Athens faces action over siphoning of farming aid

Date: 07/02/02

GREECE could face legal action for siphoning off EU subsidies to fund farmer organisations, the European Commission is warning.

Agriculture chief Franz Fischler has confirmed his officials are considering starting infringement proceedings against Athens over how it deducts part of the EU aid earmarked for farmers.

Fischler believes the deductions do not comply with a 1999 regulation stipulating that aid for growers of a wide variety of crops must be paid out in their entirety. 'There are shortcomings in the Greek paying agencies,' said spokesman Gregor Kreuzhuber. 'They don't pay out farmers in full.'

For the past two years, the European Court of Auditors has upbraided Greece in its annual reports. According to the Union's financial watchdog, Athens deducts a charge of 3 of all EU aid for olive oil, citrus fruit, cotton and tobacco every year. That sum - worth about €64 million - is then paid to the Greek Agricultural Insurance Organisation. A separate deduction worth €8 million is taken from the olive oil aid and transferred to a national confederation of producers.

A spokesman for Greece's EU embassy said talks are taking place in a bid to resolve the issue.

Greece could face legal action for siphoning off EU subsidies to fund farmer organisations, warned the European Commission in February 2002.