SENIOR EU Commission officials say there is little hope of any cut in the £93 million in Irish beef intervention fines due to be ratified by the Commission on Wednesday.
Irish and Commission sources - are adamant that no deal has yet been done to cut the fine for the period 1990-1992. They warned against expectations that the Commission will want to go beyond agreeing to a phasing of some of the payments.
The Agriculture Commissioner, Mr Franz Fischler, is understood to have proposed that a portion of one of the fines would be paid over three years, with the possibility of a review in 1997 based on an examination of improved practices. The current Fischler package would thus mean a possible saving of £24 million for the State in 1996 but with the balance to be paid in 1997 and 1998.
The Irish fines being considered by the Commission on Wednesday consist substantially of £18 million for malpractices in the beef intervention tendering system and £75 million for inadequate controls of quality and yields in intervention storage. The latter figure contains a £48 million fine for 1991 and the Commission is proposing to phase half this over the next two years.
Sources close to the Commission say that if further progress is to be made by Ireland on reducing its liability it is likely to be only on the former tendering fine.
Other fines - over a fire in a Ballyhaunis plant (£9 million) and export refund payments (£7 million) - are not yet on the Commission's agenda.
The Irish case for a cut in the fines has been strengthened by recommendations from an independent conciliation committee, set up to mediate in cases between Ireland, Britain, Italy and France and the Commission, that the fines are too high and that the Commission should negotiate lower figures.
The committee pointed out that although the tendering regulations forbade more than one tender per applicant for contracts, and that there were clear breaches of the rules, the abuse never threatened the Commission with significant losses. It felt the fine, levied at 5 per cent of EU spending on the contracts, was too severe.
The conciliation report on the storage issue was less sympathetic. Ireland, Britain, Italy and France have all been fined for serious contraventions of their obligations to safeguard Community funds as managers of the intervention system. They have been fined £75 million, £12 million, £19 million and £24 million respectively.
Inquiries by the Commission's inspectors," the conciliation report notes in considering the submissions from the four countries, have incontestably found a series of serious flaws in the operation by member states of their system of controls in for example, the acceptance of ineligible products (including some cases of complicity by intervention authority officials), falsification of classification, systematic upgrading of classification, a total absence of controls of either product weight or quality both on entering and leaving intervention, and the absence of account ability".
Nevertheless, the committee felt that the Commission's surveys of the malpractice were not enough to justify levying the fines at the maximum level of 10 per cent. It recommended that the Commission should agree to a reduced figure.
When the issue came up 10 days ago at a meeting of agriculture experts from the Commission cabinets, Mr Fischler's officials failed to circulate the reports as they are obliged by law to do and the meeting was adjourned. It resumed on Friday night but, sources say, there was little willingness to go beyond Mr Fischler's limited compromise, although they were less gloomy than previously.
The fines will be discussed today at a meeting of chefs de cabinet and a final decision will be taken on Wednesday at the Commission meeting. Senior officials are not, however, expecting the Commission to overturn Mr Fischler's recommendation, despite what some have described as "serious arm twisting" by Irish Commissioner Mr Padraig Flynn.
Officials say the battle has been particularly ferocious because the Commission is determined to be seen to crack down on fraud and fears that the Court of Auditors and the European Parliament will criticise any sign of weakening.
The line is being held most firmly by the Finnish Budget Commissioner, Mr Erkki Liikanen, and the Swedish Justice Commissioner, Ms Anita Gradin.
They are also coming under pressure from Italy and Spain which face hefty fines - £360 million and £160 million, respectively - largely attributable to breaches in milk quota rules and breaches of the olive oil regime. Greece faces possible fines of £145 million (tobacco and cotton), at present still in conciliation. Most other member states also face fines but on a smaller scale.
