MEPs decry overcharge for Strasbourg buildings

Date: 20/04/06

Senior MEPs have accused the city of Strasbourg of charging the European Parliament an inflated rent for two buildings in the Alsatian capital.

They believe that the Parliament has been overcharged 1 million euro a year on annual rent of 10.5m euro.

The buildings are owned by a Dutch property fund called SCI Erasme and are let to the city of Strasbourg which in turn sub-lets them to the Parliament.

"It is clear that for more than a generation the city of Strasbourg has been siphoning off 1 million euro," said Edward McMillan-Scott, a vice-president of the European Parliament.

The allegedly excessive levels of rent have emerged during negotiations over the price of purchasing the two buildings, known as Winston Churchill and Salvador de Madariaga.

MEPs have been incensed by an admission from Strasbourg's Mayor Fabienne Keller that the city stands to receive 29m euro in compensation if the Parliament buys the two buildings for 136m euro, taken out of the purchase price.

The disclosure prompted speculation that the money was to compensate for revenue the city has been receiving since the Parliament started renting the two sites in 1981. The Parliament appears to have assumed that the bulk of the rent it paid to the city was being passed on to the owners.

G�rd Onesta, a French Green MEP, told European Voice that the city of Strasbourg could have held on to as much as 25% of the annual rent of the buildings.

Dutch Liberal MEP Jan Mulder, vice-president of the Parliament's budgets committee, said: "We have been taken for a ride. It was a big surprise."

In the wake of the revelations, the Parliament's bureau, which is made up of the president, the 14 vice-presidents and the five quaestors, and which is in charge of the assembly's administrative affairs, have blocked plans to buy the two buildings.

The MEPs are angry that they have been kept in the dark by the city of Strasbourg about the benefits the authorities would receive if the sale went through.

McMillan-Scott is calling for a full investigation into the affair by the Parliament's budgetary control committee and the European Court of Auditors.

Onesta, who is responsible for the building policy, will give members of the budgets committee a detailed report on the case next week. The issue will also be discussed by a meeting of the Parliament's bureau next Wednesday (26 April).

Onesta said that the city had claimed that it had incurred expenses from changing the calculation of the rent from ECU to the euro, from building work paid for by the city and from the cost of insuring the city against the risk that Parliament might one day stop meeting in Strasbourg. The MEP said that the Parliament had not seen any documents or invoices to substantiate the city's arguments.

So far the Parliament had not received any response or clarifications from the city, he said.

If it turned out that the rent paid by the Parliament for the two buildings had been "artificially inflated" by payments made by the owner SCI Erasme to the city, the price the Parliament had agreed to pay would have to be reduced, given that the value of buildings was calculated from the rental income, Onesta said.

A spokeswoman for the city of Strasbourg declined to comment on the allegations as it was not possible to reach officials familiar with the case, including the mayor herself.

If the city fails to provide satisfactory answers to the allegations, it is likely to increase support for the current campaign among MEPs to stop meeting in Strasbourg.

Jan Mulder said he would be "surprised if this didn't have an impact" on the debate about keeping the Parliament in Strasbourg.

The German Liberal MEP Alexander Alvaro, chairman of the Campaign for Parliamentary Reform, a group of MEPs lobbying for Parliament to leave Strasbourg, said the revelations about the buildings would give the campaign a boost because most members were not aware of the figures. "This could be an additional argument for saying we should have the European Institute of Technology [in Strasbourg]," he said.

MEPs have proposed siting a planned European Institute of Technology, which would co-ordinate research efforts across the EU, in Strasbourg to compensate the city for the financial impact of losing the Parliament.

Article reports on a dispute between the European Parliament and the city of Strasbourg over the rent for two buildings used by the Parliament.

• Primary Source

BBC News, 27.4.06: EU and Strasbourg in rent row http://news.bbc.co.uk/1/hi/world/europe/4952228.stm

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