Extra virgin con?
Just off the main road near Athens airport is a little block building with a cramped car park packed with old pick-up trucks, estate cars and the odd tractor.
One stubbly weather-beaten old man is accompanied by his wife done up in her Sunday best. This is a big day. As he undoes knobbly, bulging sacks he carefully hands her the rough rope and pieces of plastic wire that held them closed. It looks like a ritual burnished by decades.
Then, a glorious sight. A cornucopia of black and green olives, some with their leaves still attached, tumble from the sacks into stainless steel pits. A hole soon appears in the mass of olives as the fruit are sucked down onto a conveyor belt on their way into a little industrial unit, where they are crushed into olive oil.
The little factory is filled with that lovely fruity freshly-mown-grass smell of good olive oil. And there’s of the stuff here gushing out of pipes, after the olives make their way through the crusher.
Terrible reputation
The farmers, for all the world looking like anxious but proud fathers at a sports day, watch carefully as their product glugs into big churns, which they then load up in their trucks and take home to decant into to sell round the neighbourhood. They used to be paid EU money according to a formula based on a combination of oil produced and number of trees, but now there’s a different approach, which takes into account field size but no longer attaches any weight to volume of production.
I’m sure everybody here is honest as the day is long, but are they inadvertently responsible for the European Union having a terrible reputation for fraud and money-wasting?
Each year, the Court of Auditors fails to give the thumbs up to the EU's accounts. It takes and refuses to give details of the projects it fails, but just about each year the Greek government and olive farmers are given a not-particularly-honourable mention.
The European Commission publicly says the auditors' verdict is largely the fault of the member countries, who after all do pay out more than 70% of the money. It's they, says the commission, who don’t keep a proper track of the money they are spending.
Privately, officials say that Greece is perhaps the worst offender, the problem child with a long record of incompetent accounting. (Of course, Greece is not the only offender. Read this about an apparent failure in England that is going to cost the UK millions in fines.)
The owner of the plant, Neil Papachristostou, doesn’t get any European Union money but he sees the problems. He says the system used to be very complex but now it's simpler, and farmers needn’t make another declaration for six years. He thinks fraud - the deliberate overclaiming of the number of trees - used to happen a lot but is now rare.
Other farmers confirm the system is simpler now. A couple of old boys tell me they just have to pop down to the town hall and sign some papers now. But they say it's no wonder that it's been a mess, because Greece is only just bringing in a proper land register and register of olive groves.
Not quite a wink
We follow one of the farmers, Takis Kolias, back to his estate and watch as two men climb a ladder, and use what looks like a big yellow plastic comb to tug the olives from the tree. They rain down onto a tarpaulin below and it seems to take an age to denude one tree. It must be back-breaking work.
This is just one plot owned by the farmer. He tells me that he’s got 1,500 trees and that he's honest about it. But others, perhaps with fewer trees, do exaggerate, he says. He adds the Greek government can only tell Brussels what farmers have declared to be the case.
Does he have any criticism of the system? He smiles, doesn’t quite wink, and say it seems to take a long time to get the money. I ask him what he means, as he’s obviously hinting at something but he just repeats that it does seem to take an awfully long time to get the money.
I later find out that many farmers think intermediate organisations hang on to the vast sums from the European Union, put them in a bank for a few months and cream off the interest. I have absolutely no idea whether this is a popular myth, something that might have happened once in one region, or common practice.
But my next pretty obvious question, I think, shows a real difficulty with the system. I ask Mr Kolias, how much money he gets from the EU. He doesn’t know, so we ask if he could check, as it's important to the story. The next day he says his accountant doesn’t know but he’ll check with the co-operative he's a member of. They tell him about the formula used to calculate payments, but don’t know the actual amount. He says it's probably too little to worry about.
Satellite photography
But things are changing. In Brussels I’d been told that there was a new guy in charge of payments and he was determined to clean up the Greek government’s act.
The new guy is John Karatzoglou of the He ruefully agrees he has got one of the most difficult jobs in Greek public life. The scheme to register land is under way and with reasonable ease. He tells me that if in the past his country has been the black sheep, tomorrow’s annual report will find it to be a grey sheep. White sheep by next year, he thinks.
(I won't be covering the publication of the report, as I have had to take time off for family matters. This will also mean no regular piece on Thursday - normal service will be resumed as soon as possible.)
But does Mr Karatzoglou agree with the commission that this problem, this annual failure, is all the fault of member countries, whether Greece or Great Britain? No.
He says: "The so-called bureaucracy of Brussels is not a myth, it is a reality, and the member states are facing this reality and trying to cope. Let me give you an example. For three years, we’ve been discussing the simplification of the new single payment scheme and nothing has been done. That is a fact. The is difficult even for experts to understand, so can you imagine how many of the 500,000 farmers understand? Every time we try to make things easier we make them difficult."
This is a pretty gloomy conclusion. Single payments are meant to be simpler: you’ve got a field of a certain size and you get a certain amount of money. Twice the size and you get twice as much money. Simple? Not really. You can’t really expect the EU to allow people to plant one olive tree and call it an olive grove. So there is a gradation of density that earns more money.
It seems that unless farmers all become accountants, or the Common Agricultural Policy is buried once and for all, the EU’s finances will never get a clean bill of health.
I’m Mark Mardell, the Â鶹ԼÅÄ's North America editor. These are my reflections on American politics, some thoughts on being a Brit living in the USA, and who knows what else? My 
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Mark, please see my comment on your earlier blog. Why is the UK (and the Â鶹ԼÅÄ?) getting worked up about this. The UK does not, in practice, contribute a cent to the operation of the CAP, taking into account the extent of the UK rebate.
It is not about who pays and who's not. UK is an EU country and it has to behave like one. Payments-CAP, is something every EU country should pay attention to and not behave in a way that says; we do not pay, we do not care.
Mark Mardell wrote:
"just about each year the Greek government and olive farmers are given a not-particularly-honourable mention."
And not only olive farmers.
In December 2004, the Greek government decided to privatise Olympic Airlines, but the sale process ended in failure as none of the buyers was eager to repay the Greek state millions of euro in state subsidies declared illegal by the European Commission in December 2005.
72 extra virgins were hard pressed to make this bird (OA) fly.
But on Sept. 12, 2007, after an appeal and a review, The Luxembourg-based court has determined that Greece still has to repay EU 130 million euros.
This has been known for years. Successive Greek governments have connived in the falsification of farm sizes, in order to inflate subsidy claims from the EU. Yet the EU commission has not cracked down on this type of blatant corruption by high officials in Greece
Why are they getting paid at all?
Shouldent they be living off the money earned from selling the crops?
While Chirac managed to preserve it for an extra few years - surely the CAP is being reduced (even phased out) over the next years?
Maybe there's a case for preserving some kind of minimal European food production, for strategic reasons, but both the EU and the developing world would benefit from more trade without subsidies...
...meanwhile, the rural economy should be updated/modernised through the structural funds rather than being frozen in amber via the CAP.
Replying to #2, I assumed that all are agreed that there is no justification for the misuse of EU funds and every effort should be made to combat it. It will, no doubt, be one of the major concerns in the pending review of the CAP.
My point is that the UK makes a hobby-horse of the issue. Indeed, Her Majesty's Treasury titles its annual report "European Community Finances - Statement on XXXX EC Budget and measures to counter fraud and mismanagement".
There is no disguising the fact that the attitude is politically motivated and the aim is to dismantle the CAP (for which there may be strong arguments). Indeed, HM Treasury under the current Prime Minister made no secret of its objectives in this regard.
Mark refers to the CAP "being finally buried once and for all". This is unlikely to be an objective shared by producers of Greek olives or any other agriculural producers for that matter. The rapidly waning influence of the UK within the European Union will be a reassurance to them.
Replying to #7
The CAP is a political tool (for getting votes, preserving cultures and generally drawing EU funds to local region). Whilst many, including I, believe that the countrysides should be helped and preserved, the CAP is a mess. The bureaucracy in Brussells must be brought under heel, (and Strasbourg closed), and we need to give a break to the farmers in the third-world.
Have you any friends that have worked in Brussells? You may find it enlightening to talk to them...
By any accounts Greece did not meet EU criterea for ascension back in 1981 - and has not met them yet. It is corrupt by western European standards and reports of it's economic and financial performance have always been fudged. But then the EU is a political project, not the 'European Economic Community' that Britons thought they were voting for back in 1975...
I have 20 olive trees, can I apply for some EC funding?
It is hard work to got all those olives of the trees and sometimes the weather is not so nice as you have only a short period in October/November to "pick" the olives.
I think I deserve some funding
Olympic airlines was a different case:
Traditionally the government has used iit and passed the bill to the company-hence the debt, for example:
-The prime minister takes a trip to the US for 2 weeks with OA. Who pays for it?, You guessed, Olympic Airlines
-MPs and political parties want to go to their districts to vote, and also bring along their friends and supporters. Who would not pay, of course, so the company foots that bill too(a similar thing also happens with other former public companies, i.e. MPs do not pay the phone company either.)
So, even if you think that MPs or the Prime Minister rightly should not pay for the use of the airline company,
why should the company foot that bill?(remember the company still has to pay
airport expenses, fuel, crew, maintenance etc). So the so-called subsidy is actualy a fraction of what
the government actually owed the company
As to the question of olive oil,
this is just one example of agricultural subsidies and I do not see why it is being singled out-
certainely agricultural subsidies have been abused in many countries, not just Greece. Certainely in Greece
people are convinced that the government is corrupt, - their only choice is which corruption to choose from. Indeed the argument of every politician is "vote for us, the others are worse"
Mark,
In fact you are rather behind the times with these comments.
The Court of Auditors DOES give a so-called 'clean bill of health' to quite a lot of CAP spending these days - with the increasingly effective computerised (and satellite-controlled) checking which takes place. Perhaps not the Greek olive farming yet - I dont know - but probably it wont be much longer before even that is under a 'reasonable' level of control
The spending areas which continue to trouble the Court are more in the area of Structural Funds than CAP. Perhaps that is because the regional support is for a much more heterogeneous set of projects - which are probably more difficult to control.
My family are Olive oil farmers in Greece and their oil is the best organic, extra virgin oil you can get. The keep some for themselves and sell the rest to a 'co-operative' who deals with the EU. If anyone is corrupt it is those who run the 'co-operatives' (some might call them the mafia.) The actual farmers are poor and hardworking. They live off the land by growing vegetables and keeping goats and chickens. They make their own cheese from goats milk. They consider the supermarket to sell inferior food and only use it as a necessity.
That is a bit like asking if Bae is morally sound in its dealings with its middle eaastern customers, or whether the decision to abort the bribery investigation, was morally sound, or whether the Metropolitan Police Commissioner is morally sound in refusing to accept responsibility for for the mismanagement of his force.
Why pick on poor Greek peasants for an example. There are a lot bigger and more important fish nearer to home.
I won't comment on individual fraud cases and those member states that are particularly bad at governance.
But we should keep in mind that the CAP was created for a reason and that it has been reformed many times. The black and white picture the UK europhobes are creating is simply misleading people.
I take a very simple view: France has a beautiful countryside and decent hard working people are producing excellent food. The UK has not much nature left and the food is simply awful (and don't give me the "Ivy" argument, posh London restaurants are certainly not typical for the British food culture). The agricultural output seems to consist mainly of food scares and dangerous diseases.
Guess which model I prefer?
Karel (#10). Yes, you probably do.
As with all things related to the general absurdity of the CAP my only answer is the folowing:
From the latter:
"They say we need to bring the EU milk price more in line with the world market. But in New Zealand they can make milk at half the cost we pay here." - SERGE LE DOARE
The irony being that New Zealand didn't achieve what it did because it is a land constantly blessed with sunshine and warm weather. Some of it is not. But primarily because it was forced to achieve that due to the fact that after the UK joined the EU it was faced with ever more tariffs, trade restrictions and EU subsidies.
Nearly a quarter century later, Europe though still seems to have people thinking in the same terms of the subsidies they get for not having/having a tree, or for how long the shadow behind them is on a summer's equinox...
When I first came in England some 25years ago the use and of olive oil was extremely rare and was almost treated like a medicine: Used in tiny quantities and very expensive by those days’ standards. The usage of fats and cheap vegetable oils were the norm!
Now the benefits of this excellent cooking ingredient are very widespread here with all the taste and health benefits it implies. I still don’t know how many people here do understand this very beneficial reality and If they did they would probably had spend more time looking at this positive aspect rather than one-sided focusing on the usual accounting paranoia who on many occasions ends up in a blanket negative trademark attitude towards anything coming from Southern Europe in general and Greece in particular.
I have family in Greece that own olive farms. It is very hard labour intensive work. Most farms are not rich and just earn enough to survive. The biggest problem with olive oil production are those producers that claim thier product is 100% virgin oil when it is not. In fact Kalamata olives are bought from Greece sent to other European nations mixed with lower grade oil and sold in European and North American markets as 100% virgin oil. When the consumer buys virgin oilive oil in the supermarket for a low price it is in fact not 100% virgin oil. This is something that is done on a large scale by other industrialized European nations. And this is a much bigger scam to the consumer than a poor farmer getting a subsidy.
The same happens in Italy. Money was (is?) given by the EU to replant olive groves but generally the money has been pocketed without control.
Spain has invested the EU funds and now Italy is lagging far behind Spain thanks to these olive con.
The key question with Olive Oil is the quality.
Whatever happens to payments systems is a matter for officials.
When I buy Kalamatas extra vergin oil I expect the good quality oil that is generally available from an specific area.
If people cut corners and offer sophistications or inferior products then is the time to act.
Greek Oil is still about the best and the Â鶹ԼÅÄ should make people aware about risks to the maintenance of the product quality.
If it were only about CAP then we could complain closer to home as to the farmers in the South West being swindled by our government over EU Euro currency payments...but that is another story.
Replying to #9
Max Sceptic, if Greece's "reports of financial and economic performance have always been fudged", then they're certainly doing a bad job at it: not having initially met the EMU criteria in 1999, along with slightly overstepping the EMU's deficit benchmarks on some years (just like Germany and France) which have gotten Greece a reprimand from the EU...these are not exactly the signs of an excessively corrupt country constantly -and successfully- fudging figures as you imply. Let alone oversight from the IMF, and other non-EU organizations. I'm not saying that questionable practices don't occur, but please don't grossly exaggerate when you have nothing to back up your statements. Greece did not "fail to meet EU criteria", and was legitimately admitted as a member-state in 1979, not 1981. 1981 was the official accession date.
Dear Mr Mardell,
Is this the same Greece which for 16 years is dictating EU policy on Macedonia whereby endless courtage of useles cronies is asking Macedonia '' can you put your financial afairs in order please '' before we consider you suitable for EU enlargment.
Oli Rehn the EU mastermind of all economics & reforms stated in his report last week that Macedonia has made a progress . Compared with which country he forgot to mention.
To make progress after 16 years in Nazy Styelk Ghetto isolation can be made only by superhumans,
Greece is blackmailing EU for 16 years on the name of Macedonia and the very same EU never asked for accounts on olive subsidies which
are just tip of the iceberg.
I was a witness this summer when Greek traders are buying vegetables for bargain in Macedonia only the very samne truck loads to be delivered to to warehosues and decleared Greek and subsidy is granted.
It is disgrace of no paralell in modern day history,
Regards
Toni Dimovski
So You're saying the EU can't tell the forest for the trees because it is utterly corrupt and riddled with fraud? Now tell me something I don't know.
Michael Berrigsford #12
Even Al Capone earned an honest nickel...once.
The EU Budget Committee says that the accounts for the EU is a bit like Tesco's saying that they are aware of shoplifting going on, but not by whom and where, but that the accounts are still pretty much OK.
What rubbish.
It's like Tesco's saying that they think shoplifting is going on, but that they do not have sufficient internal controls to establish how much, by whom, where and when. If this happened, their accounts would also be qualified and investors would be up in arms.
Euro-sceptic UK against the whole of EU again! Greece is just a good example, nothing more than that. We're missing the forest here...Mr O'Leary has a very good point.
Greece not only doesn't meet the economic criteria for EU or NATO membership, but it neither meets the political criteria. There are large ethnic minorities living in Greece (Macedonians, Turks, Albanians, Roma, Vlach) that are forbidden from even identifying with their respective minority groups. The Macedonians living in Greece, for example, were forced to changed their own personal names into Greek sounding names and are not allowed to change them back. This is only one example of the systematic human rights violations perpetrated on the ethnic Macedonians living in Greece. And these are very well documented by the Council of Europe, the OSCE, the Greek Helsinki Monitor and the US State Department.
Rather than Greece trying to change it's neighbours names, it should cease all human rights violations in relation to the minorities living within its own borders
Mr Toni Dimovski,
I can detect great bitterness in your comment regarding the Macedonia issue, which has nothing to do by the way, with the olive trees and this article. The corruption in Greece is indeed a fact, but her persistance to the Macedonia cause is justifiable and indisputably correct.
As an anti-nationalist Greek I have often objected to the unreasonable chauvinism, the corruption in politics that dates since the ancient years and any anti-turkish propaganda that might have occured. I learnt to inveestigate facts objectively and realized that history is pure science, based on true evidence, such as excavated items, religious, cultural and linguistic evidence.
I would therefore advise you to liberate yourself from a passion that is reflected in phrases such as 'it is a disgrace that has no parallel in modern day history', otherwise you inavoidably become a pone at your governmental service. Search thoroughly for the truth before you become hateful and absolutely certain that you are right, otherwise your credibility is at stake.
As far as Max Sceptic's comment is concerned, I couldn't have put it better. Modesty never hurt anybody.
For years, and all over Europe -not only in Greece- farmers do struggle with the EU policies and related subsidies of the EU. The system is complex, millions of euros are involved, and therefore, generate fraud and corruption. I believe it should be the EU to reform its community aid programs and bureaucracy. And not point out the finger to farmers who already have a hard time selling their goods for reasonable prices.
MR DIMOVSKI it is not greece who is blackmailing EU,it is Skopje that is blackmailing EU for something that it is not theirs.....
The story with olive oil and financial aides does rather boil down to large companies selling mixed oil coming from several mediterrenean countries. These big companies have reduced dramatically the profits of the small producers. What do you expect? The only cure to this problem would be to correct the market and underline the quality aspect. Todays consumer, is overwhelmed with lessons how to buy more and cheap. This situation won't drive us any further you know. If consumers were about to limit spending on unnecessary gadgets, they would have money left to invest on some quality nutrition, which, in turn, would relief farmers and keep people in the country.
So, it is not exactly a failure of the European Court of Auditors, nor of the member states, but it is actually a failure of our economy and society.
Therefore, we need to educate our society, which in turn proves the importance of the education.
Someone, has to pinpoint these relationships too, not?
tom
obviously you are very ignortant about greece and it's minorities...
there is muslim minority in the north,which is represented in greece's parliament...there are roma wich are also have from time to time representatives in the parliament...
there is no "macedonian" minority in greece..in fact there is greek minority in FYROM,who they were forbidden to keep their greek named and forced to change them into slavic...your propaganda will not pass here...
mr dimovski
you should be greatfull that greece has opened it's borders to you,we should block you completelly from interantional affairs,since your claim over our history is actually an act of war...
and lina
there's nothing wrong to be nationalist since your country and it's history is under attack by other ultranationalist groups...we suffered enough,don't you think..??
it is true that since our accession in 1981 in EE,our goverment practiced one thing..corruption..
whatever we tried to do,no matter which political party we voted for,or prime minister the result would be the same..
so what is EU doing about that...? because i don't believe that any nation or party of nations would accept happily to give money to a corrupt nation,it's like throwing your money into the bin..the money we get are agreed with EU with all south nations (greece portugal and spain) as a compesation from the rich northern sates because the free market is benefiting more them..
but in greece we earn loads by the common market and the free trade,we have one of the largest tourism and shipping industries in the world,plus we invest in new european countries like romania and bulgraria and projects like ESA...we sure could built our own roads and ports and buildings..so where all those money go..
and why since our liberation from the turks foreign powers either from east or west were meddling up with our internal affairs and national ones,now they can't put greece right..greece is a small nation it would be easy to make it copmly with EU laws..is this situation in greece or the balkans suitable for some others...??what is EU doing about all this...
and why ireland managed to become so rich,was it the good relationship with USA,or the constant threat to UK because of IRA..??
just a few thoughts..
"whatever we tried to do,no matter which political party we voted for,or prime minister the result would be the same.."
Allow me to disagree, political life in Greece has been dominated by only 2 political parties since 1978. With the exception of the 1989 elections and the subsequent chaos during 1989-1991, these 2 parties have formed one-party majority governments, some of them even had blank checks by the voters (1997 election).
The irony is that the current government party (ND) won the 2004 elections having, as it's main campaign promise, to stump out corruption. Now, the opposition party (PASOK) is using the same argument to replace the government. Are people going to fall for that, again?
During the last 12 years there have been 3 new parties (Politiki Anixi, Fileleftheroi and KEP), all of them very short lived.
The problem, of course, is, that corruption runs deeper than just the politicians. There can be no change if the citizens don't take matters into their own hands. If i started to list the kind of political "favors" citizens ask of their politicians, many readers would be amazed. If they don't reverse their attitude towards politicians, how do they expect less corruption and progress?
As for the CAP funds, we all know the farmers are not getting any richer (especially the olive farmers). Most of the money doesn't even reach their hands. As for the rest, ask the banks in Greece, which can charge up to 400% in interest if you don't pay 1 or 2 loan payments. Greek banks are the most profitable in their sector in the EU!
Finally, i'd like to add a glimmer of hope. The last elections proved that voters are getting somewhat wiser (especially young ones), and attitudes are changing (slowly, but nevertheless). I believe that, while Greece is not going to reach North European standards, in the next 25-30 years the gap will gradually close.
sakis..
i agree with you..but don't you think that they greek public is brainwashed by those 2 political parties and 2-3 families that run the coutry for the last 40 years or so..??and not to mention their connections with america or europe..no names here...
second, i would like to thank and congratulate Mr. Mardell about his report yesterday in Â鶹ԼÅÄ about HM the Queen and the subsidies she receive by EU as part of the CAP....but then this makes this blog a bit of a joke...talking about corruption in EU and greece and other countries,while the british public complain about the money the give to EU and part of it goes back to the royal family...and god knows how much money the rest of the royal families throught europe get (spain,netherlands,belgium,denmark, luxenburg and sweden have also royal families)...i think it's out of the realm of reality to complain about freeloaders in south or poor european countries getting the money of the rich and poor,while they should look at the bigger picture...
i hope after yesterday's report of Mr. Mardell some will see the picture....
thanx
chris
This was a strange article for me to read, because I feel what an olive oil producer should be getting ought to be dictated by market forces. How much received should be contingent upon quantity and quality sold, not acrerage or the number of trees. I don't see why the EU should be paying olive growers at all; it's just uneconomical, statist thinking.