EU suspends farm aid to Romania

21/08/2008

Romania will regain access to millions of euros in EU financial assistance for farm development once it has remedied deficiencies in the management and control of such funds.

(Nine O'clock - 21/08/08; AFP, FT, Mediafax, HotNews.ro - 20/08/08)

The European Commission suspended farm development payments to Romania after identifying "deficiencies" in the country's auditing procedures. [Getty Images]

The European Commission (EC) has temporarily suspended millions of euros in rural development assistance to Romania, a letter obtained by Romanian media Wednesday (August 20th) suggests. Payments would restart only after Bucharest properly addresses deficiencies, detected in a June audit, in the management and control of funds under the SAPARD pre-accession programme, it added.

The aid set aside for Romania under that programme amounts to around 150m euros a year, to help make the country's agricultural sector more competitive.

"The commission has temporarily suspended ... payments of up to 28.3m euros," the Romanian finance ministry said in a statement Wednesday.

The amount covers expenditures made during the first quarter of this year, according to the letter EC Director-General for Agriculture and Rural Development Jean-Luc Demarty sent to Alice Batu, national authorising officer at the ministry, on July 9th. Demarty reminded Batu the EC had already requested a plan to fix specific issues.

"I would appreciate receiving this action plan together with a timetable for its implementation as soon as possible and not later than August 31st," Demarty wrote in his letter. "I will consider resuming the reimbursement of expenditures as soon as I have received your confirmation that the action plan is properly implemented and this is confirmed by an independent authority."

If Romania fails to deal with the observed deficiencies, there could be no guarantee of correct processing of payment claims from the final beneficiaries, the Financial Times quoted the EC as saying. Duplication of payments is a potential problem.

Batu said on Wednesday that the weaknesses detected by EU auditors were largely linked to the payment authorisation procedures at the Payment Agency for Rural Development and Fishing, which handles SAPARD funds.

She did not say whether officials had already drawn up and submitted the requested action plan to Demarty's office but appeared confident the EC would soon release the aid Romanian farmers badly need.

"It's just a few weeks," Batu told Romanian news agency Mediafax on Wednesday.

According to the Financial Times this is not the first time Brussels has criticised Romania's handling of farm subsidies. The latest similar instance was its failure to make payments under the EU Common Agricultural Policy within the set deadline.

Brussels has faulted Romania's neighbour and fellow EU member Bulgaria too. Citing weaknesses in Bulgaria's control systems, cases of fraud and irregularities, the EC in July froze nearly half a billion of euros in aid to the country, including 121m euros for rural development under the SAPARD programme.