Auditors underline need for ‘deep-seated’ reforms

Date: 18/11/1999

By Gareth Harding

SENIOR MEPs have attacked the European Commission and EU governments for turning a blind eye to the fraud, mis-spending and poor accounting identified in the Court of Auditors' report on the Union's 1998 budget.

British Socialist MEP Eluned Morgan, the group's spokeswoman on budget control, said the report "vindicated the forced resignation in March of a sloppy, slap-dash Commission". She added that President Romano Prodi's new team would be "on remand" until the assembly saw evidence of fundamental reforms in the institution's financial controls.

Morgan said EU member states, which are responsible for managing more than 80% of the Union's budget, could not escape blame either. "We have seen a litany of irresponsibility by governments prepared to criticise but not act on fraud," she added.

The Parliament's largest political group, the European People's Party, also expressed its dismay at the report's findings, although budget spokesman José Javier Pomes Ruiz said the criticism was less severe than last year. The Spanish MEP added that he "did not have the slightest doubt that after the scandals earlier this year, Prodi's team will use this report to undertake deep-seated reforms in the Commission's management of funds".

The auditors' annual report, published earlier this week, estimates that about 5% of the Union's h85-billion budget was mis-spent in 1998. According to the 500-page document, the reason for this high level of waste is that the Commission is often more interested in making sure money allocated to specific policy areas is paid out than ensuring goals are met at minimum cost. Member states are also rebuked for "serious and, on occasions, persistent weaknesses" in their management of EU funds.

Many of the financial watchdog's recommendations echo those made by the committee of wise men in their two reports on the allegations of fraud and mismanagement within the Commission.

Budgets Commissioner Michaele Schreyer said the new administration took the report's findings "very seriously," but added that many of the problems it identified were the legacy of the previous Commission. "We have already made concrete proposals for improvement," she said, citing the new system for clawing back misused structural funds as an example.

She admitted, however, that "financial controls must be made more efficient and modern", adding that this would be "one of the biggest projects for Commission reform" when Vice-President Neil Kinnock presents his blueprint in February.