24, 2004: A recent audit of Common Agricultural
Payments (CAP) shows over 2.3 billion EUR in outstanding
loans with no record or plan for recouping these debts.
The European Court of Auditors found that the program
had made 3.1 billion in what are categorized as irregular
payments in the period between 1971 and 2002. They also
determined that of the loans fitting these criteria
75% remain unpaid.
“Recovery of reported irregular payments is disappointingly
partial and slow,” David Bostock, member of the
European Court said in response to the court’s
findings, “Only a quarter of the irregular payments
of over the 3 billion EUR detected between 1971 and
the end of 2002 had been recovered or written off as
irrecoverable: the rest were still pending.” The
missing money has been blamed on many things from poor
collection guidelines to slow legal battles.
Member states are obliged to notify the European Commission
(EC) when they detect irregular payments over 4,000
euro. The Member State must then attempt to recover
the funds, write off the losses or commit the liable
recipients to a black list. While most member states
have reported the delinquent payments the reports are
often delayed and often inconsistent. After this step,
action dwindles. Low rate of recovery, only 17% since
1971, has been blamed on administration delays, unresolved
legal action and the EC’s reluctance to accept
partial settlement. Then when payments can’t be
made Member States are reluctant to write off these
debts because the EC does not have adequate criteria
in place to determine who would be responsible for un-recovered
funds the Member State or the EC.
The EC has already submitted several proposed changes
in response to the audit, Bostock reported Tuesday.
These changes include a provision that would obligate
the EC to cover half of all outstanding payments after
4 to 6 years provided the Member State had been steadfast
in their efforts to collect. “We have not yet
had a chance to study this proposal in detail,”
Bostock said, “but at first sight it promises
to be a positive and bold step in the right direction.”