(CN) - EU authorities will withdraw more than $340 million of agricultural funding from Greece because of its lapses in connection to olive oil and arable crops, the European Court of Justice ruled Thursday.
The European Commission had uncovered the deficiencies as part of its checks into the financing of common agricultural policy (CAP).
In a 2007 investigation, the commission found that geographical information system (GIS) for olive cultivation, which Greece uses to check aid for olive-oil production, had so many deficiencies that it had to be regarded as not having been completed in time for the 2003-04 marketing year. Greece also failed to update the olive cultivation GIS for the 2004-05 marketing year, the commission found.
Those lapses led the commission in 2011 to rescind approximately $180 million from EU financing of the olive oil production sector. After Greece missed the deadline to establish the olive cultivation GIS, it cut an extra $5 million.
The commission also found significant deficiencies in Greece's on-the-spot checks with regard to direct aid for arable crops, as well as in the operation of the related GIS system and the land parcel identification system. For those lapses, the commission rescinded approximately $166 million in 2007 direct aid for arable crops.
The EU General Court upheld the commission's decision last year, finding that the commission had properly accounted for the recurrent nature of the deficiencies in the Greek olive cultivation GIS.
Saying Greece's system had resulted in repeated failures, the General Court also upheld how the commission calculated the amount to be recovered.
On appeal with the EU's highest court, Greece challenged the flat-rate corrections of 15 percent of the subsidies for olive oil sector and of direct aid for arable crops.
The European Court of Justice found Thursday that Greece's appeal took issue with the General Court's factual assessments, and that the challenge cannot proceed since this type of factual appraisal is impermissible.
Greece's evidence that it had improved its control systems had improved and that the olive oil cultivation GIS operated in a more efficient manner received proper analysis by the General Court, according to the ruling, which is not available in English.
The appellate court also upheld the increase of the financial correction rate, tying the scale of the corrections to the significant increase in expenditure with respect to area-related aid. The scale of corrections was the same rate that had been applied in the past to the larger sums that Greece had received as direct aid, the Court of Justice found.