WRITTEN QUESTION E-1874/96 by Jannis Sakellariou (PSE) to the Commission (11 July 1996)

Subject: Disbursement of funds in Bavaria for the EC project to promote the marketing of products produced by extensive and environmentally friendly methods

The government of the Land of Bavaria complains in Europabericht, No 10/96, that the Commission was late in disbursing the second tranche for the pilot project to promote the marketing of products produced by extensive and environmentally friendly methods in Bavaria, disbursement having occurred only after 'more than 20 enquiries, personal visits... and written questions'. The Bavarian Land government sees this as proof of the 'Commission's inefficiency' and as justification of the demand that the regions take greater responsibility under the agricultural policy and that stricter compliance with the subsidiarity principle be ensured.

How does the Commission explain the delay in disbursement criticized by the Bavarian Land government?

What is the Commission's position on the Bavarian Land government's views in this context with regard to the responsibility of the regions under the agricultural policy and compliance with the subsidiarity principle?

Answer given by Mr Fischler on behalf of the Commission (31 July 1996)

The Commission decided on 29 September 1989 to make a financial contribution of ECU 750 000 towards the running of this project to the Bavarian Ministry for Food, Agriculture and Forestry. In accordance with the decision to grant the aid, the Ministry contracted five organizations to run the project, each of them specialists in the field.

The recipient informed the Commission on 7 April 1993 that one of the project activities had been suspended as a result of bankruptcy proceedings against the organization in charge of it (Naturkost Rottmüller GmbH). An examination of the documents sent revealed, however, that the organization in question was not among those originally proposed and approved by the Commission. The Commission was obliged to investigate the consequences of this situation. It therefore wrote to the beneficiary to establish why one of the sub-contractors had been replaced without prior authorization from the Commission. The recipient of the aid supplied a satisfactory explanation on 16 June 1994. All of the projects financed from the first payments were completed.

Because of the interruptions to the project, the recipient requested that the time allotted to complete it be extended to 30 June 1995. The request for an extension was accompanied by a request to reallocate the funds, in the light of the bankruptcy. Owing to a misunderstanding, the reallocation did not occur, and this led in turn to further delay and to a second request for an extension from the Bavarian Ministry.

The prevailing legislation requires amendments to decisions to take the form of a new decision. The new decision was adopted on 24 November 1995 and the Bavarian Ministry informed immediately. The second payment depended both on compliance with this formality, and on the submission of an up-to-date progress report. The Commission requested this report on 30 November 1995 and received it on 11 January 1996. It was examined and approved, and the current financial tables relating to it were then checked to ensure that the expenditure was eligible; this was completed on 29 April 1996. The payment order was made on 25 May 1996.

The problems in this case were due to specific circumstances and not directly linked to the aspect of subsidiarity. The Commission attaches a high importance to policy conceptions which emphasize the principle of subsidiarity and increased responsibility of the regions. This is already laid down in the structural policies relating to objectives 1 and 5b of the structural funds provisions. The principle of subsidiarity is equally reflected in the way the accompanying measures of the 1992 common agricultural policy reform are implemented. Some new elements have also been introduced through the 1992 reform in the implementation of market support policies. Further steps in this direction must not lead to distortion of competition or run counter to the objective of cohesion. Since this latter aspect implies the engagement of Community funds, an orderly conduct of financial procedures by the Commission is indispensable. This will certainly work best if it can be based on joint responsibility of all institutional levels.