WRITTEN QUESTION E-0545/03

by Konstantinos Hatzidakis (PPE-DE) to the Commission

(26 February 2003)

Subject: Compensation for fire damage in Pilion in 2000

In July 2000, the area of Pilion in Greece suffered major damage to olive trees in the areas of Xynovrisi, Argalasti and Siki situated in the municipality of Argalasti and Afetai, destroying the property and, in many cases, the sole livelihood of hundreds of inhabitants. Initially, the Greek Government announced payment of damages in the order of GRD 16 000 per olive tree. Those affected initially received an advance payment of GRD 5 000 per olive tree and the ministry responsible announced that the remaining amount would be paid following Commission authorisation.

When was the relevant file submitted to the Commission informing it of the extent of the damage?

Was the Greek Government seeking Commission authorisation to meet the damages from national funds (in ELGA Farmers Insurance Organisation), or was it seeking Community funding under the CSF Operational Programme for Agricultural Development?

What stage has now been reached by the proceedings?

If the request by the Greek Government has not yet been approved by the Commission, to what can this delay be attributed?

Answer given by Mr Fischler on behalf of the Commission

(26 March 2003)

The scheme for compensating Greek farmers who suffered losses caused by the fires in 2000 was notified to the Commission by letter of 7 December 2000, received on 11 December.

The Greek draft interministerial decision constituting the legal basis for the compensation scheme provides for a budget of GRD 25 billion (EUR 73 367 572), to be financed as follows:

- GRD 17 billion (EUR 49 889 949) from the public investment programme of the Ministry of Agriculture (SAE 082/3); on the basis of the Commission's conclusions when examining other compensation cases, this appears to be eligible for part-financing,

- GRD 8 billion (EUR 23 477 623) from the ordinary budget of the Ministry of Agriculture, in other words State aid.

The Commission must therefore decide whether two sources of financing can be used, i.e. it must consider this case in the light of two sets of rules.

The Greek authorities were recently asked to provide additional information. The Commission is awaiting their reply before drawing up a draft decision.

There are several reasons for the time taken to examine the compensation scheme:

- Under Article 4(5) of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article 93 of the EC Treaty(1), when the Commission examines State aid, it has two months from the day following the receipt of a complete notification to reach a decision.

- When the Greek authorities notified the compensation scheme, they announced their intention of not waiting for the Commission's approval before making advance payments. These advance payments began without the Commission's agreement, and became illegal aid under the above-mentioned Regulation (EC) No 659/1999. Article 13(2) of the Regulation provides that in cases of possible unlawful aid the time-limit mentioned above does not apply. As pointed out above, the Commission must in any case await the reply of the Greek authorities before drafting a proposal for a decision.

- If the Greek authorities are intending to finance the compensation scheme for farmers from part-financed funds, they must present an amended version of their national Rural development operational programme for 2000-2006 drawn up under the Community Support Framework for Greece, re-drawing the profiles of the financial tables of the programme to take account of the funds transferred between priorities. The profiles should be redrawn not only as a function of the use of the part-financed funds under the scheme we are concerned with here, but also to take account of all transfers of funds in the framework of other compensation schemes set up by the Greek authorities. The Commission has not so far received an amended version of the programme, or the new profiles for the financial tables. Until these documents are available, the Commission cannot take any decision concerning the use of the part-financed funds under the compensation scheme.

(1) OJ L 93, 27.3.1999, p. 1.