By Bruno Waterfield - 24th January 2006
New European financing proposals from national governments will weaken Brussels spending controls and increase potential abuse of funding, EU officials have warned.
Europe’s leaders agreed changes to the workings of ‘cohesion’ expenditure targeted at the EU’s poorest regions as part of a deal on budgets for 2007 to 2013.
But EU officials warn the new rules will relax Brussels vigilance and weaken accountability on the spending of European funds.
“These rules will make financial discipline looser,” said a senior European commission official on Tuesday.
Commission officials are particularly angry that in the run-up to December EU budget negotiations, national governments rejected tighter accounting rules.
Brussels has urged member states to play a more active role in ensuring that European money is properly allocated after criticism of the current system by the European Court of Auditors.
The ECA has failed to give a ‘positive statement of assurance’ on the EU accounts for the last 11 years, mainly because of a lack of transparency at the national level.
European commission President José Manuel Barroso has made no secret of his desire to obtain a positive statement of assurance from the ECA before the end of his tenure.
National governments distribute 80 per cent of the EU’s annual budget, mainly in the form of farm subsidies or ‘structural funds’ targeted at Europe’s poorest regions.
But it is the commission that is responsible for ensuring that the EU money is correctly spent and officials complain that any blame will be laid on the Brussels doorstep.
“It is a bit rich for governments to refuse national rules but then to open up funds to potential abuse while leaving the commission weakened,” said another EU official.
New EU funding rules for structural funds are applicable for new member states, Greece and Portugal – the biggest spenders – and allow countries longer to spend funds on a wider scope of projects.
Officials are particularly concerned that funds can be earmarked for “housing” in the new EU10 - and in Romania and Bulgaria when the pair join the EU in 2007.
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