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Friday, May 17, 2024 | Back issues
Courthouse News Service Courthouse News Service

$470M Greek Farm Aid Illegal, EU Court Says

(CN) - Europe's highest court on Tuesday ordered Greece to claw back nearly $470 million in farm aid for weather-damaged crops, finding the payments amounted to illegal state aid.

In 2009, Greece through its agricultural insurance exchange paid 800,000 Greek farmers a total of $468 million for damage caused by adverse weather conditions the previous year.

According to government officials, about a quarter of the money came from mandatory insurance premiums paid by farmers. The average farmer received about $550 for the damaged crops.

In 2011, the European Commission ruled that the payments constituted illegal state aid and ordered the Hellenic Republic to take back the money. Greece appealed to the European General Court, which dismissed the case in 2014.

Greece then took its case to the European Court of Justice, which ruled on Tuesday that although the farmers had paid some money into the insurance scheme, the amount of aid given to the farmers far exceeded what they paid and gave them an advantage that affected competition in the farming sector.

The Luxembourg-based high court noted that while the commission has some latitude to depart from state-aid rules when exceptional circumstances exist - Greece's economic troubles in this case - Greece did not claim any exceptional circumstances affecting the agricultural sector when it made its case before the general court.

Furthermore, the court said a number of EU member states were affected by the economic crisis in 2008 and 2009, and Greece did not show that it suffered any more than others.

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