Eurostat chief in “conflict of interest” quiz

Date: 20/02/03

By David Cronin

THE head of Eurostat, the European Commission's data agency, has rejected claims of a conflict of interest after it emerged that a firm he established has received some €18 million in EU funds.

Eurocost was founded as a "not-for-profit" company by Yves Franchet, the Eurostat director-general, in 1989.

It received the millions over a nine-year period between 1990 and 1999 for work it carried out for Eurostat.

The amount was disclosed by Pedro Solbes, the commissioner for economic and monetary affairs, in reply to a query by MEP Chris Heaton-Harris.

The UK Conservative said: "At the very least, there is a conflict of interest involved here." But Franchet rejected the claims as "totally unjustified".

While confirming that he had set up the Luxembourg-based company around two years after being appointed to his EU job, Franchet stressed that he received no salary and made no money out of the company. "I did not benefit financially in any way. I didn't get a single euro out of it."

Franchet also pointed out that an audit into Eurocost's activities was undertaken at his instigation in the late 1990s. When auditors concluded in 2000 that it was overcharging the Commission, he ordered Eurocost to pay back €1 million of the payments.

The EU anti-fraud office OLAF is currently investigating the audit's findings.

The €1 million has not been repaid, however, as the company has gone into liquidation. Franchet said that it had failed to have a contract with Eurostat renewed in the 1990s after a tendering process.

The audit was undertaken jointly by Eurostat officials and the Commission's directorate-general for financial control.

Yves Franchet, the head of Eurostat, the European Commission's data agency, has rejected claims of a conflict of interest after it emerged that a firm he established, Eurocost, has received some €18 million in EU funds.