Brussels, 31/05/2005 (Agence Europe) - At their meeting in Brussels on 30 May, the EU Member States' farm ministers reached political agreement on the proposal on the financing of the Common Agricultural Policy (CAP) for 2007-2013. The only country to vote against was Italy, for motives connected with its domestic account clearing legislation (see Europe No. 8957).
The President of the Agriculture Council, Fernand Boden, said that in a difficult political context, the Luxembourg Presidency had been able to find a good solution and following the excellent preparatory work, it had been able to unveil a compromise that was hard to refuse. He said the Luxembourg Presidency had convinced the Council that the compromise improved the financing of the CAP, making it simpler and more transparent. A statement has been added to the regulation to enable possible technical adjustments after the decision on the Financial Perspectives has been taken, but without changing the substance of the farm agreement.
The regulation foresees the creation of two funds - the European Agricultural Guarantee Fund (EAGGF) for direct aid and market support; and the European Agricultural Fund for Rural Development (EAFRD) for funding rural development support programmes. Boden said he had high hopes of reaching political agreement on r4ural development support at the June Council. The regulation lists measures that can be funded by the two funds, the account clearance procedure and budget disciplinary measures.
Various problems had already been settled by EU Member States' experts (see Europe No. 8956). The Luxembourg Presidency compromise accepted by the Council foresees a single centralised payment body per fund in the Member States to liaise with the European Commission and coordinate with any sub-payment bodies. The period foreseen for financial corrections in the account clearance mechanism for EAFRD expenditure remains at 24 months (the European Commission had suggested extending it to 36 months). This measure gives the Commission 24 months in which to do a u-turn and refuse to co-finance expenditure it judges to be unsuitable. The Commission and Member States will be responsible for reimbursing equal amounts to the EAGGF of advances made to the Member States for the period of implementation of the programmes in the event of irregularities. However, for amounts to be recovered exceeding EUR 1 million, financial liability will be decided on a case by case basis. In terms of overshooting the budget, the regulation stipulates that if the annual financial ceiling risks being exceeded, the Commission can and must take appropriate measures at its disposal to adjust expenditure. Should those measures prove insufficient, the Commission will suggest to the Council further measures to be taken without delay.