EU Budget Audit Finds $6.4 Billion In Misspending
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The European Union wasted more than 5 billion euros ($6.4 billion) on errors in payments and ineffective economic programs last year, said its auditors on Tuesday, with about 3.9 percent of 2011’s budget payments directed at projects that didn’t comply with EU or national funding rules.
According to the European Court of Auditors (ECA), EU policymakers had failed to set up fully functioning systems and methods to detect and correct spending errors, while member states were also not distributing its allocated budget efficiently enough.
The European Union wasted more than 5 billion euros ($6.4 billion) on errors in payments and ineffective economic programs last year, said its auditors on Tuesday, with about 3.9 percent of 2011’s budget payments directed at projects that didn’t comply with EU or national funding rules.
According to the European Court of Auditors (ECA), EU policymakers had failed to set up fully functioning systems and methods to detect and correct spending errors, while member states were also not distributing its allocated budget efficiently enough.
“Put simply, the Court found too many cases of EU money not hitting the target or being used sub-optimally,” said ECA President Vitor Calderia as cited by the Wall Street Journal, urging member states to tighten rules on how taxpayers’ money was spent.
[quote]”We found the Member States aren’t doing their job as fully as they should. There needs to be a greater degree of commitment on the part of national authorities to the management and control of EU money,” Calderia claimed.[/quote]Related: Can Europe Learn From Their Own Past Crises?: Harold James
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In response to the audit, the European Commission, the EU’s executive arm, said that it had already taken steps to correct payment problems in the future. Nevertheless it also expressed concern that the cost of erroneous payments in relation to the region’s budget had risen from 3.7 percent in 2010 to 3.9 percent, moving the EU further away from its target of 2 percent.
The EU will have a special summit from November 22-23, where its budgets for 2014-2020 budgets are expected to be decided. The latest ECA report could strengthen the argument of wealthier member states such as Britain, Germany and the Netherlands, who have called for the need to improve budget efficiency, rather than having national governments hand out more money to the budget.
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“It is risible that the commission wants a 5 percent increase in the budget yet nearly 4 percent of spending is affected by error. Before asking for more taxpayers’ money, perhaps the commission should prioritize better spending of the money it already has,” said British EU parliamentarian Martin Callanan, ahead of the budget talks.
[quote]”A little more effort by member states to control projects properly and retrieve misused funds could go a long way, particularly in this time of economic difficulty,” added Audit Commissioner Algirdas Semeta to Reuters.[/quote]
