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18th Jan 2020

Theft of EU funds greater than reported

  • Member states reported €600 million in stolen EU funds in 2010 (Photo: bundesbank.de)

EU funds fraud is considerably higher than the €600 million reported by member states in 2010.

“The extent of the illicit activities that lead to losses in the EU budget is really shocking […] we assume that the real figure is considerably higher,” EU justice commissioner Viviane Reding told euro deputies in the civil liberty committee on Thursday (20 September).

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Last year’s EU budget amounted to €125.5 billion but a large amount is allegedly stolen primarily in the areas of EU agricultural and regional development programmes. Member states manage 80 percent of the EU budget with national authorities in charge of how it is spent and who and how to prosecute suspected fraudsters.

But patchy judicial systems and low recovery rates prompted the commission to table an anti-fraud directive in July that would provide for an EU response to the problem. Those who commit the crime, she noted, often simply go to member states where prosecution is extremely low or non-existent.

Reding told deputies that the EU needs a “federal law” to ensure the money is better spent and deter criminals from seeking refuge in certain member states.

“If we have a federal budget with money coming from EU-27 member states then we also need a federal law to protect this budget,” she said.

The commissioner wants an automatic minimum six-month sentence and up to 5-years for the most serious offences. Fines would top €100,000 for stealing EU funds and €30,000 for money laundering. Member states would also have to extend time limitations on investigations that in some cases “are too short” and allow suspects to slip away.

A European public prosecutor, a position that the Lisbon Treaty allows to be created, would coordinate national prosecutors in tracking down and jailing suspects. The position has yet to be created and his or her role would be limited to coordinating member states primarily in anti-fraud cases.

But Reding supported the view of eventually expanding the powers of the future prosecutor even if it entails re-writing the treaty.

“I am favourable to have a treaty change but we need a step-by-step approach and do solely what the treaty allows us to do,” said Reding.

Some MEPs voiced their reservations over the plans.

British Liberal MEP Sarah Ludford said the automatic minimum sentence “undermines the freedom of national justice systems.”

She called for judicial discretion and warned that a required minimum sentence could force a judge to impose a six-month sentence even in the most minor of offences.

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