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Extra virgin con?

• Mark Mardell
• 12 Nov 07, 12:13 AM

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鈥檚 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鈥檚 a different approach, which takes into account field size but no longer attaches any weight to volume of production.

I鈥檓 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鈥檛 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鈥檛 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鈥檛 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鈥檚 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鈥檛 quite wink, and say it seems to take a long time to get the money. I ask him what he means, as he鈥檚 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鈥檛 know, so we ask if he could check, as it's important to the story. The next day he says his accountant doesn鈥檛 know but he鈥檒l check with the co-operative he's a member of. They tell him about the formula used to calculate payments, but don鈥檛 know the actual amount. He says it's probably too little to worry about.

Satellite photography

But things are changing. In Brussels I鈥檇 been told that there was a new guy in charge of payments and he was determined to clean up the Greek government鈥檚 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鈥檚 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鈥檝e 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鈥檝e 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鈥檛 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鈥檚 finances will never get a clean bill of health.

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