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30th Jul 2016

Member states blamed for EU budget errors

  • The EU budget in 2011 was €126.5 billion (Photo: snorski)

Member state authorities are to blame for the mismanagement of the EU budget, say euro-deputies who scrutinise EU funding.

“Better spending starts at home,” said German Social-Democrat MEP Jens Geier on Wednesday (20 February) at a press event in Brussels on EU funding oversight.

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Geier, who drafted the parliament’s position on the European Commission’s budget report for 2011, noted that the number of errors in the budget is on the rise.

In 2011 it was 3.9 percent, up from 3.7 in 2010. The commission interrupted 91 EU funded programmes totaling €2.6 billion in 2011 because of suspect spending practices by national authorities.

The euro-deputy attributes the increase to lax standards by some national control authorities and a pervasive culture of silence among member states on how they spend or misspend the EU budget.

“To blame the European Commission is simply not fair given that 80 percent of the monies is handled in shared management,” said Geier.

Violations are commonly found in the European agricultural fund for rural development (EAFRD), research funding (Seventh Framework Programme), and the European social fund (ESF), he added.

For its part, the European Court of Auditors recently found that almost two-thirds or 60 percent of the errors found should have been detected by the national or regional control systems.

The percentage is greater in some individual funds.

An ESF audit of 180 transactions revealed that member states’ add-on rules accounted for 86 percent of the detected errors. These errors, also known as "gold plating," are then passed off as EU-level errors, the ESF said.

For his part, Geier noted that the commission’s director general for regional policy is unable to guarantee the probity of funds spent by 18 out of 27 member states. The worst offenders are Romania, the Czech Republic and Italy.

An activity report published by the director general in 2011 notes they can rely on the national audit opinions on 65 percent of the programmes.

Other budget abuses stem from so-called retrospective projects, where member states apply for EU funding on projects initially funded from national coffers.

In some cases, the projects are already finished. The member state still applies for funding, receives it, and simply deducts it from its total expenses. Current regulation does not prohibit the practice.

“It is my aim, to have this stopped at least with the new regulation for EU funds for the new financing period after 2014,” Geier told this website in an email.

Conflict of interest at EU agencies

Despite the focus on member states, MEPs also pointed out that a handful of the more than 30 EU-based agencies - commission offshoots - are currently embroiled in conflict of interest issues.

Speaking alongside Geier at the event, Dutch Liberal MEP Gerben-Jan Gerbrandy drafted the parliament’s position on agencies.

He said some are hiring questionable outside experts to draft reports.

“We simply cannot allow that experts who are also dealing with a certain company are saying whether a certain product of this company can enter the European market,” said Gerbrandy.

Conflict of interest standards in the agencies are based on guidelines established by the Paris-based economic club, the OECD. The standards apply to staff but rules governing external help like consultants are non-existent.

Gerbrandy said the management board at the German-based European Aviation Safety Agency (EASA) is composed of national authorities who compromise the agency’s independence.

The EASA is one of four agencies that came under the Court of Auditors' scrutiny in an October 2012 report on conflict of interest.

Dominique Fouda, an EASA spokesperson denies the charge. He told this website that everyone in the management board is working for the sake of aviation safety alone.

“The individual interest comes always after the interest of the public in safety. I don’t think anyone would position his own little interest first,” said Fouda.

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