Monday

23rd Oct 2017

Opinion

See where the EU millions end up

  • "The bulk of errors are found in the payments made by national and regional authorities on behalf of the EU" (Photo: Donald Townsend)

On Tuesday (10 November), the EU auditors will publish their report on the way the EU spends money and keeps its books, offering an insight into the state of the Union's finances. Sadly enough, rather than listen to what the auditors say, some quarters will yet again use the report to promote their own anti-EU agendas, which have little or nothing to do with the report's findings.

The usual mantra in recent years has been that of 'fraudulent accounts' and 'billions lost' or 'wasted'. Neither is to be found in the auditors' conclusions. Rather, the Court has noted improvements each year in our ability to manage a budget of 125 billion euro.

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Last year the European Court of Auditors gave a clean bill of health on our accounting books. As for the spending, correct payments made up at least 95% of the value of transactions in all policy areas except cohesion policy, i.e. funds to EU poorer regions and to boost employment, managed on the ground by national and regional authorities, where errors were more significant.

Let's be clear: Errors in transactions do not mean 'billions lost'. 'Error' means the failure to respect one of the many conditions we attach to our aid in an effort to make each project consistent with the EU's policies. Undue payments are subject to clawback: by member states which manage the grants, and by the European Commission whose role is to protect EU taxpayers' money.

The clawback is our ultimate weapon to protect the EU purse. It is not a perfect one. It makes more sense to make sure the errors do not occur in the first place.

And this is where the auditors' reports reveal a rather inconvenient truth: the bulk of errors are found in the payments made by national and regional authorities on behalf of the EU. These errors should have been prevented or detected by national control systems. They were not.

Another inconvenient truth: no further improvement in the quality of EU projects will ever be possible without better performance at national level. National authorities are the ones in charge of deciding which projects make sense, selecting and managing these.

This needs to be kept in mind, especially when the media occasionally reports on "silly projects" financed with EU money, for which the authors blame "Brussels". One cannot reasonably expect an EU official from an office in the Commission's headquarters in Brussels to know what best fits the needs of a small town in the West Midlands - this is for the local authorities to say.

In my view, no project should get money from the EU budget if it is not delivering results such as by attracting tourists, or providing new jobs. And very often, what is presented in the press as an absurd project is in reality a project presented in a distorted manner or taken out of context, but which makes sense at local level because it will stimulate local enterprise and create jobs.

In any event, all beneficiaries of EU funds are now online, so that any EU taxpayer can see where the money goes, exert scrutiny and decide whether his or her national authorities have selected the right projects to ensure that EU money adds value.

The writer is the EU commissioner responsible for administrative affairs, audit and anti-fraud.

Agenda

This WEEK in the European Union

European leaders gathered in Germany for the 20 anniversary of the fall of the Berlin Wall will use the occasion to hold informal talks on the shortlist for EU's newly created top positions and agree a date for a special institutional summit.

The EU budget is unmanageable

Mismanagement and waste in the EU budget are two sides of the same coin. They both stem from the size, complexity and irrational nature of the EU budget and could be radically reduced by simplifying it, writes Mats Persson.

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