Tuesday

19th Feb 2019

EU budget errors on the rise, watchdog says

  • The EU budget for 2012 was €138.6 billion (Photo: Images_of_Money)

The EU spending watchdog, the Court of Auditors in Luxembourg, says overly complex rules on how to disperse EU funds means beneficiaries are receiving money they are not entitled to.

“Simplifying rules is critical, you cannot ask a farmer to respect urban environmental conditions that no-one understands,” Vitor Caldeira, president of the court, told reporters in Brussels on Monday (4 November).

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

He noted that EU pay-outs to member states need to be linked to performance on clear objectives which are spelt out before project launch.

“We need to change the script. The script we have today is too complex, is too much focussed on allocating funds and spending money. It is input driven,” he said.

The complex rules and input-heavy system are contributing to an increase number of errors compared to previous year, he added.

“The causes of the problem lie in the fact that eligibility conditions are not respected, procurement rules are not followed, area declarations for farmers are not corresponding to reality, this is systematic,” Caldeira said.

The court's findings are detailed in a 290-page non-binding report on the EU budget for the 2012 financial year, out Tuesday (5 November).

The EU budget was €138.6 billion last year.

The European Commission and member states jointly managed around 80 percent.

But the error rate for spending went from 3.9 percent in 2011 to 4.8 percent in 2012.

Rural development, environment, fisheries and health are the most consistently error-prone spending areas. In 2012 it was 7.9 percent in 2012, a slight increase from 7.7 percent in 2011.

The greatest jump of error rate was found in employment and social affairs, which went from 2.2 percent in 2011 to 3.2 percent in 2012.

Error is not fraud

Caldeira was quick to point out that errors do not indicate fraud but rather inefficiencies.

The rate, he said, is an estimate of the money that should not have been paid out of the EU budget due to the improper application of public purchasing rules created by member states and the European Parliament.

Most failures involved lack of respect for public procurement rules.

Minor errors include forgetting to put up an EU-funded sign next to a project site.

Other, more serous errors, involved money wrongly spent to help companies hire people seeking work, or, awarding a construction highway project directly to a company, without allowing other potential bidders the chance to make better offers.

The funds were used for their intended purposes, says the court, even though the conditions for their use were not fully respected.

Authorities in a majority of the member states are in a position to correct the errors, but have little incentive to do so because it involves withdrawing and reintroducing the EU funding claim.

“This is the case for rural development, for cohesion, for all the areas of shared management where member state authorities are involved,” he said.

In other cases, the bad claims are not a drain on the EU budget but are instead offset by the national when discovered.

“In many instances, the tax payers of member states are those who are paying because the final beneficiaries of those irregular payments are not asked to pay back. It is the national budget that is paying back,” he said.

Time to change

Caldeira underlined that the EU is not paying enough attention on results, a message he says he has repeatedly delivered since 2008.

He said the next budget cycle, the upcoming European elections in May, and the selection of new European commissioners in October, is an opportunity to create a new management culture.

“The conclusion is that the European Union pays too many claims that are not eligible, that means that we are paying funds to beneficiaries into many instances or projects that are not entitled to receive them,” he noted.

EU accounts and the Brussels blame game

Publication of the European Court of Auditors' annual report on EU accounts brings predictable accusations of fraud and mismanagement.

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.

Vestager says 'no' to Siemens-Alstom mega-merger

The EU blocked the merger of the makers of Germany's ICE and France's TGV trains, citing concerns of reduced competition and extra costs for consumers and taxpayers. The two countries now want to change the rules.

'Robin Hood' measure in CAP seems doomed

Commission wanted farmers' EU subsidies to be capped at €100,000, with payouts they would have received beyond that redistributed to smaller farms. But member states oppose the idea.

News in Brief

  1. Estonia kicks out Danske Bank over money laundering scandal
  2. May and Juncker meet over Brexit on Wednesday
  3. EU promises to open up advisory groups
  4. EU agrees to limit CO2 emissions by trucks
  5. Juncker under attack in Hungary government ad
  6. EU would not oppose extending Brexit talks, Juncker said
  7. Juncker expects Trump not to impose new car tariffs
  8. Former EU official sentenced for office rape

Opinion

Eastern Europe Matters

The foreign ministers of Sweden, Poland and the Czech Republic reflect on 10 years of the Eastern Partnership with Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine.

Stakeholders' Highlights

  1. Nordic Council of MinistersMilestone for Nordic-Baltic e-ID
  2. Counter BalanceEU bank urged to free itself from fossil fuels and take climate leadership
  3. Intercultural Dialogue PlatformRoundtable: Muslim Heresy and the Politics of Human Rights, Dr. Matthew J. Nelson
  4. Platform for Peace and JusticeTurkey suffering from the lack of the rule of law
  5. UNESDASoft Drinks Europe welcomes Tim Brett as its new president
  6. Nordic Council of MinistersNordic ministers take the lead in combatting climate change
  7. Counter BalanceEuropean Parliament takes incoherent steps on climate in future EU investments
  8. International Partnership For Human RightsKyrgyz authorities have to immediately release human rights defender Azimjon Askarov
  9. Nordic Council of MinistersSeminar on disability and user involvement
  10. Nordic Council of MinistersInternational appetite for Nordic food policies
  11. Nordic Council of MinistersNew Nordic Innovation House in Hong Kong
  12. Nordic Council of MinistersNordic Region has chance to become world leader when it comes to start-ups

Latest News

  1. College of Europe alumni ask rector to cut Saudi ties
  2. EU says Hungary's anti-Juncker campaign is fake news
  3. Trump right for once: Europe should take back foreign fighters
  4. EU should clarify rules for plant burgers and lab meat
  5. Italian populists could be second biggest force in EU parliament
  6. Merkel defends Russia ties, ridicules Trump on cars
  7. British MPs condemn Facebook CEO's misrule
  8. EU's chance to step up on Hungary and Poland

Stakeholders' Highlights

  1. Nordic Council of MinistersTheresa May: “We will not be turning our backs on the Nordic region”
  2. International Partnership for Human RightsOpen letter to Emmanuel Macron ahead of Uzbek president's visit
  3. International Partnership for Human RightsRaising key human rights concerns during visit of Turkmenistan's foreign minister
  4. Nordic Council of MinistersState of the Nordic Region presented in Brussels
  5. Nordic Council of MinistersThe vital bioeconomy. New issue of “Sustainable Growth the Nordic Way” out now
  6. Nordic Council of MinistersThe Nordic gender effect goes international
  7. Nordic Council of MinistersPaula Lehtomaki from Finland elected as the Council's first female Secretary General
  8. Nordic Council of MinistersNordic design sets the stage at COP24, running a competition for sustainable chairs
  9. Counter BalanceIn Kenya, a motorway funded by the European Investment Bank runs over roadside dwellers
  10. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  11. International Partnership for Human RightsCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  12. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs

Join EUobserver

Support quality EU news

Join us