The European Commission on Tuesday reduced the reimbursement of the Common Agricultural Policy (CAP) to Greece because of "continued administrative problems" in the management of the so-called Land Parcel Identification System (LPIS).

"It is the first time that the Commission has used this new budget management option, but it is very important that our budget rules are respected," according to European Commissioner for Agriculture and Rural Development Phil Hogan.

The Commission said Greece has made considerable progress in recent years in addressing the shortcomings for this very important element for managing CAP Direct Payments. However, several Commission audits carried out in the last three years have shown that the Greek LPIS is still not in compliance with the EU rules.

The Commission has taken the precautionary measure for the first time of reducing the reimbursement of payments to Greece. The amount of the reduction corresponds to the amount considered at risk for the fund, which is estimated at around 17 million euros (about 21 million U.S. dollars).