state, Fischer Boel's proposals still represent a force for good, provided (and this is some caveat) that they are properly implemented.

The future may not, as we'd hoped, bring the necessary blast of reality blowing through Europe's economically arid vineyards, but it should, at least, give us a welcome breeze.