WRITTEN QUESTION E-1861/99

by Antonios Trakatellis (PPE-DE), Ioannis Averoff (PPE-DE) and Konstantinos Hatzidakis (PPE-DE) to the Commission

(14 October 1999)

Subject: Delays, losses and infringement of Community law in connection with the payment of Community agricultural subsidies in Greece

Delays in the payment of Community subsidies in Greece are a significant and chronic problem affecting Greek farmers, which is primarily due to the antiquated and interventionist system used to administer and pay out Community subsidies. At the same time, however, the system currently operating in Greece also damages the national economy as, pursuant to Regulation 296/96(1), for each item of expenditure effected beyond the stipulated thresholds or deadlines, there is a system of financial penalties and, consequently, a loss of funds, which in 1998 alone amounted to some DRA 5,24 billion. Moreover, many farmers have lodged complaints that the agencies paying out the Community subsidies have illegally withheld between 1 and 3 % on grounds of covering their administrative costs.

1. What is the total financial loss (reductions) to Greece over the last three years (1997-1999) resulting from the application of Regulation 296/96 and what are the reasons for these reductions? Is it correct that, pursuant to Commission Decision 1999/327(2) on the clearance of the EAGGF accounts for the 1998 financial year, those reductions/losses for Greece amounted to DRA 5 246 439 183?

2. What is the Commission's view of the current system of paying out Community subsidies in Greece in relation to Community rules and has the Commission completed the evaluation, referred to in its answer to a previous question (E-0162/99)(3), of the efficiency of the new paying agencies in Greece?

3. Has the Greek Government proceeded to establish an integrated administration and control system for Community aid schemes, as required by Regulation 3508/92(4), and what measures will the Commission take to enforce Community rules?

4. What action will the Commission take to ensure that Community subsidies are paid in full to the persons entitled to receive them, without the slightest financial deduction in Greece, in accordance with Community rules?

(1) OJ L 39, 17.2.1996, p. 5.

(2) OJ L 124, 18.5.1999, p. 28.

(3) OJ C 325, 12.11.1999, p. 77.

(4) OJ L 355, 5.12.1992, p. 1.

Answer given by Mr Fischler on behalf of the Commission

(6 December 1999)

1. The reductions in monthly advances paid to Greece, following the application of Commission Regulation (EC) No 296/96 of 16 February 1996 on data to be forwarded by the Member States and the monthly booking of expenditure financed under the quarantee section of the agricultural guidance and guarantee fund (EAGGF) and repealing Regulation (EEC) No 2776/88 and Article 13 of Decision 94/729/EC: Council Decision of 31 October 1994 on budgetary discipline(1) amount to DRA 321 million for 1997 and DRA 5 246 million for 1998. For 1999 no definitive figures are available at present. The reductions for 1998 may be reconsidered in the conformity process of the clearance of accounts.

Of these amounts, 2 780 million DRA for 1998 relates to a non-respect of the Council Regulation (EEC) No 3508/92 of 27 November 1992 on the integrated administrative and control system.

2. The Commission is not content with the current system for the payment of Community aids in Greece, in particular with the compliance with some of the accreditation criteria contained in Commission Regulation (EC) 1663/95 of 7 July 1995 laying down detailed rules for the application of Council Regulation (EEC) No 729/70 regarding the procedure for the clearance of the accounts of the EAGGF guarantee section(2). For this reason the rules on budgetary discipline, Article 13 of Council Decision 94/729/EC of 31 October 1994(3) reduce the monthly advances in the 1999 year. The final amount of these reductions will be decided soon. A definitive decision on the amount that the Commission will refuse to finance (which could be zero) will follow later after a further assessment by the Commission and after bilateral and possible conciliation procedures are completed.

The Commission is aware that it is intended to introduce a new paying agency in Greece in the future. It hopes that this new organisation, with clearer powers over all those involved in the system for the payment and control of Community agricultural subsidies, will lead to improvements in the control system. However, until genuine improvements are noted, the Commission will continue to take strong measures to protect the financial interests of the Community.

3. The Greek authorities have not yet fully implemented the integrated administration and control system, as required under Regulation (EEC) No 3508/92.

The Commission has already made deductions from monthly advances paid to Greece of DRA 2 780 million in 1998 and (provisionally) DRA 22 900 million in 1999. These amounts are based on reductions of 10 % of amounts demanded for bovine premiums, 2 % for ewe and goat premiums, 5 % for arable crops payments and 5 % for olive oil payments (1999 only). A definitive decision on the amount that the Commission will refuse to finance will follow later after a further assessment by the Commission and after the completion of bilateral and possible conciliation procedures.

4. The Commission is aware of the problems of deductions from Community aids in Greece. Where these are not in conformity with Community regulations then the Commission will act to require that the full amounts of the aid be received by beneficiaries.

For example, in the past the Greek authorities retained 3,6 % of aids paid for forestry measures under Council Regulation (EEC) 2080/92 of 30 June 1992(4). The Commission initially proposed to refuse to finance these retentions but the Greek authorities finally agreed to reimburse to beneficiaries the amounts retained.

Retentions of aid in other sectors are currently the subject of clearance of accounts action. However, it must be remembered that not all retentions from Community aids are necessarily illegal. Article 2 of Council Regulation 1259/99 of 17 May 1999 establishing common rules for direct support schemes under the common agricultural policy(5) provides that, as from 1 January 2000, almost all aids must be paid in their entirety to the final beneficiary.

(1) OJ L 293, 12.11.1994.

(2) OJ L 158, 8.7.1995.

(3) OJ L 293, 12.11.1994.

(4) OJ L 215, 30.7.1992.

(5) OJ L 160, 26.6.1999.