France, Italy and Spain ‘lose’ most EU cash

By David Cronin

Date: 14/04/05

Countries with the highest rates of financial irregularities in spending the Union's budget often have the lowest rates of recovering misused funds, according to a European Parliament report.

The paper - to be endorsed by the assembly's committee on budgetary control next week (19-20 April) - covers anti-fraud activities during the 2003 financial year.

Drawn up by Austrian Socialist Herbert Bösch, it identifies Spain, Italy and France as the three member states whose reported irregularities represent the biggest loss to the Union's 100 billion euro-a-year budget. For 2003, the level of irregularities came to €112 million in Spain, €17m in Italy and €12m in France.

The three also had the lowest rates of clawing back misused funds - just 5% in Spain, 14% in Italy and 16% in France.

Overall, Bösch notes that, at €922m, the total loss to the EU budget reported for 2003 was lower than the E1bn identified the previous year. Yet he contends that the significance of this reduction should not be over-estimated. He points out that the European Commission's anti-fraud office OLAF has investigated swindling allegations involving an aggregate €1.8bn in July 2003-June 2004.

In the past five years, he says, OLAF has dealt with cases where a financial loss of €5.3bn was incurred. Yet of that sum, less than 2% has been recovered, an amount which Bösch describes as "paltry".

Cigarette smuggling, agriculture and regional aid continue to account for the bulk of the alleged irregularities, with the sums reaching €200m, €170m and €482m in the three sectors respectively.

Bösch contends that failure to recover funds could constitute a "serious breach of the member states' duty of care".

Article anticipates the adoption of a report by the European Parliament's Committee on Budgetary Control on 19-20 April 2005, covering anti-fraud activities during the 2003 financial year. The report, entitled 'Protection of the European Communities' financial interests and the fight against fraud' and drafted by Austrian Socialist Herbert Bösch, was to state that countries with the highest rates of financial irregularities in spending the European Union's budget often had the lowest rates of recovering misused funds.

European Parliament: Committee on Budgetary Control: Draft Report on the protection of the financial interests of the Communities and fight against fraud: 2004/2198(INI) http://europarl.europa.eu/meetdocs/2004_2009/documents/PR/559/559805/559805en.pdf

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