An internal communication of 17 June 2016 from Walter Deffaa, the Commission Director-General for Regional and Urban Policy, regarding the alleged involvement of a construction company cartel in infrastructural projects in Greece, recommends that the Commission consider the possible suspension of European Cohesion Fund payments for the 2014-2020 period. This follows a press release from the Greek Competition Authority (17 May 2016).
This proposal by Walter Deffaa raises a number of questions, being based on a number of unconfirmed and unproven assertions from just one source, regarding which a hearing is currently pending. The eventuality of the Commission suspending payments is seriously jeopardising the completion of projects involving both Greek and foreign firms, as well as bank guarantees.
In view of this:
— Can the Commission say whether the possibility of ‘freezing’ Cohesion Fund payments for the 2014-2020 period is being considered?
— What are the general guidelines followed by the Commission in such cases?
Answer given by Ms Creţu on behalf of the Commission
On 17 May 2016 the Hellenic Competition Commission, the independent authority for competition matters in Greece, reported by way of a press release that it had issued a statement of objections addressed to undertakings in the context of its investigation of an alleged cartel in the construction sector in Greece. As stated in the press release, the statement of objections concerns potential serious irregularities, with a very high likelihood of involvement of EU funds because of the companies and construction sectors concerned by the alleged cartel.
Therefore, the competent authorising officer by delegation informed(1) the Greek authorities by letter of 8 July 2016 on the interruption of the deadline for the handling of payment claims which had been submitted to the Commission under eight 2014-2020 programmes co-financed by the European Regional Development Fund and the Cohesion Fund.
An ‘interruption of the payment deadline’ is a preventive measure that can be taken to allow for additional verifications following information that expenditure is linked to an irregularity having serious financial consequences.
At the same time the Greek authorities were warned that a similar interruption would affect any future payment claims under the same 2014-2020 programmes co-financed by these funds until the issues are resolved. The letter specifies that preventive and corrective actions should be taken by the Greek authorities in order to ensure that only legal and regular expenditure is certified to the Commission and to avoid a procedure for the suspension of payments(2).
On 12 August 2016 the Greek authorities have sent a first, partial answer to the issues raised by Commission services, which is currently being analysed.
(1) In line with Article 83 of Regulation (EU) No 1303/2013 of the European Parliament and of the Council of 17 December 2013 laying down common provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund and laying down general provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund and the European Maritime and Fisheries Fund and repealing Council Regulation (EC) No 1083/2006, OJ L 347, 20.12.2013.
(2) Under Article 142 of Regulation (EU) No 1303/2013.