EU pressing Athens for huge refund

Greece is involved in tough bargaining with Brussels following the questions raised by European Union officials regarding the way in which funds from the 2nd Community Support Framework were managed. Yesterday, Deputy Finance Minister Christos Pachtas, whose portfolio covers EU funds, had a secret meeting in Brussels with the European commissioner for regional development, Michel Barnier. According to sources, Barnier is to hold a similar meeting with National Economy and Finance Minister Nikos Christodoulakis next week. Reliable sources said that Barnier is calling on Greece to return huge amounts of money to the EU. Sources in Brussels put the figure as high as 2.9 billion euros (1 trillion drachmas) while in Athens talk is of a much smaller amount. The criticism concerns the funding of projects that were not eligible for EU money. Barnier apparently also seeks to impose supervision over transport projects, as was the case with Greece’s effort to create a land registry. Senior Finance Ministry sources in Athens rejoin that Barnier’s demands are excessive and they claim that he is exceeding his portfolio, with his claims assuming a political nature. They also tie the bloated demands from Brussels with outstanding issues such as Greece’s objections to Turkey having a say in the Euroforce, and possible Greek objections to enlargement if Cyprus’s EU accession is impeded. The Greek deputy finance minister requested yesterday’s meeting with Barnier after being instructed to do so by Prime Minister Costas Simitis. Simitis wants to improve the climate following recent revelations that Barnier was highly critical of delays and cost overruns in projects covered by CSF II. Now it appears that of the 1-trillion-drachma refund wanted by the EU officials, 200 billion drachmas (587 million euros) concern transport projects. They are talking about freezing these projects and setting up a supervisory body for them. In another two letters, they are critical of the effectiveness of the Central Administrative Authority set up to deal with funds from CSF III; they also accuse the Public Works Ministry of a cover-up regarding bad construction work on road projects. Barnier has been pressing Greece since March, repeatedly sending letters to ministers and the prime minister. The last two that reached Simitis concern the Central Administrative Authority and the alleged Public Works Ministry cover-ups. The former says that the authority, which has been set up at the National Economy Ministry, has turned out to be highly ineffectual and incapable of achieving the coordination required to promote CSF III projects. The CSF II funds ran from 1992 to 1999. Simitis has said that his government initiated controls that resulted in studies of projects being free of errors after 1997. Simitis became prime minister in 1996.