MEPs set to launch special fraud probe

Date: 15/06/2000

By John Shelley

MEPS are set to back down in their long-running battle with the European Commission over its handling of the Union's 1998 budget.

But they are refusing to let Commission President Romano Prodi's team off the hook over the way the institution dealt with one particular case of EU subsidies fraud.

Members of the European Parliament's powerful budgetary control committee say they are now ready to 'discharge' the Union's 1998 budget, removing a threat to trigger a repeat of the events which led to the downfall of the previous Commission.

But the committee is expected to vote in favour of setting up a special investigative panel to look into one instance of fraud - the Fléchard case - in which, they say, the Commission has still not explained its actions satisfactorily. "There are still some areas on which we are not happy with the Commission's response," said British Socialist MEP and committee member Eluned Morgan. "We are not satisfied with the systems which have been put in place in the wake of this case."

The budgetary control committee initially refused to approve the 1998 budget in a bid to force the Commission to take stronger action to clear up some of the highest-profile cases of mismanagement, including alleged fraud in the Union's humanitarian aid and Mediterranean development programmes. It was a similar refusal which led to the setting up of a committee of wisemen whose report prompted the Santer Commission to resign en masse in March 1999.

This time around, MEPs - aware that the political will does not exist to bring the institution to its knees again and partially satisfied by recent Commission responses to their queries - feel they cannot postpone discharge any longer. But they stress this does not mean that they will abandon their efforts to get answers to questions which are still outstanding.

They are particularly anxious for more information about how a fine imposed on French firm Fléchard, which was found guilty of claiming export subsidies in 1992 for butter supposedly earmarked for the Soviet Union but which was actually destined for Poland, was reduced from €17.6 million to €3 million.

Minutes of the meeting at which the decision to reduce the fine was taken have since vanished, fuelling speculation that the proper procedures were not followed and that the decision to reduce the fine was made under political pressure.

"This was an arbitrary decision in favour of Fléchard in which the Commission infringed not only binding Community law that it itself had enacted, but also the principle of equal treatment," said Gabriele Stauner, the German centre-right MEP tasked with drafting the Parliament's opinion on the budget discharge.

MEPs are set to back down in their long-running battle with the European Commission over its handling of the Union's 1998 budget.