THE European Commission has agreed to reduce Ireland's £95 million in beef fines by £24 million to £71 million. Some £18 million of the balance is to be appealed to the European Court of Justice, the Minister for Agriculture said last night.
Mr Yates admitted, however, that the general taxpayer "will be caught" for the £50 million penalty for intervention operations.
The reduction of the fines was specifically in respect of those for 1990-91 for the Department of Agriculture's serious failure to supervise yields and quality in the beef intervention storage system. One Commission document refers to a "total absence of controls".
During the day, the Agriculture Commissioner, Mr Franz Fischler, who had originally offered to phase the £24 million over 1997-98, subject to a review next year, was forced to write it off after his original proposals, failed by four votes to win an absolute majority of 11 in the Commission.
Ireland was the only country to win a concession on day when the commissioners approved fines of some £610 million against member states.
The decision is being seen in Brussels as eloquent testimony to the backroom lobbying skills of the Irish Commissioner, Mr. Padraig Flynn, and his cabinet, who secured the crucial support of the two British commissioners, Sir Leon Brittan and Mr Neil Kinnock, for the reduction. Commissioners from France, Portugal and Spain, who were disputing. their own fines, also opposed the initial fines package.
Mr Flynn was last night delighted by the result, which he said was, the outcome of a good joint effort with Mr Yates in which I am pleased to have played my part". He said the key to the decision was evidence that the Government had put in place tighter controls during 1991, allowing an argument to be made for mitigation in respect of the fine for that year.
Sources close to the Commission say there was also some support at the meeting for the Irish position on the £18 million fine for irregularities in the intervention tendering system, but that further concessions to Ireland were made difficult because commissioners from France, Italy, and Denmark were demanding, "equality of treatment".
Irish officials are confident that they have a good case to put to the court. They are understood to have lobbied to halve the 1991 part of the storage fine on the basis that, following the 300 per cent increase in Irish intervention in 1990 and the understandable strains placed by it on the system, the Department of Agriculture had succeeded in putting new controls in place for the bulk of 1991.
When Mr Fischler turned up at the meeting yesterday his aides were confident they had the votes they needed. But when a vote was called, he could only muster seven to six against the whole fines package, with two abstentions.
During the lengthy debate interrupted by the British beef ban discussion, the Commissioners for the Budget and Justice Mr Erkii Liikanen and Ms Anita Gradin, both argued against concessions, warning that the Court of Auditors and the Parliament were likely to criticise any laxity.
Mr Fischler then placed new proposals on the table, including the crucial concession to Ireland. They were backed by 14 to 4, with only the French and Italian commissioners against.
In saying that the general taxpayer "will be caught" for the £50 million penalty for intervention operations, Mr Yates had been advised by a group of senior officials and an independent legal adviser, Ms Mary Finlay SC, that it would not be legally possible to recover the fines in the form of a general levy on the meat industry or through levies on companies against which there was evidence of wrong doing in the 1990-1992 period.
To mitigate the costs, however, the Government had recently decided to recoup the full costs of the beef inspection service from the industry, thereby increasing exchequer receipts by £4.5 million a year.
In his report to Cabinet on the budgetary implications of yesterday's decision, the Minister said a provision of £50 million had been made in the 1996 budget against the possibility of EU allowances. He would also be recommending that Ireland should challenge the £18.4 million disallowance on the multiple tendering in the European Court of Justice.
Mr Yates welcomed the reduction of £24 million in the £74.3 million disallowance for intervention operations. He also suggested that, in the event of a successful challenge to the £18.4 million multiple tendering case, the final outcome of the two cases would be a reduction of some £40 million on the £93 million proposed by the EU Commission.
The Minister paid tribute to the contribution which Commissioner Flynn had made to achieving the reduction. The Fianna Fail spokesman on Agriculture, Mr Brian Cowen, said Ireland owed a lot to the political skills of Mr Flynn. The beef fine fixed at £50 million would clearly have been a lot worse if left to the inept efforts of the Minister, he added.