European Union

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Ten years of EU fraud - getting worse not better

25 November 04

For the tenth year in a row the EU's Court of Auditors has refused to sign off the European Union's accounts. The report found that the accounts were even more open to fraud this year than previously. The Court classified 93.4 percent of the budget as either unsafe or riddled with errors, compared to 91 percent last year. The Court of Auditors said in its report, "Once again, the court has no reasonable assurance that the supervisory systems and controls of significant areas of the budget are effectively implemented," and that the EU has failed to "satisfy the legitimate expectations of the citizens of the union".

The European Commission's former Chief Accountant, Marta Andreasen, who was finally dismissed last month for revealing the extent of EU fraud two years ago, warned this week that the EU Constitution would make fraud worse by further blurring responsibility for control over funds.

She said, "The new Constitution will make the situation worse as it formalises the concept of shared control of the funds. This really means no control at all. The European Commission is just looking for a way to shift its responsibility."

Two of the new EU Commissioners have had their suitability called into question because of allegations of fraud. It emerged this week that Jacques Barrot, the new French Commissioner for Transport, was involved in a political funding scam and was given an eight month suspended sentence in 2000. However, he received a Presidential amnesty and so under French law this had not been reported in the French media. EU officials have confirmed that Mr Barrot was convicted in February 2000, following an investigation into financing for his political party.

Vice-President of the Commission Siim Kallas has also been involved in court cases related to fraud. In 2001 he was convicted for providing false information during his trial for the theft of 10 million dollars from the Central Bank of Estonia in an oil-trading scam in 1993. He was however acquitted of the fraud charges. Siim Kallas has now been given the EU's anti-fraud portfolio.

A number of Dutch MEPs also argued that their government should withdraw the candidature of former minister Neelie Kroes. The Socialist Party’s Erik Meijer, one of the 41-strong United Left Group (GUE-NGL), argued at the time that "an ever-growing list of complaints about Ms Kroes’s past has cast doubt on her independence and integrity." He cited evidence regarding incorrect conduct surrounding the sale of six ships during her presidency of an export board as being "enough to prove that Kroes placed her own interests above the general good". A similar accusation was made against Denmark’s appointee regarding the distribution of agricultural subsidies.

As a spokesperson for the UK "no" campaign put it, "Despite endless promises, the EU has failed for a decade to solve its fraud problem. Only a decisive rejection of the EU Constitution will make Europe's leaders listen and start the process of real reform."

Thanks to the UK "no" campaign which provided a substantial part of this report.