§ Mr. MitchellTo ask the Minister of Agriculture, Fisheries and Food further to his answer of 22 February 1999,Official Report, column 188, on exchange rates, what form compensation will take for market support payments adversely affected by a decline in the euro; and what will be the source of such compensation. [74317]
§ Mr. RookerThe new agri-monetary regulations for market support payments are of two kinds.
The first is a one-off arrangement to deal with the effects of the ending of the green rates on 1 January 1999. Compensation is payable only if the rate on 1 January 948W 1999 was less favourable than the rates applying over the two previous years. This was not the case in the UK, so no compensation is payable.
The second deals with appreciable revaluations in the Pre-Ins currencies occurring after 1 January 1999 and before January 2002. Compensation would apply to the amount of the revaluation exceeding 2.6 per cent. The Member State and the European Union would each pay 50 per cent. of this compensation. It is too soon to say whether the UK would be eligible for such compensation.
Even if the possibility of compensation exists, payment remains optional for Member States; the EU contribution would be made only if the Member State paid its half. Decisions on paying compensation will need to take account of circumstances prevailing at the time, including the effects on the national contribution of the UK budget abatement.