Sunday

16th Jun 2019

Euro bail-out funds lack oversight, auditors say

  • MEPs worry that huge sums of public money will go unaccounted for (Photo: Images_of_Money)

Scrutinised neither by national audit offices nor by the European Parliament, the two eurozone bail-out funds amounting to €700 billion lack democratic oversight and accountability, several auditors and MEPs said on Tuesday (24 March).

The new financial architecture of the eurozone - set up under market pressure in successive phases resulting in different funds and financing methods - is putting up unprecedented amounts of public money to contain the sovereign debt crisis.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

But according to the Dutch Court of Auditors, the Luxembourg-based funds - the temporary European Financial Stability Facility and the upcoming European Stability Mechanism (ESM) - are neither transparent, nor accountable enough for the amount of public funding they will be able to draw on.

"Democratic control and public scrutiny only exist to the limited extent that ministers of finance can be held to account by their national parliament for their individual share in the functioning of the ESM and not for the functioning of the ESM bodies or the organisation as such," a report presented to MEPs on Tuesday by the Dutch Court of Auditors reads.

The report warns that waning public support for all these financial contributions will be even less certain given this democratic deficit, especially since the ESM is to be established as a permanent institution.

After lengthy back-and-forths, a coalition of national auditors late last year managed to introduce a provision in the ESM treaty creating a board of five auditors, including two from member states and one from the European Court of Auditors.

But implementing laws on what powers these auditors will have - to check only financial flows or also to look in depth at how the money is used - is still under discussion.

Meanwhile, parliamentary scrutiny remains limited to national legislatures approving bail-outs - as in Germany's case. But the European Parliament has no say and will only be "informed" in yearly reports submitted by the ESM.

"This mechanism for 17 countries has no parliamentary dimension, no public scrutiny over how these public funds are being used. We are constructing an economic governance based on inter-governmentalism, sanctions, but we don't have a parliamentary dimension for this sub-structure of the EU," said French centre-right MEP Jean-Pierre Audy.

His Dutch colleague from the Liberal group, Jan Mulder, warned that this lack of parliamentary control "is a very dangerous development" that risks undoing whatever was achieved in the past 20-30 years in terms of public accountability.

Legal challenges may delay eurozone bail-out fund

Legal challenges in Germany, Ireland and Estonia, as well as political uncertainty in the Netherlands, may delay the setting up of a permanent eurozone bail-out fund at a time when Spain's economic woes require a strong firewall.

EU top court backs Canada trade deal in ruling

The European Court of Justice ruled on Tuesday that the EU-Canada free trade agreement, and its controversial dispute settlement mechanism, is in line with the bloc's rules.

News in Brief

  1. EU plans to restructure eurozone bonds
  2. EU ups US imports in beef deal
  3. Unicef: UK among 'least family-friendly' in Europe
  4. Czech PM: No joint 'V4' candidate in commission race
  5. Johnson tops first round to replace May, three eliminated
  6. Bratislava will host new European Labour Authority
  7. Juncker cautions against further climate goals
  8. Study: Counterfeit medicine is a 'growing threat' in EU

Feature

Romania enlists priests to promote euro switchover plan

Romania is due to join the single currency in 2024 - despite currently only meeting one of the four criteria. Now the government in Bucharest is enlisting an unlikely ally to promote the euro to the public: the clergy.

Trump and Kurz: not best friends, after all

The visit of Austrian chancellor Sebastian Kurz to the White House on Wednesday showed that the current rift in transatlantic relations is deepening by the day.

Stakeholders' Highlights

  1. Nordic Council of MinistersNo evidence that social media are harmful to young people
  2. Nordic Council of MinistersCanada to host the joint Nordic cultural initiative 2021
  3. Vote for the EU Sutainable Energy AwardsCast your vote for your favourite EUSEW Award finalist. You choose the winner of 2019 Citizen’s Award.
  4. Nordic Council of MinistersEducation gets refugees into work
  5. Counter BalanceSign the petition to help reform the EU’s Bank
  6. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  7. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  8. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  9. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat
  10. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North
  11. Nordic Council of MinistersLeading Nordic candidates go head-to-head in EU election debate
  12. Nordic Council of MinistersNew Secretary General: Nordic co-operation must benefit everybody

Latest News

  1. 'Russian sources' targeted EU elections with disinformation
  2. Top EU jobs summit dominates This WEEK
  3. EP parties planning 'coalition agenda' ahead of jobs summit
  4. MEP blasts Portugal over football whistleblower
  5. Catalonia MEPs are a judicial, not political, issue
  6. Meet the lawyer taking the EU migration policy to the ICC
  7. Europe's oil supplies 'at risk' after tanker attacks
  8. EU paths fork for Albania and North Macedonia

Join EUobserver

Support quality EU news

Join us