Monday

5th Dec 2022

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).

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

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.

Auditors reject EU spending 18th year in a row

EU's top auditing body has for the 18 year in a row said there are too many errors in how EU money is spent, particularly in subsidies going to farmers and fishers.

EU Commission proposes suspending billions to Hungary

Prime minister Viktor Orbán's government has to implement 27 measures "fully and correctly" before any payment from the €5.8bn recovery fund can be made, or the suspended €7.5bn of cohesion funds can be unblocked.

Catalan spyware victims demand justice

Victims of the widening spyware scandal in Spain are demanding justice and reparations, following the revelations that journalists, lawyers, civil society and politicians had been targeted.

EU Commission to keep Hungary's EU funds in limbo

The EU executive, on the other hand, is expected to approve Hungary's recovery plan, worth €5.8bn, but only would disburse actual money if Hungary delivers on some 27 key reforms.

Portugal was poised to scrap 'Golden Visas' - why didn't it?

Over the last 10 years, Portugal has given 1,470 golden visas to people originating from countries whose tax-transparency practices the EU finds problematic. But unlike common practice in other EU states with similar programmes, Portugal has not implemented "due diligence".

Stakeholders' Highlights

  1. Nordic Council of MinistersCOP27: Food systems transformation for climate action
  2. Nordic Council of MinistersThe Nordic Region and the African Union urge the COP27 to talk about gender equality
  3. International Sustainable Finance CentreJoin CEE Sustainable Finance Summit, 15 – 19 May 2023, high-level event for finance & business
  4. Friedrich Naumann Foundation European DialogueGender x Geopolitics: Shaping an Inclusive Foreign Security Policy for Europe
  5. Obama FoundationThe Obama Foundation Opens Applications for its Leaders Program in Europe
  6. EFBWW – EFBH – FETBBA lot more needs to be done to better protect construction workers from asbestos

Latest News

  1. Bad Karma
  2. Serbia now has no choice but to join EU sanctions on Russia
  3. Hungary's funds showdown in focus This WEEK
  4. EU must break Orbán's veto on a tax rate for multinationals
  5. Belarus dictator's family loves EU luxuries, flight data shows
  6. How Berlin and Paris sold-out the EU corporate due diligence law
  7. Turkey's EU-funded detention centres ripe with abuse: NGO
  8. In green subsidy race, EU should not imitate US

Join EUobserver

Support quality EU news

Join us