Brussels, 10/10/2001 (Agence Europe) - The fifteen experts of the Special Agriculture Committee (SAC, entrusted with the task of preparing the Agriculture Council at technical level) met on Monday to study the European Commission's proposal to create a common market organisation (CMO) for ethyl alcohol of agricultural origin (see EUROPE of 22 February, p.7). The discussions brought to light a problem that can only be resolved at political level: - the possible questioning, through creation of a CMO, not only of the specific features of the German monopoly on alcohol ("Branntweinmonopol") but also the granting of national aid by the Italian government.
The above system provides for the production of raw alcohol to be subsidised by the federal authorities with producers being paid a price that covers production costs. The alcohol is marketed as an agricultural alcohol for the production of spirits, food products, vinegar, medicines and cosmetics, all sectors for which the use of agricultural alcohol is compulsory in Germany. Berlin calls for the abolition of the article of the proposal that refers to national aid because of the consequences of its monopoly system or, failing this, in order to be able to benefit from derogation. Italy has also announced its determination to be able to continue to grant aid for the production and marketing of wine alcohol and calls for an explicit and unrestricted authorisation for certain aid, as provided for in the "sugar" CMO. The Commission felt it would not be normal not to have provisions relating to State aid in a CMO, and added that the alcohol in question competes directly with alcohol of synthesis which is subject to binding rules on State aid. The SAC agreed to entrust the Council's legal service with the task of finding a technical way to allow the Commission or the Council (according to the unanimous vote rule) to approve such national aid.
Furthermore, discussions were held on two technical points: extension of the scope of the regulation on distillation, and the inclusion (recommended by the German, Spanish and Italian delegations) of data on alcohol of synthesis in information to be forwarded by the Member States to the Commission. The Presidency, which recalled that the European Parliament's opinion is not to be given before December, pointed out that it hopes to reach an agreement on the issue at ministerial level before the end of the year.