The Government To Seek Funds to Pay the EU Penalty for Food Reserves

The European Commission has meted out to the Czech Republic an overall sanction to the tune of 12.3 million EUR (350 million CZK). The cabinet will also decide about the Czech Republic’s further course of action in this matter. In fact, the Ministry of Agriculture wants to contest the imposition of the penalty at the European Court of Justice.

Czech Agricultural Minister Petr Gandaloviè claims that it has not been proved that the Czech Republic committed any violation of the EU market. "The alleged excessive stockpiles of some commodities caused no fluctuations on the unified market and, as a result, the Union’s budget incurred, in this context, no extraordinary expenses, not a single euro," Mr. Gandaloviè was quoted as saying earlier.

The European Commission has imposed penalties also on Estonia, Latvia, Cyprus, Lithuania, Malta, Poland, Slovenia and Slovakia. All the new EU members are to pay to the European Union as fines for their excessive reserves a total sum of 41.1 million EUR (almost 1.2 billion CZK). The highest penalty has been imposed on Poland - 12,451 million EUR. The Czech Republic is second in the amount of fines. Installments are to be staggered until 2010, the first one to be paid by the end of July of this year.

According to the Ministry of Agriculture, the original penalty, tentatively imposed on the Czech Republic in 2005, amounted to almost 100 million EUR. Following a strong wave of protests from all the new member states that questioned the correct calculation of the penalties, the European Commission reduced its calculated sums and meted out to the Czech Republic a fine amounting to roughly 44 million EUR. After additional consultations during which the European Commission had accepted some of the specific arguments presented by the Czech side, the Commission adjusted its fine to 19.2 million EUR last September. Eventually, the European Commission reduced the sanction to 12.29 million EUR. The Czech Republic’s penalty is imposed for what the European Commission classified as excessive reserves of poultry, tinned champignons, tinned tangerines and pineapple, orange juice, and rice.

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