[salt&pepper] Business as usual in the EU
www.euobserver.com 18.03.2003 - 09:58 CET
DAVID HEATHCOAT-AMORY - "Public expenditure works best when it is carried out as near as possible to those who pay for it, in other words the taxpayer."
EUOBSERVER / SALT&PEPPER - This week the European Parliament will have to decide whether to approve the 2001 accounts. The financial record of the EU is one of waste, mismanagement and fraud.
The Court of Auditors has for eight years refused to sign off the expenditure as properly accounted for. If a public company behaved like this the directors would be sacked or imprisoned.
Yet the European Commission, which is the body responsible, is bidding for even more power in the emerging European Constitution.
Four years ago the whole Commission was forced to resign after an enquiry revealed widespread negligence, nepotism and unchallenged fraud. Little has changed. Employees who speak out are sidelined or sacked. The latest is Marta Andreasen, the EU's former chief accountant.
Last year Ms Andreasen refused to sign the 2001 accounts, "because they were not the right numbers." She demanded a complete overhaul of the accounting system and Neil Kinnock, the administration Commissioner, shunted her into a non-job in the personnel department before suspending her on full pay.
It has now been revealed that Jules Muis, the EU's internal audit chief, supported Ms Andreasen's view of the chaotic and rudimentary accounting system. Moreover Neil Kinnock knew this when he suspended her.
It is characteristic of a rotten system that it deals harshly with 'whistleblowers' who tell the truth, and not with the problem itself.
Unreformable Why is it that the EU budget - now almost €100 billion a year - is out of control? The answer is not just incompetence in the bureaucracy that handles it. This supranational spending machine is unreformable.
Public expenditure works best when it is carried out as near as possible to those who pay for it, in other words the taxpayer.
They can then be sure that they are getting value for money and can take action to correct abuses. The trouble with European expenditure is that it is entirely disconnected from the taxpayer - the chain between payment and results is just too long.
EU budget money exists in a world of its own, swirling around the system before coming back to be spent on various political projects.
Pay the bandits When I was UK Europe minister in 1994 I read an EU audit report which said that sheep premium payments in Greece could not be properly checked, 'because of bandit activity in two provinces.'
I wrote a tongue-in-cheek memo, the present system was inefficient: the public paid taxes to the EU Commission, who passed it to the Greek government, who paid it to the sheep farmers, who passed it to the bandits. Too many middlemen. Why not pay a small sum directly to the bandits and keep the rest?
Since fraud in the Common Agricultural Policy is still a major problem, perhaps my suggestion was not a joke after all.
The EU budget is flawed as a concept. Huge transnational subsidies, politically driven spending projects, remote control systems, and an inefficient multinational bureaucracy.
Enlargement of the EU will add to the problem. It is certain that an extension of these grants and subsidies to countries with generally weak administrative systems will bring more scandals in a few years' time.
If poorer member states are to be helped this should be done by adjustments to the revenue side of the budget, ie by relieving them of some contributions to the budget.
The EU budget needs radical pruning and recasting on an entirely new basis. This is receiving no attention at all in the Convention on the Future of Europe.
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DAVID HEATHCOAT-AMORY - is a member of the Convention on the Future of Europe. He is a former Minister for Europe and has been a UK Conservative MP since 1983.
Written by David Heathcoat-Amory Edited by Andrew Beatty