CYPRUS: STATE AID FOR AGRICULTURAL DEBT
Letter from Lord Bach, Minister for Sustainable
Farming and Food, Department for Environment, Food and Rural Affairs
to the Chairman
I am writing to you with regard to a proposal
by the Republic of Cyprus to grant 23 million Cyprus Pounds (around
UK £27 million) of State aid to enable Cypriot farmers to
pay back debt accumulated following the Turkish military intervention
in 1974. Although most proposals to grant State aid are notified
to and approved by the Commission, Article 88(2) of the Treaty
also allows the Council to make such a decision where there are
exceptional circumstances.
It has now become clear that the Republic of
Cyprus may press for a vote at Council on 23 January.
This issue has come to a head very quickly after
the draft Decision was previously withdrawn in December owing
to opposition from other Member States and little progress being
made during the Christmas holidays. However, Article 88(2) of
the Treaty only allows for the Council to take decisions on State
aid matters within three months of a proposal being put before
the Council and, while the February Council might just be in time,
the Republic of Cyprus is reluctant to let it slip.
It is not yet sure that a vote will be taken.
However, if this happens, scrutiny procedures will not be completed
before the vote. While this is unfortunate, given the circumstances
I wish to inform the Committee of the Government's decision to
proceed.
20 January 2006
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