Brussels, 11/03/2002 (Agence Europe) - The proposal aimed at regulating the sector of ethyl alcohol from agricultural origin has again reached an impasse, as Germany is not able to give up its monopoly on alcohol ("Branntweinmonopol"). The Spanish Presidency considers that the only way to make progress on this issue would be for the European Commission to amend its initial proposal to take the refusal by Germany and by the European Parliament into account (see EUROPE of 28 February, p.13).
During the last Special Agriculture Committee (SAC), the German delegation repeated that it was categorically opposed to the European Commission's intention to provide provisions on State aid, which could bring the German aid system into question (see also EUROPE of 11 October, p.12). The system allows the federal authorities to subsidise the production of alcohol obtained from distillation from costly raw material (fruit and potatoes). Germany insists that the system has: - socio-economic advantages (it provides income for 31,000 small family farms located in less favoured regions, which distil their own products); - ecological advantages (keeping potato farming allows crop rotation to be ensured, as distillation by-products may be used to feed cattle, and the keeping of orchards allows traditional landscapes to be preserved).
Even though the German monopoly is the main obstacle to continued examination of this proposal, some delegations like Germany, the Netherlands, Sweden, Denmark and the United Kingdom are opposed, by principle, not only to the creation of a common market organisation (CMO) for ethyl alcohol of agricultural-origin ("even if the Commission proposes a "light" CMO with no intervention measures, and thence no effect on the budget), but also to the creation of any other new CMO. France, which is very much in favour of the Commission's proposal, would like the Member States to get over this "passionate" debate on CMOs. It considers there is a chance of bringing the issue out of deadlock. It says that what is needed is for the Commission to agree to: - change the wording of its proposal so that the term CMO is not mentioned: - and do away with the provisions of Article 10 which have an effect on State aid, in order to allow Germany to rally to the project. Only four countries (United Kingdom, Netherlands, Sweden and Denmark) would like Article 10 to be kept. Austria, which phased out a national aid system in this sector several years ago, considers the proposal is "well-balanced" even though it recognises the fact that Germany must find a solution to settle its problem. It is in favour, like France, of establishing requirements for the provision of information and a system of import and export licenses. It also insists that a committee on "alcohol management" be created to deal with this subject alone (currently, such issues come under the management committee).
Some Member States, e.g. Portugal, Greece and Italy, are not opposed to the Commission's proposal but hope the regulation will be as light as possible (mainly without a licensing system).
Furthermore, the Spanish Presidency has noted that the extension of the scope of this regulation to synthetic alcohol (recommended by some agricultural alcohol producers in order to gain an overall view of the alcohol market) could be envisaged on condition that Article 3 of this proposal concerning information to be provided by the Member States (on production and outlets for alcohol) is used, in order to allow the Commission to draw up an annual report on the alcohol market. If it is only a question of information on synthetic alcohol, then amendments to the legal base (Article 37 on the proposals concerning the elaboration and implementation of CAP) are not necessary, explained the representatives of the EU Presidency and of France.
The alcohol CMO issue is on the agenda of the SAC, which will be held on the sidelines of the informal Agriculture Council meeting (27-30 April in Murcia, Spain), just a few days after the examination by the European Parliament of the report on this same theme by Maria del Pilar Ayuso Gonzalez (EPP-ED, Spain).