Select Committee on European Union Fortieth Report


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  This issue has come to a head very quickly after the draft Decision was previously withdrawn in December owing to opposition from other Member States and little progress being made during the Christmas holidays.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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