(CN) --- Europe's top court on Wednesday left Greece facing hefty fines unless it finally claws back more than $500 million in illegal state aid it handed out to protesting farmers more than 10 years ago to cover losses they suffered from weather-damaged crops.
The European Court of Justice's ruling, which is not available in English, comes five years after it first ordered the Hellenic Republic to retrieve the funds, which were distributed in the wake of paralyzing strikes by angry farmers over low commodity prices and violent riots in Greek cities following the 2007-2008 financial collapse.
At the time, Greece was at the beginning of a crisis over its massive public debt that threatened the very survival of the European Union as Brussels demanded the country to cut its public spending. In Greece, an anti-EU movement sprang up and many Greeks favored leaving the bloc rather than endure austerity measures.
Against this backdrop, Greece provided about 800,000 farmers with 425 million euros (about $513 million today) in aid to cover crop losses caused by bad weather. The average farmer received about $550 for the damaged crops.
The funds were drawn from the coffers of the Greek Agricultural Insurance Organization, a public body that insures agricultural holdings against damage due to natural risks.
But in 2011 the European Commission, the EU's executive body, challenged Greece over its compensation scheme, charging that it amounted to illegal state aid that unfairly benefited Greek farmers to the disadvantage of farmers in other EU countries.
In 2014, the European General Court, a lower court, ruled in favor of the commission and that decision was upheld in 2016 by the Court of Justice.
The high court found that the amount each farmer received far exceeded what they had paid into the crop insurance fund, making it illegal state aid. Although there is some latitude given for state aid, such as offsetting an economic crisis, the court noted that Greece was not the only country badly hit by the financial recession.
Regardless, Greece brushed off the court's ruling and did not take the politically unpleasant step of asking farmers for the money back.
In 2020, the European Commission once again took Greece to the EU's high court in Luxembourg over its failure to repossess the funds, leading to Wednesday's decision.
In its ruling, the Court of Justice rejected Greece's arguments that clawing back the funds is tremendously difficult to do both because of the large number of beneficiaries and the likelihood of public unrest.
Unless it takes action to retrieve the funds, the commission could ask the court to impose high fines on Greece.
Courthouse News reporter Cain Burdeau is based in the European Union.
Follow @cainburdeau
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