The rules for the restructuring and conversion of vineyards are laid down in Regulation (EC) No 1493/1999 and Commission Regulation (EC) No 1227/2000 of 31 May 2000 laying down detailed rules for the application of Council Regulation (EC) No 1493/1999 on the common organisation of the market in wine, as regards production potential.

The detailed rules on financial planning and participation in financing the restructuring and conversion scheme laid down in Regulation (EC) No 1227/2000 stipulate that the references to a given financial year refer to the payments actually made by the Member States between 16 October and the following 15 October.

In accordance with Article 14(1) of Regulation (EC) No 1493/1999, the Commission makes initial allocations to Member States each year on the basis of objective criteria, taking into account particular situations and needs and the efforts to be undertaken in the light of the objective of the scheme.

The Commission fixed the financial allocations for the 2006/07 marketing year in Commission Decision 2006/701/EC and, for Bulgaria and Romania, in Commission Decision 2007/381/EC.

Under Article 17(1) of Regulation (EC) No 1227/2000, expenditure incurred and validated by the Member States is limited to the amount of their indicative allocations. This limit applies in 2007 only to Italy, whose incurred and validated expenditure together exceeded its initial allocation.

Under Article 17(4), a penalty is applied where the actual per hectare expenditure of a Member State exceeds that laid down in the initial allocation. This year, penalties of EUR 16 690 apply to Malta.

Under Article 16(1)(c) of Regulation (EC) No 1227/2000, Member States may submit a further request in the current financial year. The Czech Republic, Spain, France, Italy, Hungary, Austria and Portugal have done so. Under Article 1(1) of Commission Regulation (EC) No 922/2007 of 1 August 2007 derogating from Regulation (EC) No 1227/2000 as regards transitional arrangement concerning the financial allocations for Bulgaria and Romania for the restructuring and conversion, Bulgaria and Romania may apply to the Commission, for a further contribution to expenditure in the 2007 financial year above that notified to the Commission under Article 16(1)(a) and (b) of that Regulation, and up to 90 % of the financial allocation awarded to them by Decision 2007/381/EC. Bulgaria has indeed lodged such an application with the Commission.

Under Article 17(3) of Regulation (EC) No 1227/2000 and Article 1(2) of Regulation (EC) No 922/2007, applications for further funding sent to the Commission by Member States other than Bulgaria and Romania are accepted on a pro-rata basis, using the appropriations available after deducting for all Member States the amounts notified in accordance with Article 16(1)(a) and (b) of Regulation (EC) No 1227/2000 and the amounts notified by Bulgaria and Romania in accordance with that provision and Article 1(1) of Regulation (EC) No 922/2007 from the total amount allocated to the Member States. This provision applies in 2007 to the Czech Republic, Spain, France, Italy, Hungary, Austria and Portugal.

Article 16(1)(b) of Regulation (EC) No 1227/2000 requires the Member States to forward to the Commission, not later than 10 July of each year, a statement of restructuring and conversion expenditure validated as at 30 June of the current financial year, as well as the total area involved. Article 17(2) of that Regulation lays down that Member States are to make the statement referred to in Article 16(1)(b) only if the amount which they have declared in accordance with Article 16(1)(a), i.e. the expenditure actually incurred as at 30 June of the current financial year, is at least equal to 75 % of the indicative amount allocated to the Member State concerned. The expenditure validated by Germany cannot be accepted as the expenditure actually incurred did not reach 75 % of its initial allocations,