WRITTEN QUESTION E-1630/00

by Avril Doyle (PPE-DE) to the Commission

(29 May 2000)

Subject: Need for a bank guarantee in order to receive certain EU funding

The Mid-South Roscommon Rural Development Co. has run two successful Leader-funded pilot projects in the past four years, one of which was the Roscommon Home Services cooperative. The Roscommon Home Services cooperative was awarded further funding under the Innovative Actions for Women in Agriculture and Rural Areas (one of 30 from about 400 aplicants) in December 1999(1). This funding is being withheld as they cannot provide a bank guarantee. Since the cooperative is a not-for-profit organisation that does not own any assets, banks in Ireland are unwilling to provide such a guarantee.

Would the Commission reconsider its refusal to release the funding, bearing in mind that:

- the group in question is proven, innovative and successful project team with a history of reliable financial control (having been approved for financial assistance on a number of occasions by the European Commission)

- many people in the surrounding rural area are becoming increasingly dependent on their services

- the group is unable to obtain a guarantee as a result essentially of its legal definition and not of its financial management capacity.

(1) Project No Arinco No 99 IE 06002 (Roscommon Home Services).

Answer given by Mr Fischler on behalf of the Commission

(26 June 2000)

Community financial assistance under the Innovative actions for women in agriculture programme was available under the second and third indents of Article 8 of Council Regulation (EEC) No 4256/88 of 19 December 1988, laying down provisions for implementing Regulation (EEC) No 2052/88 as regards the EAGGF Guidance Section(1). In December 1999 several pilot projects were selected and approved. In Ireland, two projects were chosen: Roscommon Home Service and Moy Valley Bog Wood Crafts (ref. Arinco No 99. IE.06002 and Arinco No 99.IE.06001).

The Commission decision approving these projects and notified in December 1999 to the beneficiaries provides (item 3 of Annex 1) that Community support will be paid after mldr the Commission has adopted the decision and notified the beneficiary and received a bank guarantee as shown in Annex 2 mldr. This rule is valid and compulsory for all the beneficiaries in the Community. The content of the decision notified to each beneficiary, from a legal point of view, is compulsory. Article 249 (ex-Article 189) of the EC Treaty provides that a decision shall be binding in its entirety upon those to whom it is addressed.

On the other hand, each Community programme or initiative has its own financial procedures. The fact that insurance bonds were used for Leader II programme does not mean that the same would be applicable in the case of Article 8 of Regulation (EEC) No 4256/88. In this precise framework, if a beneficiary cannot present the bank guarantee as provided in the Commission decision the project in question would not be eligible for Community financial assistance. The same approach is applied to the beneficiaries of all Member States, in the framework of a sound and transparent financial management of Community resources.

(1) OJ L 374, 31.12.1988.