September 24, 2004: A
recent audit of Common Agricultural Payments (CAP) shows over 2.3
billion euro 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