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17.3.2012 Official
Journal
of
the
European
Union L
78/21
COMMISSION DECISION
of 7 December 2011
concerning compensation payments made by the Greek Agricultural Insurance Organisation (ELGA)
in 2008 and 2009
(notified under document C(2011) 7260)
(Only the Greek text is authentic)
(Text with EEA relevance)
(2012/157/EU)
THE EUROPEAN COMMISSION,
letter of 16 June 2009. By letter of 13 July 2009, the
Commission informed the Greek authorities that the
compensation of EUR 425 million for 2009 had been
Having regard to the Treaty on the Functioning of the European
registered as an alleged case under CP 196/2009 and
Union, and in particular the first subparagraph of Article 108(2)
that the compensation of EUR 444 million paid in
thereof,
2008 had, for the part concerning compensation for
damage due to causes covered by ELGA, been considered
to be unlawful aid within the meaning of Article 1(f) of
Council Regulation (EC) No 659/1999 of 22 March
Having regard to the Agreement on the European Economic
1999 laying down detailed rules for the application of
Area, and in particular Article 62(1)(a) thereof,
Article 93 (*) of the EC Treaty ( 2 ) and had been registered
under NN 39/09.
Having invited interested parties to submit their comments, in
accordance with the first subparagraph of Article 108(2) of the
Treaty ( 1 ),
(4) Following the reply by the Greek authorities, dated
18 August 2009, the Commission asked for further
information by letter of 14 September 2009. In that
letter the Commission also informed the Greek auth
Whereas:
orities that as a result of the information they had
supplied, i.e. that the compensation of EUR 425 million
for 2009 had been paid to the farmers concerned, those
I. PROCEDURE
payments had also been registered as unlawful aid within
the meaning of Article 1(f) of Regulation (EC) No
(1) Following
press
reports
which
came
to
the
Commission’s
659/1999, also under NN 39/09.
attention that the Greek Agricultural Insurance Organi
sation (‘ELGA’) intended to make compensation
payments of EUR 425 million after protests by a large
number of Greek farmers in January 2009 about their
revenue losses in 2008 due to damage caused by adverse
(5) The
Commission
decision
to
initiate
the
procedure
was
weather conditions, a bilateral meeting with the Greek
published in the Official Journal of the European Union on
authorities was held on 4 February 2009. Subsequently,
20 March 2010 ( 3 ). The Commission invited interested
the Permanent Representation of Greece to the European
parties to submit their comments on the measures
Union, by letter of 9 February 2009, supplied
concerned. The Commission received comments from
information regarding this measure.
third parties which were forwarded to the Greek auth

orities on 6 May 2010. The Greek authorities sent their
observations on the comments of the interested third
parties on 21 July 2010.
(2) The
Commission
asked
for
additional
information
by
letter of 23 February 2009. By letter of 20 March
2009, the Greek authorities replied to the Commission
that ELGA had taken out a loan for the compensation
(6) The
Greek
authorities
provided
additional
information
on
payments of EUR 425 million in question, as well as
the aid concerned by letters of 4 June 2010,
another loan of EUR 444 million, mainly to make
10 September 2010 and 14 September 2010. The
payments to compensate producers for damage, in
Commission requested further information in a letter
2008, to crop and animal production due to causes
dated 17 November 2010. The Greek authorities
covered by ELGA.
replied by letter of 9 March 2011.
(*) Subsequently Articles 87 and 88 of the EC Treaty. On 1 December
(3) The
Commission
asked
for
additional
information
by
2009 Articles 87 and 88 of the EC Treaty were replaced by Articles
letter of 4 May 2009. The Greek authorities replied by
107 and 108, respectively, of the Treaty on the Functioning of the
European Union.
( 2 ) OJ L 83, 27.3.1999, p. 1.
( 1 ) OJ C 72, 20.3.2010, p. 12.
( 3 ) See footnote 1.

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Official Journal of the European Union
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(7) At the request of the Greek authorities, a bilateral
plant origin and at 0.5 % for animal products ( 7 ). These
meeting with the Commission took place on 31 March
contribution rates are set by the competent ministers on
2011. Subsequently, the Greek authorities sent additional
the basis of a proposal by ELGA to the Minister of
information on 11 May 2011 and 12 July 2011. At the
Agriculture. ELGA’s income from the special insurance
request of the Greek authorities, a second bilateral
contribution, collected by the tax authorities, is
meeting with the Commission took place on
included in the State budget as State revenue and is
11 November 2011.
entered under a special heading. This revenue is paid to
ELGA from the budget of the Ministry of Agriculture,
now renamed the Ministry of Rural Development and
Food, by a transfer of funds in the same amount each
year, following a proposal to that Ministry by ELGA.
ELGA has no other influence on the level of either the
II. DESCRIPTION
contribution or the compensation.
(8) Greek
Law
No
1790/1988
on
the
organisation
and
operation of the Greek Agricultural Insurance Organi
sation ( 4 ) (‘Law No 1790/1988’) created a public service
body known as the Greek Agricultural Insurance Organi
(12) Natural and legal persons who own or operate agricul
sation (ELGA), a private legal person wholly owned by
tural, stock-breeding, poultry, fishing, aquaculture or
the State. According to Article 12 of the above Law,
other related undertakings are subject to insurance by
ELGA is subject to supervision by the Minister of Agri
ELGA. ELGA’s income mainly comes from the special
culture. ELGA administers its budget items in line with
insurance contribution. In addition, ELGA is, according
the decisions of its Administrative Board, the members of
to Law No 3147/2003, able to make aid payments as
which are appointed by decision of the Minister of Agri
part of planning programmes in case of extreme need to
culture. ELGA’s main task is that of insuring crop and
compensate for damage to crop and fixed assets due to
animal production and assets of agricultural holdings
natural disasters, extraordinary events or adverse climatic
against damage due to natural risks.
conditions. This aid is financed by the State budget or by
loans. These programmes concern State aid approved by
Commission decisions.
(9) Pursuant
to
Article
3(a)
( 5 ) of Law No 1790/1988,
(13) Decree No 262037 issued by the Minister of
insurance with ELGA is compulsory and covers natural
Economic Affairs and the Minister of Rural Develop-
risks, in particular floods, storms, ice and excessive frost,
ment on 30 January 2009 (‘Common Ministerial
snow, hail, high temperatures and sunlight, excessive or
Decision’) envisaged emergency compensation totalling
unseasonal rainfall, drought, plant entomological and
EUR 425 million for damage in 2008. Pursuant to the
phytopathological diseases, epizootic diseases, fire
Common Ministerial Decision, this compensation was to
caused by lightning, earthquakes, risks caused by the
be paid out by ELGA because of the reduction in the
sea, damage to crops by wild animals and a series of
production of certain crops during the 2008 growing
cattle, sheep and goat diseases.
season due to adverse climatic conditions such as
drought, high temperatures and rainfall and to entomo
logical and phytopathological diseases suffered by these
crops. This damage concerns almond, cherry, apricot,
some peach, plum, pear and apple trees, as well as
asparagus, oriental tobacco, potatoes, cotton, olive
(10) According
to
Article
5(a)
( 6 ) of Law No 1790/1988,
groves and cereals.
farmers who are members of the insurance scheme
described in recital 9 must pay a special insurance
contribution to ELGA. This contribution is in essence a
charge levied by the legislator on the buying and selling
(14) According
to
information
supplied
by
the
Greek
auth
of Greek agricultural products, the revenue from which
orities, apart from loss of production, deterioration in the
goes to fund ELGA, a body tasked with preventing
quality of some crops (cereals, cotton) had also been
damage and providing compensation for damage to
taken into account when determining the level of
farms caused by natural risks.
damage. This loss or deterioration in quality resulted
from a combination of meteorological phenomena and
crop diseases due to the bad climatic conditions affecting
these crops during the year in question.
(11) Under
Article
5(a)
of
Law
No
1790/1988,
the
special
insurance contribution is set at 3 % for products of
(15) To
pay
the
compensation
in
question,
ELGA
took
out
a
bank loan of EUR 425 million to be paid back over 10
( 4 ) FEK A' 134 dated 20 June 1988.
years (2010-2019). For the first 3 years (2010-2012) this
( 5 ) Inserted by Article 5 of Law No 2945/2001 and amended by
Article 9 of Law No 3698/2008.
( 6 ) Inserted by Law No 2040/1992 (FEK A' 70).
( 7 ) Amended by Article 53(1) of Law No 2538/1997.

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Union L
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loan is subject to annual interest and a Greek State levy
question and the granting of compensation to producers
of EUR 28 513 250, and for the following 7 years
during the relevant years. Therefore it was not possible to
(2013-2019) the interest, depreciation and levy will
rule out that these measures would also be financed
amount to EUR 89 227 536 in 2013, EUR 85 087 786
through other State resources available to ELGA.
in 2014, EUR 81 025 536 in 2015, EUR 76 963 286 in
2016, EUR 72 901 036 in 2017, EUR 68 838 786 in
2018 and EUR 64 776 536 in 2019. The loan is guar
anteed to ELGA by the Greek State.
(21) Measures
which
affect
trade
and
distort
or
threaten
to
distort competition: The payments made by ELGA in
2008 as part of the compulsory insurance scheme
concerned numerous Greek animal products and
(16) According
to
the
information
provided
by
the
Greek
products of plant origin, while those made in 2009
authorities, the payments made by ELGA in 2008 for
concerned several crops (see recital 13). At the
damage covered by its insurance amounted to
beginning of the procedure, therefore, the Commission
EUR 386 986 648. This amount came partly from
noted that the payments in question gave local farmers
insurance contributions of EUR 88 353 000 and partly
an advantage over those elsewhere in the Union who did
from revenue obtained on the basis of a loan of
not receive similar support. The agricultural sector is
EUR 444 million.
open to competition at Union level and is consequently
sensitive to any measure favouring production in a
particular Member State. The payments in question
therefore threaten to distort competition in the internal
(17) ELGA
took
out
a
bank
loan
of
EUR
444
million
on
the
market and to affect trade between Member States.
basis of Article 13 of Law No 3074/2002 and
Article 28(17) of Law No 3147/2003. The loan is to
be paid back over 10 years (2009-2018). For the first
3 years (2009-2011) this loan is subject to annual
interest and a Greek State levy of EUR 23 709 600,
(22) Measures which favour certain undertakings or the
and for the following 7 years (2012-2018) the interest,
production of certain goods: Regarding the issue of
depreciation and levy will amount to EUR 87 138 171 in
whether the payments made by ELGA in the context of
2012, EUR 83 789 143 in 2013, EUR 80 395 714 in
the compulsory insurance scheme against natural risks
2014, EUR 77 002 286 in 2015, EUR 73 608 857 in
provided selective advantage, the Commission considered
2016, EUR 70 215 429 in 2017 and EUR 66 822 000
that, a priori, the selective nature of the measure results
in 2018. The loan is guaranteed to ELGA by the Greek
from the fact that the payments by ELGA were limited to
State.
certain agricultural production.

(18) The
other
part
of
the
loan,
EUR
145
366
352,
was
for
The Commission took the view that it was arguable that
State aid approved by Commission decisions regarding
the special characteristics of the agricultural sector and its
emergency planning programmes for the 2006 and
particular dependence on certain climatic conditions, as
2007 fires. This part of ELGA’s income is not affected
well as its vulnerability to natural risks in Greece, makes
by this Decision.
it necessary to set up a State scheme which assures a
minimum level of compensation based on the principle
of solidarity. In so far as the payments by ELGA as part
of the compulsory insurance scheme are financed from
III. DOUBTS RAISED BY THE COMMISSION IN
the income from the special insurance contribution, the
INITIATING THE INVESTIGATION PROCEDURE
Commission took the view that these could be
considered as not giving those benefiting from them an
1. The existence of aid within the meaning of Article 107(1)
undue advantage.
TFEU
(19) Measures granted through State resources: The
Commission took the view that this condition was met
in this case, given that the relevant national legislation
Nonetheless, this justification based on logic and the
(see recital 11) clearly states that the services provided by
nature of the scheme could not cover additional
ELGA are financed by State resources and that the former
financial interventions by the Greek State for the
are attributable to the State.
scheme in question (beyond financing through
compulsory contributions). However, the Commission
did not have sufficient evidence that this was the case
when it initiated the investigation procedure. In
(20) In the information provided prior to the initiation of the
particular, the Commission doubted whether the
procedure the Greek authorities had indicated that they
measures in question had been financed without
intended to raise the percentage of the special insurance
additional State intervention.
contribution in order to increase ELGA’s income.
However, the information provided on the increase in
ELGA’s income did not contain precise figures at this
stage of the procedure to allow the conclusion that this
(23) For
these
reasons
the
Commission
concluded,
when
it
increase would be sufficient to repay the loans in
opened the procedure, that it could not rule out that

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Official Journal of the European Union
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the payments by ELGA in 2008 and 2009 as part of the
granted to farmers, in reality went to agricultural cooper
compulsory insurance scheme fall under Article 107(1)
atives and their associations which, because only they
of the Treaty and constitute State aid.
handle agricultural products, compete with the inde
pendent traders.
2. Qualification of the measures as illegal aid
(30) According
to the interested parties,
Greece
failed
to
(24) The
Commission considered that, since the aid was
provide evidence to show that the payments in
granted and paid without prior notification to the
question were granted to compensate for losses caused
Commission, it is illegal aid within the meaning of
by adverse climatic conditions. The Greek authorities
Article 1(f) of Regulation (EC) No 659/1999.
failed to submit an analytic description of the climatic
conditions concerned based on appropriate meteoro
logical information, as called for by the guidelines.
3. Preliminary assessment of the compatibility of the aid
(25) As the Greek authorities had maintained that the
measures in question are not State aid, the Commission
(31) In the opinion of the interested parties the Greek auth
orities had specified neither the method of calculating the
did not, at the time the procedure was initiated, have the
payments in question nor the minimum threshold of
necessary information to determine whether the aid was
losses. In addition, these payments were limited to
compatible with the legal texts applicable when it was
certain agricultural products, while other producers
granted, i.e. in 2008 and 2009. These are the
who were excluded from these payments had also
Community Guidelines for State aid in the agriculture
suffered production losses.
and forestry sector 2007-2013 (


8 ) (‘guidelines’), and in
particular Chapter V.B, on aid to compensate for
damage to agricultural production or the means of agri
cultural production.
(32) The
interested
parties
also
thought
that
the
granting
of
these payments has had an impact on the price of the
final products since the price of the products fell as result
of these payments. This aid therefore gave the producers
(26) On the basis of the information provided, the compen
concerned an economic advantage by allowing them to
sation for most of the crops concerned appeared to
market those products not affected by adverse weather
involve damage of a minimum threshold of 30 %,
under conditions which distorted competition. Moreover,
taking into consideration loss of production or deterio
the private marketers (such as traders, flour and feedstuff
ration in quality for certain products suffered during the
millers, poultry and pig farmers) were forced to pursue a
year concerned due to a combination of more than one
price policy imposed by the agricultural cooperatives and
negative meteorological phenomenon and, for some
their associations, thus putting these cooperatives into a
crops, also due to plant diseases. The information trans
monopoly position.
mitted by the Greek authorities did not supply any details
about the method used to calculate this compensation.
(33) Also,
the
coverage
offered
by
ELGA
regarding
the
risks
to
which the agricultural sector is exposed had to respect
(27) Therefore the Commission has doubts whether the aid
the principles of proportionality and equality. According
could be said to be compatible with Chapter V.B of the
to the interested parties, it is not acceptable that the
guidelines.
payments made by ELGA in 2008 and 2009 were
three and four times, respectively, the total insurance
contributions for the same years.
IV. COMMENTS BY THIRD PARTIES
(28) The
interested
parties
which
made
comments
are
the
(34) According
to
the
interested
parties,
by
taking
out
the
European Liaison Committee for the Agricultural and
new loan for 2009 ELGA excessively ‘mortgaged’ its
Agri-Food Trade (CELCAA), the European Association
income for the next 10 years, given that it was already
of Cereals, Rice, Feedstuffs, Oilseeds, Olive Oil, Oils and
obliged to pay back the loan it had taken out for 2008,
Fats and Agrosupply Trade (COCERAL), and a third
for which it had ‘mortgaged’ its insurance contributions
interested party which asked for its identity to be
in advance for the following years. The interested parties
treated confidentially.
also pointed to the two additional loans ELGA took out
in 2009, i.e. a loan of EUR 350 million with the Bank of
Piraeus and a loan of EUR 112 million with the Agri
cultural Bank of Greece and the National Bank of Greece.
(29) The
interested
parties,
being
independent
traders
(the
third interested party) and, in the case of CELCAA and
COCERAL, being charged with protecting the interests of
independent traders, feel that this aid, while initially
(35) The interested parties also thought that the loans of
EUR 444 million and EUR 415 million represent income
( 8 ) OJ C 319, 27.12.2006, p. 1.
additional to that from the insurance contributions and

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17.3.2012 Official
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of
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European
Union L
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paid under Greek law in the form of loans guaranteed by
(38) With
regard
to
the
compensation
aid
in
2008
and
2009
the Greek State. Those loans should therefore be
for damage which led to the destruction of more than
considered as State resources.
30 % of normal crop production, the Greek authorities
take the view that all conditions laid down in paragraphs
124 to 130 of the guidelines as well as in Article 11 of
Commission Regulation (EC) No 1857/2006 of
V. OBSERVATIONS BY GREECE
15 December 2006 on the application of Articles 87
and 88 of the Treaty to State aid to small and
1. Specific observations concerning compensation aid granted
medium-sized enterprises active in the production of
in 2008 and 2009
agricultural products ( 10 ) (‘Exemption Regulation’) are
(36) According
to
the
Greek
authorities
the
compensation
aid
met.
paid out by ELGA in 2008 and 2009 does not constitute
State aid.
(39) In the opinion of the Greek authorities the aid in
question was paid to the farmers concerned or to the
organisations to which they are affiliated, in line with the
The insurance scheme in question is financed from
guidelines and the abovementioned Exemption Regu
compulsory special contributions paid by the farmers.
lation. The Greek authorities confirmed in particular that:
Since this insurance scheme is governed by the
principle of social solidarity, the compulsory special
contributions need not be strictly proportionate to the
(a) in no case did the aid exceed the real losses suffered
insured risk and the benefits paid need not necessarily be
by the farmers;
proportionate to the income of the insured person ( 9 ).
Therefore, according to the Greek authorities, these
payments are genuine compensation given in order to
(b) regarding the intensity of the aid, the Greek auth
make good damage to agricultural production due to
orities have confirmed that the conditions laid
adverse climatic conditions, in line with Greek law
down in Article 11 of the Exemption Regulation
regarding agricultural insurance paid by ELGA.
were respected, since the compensation paid by
ELGA did not exceed 74,8 % of the reduction in
revenue from the sale of the product due to
adverse climatic conditions;
Moreover, according to the Greek authorities, ELGA is
capable of paying its financial obligations at maturity
using the system of compulsory insurance. This capa
(c) the maximum amount of loss eligible for aid was
bility is reinforced by the adoption of the new Law No
reduced by all amounts paid out by an insurance
3877/2010 concerning the protection and insurance
scheme and costs not incurred because of the
system for agricultural activities, which envisages
adverse climatic event;
additional sources of finance for ELGA. This Law
therefore, in most cases, increases the special insurance
contribution (from 3 % to 4 % for damage to crops and
(d) the calculation of loss was made at the level of the
from 0,5 % to 0,75 % for damage to animal production).
individual holding;
In addition, it establishes a voluntary insurance for losses
not covered by the compulsory insurance, as well as a
general insurance to be paid to ELGA by natural persons
(e) the decision to grant the aid in question and the
not practising farming as their main occupation and by
payment of that aid took place within the deadlines
legal persons the majority of whose shares do not belong
laid down in Article 11(10) of the Exemption Regu
to full-time farmers.
lation, i.e. three and 4 years after the loss, respect
ively; and
(37) However,
even if the compensation aid were to be
(f) the aid in question was not combined with other
regarded as State aid, the Greek authorities consider
State aid or with the financial contributions
that it is compatible with Article 107(3)(c) of the
allocated by the Member States or the Union for
Treaty and with the guidelines. The Greek authorities
the same eligible costs. The producers concerned
have provided the Commission with detailed data
did not receive aid to compensate for the same loss
concerning all aid granted by ELGA in 2008 and
based on more than one legal text; therefore this aid
2009, indicating the name and tax number of each
was granted either pursuant to the guidelines or to
farmer concerned, the department in which the parcel
the Exemption Regulation, or to Commission Regu
is situated, the type of crop, the unit of measurement
lation (EC) No 1535/2007 of 20 December 2007 on
of the crop and the number of units used, the amount of
the application of Articles 87 and 88 of the EC
aid and the date when it was granted, a description of the
Treaty to de minimis aid in the sector of agricultural
damage and its level compared to normal production.
production ( 11 ) (‘de minimis Regulation’), or to the
Communication of 22 January 2009 for State aid
( 9 ) In this regard see the Opinion of Advocate-General Stix-Hackl
presented on 14 November 2002 concerning Case C-355/00 Fres
( 10 ) OJ L 358, 16.12.2006, p. 3.
kot/Elliniko Dimosio [2003] ECR I-5263, paragraph 68.
( 11 ) OJ L 337, 21.12.2007, p. 35.

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measures to support access to finance in the current
2007, heavy rainfall in several areas of the country in
financial and economic crisis (‘Temporary
October 2007, hot, dry katabatic winds in Crete in
Community Framework Communication’) ( 12 ).
October 2007, storms and hail in a number of
prefectures in the north-west and centre of mainland
Greece in early August 2008, and storms in late
August 2008 in the regions of Magnesia, Viotia, and
East Attica, and on the islands of Evia and Crete.
(40) With regard to the method of calculating normal
production, the Greek authorities presented information
on the method used and confirmed that the conditions
laid down in paragraph 128 of the guidelines, which
state that in case an alternative method is used, it
should be representative and not based on abnormally
In particular, the compensation in question was granted
high yields, have been met. In particular, the losses
in respect of damage which exceeded the following
resulting from adverse climatic conditions have been
percentages of normal production ( 13 ):
evaluated at the level of the individual holding by agro
nomists, based on estimates made on site, as provided
Minimum
for in the ELGA insurance regulation. During the on-site
amount of
Number of
Percentage of
damage as a Total amount of
agricultural
total amount of
inspection the evaluating agronomist measures the area
percentage
compensation
parcels which
compensation
of the parcel using all appropriate means (tape measure,
of normal
(EUR)
suffered losses
granted
parcel identification map, GPS) and, in the case of crop
production
sites with trees, counts the number of trees. The agro
nomist then estimates the expected production of the
20–29 26
063
999,19 101
162 6,98
parcel, taking account of the growing techniques used
30–100 347
193
466,52 565
244 93,02
(in particular the density of planting, the pruning
system for tree crops, early crops using plastic sheeting,
Total 373
257
465,71 666
406 100
irrigation system), the varieties of crops grown, the
previous crop in the case of annual crops, crop control
(particularly fertilisers, pest control), solar productivity
and any special features of the production year (such
as drought, setting problems). Lastly, the agronomist
ELGA also made additional compensation payments
evaluates the expected damage to production in the
totalling EUR
2
472
785,97 to farmers who had
parcel. To do this samples are taken from different
suffered further losses of the same crops due to adverse
parts of the parcel, taking into consideration the
weather conditions. 6,98 % of the total amount of
expected quantitative loss of production, the deterio
compensation paid was also for damage equivalent to
ration of quality due to the damage, crop control
20-30 % of normal production; 93,02 % of the total
following the damage (such as additional crop protection,
amount was for damage which had destroyed more
weeding or removal of damaged fruit).
than 30 % of normal production.
2. Specific observations concerning compensation aid granted
(43) Furthermore,
aid
granted
by
ELGA
to
farmers
in
2008
in 2008
included the following:
(41) Of the aid granted by ELGA in 2008, i.e. EUR
386 986 648, compensation of EUR 373 257 465,71
was paid to producers for loss of crop production due
to adverse climatic conditions. Regarding this aid, ELGA
applied Article 6 of the Regulation on insurance for crop
(a) aid totalling EUR 7 338 119,74 for livestock asset
production concerning compensation to producers of
losses. Among these losses, the amount of
agricultural products for losses due to adverse climatic
EUR 1 860 279,67 was paid for livestock asset
conditions, as provided for in Greek Law No 1790/1988
losses resulting from adverse weather conditions,
establishing the ELGA insurance system.
EUR 3 188 825,78 concerned losses caused by
animal illness and disease, and EUR 2 289 014,29
related to other types of damage (such as attacks
by wild animals, bears, wolves or stray dogs). The
Greek authorities take the view that this aid is
(42) For the aid in question, Greece has provided meteoro
genuine compensation in the context of the
logical information about the adverse weather conditions
compulsory insurance scheme and does not
in the 2007/2008 marketing year. These adverse climatic
constitute State aid within the meaning of
events were formally acknowledged by the public auth
Article 107(1) of the Treaty;
orities. They include, in particular, the heatwave which
affected the entire country in late June and late July
( 13 ) Article 6 of the Regulation on crop production insurance (Common
Ministerial Decision No 15711 of 30 September 1998) provides
( 12 ) OJ C 16, 22.1.2009, p. 1. The Communication was last amended in
that the minimum threshold for damage to be covered by ELGA is
October 2009 (OJ C 261, 31.10.2009).
20 % of normal production.

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(b) aid totalling EUR 114 374,86 for crop losses caused by bears. That aid was granted under the
Community ‘LIFE’ project for the conservation of the brown bear in Greece. The aid intensity was
100 %; and
(c) aid totalling EUR 3 803 901,72 for corrective measures following inadvertent errors made in the
evaluation reports in respect of crop and livestock asset losses. These errors, which were not
detected until the aid had been paid to farmers, related to ELGA debts vis-à-vis the beneficiaries
concerned.
3. Specific observations regarding compensation aid granted in 2009
(44) With regard to the compensation paid in 2009 on the basis of the Common Ministerial Decision of
30 January 2009, i.e. EUR 415 019 452, the table below provides details of the products concerned,
the weather conditions which caused the damage and a description of the damage caused.
Agricultural
Total amount of
Adverse weather
product
compensation
(EUR)
conditions
Description of the damage
1. Almonds
56 580 555
High temperatures and The high temperatures and the heatwave in the
Cherries
(for all
heatwave;
summer of 2007 had a negative impact on the
Apricots
products)
warm, dry winter;
production of these crops and, in particular, on
(bebekou
prolonged drought;
fruit bud formation. Prolonged drought in 2007
variety)
sudden variations in and sudden changes in temperature led to a fall in
Apples
temperature.
production. In addition, tree crops did not have
Plums
sufficient chill time as a result of the warm, dry
Pears
winter.
2. Peaches 10
970
348 Same
weather
Same damage as in 1.
conditions as in 1.
3. Asparagus 6
751
747 Warm,
dry
winter; The warm, dry winter of 2007-08 increased the
low temperatures.
level of catabolic (acid-forming) activity in the
asparagus, depleting the nutrient content. These
conditions led to a sudden drop in the next
asparagus yield. Production, which was already
reduced, was also affected by the low temperatures
in February 2008 which retarded growth. This
caused a further fall in the asparagus yield in
Greece in 2008.
4. Oriental
13 817 834 High
temperatures
and
The high temperatures and heatwave in the summer
tobacco
heatwave;
of 2007 combined with the drought made it
drought.
difficult to treat insect and thrips virus infestations
and caused tobacco production to fall throughout
Greece.
5. Potatoes 7
220
996 High
temperatures. High
temperatures
in
the
summers
of
2006
and
2008 made it difficult to treat insect infestations
and plant diseases which affected summer potato
crops in several Greek prefectures.
6. Cotton 109
564
462 Prolonged
drought; The prolonged drought reduced water stores. In
hot summer;
2008, a hot summer followed by a cold autumn
cold autumn;
combined with excessive rainfall towards the end
rain.
of September led to a reduction in production and
a decline in the quality of the cotton crop
throughout Greece.
7. Olives 72
026
112 Drought;
Prolonged drought, the icy weather of February
frost;
2008, which followed a mild winter, and the high
rain.
temperatures and excessive rainfall during the olive
flowering period led to a significant reduction in the
olive yield throughout Greece.

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L 78/28
EN
Official Journal of the European Union
17.3.2012
Agricultural
Total amount of
Adverse weather
product
compensation
(EUR)
conditions
Description of the damage
8. Cereals
138 087 394 Rain;
The rain and variations in temperature in the spring
(maize,
variations in
and autumn of 2008 led to a decline in the
common
temperature.
production of cereals and left the crops more
wheat,
vulnerable to disease. The decline in quality was
barley,
also due to the absence of essential nutrients
oats, rye,
(protein, gluten) caused by the adverse weather
rice)
conditions.
Total 415
019
448
(45) According
to
the
Greek
authorities,
out
of
the
compen
compensation (see recital 36) or deemed compatible with
sation
of
EUR 415 019 452,
aid
totalling
the Exemption Regulation (see recital 46), it should still
EUR 27 614 905 paid to 871 farmers is considered to
be deemed compatible with Article 107(3)(b) of the
be State aid compatible with the internal market within
Treaty and the Communication on the Temporary
the meaning of Article 107(3)(c) of the Treaty and the
Framework.
guidelines.
The grant of the aid in question improved access to
(46) The remaining aid, EUR 387 404 547, was paid to
784 408 farmers. According to the Greek authorities,
finance for the farmers concerned. Thus, the abovemen
the aid in question is compatible with the internal
tioned compensation ensured financial liquidity for the
market under Article 107(3)(c) of the Treaty and the
primary production sector in Greece, the only sector on
Exemption Regulation.
which the Greek State was able to depend during the first
few months of the economic crisis in order to avert risks
to other sectors of the Greek economy. However, the aid
The Greek authorities take the view that the aid in
in question was granted according to strict criteria.
question satisfied all the conditions laid down in
Indeed, it was only granted where there were genuine
Article 11 of the Exemption Regulation. In particular:
economic problems linked exclusively to agricultural
production and, more specifically, where this was
affected by adverse weather conditions (see recital 44).
(a) the gross aid intensity did not exceed 80 % of the
For the majority of this aid, thresholds had not been set
reduction in income from the sale of the product
for the intensity or the extent of the problems faced by
resulting from the adverse weather conditions;
each farmer, as the aim was to support the Greek agri
cultural sector in general.
(b) the losses were calculated at the level of the indi
vidual holding;
(48) Furthermore, in accordance with point 7(a) of the
Communication, in the case of non-notified aid ( 14 ) the
Commission applies the Communication if the aid was
(c) the amount of the loss did not include expenditure
granted after 17 December 2008. The Greek authorities
which did not result from the adverse weather
therefore take the view that point 7(a) of the Communi
conditions and the farmers did not receive compen
cation applies in respect of the non-notified aid in
sation from any other insurance institution;
question, since it was granted to farmers after
17 December 2008.
(d) the compensation in question was paid directly to the
farmers;
(49) The
Greek
authorities
consider
that
the
aid
in
question,
which is provided for in exceptional cases by the
(e) the decision to grant the aid in question and the
Common Ministerial Decision of 30 January 2009,
actual payment of the aid took place within three
fulfils all the conditions set out in point 4.2.2 of the
and 4 years of the losses, respectively;
Temporary Community Framework. More specifically:
(f) the standard calculation method used is the same as
(a) the aid was granted within the context of an aid
that described in recital 42 for the aid granted in
scheme, since it was based on the abovementioned
2008.
Common Ministerial Decision;
( 14 ) In accordance with the Commission notice on the determination of
(47) Moreover,
the
Greek
authorities
consider
that,
even
if
the
the applicable rules for the assessment of unlawful State aid (OJ C
aid in question cannot be considered to be genuine
119, 22.5.2002, p. 22).

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EN
17.3.2012 Official
Journal
of
the
European
Union L
78/29
(b) it was granted to undertakings which were not in
(52) The
Greek
authorities
consider
that
the
abovementioned
difficulty on 1 July 2008 in accordance with the
aid of EUR 75 382 500 meets all the conditions laid
Community guidelines on State aid for rescuing
down in Regulation (EC) No 1535/2007 on de minimis
and restructuring firms in difficulty. The Greek auth
aid. More specifically:
orities have confirmed that the aid was granted
exclusively to natural persons, the majority of
whom were exempt under Greek legislation from
filing a tax return since their annual income did
(a) in accordance with Article 3(2) of Regulation (EC) No
not exceed EUR 12 000. All the farmers who were
1535/2007, in respect of the abovementioned aid,
beneficiaries of the compensation in question had
the farmers concerned did not receive compensation
bank accounts which they were using and the aid
exceeding the sum of EUR 7 500 per farmer during
was paid into their bank accounts. The Greek auth
the fiscal years 2008 to 2010;
orities confirm that the farmers in question were
solvent and had access to adequate bank finance.
Therefore, these farmers were not in difficulty when
the aid in question was paid;
(b) the cumulative amount of de minimis aid granted by
Greece to agricultural holdings over a period of three
financial years did not exceed EUR 75 382 500, i.e.
(c) the aid scheme was not applied to undertakings
the maximum cumulative amount of aid laid down
active in the fisheries sector;
for Greece in accordance with Article 3(3) of and the
Annex to Regulation (EC) No 1535/2007.
(d) the aid in question was not export aid or aid
favouring domestic over imported products;
4. Comments on the observations made by third parties
(53) Greece argues that the interested parties have not
provided any evidence to prove that the compensation
(e) it was granted in 2009, thus prior to 31 December
in question has affected the position of their members on
2010 as stipulated in point 4.2.2(f) of the Communi
the internal market.
cation on the Temporary Community Framework;
and
(54) With
regard
to
the
observation
that
no
description
of
the
(f) the amount of aid per farmer ranged from
adverse weather conditions was provided, the Greek
EUR 7 501 to EUR 15 000.
authorities emphasise that, under the Common Minis
terial Decision on compensation, no such description is
required, but that it was necessary to demonstrate the
existence of adverse weather conditions and to prove
(50) In
accordance
with
point
4.2.2(g)
of
the
Communication
that the damage caused had reached the minimum
on the Temporary Community Framework, as amended
threshold of 30 % of normal production. Furthermore,
in October 2009, the aid in question received by each
Greece did provide, in the context of the observations
farmer concerned should not raise the total amount of
it submitted to the Commission, analytical data
aid received by the farmer concerned during the period
concerning the weather conditions in question, accom
from 1 January 2008 to 31 December 2010 to above
panied by the relevant meteorological information.
the ceiling of EUR
15
000. The Greek authorities

consider that the fact that ELGA did not obtain a
declaration from the farmers concerned, in written or
electronic form, about any other de minimis aid, or aid
received pursuant to the Temporary Community
(55) With
regard
to
the
observation
that
Greece
did
not
specify either the method used for calculating the
Framework during the current fiscal year, should be
compensation in question or the minimum threshold
regarded as a mere formality. Thus, the failure to
of the loss suffered, the Greek authorities reiterate that,
observe that formality should not lead to the conclusion
in the context of the observations submitted to the
that the condition laid down in point 4.2.2(g) of the
Commission, it provided detailed information in respect
Communication on the Temporary Community
of both factors.
Framework, as amended in 2009, was not satisfied,

particularly since, as shown by ELGA’s computer
records, Greece did not grant de minimis aid to farmers
in the primary agricultural products sector or aid based
(56) The Greek authorities claim that the granting of the aid
on the Communication on the Temporary Community
in question did not affect the end-consumer because the
Framework during the period from 1 January 2008 to
fall in the price of the agricultural products concerned
31 December 2010.
did not lead to a fall in retail prices. To support this
claim, the Greek authorities submitted articles from the
Greek press showing that the retail price of several agri
(51) Nevertheless, in the opinion of the Greek authorities, of
cultural products, including those involved in this case,
the sum of EUR 387 404 547, aid of EUR 75 382 500
remained high despite the fact that the wholesale price of
falls within the scope of the de minimis Regulation.
those agricultural products had fallen.

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L 78/30
EN
Official Journal of the European Union
17.3.2012
VI. ASSESSMENT OF THE AID
question, the two loans taken out by ELGA for the
compensation paid in 2008 and 2009 and guaranteed
1. Existence of aid within the meaning of Article 107(1) of
by the Greek State (see recitals 15 to 17) constitute State
the Treaty
resources within the meaning of Article 107(1) of the
(57) Article
107(1)
of
the
Treaty
states
that
any
aid
granted
Treaty since they are part of the resources of ELGA, a
by a Member State or through State resources in any
private legal person wholly owned by the State and
form whatsoever which distorts or threatens to distort
under the supervision of the Minister for Agriculture
competition by favouring certain undertakings or the
(see also recital 8).
production of certain goods is, in so far as it affects
trade between Member States, incompatible with the
internal market. The Commission considers that, in
(59) Measures
which
affect
trade
and
distort
or
threaten
to
respect of the measures in question, the abovementioned
distort competition
conditions have been satisfied.
The Commission notes that the compensation in
(58) Measures
granted
through
State
resources
question gives national farmers an advantage over those
elsewhere in the Union who do not receive the same
support. The agricultural sector is open to competition
In accordance with the Court judgment of 22 March
at Union level ( 19 ) and is consequently sensitive to any
2003 in Case C-355/00 Freskot AE v Elliniko Dimo
measure favouring production in a particular Member
sio (
State ( 20 ). The compensation in question therefore

15 ) (‘Freskot case’), this condition is satisfied in the
present case since the national legislation concerned
threatens to distort competition in the internal market
clearly establishes that the benefits provided by ELGA
and affects trade between Member States.
are granted through State resources and are imputable
to the State within the meaning of the Court’s case-
law ( 16 ).
(60) Measures which favour certain undertakings or the
production of certain goods
In the present case, as in the Freskot case, under
Article 5(a) of Law No 1790/1988 (see also recital 11)
Moreover, in accordance with the case-law of the
and other provisions of Greek legislation in force, ELGA’s
Court ( 21 ), measures which, in various forms, mitigate
income from the special contribution was collected by
the charges which are normally included in the budget
the tax authorities, entered in the State budget as State
of an undertaking and which, therefore, without being
revenue and paid to ELGA from the budget of the
subsidies in the strict sense of the word, are similar in
Ministry of Agriculture (now the Ministry of Rural Devel
character and have the same effect are also considered to
opment and Food). Consequently, the fact that the
be aid.
contributions in question are entered into the accounts
as State revenue is sufficient to consider that the
payments made by ELGA were financed by State
In the Freskot judgment, the Court found that the term
resources.
‘undertaking’ within the meaning of Article 102 of the
Treaty does not cover a body such as ELGA in respect of
its activities under the compulsory insurance scheme
Furthermore, in accordance with Article 2 of Law No
against natural risks (see paragraphs 79 and 88 of the
1790/1998 ( 17 ), by decision of the Minister for Agri
judgment).
culture ELGA may pay aid or compensation to bene
ficiaries through a transfer of resources from the State
( 19 ) In accordance with the case-law of the Court of Justice, the
budget or by means of loans taken out by ELGA and
improvement of the competitive position of an undertaking
guaranteed by the Greek State where the Greek State is
resulting from a State aid generally constitutes a distortion of
obliged to repay the loan.
competition with other competing undertakings not receiving
such aid (judgment in Case C-730/79, Philip Morris v Commission
[1980] ECR 2671, paragraphs 11 and 12).
( 20 ) In terms of intra-EU trade in the EU-27 in 2008, crop imports
amounted to 11 043 000 tonnes and exports to 10 799 000
However, it is clear from the case-law of the Court that
tonnes; fruit 13 494 000 tonnes (imports) and 13 227 000
benefits granted directly by the State and those granted
tonnes (exports) of which citrus fruits, 4
236
000 tonnes
by a publi