Governments bear brunt of blame for budget abuse

Date: 14/11/1996

By Rory Watson

THE onus was firmly placed on EU governments this week to tighten up controls on the multi-billion-ecu Union budget, when the Court of Auditors revealed that the vast majority of abuses took place within member states.

Presenting the Court's annual report on 1995 EU spending, its President Bernhard Friedmann told MEPs in Strasbourg that 90&percent; of the 4 billion ecu of “substantial errors” identified had occurred at national level.

Just over a third of the funds paid out illegally involved agricultural spending and 42&percent; concerned regional and social programmes. But research and development cooperation also came in for criticism, with the auditors pointing to finance going to ineligible projects and mistakes in calculating aid levels.

Extrapolating from an investigation into 683 financial transactions which uncovered known errors totalling 163 million ecu, the Court calculated that if these were repeated throughout the budget, 5.9&percent; of the 67 billion ecu paid out in 1995 would be “the most probable cumulative amount for the very numerous substantial errors”.

But Friedmann insisted: “Our assessment of 5.9&percent; does not necessarily mean cases of fraud. They are irregularities and there are a number of explanations for them.”

He paid tribute to the attention which various EU institutions were paying to tightening up financial management. But, although the Court confirmed that the 1995 financial statements correctly reflected the Union's receipts and expenditure, it was unable, for the second year running, to provide a global seal of approval because it had found too many errors in the payments which had been made.

In response, Budget Commissioner Erkki Liikanen pledged: “Every single error detected by the Court concerning agricultural spending will be examined and recuperated wherever justified.”

In contrast to critics who seized on the auditors' findings to condemn the Union, British Socialist MEP John Tomlinson called for a sense of perspective in the debate. “This is an important report, but it is the beginning of the process not the end. The end comes when the European Parliament uses its important power of budgetary discharge,” he told MEPs.

Speaking for the European People's Party, German MEP Diemut Theato condemned the fact that a quarter of the available finance in the social fund had not been paid out, even though the fight against unemployment was the Commission's highest priority.

The severest criticism came from the Liberal Group, whose Danish member Eva Kjer Hansen accused the Commission of failing to act on criticisms which were repeated year after year.