Tuesday, March 08, 2005

Most of sugar mountain was for making jam

Estonia has claimed that the greater part of a massive sugar mountain in the country is the result of Estonians hoarding enormous amounts of sugar to indulge in the favourite national pastime of jam making.

However, the matter is far from funny as the small Baltic country faces up to €50m in fines (2% of GDP) for failing to get rid of as much as 90000t of surplus sugar prior to accession. Accession rules state that new member states have to bear the cost of getting rid of stocks of any product 'exceeding the quantity which could be regarded as constituting a normal carryover.' Estonia is charged with having failed to prevent traders flooding the low price Estonian market in anticipation of much higher EU prices after enlargement.

The problem in Estonia is seen as a test case on which to base discussions with other new member states. Cyprus and Malta are in the firing line for having high sugar surpluses.

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