Estonia to hire heavy weight to defeat sugar fine

  • 2005-06-15
  • From wire reports
TALLIN - The Estonian government is planning to hire a Brussels law office to help it compile a suit against the European Commission for the latter's decision to penalize the country for amassing sugar on the eve of EU accession.

Foreign Minister Urmas Paet told reporters that the government had set 700,000 kroons (44,700 euros) as the limit to be paid to the lawyers. "To file the suit, Estonia will pick a law office that is professional and with as good a price and quality ratio as possible," he said.

Prime Minister Andrus Ansip defended the Cabinet's decision by explaining that 700,000 kroons spent on legal assistance is significantly smaller than the looming penalty of 715 million kroons, which, according to EU regulations, the country will have to pay prior to a final settlement in court. If Estonia wins the case, the money will be returned.

The European Commission ruled on May 31 that the Baltic state's excessive sugar stock on the eve of accession in May 2004 was 91,464 tons. Commission officials believe that the additional sugar was imported for speculative purposes, as trading companies tried to make a profit on pre- and post-accession price differences.

As Paet explained, "In spring 1994 the European Commission passed an additional ruling on speculative reserves. Estonia finds that 42,000 tons of sugar in the hands of individuals must not be included in the excessive stocks, as this is not speculative stock."

Ansip said the government had not had any good solutions before accession to the European Union. "Introduction of an excise tax would have brought an increase, but it wouldn't have fully prevented creation of excessive stocks," he said, adding that politically it would have been difficult to reach a consensus in Parliament on tripling the sugar price. o