90 per cent of EU budget ‘materially affected’ by irregularities, report finds

Telegraph
09.11.2010
By Bruno Waterfield

More than nine tenths of the EU’s budget last year, spending that totalled £94 billion, was “materially affected” by irregularities that included the improper award of contracts worth over £4 billion, Europe’s Court of Auditors has found.

The findings come amid a heated debate over the size of the EU budget for next year and demands from the European Commission and Parliament to defy national austerity programmes by increasing Brussels spending by six per cent despite 16 years of critical reports by auditors.

Yesterday’s (TUES) report into the discharge of the EU’s £102 billion 2009 budget declared the Brussels books to be “true and fair” accounts but highlighted “material errors” that affected 92 per cent of spending, with particular concern expressed over worsening farm subsidy payments and shoddy public procurement rules.

The EU auditors also warned the Commission that information on “recoveries of irregularly paid amounts is not completely reliable” and “cannot yet be compared with the Court’s estimated error rate”, meaning that the return of money paid irregularly is not accounted for.

Auditors continued to find “systemic weaknesses” leading to a high frequency of “quantifiable errors”, meaning irregular payments, in 214 audited transactions of agriculture and rural development subsidies.

The EU’s agriculture spending consumes the bulk of the budget, worth £48.5 billion in 2009 and auditors found a growing rate of error, mainly linked people claiming payments for “ineligible” land or, in one Italian case, where “the same sheep were counted for two different farmers”.

The auditors singled out the lack of checks, as legally required, in Greece to visually check whether subsidised land was actually a permanent pasture when “photos clearly show a significant density of trees and rocks”.

Court officials have growing concerns, particularly affecting Britain, that farm subsidies are being paid to companies, such as golf clubs, property developers or speculators, who engage in no farming activity except for “maintaining land in good condition” under rules that are badly policed.

“People can get high-value subsidies by renting low-value land. We think this problem is bigger than it seems,” said an auditor.

Audits of EU funded projects found “quantifiable errors” affecting £9.5 billion of spending, with “non-respect of public procurement rules” calling into question contracts worth £4 billion.

Nine out of 10 audited road building projects across the EU were identified as proceeding with “unlawful use of award criteria” despite the breach of rules being detected before contracts were paid.

Marta Andreasen, a Ukip MEP and member of the parliament’s budgetary control committee, linked the report to ongoing negotiations over an increased EU budget for 2011.

“The European Commission and the European Parliament are screaming for a 6 per cent increase in the EU budget. Why do they want more money to waste?,” she asked.

Full article

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