Brussels, 10/06/2014 (Agence Europe) - The possibility that France may be forced to pay €1.8 billion back to the EU budget, corresponding to irregular expenditure under the common agriculture policy (CAP) in recent years, has been confirmed by a report by the French Court of Auditors. The European Commission states that negotiations are underway with Paris, which is challenging the level of the possible fines and states that it is prepared to “take the matter to court”..
In its report on the execution, in 2013, of the State's budget for agriculture, food, forestry and rural affairs, the French Court of Auditors warns that, for 2014, the execution of this budget is “already compromised” (our translation). This is due to the European Commission's refusal to rubber-stamp not only “at least €406.7 million ” in CAP expenditure deemed irregular - and which France will therefore have to pay back - but also other amounts, still “under discussion” between France and the European Commission and “likely to have a budgetary impact of €1.4 billion on the financial year 2014”.
Earlier this month, the spokesperson to European Commissioner Dacian Ciolos (agriculture) pointed out that clearance of accounts decisions had been made in December 2013 and March of this year to recover a total of €406.7 million from France due to “errors observed in the application of the eco-conditionality rules and rights for direct CAP payments”. However, “there are other procedures underway, particularly on the question of the system for the identification of agricultural parcels of land” (known by its French acronym, SIPA), he stressed, adding that, “if we take all of these procedures together, this could potentially give us a figure considerably higher than the €406 million for the period covering 2014 and 2015”.
“The final amount of this correction has not yet been determined”, the spokesperson added. In March, Ciolos told a group of MEPs that, in France, there were many issues with the management of the first pillar of the CAP. Significant financial corrections have already been imposed on this member state and further substantial ones are in the pipeline, he warned.
Paris disputes the findings
The negotiations underway between France and the Commission focus on the failings related to the identification of parcels of land eligible for assistance under the CAP over the period 2008-2012. Every year, France receives around €8 billion in direct payments, giving around €40 billion in total over this period.
In the clearances of the accounts, the Commission generally applies a fixed penalty equivalent to 2% of the envelope in question, which can be increased to 5% in the event of repeat offences and a failure to correct the mistakes, or even to 10%. “We're challenging the basis on which the penalties are estimated. At the moment, we are seeking a solution, but we could go to court over it”, was the reaction, on 4 June, of the French agriculture minister, Stéphane le Foll. “We do not agree with the level of the fines: they've applied a fixed percentage of 5% to the whole of the surface area, but we did some precise calculations and used aerial photography which point to a 0.5 - 0.6% margin of error” on the size of the eligible parcels, explained le Foll. This would bring the fine down to around €100 million for the year 2014, compared to the figure of €1.5 billion quoted in the report by the Court of Auditors. “My challenge relates to the substance, but we are in talks to find a solution”, the French minister stressed. France “recognises and will pay” a fine of €400 million relating to the years 2007 and 2009. (LC)