Bid to recoup misused EU funds

Date: 25/04/1996

MEMBER states are to be challenged to improve their notoriously poor record in recovering money lost to the Union budget through fraud.

The need for the EU to find better ways to recoup the missing funds will be one of the main messages to emerge from the annual anti-fraud report due to be approved by the Commission next week.

The need for a tougher approach was underlined this week by European Parliament President Klaus Hänsch, who insisted: “We must make greater efforts to recover money that has been misappropriated. This is surely the scandal within the scandal: where we succeed in detecting fraud, we fail in four cases out of five to recover the money that has been used illegally.”

Statistics released in Brussels this week paint an even worse picture. They indicate that between 1991 and 1994, less than 10&percent; of the money identified as illegally paid out made its way back into the Union's coffers. The record was particularly poor for customs duties and agricultural levies, which make a key contribution to the EU's annual income. Member states identified 4,295 cases of fraud, but recovered just 28 million ecu of the 503 million ecu at stake. “We have to look into this and define procedures for recovering the money,” said Budget Commissioner Erkki Liikanen this week.

The Commission will also press for stronger legal powers to bring criminals to justice and ensure that member states apply similar penalties against people convicted of fraud.

Commission President Jacques Santer told European and national parliamentarians in Brussels yesterday (24 April) that the unanimity rule which now applied to judicial and interior policies was “no longer tenable”.

“Everyone knows that you cannot effectively continue to protect the Union's public finances through unanimity when decisions on Community expenditure are based on policies decided by majority votes,” he insisted.

At next week's Commission meeting, Anti-Fraud Commissioner Anita Gradin is also expected to stress the need to increase the ability of the anti-fraud unit UCLAF to carry out investigations on the ground.

The increasingly high-profile campaign against fraud is running alongside a more discreet operation to improve financial management within the Commission which has led to the creation of budgetary units in every directorate-general.

“This brings operational and human resources together. We are also concentrating on evaluation. Before we accept a new programme, we must define the targets, see how to measure if we hit the targets and decide how many targets we can hit,” said Liikanen.

“Sound financial management is here to stay. I hope that when we recruit young people, they will realise that if they wish to become a head of unit, they will first need to do their military service in financial management.”