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Europe D66 European Parliament

Better control of EU finance needed

   Thu 01/03/2001

EU expenditure needs to be scrutinised better and all institutions (including for the first time the Council of Ministers!) should be evaluated. Taxpayers deseve value for money. Text of the report van der Laan on discharge 1999.


1. Parliament, in its capacity as budgetary control authority, has a duty to evaluate the proper and effective use of the Community budget and act on the detailed reports from the European Court of Auditors. This evaluation should involve not only an assessment of the way in which tax-payers money is spent – i.e. that there have been no irregularities or fraud – but also a regular examination of the effectiveness and impact of the Community budget in carrying out the policies and goals laid down in the Treaties and in secondary legislation. Where this is not or no longer the case, Parliament should recommend that action be take to remedy the situation or use its power as joint budgetary authority to reallocate the funds elsewhere.

2. The Commission has a central role and duty in evaluating the effectiveness of programmes it undertakes and reporting regularly to Parliament on difficulties as well as successes so that, ideally, no money is wasted at the end of the day. However all Institutions, Courts, Committees and Specialised Agencies should be equally concerned at providing an efficient and beneficial service, in essence – value for money. To this end each institution and body funded from the Community budget, whether it be Parliament or the Monitoring Centre on Racism and Xenophobia, should evaluate their effectiveness and performance. This should entail a constant re-evaluation of working methods and procedures as well as human resource management and overall objectives. If the original goals are achieved or they lose their ‘raison d’être’ then they either need to be redefined or the body in question disbanded and the budget used for new priorities. Where defined objectives could be met in a more cost-effective way, these alternatives should be considered.

The Economic and Social Committee has existed for over 40 years and groups together employers, union representatives and consumer groups with a view to providing the Community legislative and executive bodies with timely advice in the drafting and amending of legislation. Yet all these groups are also represented (and mostly consulted) through their respective interest groups at a national and/or European level, many forming powerful federations to lobby for the industry, for the employees or for the consumers. Is this a duplication of effort or does each have its role? 3. The Committee of the Regions has only been in existence since 1994 and, to some extent, is still finding its true role in the Community legislative process. The CoR was hampered by a very inauspicious beginning where the structure was largely imposed on it by the Council, merging regional with municipal authorities, and national groups with political groupings. The nature of the membership, whereby most members are not full-time, cannot help cohesion and vision for the CoR, although it does endow it both with a direct democratic link and genuine knowledge of regional and local affairs affected by EU legislation. What has been the impact of CoR on Community legislation since the former’s inception in 1994 ? Is it able, in the limited number of meetings per year, to provide a useful and timely advice to the other institutions, notably the Commission? If not, how does it need to change? Are its staff optimally deployed, e.g. in the core area of policy preparation in the different commissions? What evaluation / reforms are taking place to improve its performance and contribution?

4. The European Court of Auditors has recently come under severe criticism by the European Parliament for its working methods. Parliament's pressure aims to achieve a shift in policy: away from anonymous criticism towards more open "naming and shaming" of those Member States that fail to perform. The Court however still refuses to quantify the number of mistakes made, while stating clearly that the level is unacceptably high. In order to ensure that the annual discharge procedure is not reduced to a mere accounting exercise, the Court needs to specify numbers of mistakes broken down both on a geographical and a sectorial basis. Only in this way can comparisons be made and lessons learned for the future. Distinctions should be made between minor oversights and full-fledged fraud, which are currently lumped under the same name of "error". The Court's internal setting of priorities also needs to be investigated in more detail especially how objectivity can be guaranteed. this will also be helped if the Court would publish its member´s financial interests on the Internet.

5. The 12 Agencies, set up by various Council Regulations, provide a variety of tasks and functions from forums on vocational training to approval of new plant types. Some are financed from the Community budget, others are self financing. Most adopt annual work programmes though they should ideally be presented and discussed by the European Parliament, at least at the level of a relevant specialised committee, in order to ensure that Parliament can properly evaluate their work and objectives each year. Three of the Agencies have failed to publish any budget for 1999. Parliament should take more interest in the activities of the agencies and advisory bodies and assess whether they are really providing the service required of them. Do they provide a greater degree of expertise than can be provided by the Commission? If so, do they operate efficiently and effectively? Do their mandates overlap / duplicate each other ? To whom are they accountable? Is there a need to rationalise the number of agencies created? Should they have an indefinite life or be subject to 5 yearly reassessment? Are there lessons that can be shared and learned by all?

6. The changing nature of expenditure in the Council of Ministers is forcing the Parliament to reconsider its absence of scrutiny in the framework of the discharge procedure. Whereas the budget used to be for purely administrative purposes, increased responsibilities notably in the areas of Common Foreign and Security Policy and Justice and Home Affairs, indicate a shift in budgetary control policy may be needed.