Cuts in agriculture penalties on cards

Date: 31/10/1996

By Michael Mann

AGRICULTURE Commissioner Franz Fischler is expected to recommend next month the easing of financial penalties against Greece for suspected malpractice in the farming sector.

Eight months after the Commission's original decision on the penalties to be imposed on member states for irregularities in spending cash from the 1992 farm budget, Fischler's officials are finalising work on a number of cases referred to a newly-established conciliation committee set up to mediate between the Commission and aggrieved governments.

More than half of the 209 million ecu at stake concerns aid granted to Greek cotton growers during 1992. Athens is also awaiting the Commission's view on fines of up to 17.3 million ecu in the olive oil sector and 33.3 million ecu in the tobacco market.

The rest of the penalties imposed under the “clearance of accounts” procedure relate to public storage of beef in Germany and a number of irregularities in Spain and Italy.

The move to reduce the penalty imposed on Greece is bound to come under fire in some quarters, with critics pointing out that it comes at a time when the Commission is pushing harder than ever to clamp down on fraud against the Union's budget, and as finance ministers consider a freeze on farm spending next year.

It could also coincide with the publication of the EU Court of Auditors' annual report, which is expected to maintain that severe shortcomings remain in the management of agricultural aid payments.

The Commission must make up its mind whether improvements in the running of the Greek cotton market justify the return of some of the 25&percent; of premium payments it withheld from Athens for wrongdoings committed during 1991.

If, as expected, it judges that matters have improved sufficiently, it will refund 36 million ecu originally confiscated for irregularities in 1991 and reduce the fine for 1992 from 107 million to 42 million ecu.

Officials in the Directorate-General for agriculture (DGVI) say they are “broadly satisfied that measures have been taken to improve financial controls” and claim the conciliation committee largely agreed with the Commission on what line to take.

But the final decision rests with the full Commission, which is due to discuss the issue in November. The outcome is by no means certain, however, as political considerations and the desire not to be seen as soft on fraud will inevitably play a role in its deliberations.

In March, there was considerable controversy over the Commission's decision to reduce fines on Dublin for not applying sufficient controls on beef held in intervention stores. The fine eventually fell from 116 to 62 million ecu.

Earlier this month, MEPs attacked the Commission's decision to reduce the size of the fine in line with the conciliation committee's recommendations.

But Fischler has also come under fire from the Irish government, which accused him of trying to overrule the committee's recommendation that a degree of leniency be shown.

This year's 'clearance of accounts' procedure has pro-vided the first test for the new conciliation committee set up under the chairmanship of Joe Carey, a former member of the Court of Auditors.

Fischler is currently preparing a report on the workings of the committee, due for publication at the same time as the final 1992 penalty decisions are made.

“This broadly says that the conciliation procedure works reasonably well, and should not be changed in substance,” said an official.

The Commission hopes the existence of an arbitration body will put an end to some of the less subtle tactics employed by member states to reduce the sanctions imposed on them for breaking Union rules.

In 1994, Italy forced its EU partners to shave 500 million ecu off a fine for blatantly exceeding its milk quota by refusing to vote through a previously agreed increase in member states' contributions to Union coffers.