EU finances must be overhauled

By Andrew DuffTHE good news is that European Union finances are gradually being brought under control, especially in relation to farm subsidies. The less good news is that the EU Court of Auditors again this week, for the 11th year in succession, failed to give an overall positive account of the EU's finances.

By Andrew Duff

THE good news is that European Union finances are gradually being brought under control, especially in relation to farm subsidies. The less good news is that the EU Court of Auditors again this week, for the 11th year in succession, failed to give an overall positive account of the EU's finances.

In their report on the accounts for 2004, the auditors still find, despite improvements, an unacceptably high rate of error, 'notably within the member states'. This is because about 80 per cent of all EU spending is administered by national, regional or local government and not centrally by the European Commission in Brussels. Decentralisation has to be the right way to manage the EU's common policies, but it has to be accountable decentralisation.

What is needed is a thorough overhaul of the process of evaluating the spending of the EU's annual budget. Proper attention has to be paid to the way national governments spend EU money within their own countries. Here the Court of Auditors is disappointing.


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It does not sufficiently analyse or criticise the role and responsibilities of national governments and the part they play in implementing and controlling the bulk of the EU's annual expenditure, which last year amounted to €100bn in 2004 -- or 0.95% of the gross national income (GNI) of the Union.

The EU Council of ministers is at fault for failing to take its share of responsibility. Its current president Gordon Brown continues to refuse to be made accountable for how HM Treasury disburses EU money on the ground in the UK. In these circumstances, it is no wonder that the European Commission, left high and dry, cannot guarantee transparent financial control.

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National authorities must be persuaded to hold themselves accountable both to their own national parliament and to the Commission for the proper use of EU money.

The House of Commons should collaborate much more closely with the European Parliament by seeking to correct weaknesses in the management of Britain's treatment of EU money. Its own public accounts committee has been pretty severe with UK domestic spending, for example by regularly refusing to sign off the accounts of the Department of Work and Pensions.

MEPs, in our turn, should now address these structural failings of the discharge process at the EU level. Europe's tax payers need greater clarity and reassurance that their money is being properly and wisely spent. The annual ritual over the EU's accounts is both unseemly and unnecessary.

Andrew Duff is the Liberal Democrat Euro MP for the East of England.

www.andrewduffmep.org

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