Thursday, 17 February 2011

EU fraud

(More about the yellow Ferrari in the end of this post)

Britain, The Netherlands and Sweden on Tuesday withheld approval of the Europen Union´s accounts for 2009. With this symbolic move the three countries wanted to highlight their concerns over a budget that is mostly spent on agriculture subsidies and funds for poorer member countries.

"The slow pace of reforms to the financial management of EU funds is detrimental to the credibility of the EU budget as a whole," the three countries said in a joint statement. The trio - noting that there has been insufficient progress in combating EU fraud - also pointed out that the EU´s own auditors had failed to give an unqualified sign-off to the Union´s accounts for 16 consecutive years.
The reaction from the Commission was, as always, the usual one:
A Commission official pointed to marked improvements in the auditors’ annual reports on the EU budget in recent years, and said that it was pushing for more transparency from member states as part of a package of reforms.

Some of you may still remember this report from November last year:

A new report has revealed that the amount of EU funding lost in fraud and "irregular payments" last year almost doubled to €1.3bn.Fraudulent use of EU cash includes claims for a lemon and orange grove orchard that did not actually exist on the Italian island of Sicily.

In another case, thousands of euros were paid out to livestock owners in Slovenia for "non-existent" cattle.

According to the European commission's "Fight Against Fraud" report, irregularities in the common agricultural policy (CAP), which accounts for about half the EU budget, cost €1.2bn, up 23 per cent.

However, the worst area for fraud in 2009 was cohesion policy, where funds go to Europe's poorest regions and which takes up more than one third of the whole EU budget.

Suspected fraud and irregularities in this area was €1.2bn last year, up a huge 109 per cent.

An estimated one euro in every five handed out in aid was said to be "siphoned off by corrupt officials".

About two-thirds of alleged EU fraud concerns just six countries: Bulgaria, Romania, Greece, Italy, Poland and Spain.

The revelations come after EU leaders agreed to a 2.9 per cent increase in the EU budget for 2011 and as member states introduce tough austerity measures.

Ukip MEP Marta Andreasen, who was sacked from her job as the European commission's chief accountant after she blew the whistle on the state of the EU's accounts, was quick to respond. She said, "Why does the EU allow this situation to continue?

Also then, a typical reaction from the Commission:

A European commission spokesman said, "We take the issue of fraud very seriously and have made considerable efforts to improve the system for finding and dealing with it."

Opens Europe has published a list with "100 examples of EU fraud and waste". It makes interesting reading. Here is just one item from the list:

A dentist in Cosenza used EU funds to buy a yellow Ferrari Testarossa, which sells at around €200,000 and a Formula One car, along with 55 other luxury cars, which he stored in warehouses. He received EU money by inventing a solar-panel business that never saw the light of day. The dentist was part of a larger fraud scheme involving a staggering €80 million, in which four business organisations siphoned off funds during a four year period to buy luxury items such as cars, motorbikes and yachts


The sad reality is that EU fraud continues and even grows, and no-one ever gets sacked for misspending or fraud. Only the whistleblowers loose their jobs.

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