92002E0744

WRITTEN QUESTION P-0744/02

by Pernille Frahm (GUE/NGL) to the Commission

(8 March 2002)

Subject: State aid for agriculture

Full credit is due to the Commission for intervening in the case of the unlawful state aid granted to Portuguese pig producers, but will it now clarify its position on the aid the Council has decided to grant to France and Italy for the destruction of wine?

Answer given by Mr Fischler on behalf of the Commission

(8 April 2002)

As far as the Council decisions referred to by the Honourable Member is concerned, the Commission has made the following declaration in the Council:

The Commission in general has a negative attitude towards operating aids. Unilateral state aid measures which are simply intended to improve the financial situation of producers but which in no way contribute to the development of the sector, and in particular aids which are granted solely on the basis of price, quantity or unit of production are considered to constitute operating aids which are incompatible with the common market. Furthermore, by their very nature, such aids are also likely to interfere with the mechanisms of the common organisations of the market.

The new wine market organisation has only been in force since 1 August 2000. It reflects the common position of Member States to what kind of financial support is sufficient and necessary for the wine market to function. It is worrying that already now Member States resort to granting additional national aids of a type which can usually not be authorised by the Commission, because they are pure operating aids which do not bring about any structural improvement in the sector.

There is a serious risk of distortion of competition between Member States if such a state aid is authorised without any check or obligation whether these aids are linked to structural measures. There will be pressure on the other Member States to follow suit, and also grant aids. The incentive for farmers to undertake structural reform under the wine market organisation will decrease.

The Commission reserves the right to ask the Court of Justice for the annulment of the Council's decision.

At this stage, the Commission has not yet decided whether it will seek annulment of the Council's decision.