Putting the EU’s house in order

Date: 09/11/1995

The way the EU's institutions spend taxpayers' money will be at the centre of attention in the coming week as the Court of Auditors - the Union's tough-talking financial watchdog - publishes its annual report.

Outgoing president André Middelhoek is not expected to pull any punches as he catalogues the latest allegations of mismanagement of EU funds and fraud against the Union's budget.

In the three years since Middelhoek took over as president of the Court, his annual reports have amounted to a damning indictment of the way the EU monitors and controls the use of its funds.

This has done much to tarnish the Union's image in the eyes of the public in those countries which are net contributors to its budget. It is not surprising that many people resent their governments handing over large sums of money to the Union in the face of such authoritative evidence that it is not always spent wisely and well.

This is especially true at a time when they are being asked to accept harsh cuts in government spending at home as countries take the tough action needed to qualify for economic and monetary union.

The most damning allegation all too often made by Middelhoek and his fellow auditors is that the European Commission and member state governments have failed to heed past warnings about financial mismanagement.

If they had, this surely could have resulted in steps being taken to prevent money desperately needed for important EU schemes being wasted on undeserving projects and led to the swifter introduction of measures aimed at stopping fraudsters from exploiting loopholes in the system to reap rich rewards at the expense of taxpayers.

There are welcome signs that this is now changing. The need to improve the internal managment of the Union's finances has already been acknowledged by Budget Commissioner Erkki Liikanen, who is now working hard to put the institution's own house in order.

The organisational and structural changes planned by Liikanen, with special emphasis on evaluating programmes both before they are approved and once they are completed, and the Commission's decision to hold a policy debate in January to decide its bugetary and staffing priorities for the year, are steps in the right direction.

So too is the move by some members of the European Parliament to persuade fellow MEPs to focus on transit fraud as they exercise - for the first time - their right to set up committees of inquiry, as laid down in the Maastricht Treaty.

It is far better, surely, for MEPs to use their new powers to conduct a full-scale inquiry into aspects of an issue so important to the EU's credibility and so potentially damaging to its public image, than to opt for a topic such as nuclear testing which may seem on the face of it to have a broader political appeal but is an area where they can have, at best, only limited influence.

The European Parliament has an excellent opportunity to show that it can play a key role in the fight against fraud and waste. It should seize it. For there is no better way for the Parliament to enhance both its own credibility and that of the Union as a whole than by taking such a step.