Brussels, 16/10/2013 (Agence Europe) - On Wednesday 16 October, the European Commission introduced a new proposal that would cause farmers less pain when it comes to the direct aid reduction rates for 2013 (these will be taken out of the EU's budget for 2014). The principle of financial discipline makes this cut necessary. On 9 October, the Commission applied a 4% reduction in 2013 direct payments in compliance with financial discipline and a €2,000 ceiling under which this reduction would not apply (see EUROPE 10940). Amending letter number 2, however, for 2014, changes the perspective somewhat.
The Commission is now proposing a 2.45% reduction in direct payments to the Council. This amending letter effectively provides a more precise estimate of the requirements for the 2014 budget and illustrates that the amount of revenue affected and postponed to the 2014 budgetary year would be significantly higher than planned. The savings to be made now stand at €902.9 million (as opposed to €1.47 billion according to the decision made on 9 October). Subsequently, by applying the €2,000 ceiling, the Commission is proposing a 2.45% reduction rate, in an effort to respect the ceiling of the EU's Multiannual Financial Framework.
The planned reduction relates to direct payments requested by farmers in 2013 (the requests were submitted in May), which will be paid to farmers as from 1 December 2013, from the 2014 budget. It should be noted that this year, EU countries have the right to pay a 50% advance from 16 October on aid for 2013.
The Council will have to adopt the text on the Financial Discipline rates before 1 December. If this does not happen, the rates previously decided by the Commission will apply (4%). Financial discipline will not apply to Bulgaria, Romania and Croatia, where direct payments are still in a gradual implementation phase. (LC/transl.fl)