Auditors refuse to sign off EU spending for 20th year in a row

BRUSSELS - Almost €7 billion of the EU budget was illegally spent in 2013, the European Court of Auditors (ECA) revealed on Wednesday (5 November), as it declined to sign off EU spending for the 20th consecutive year.

Although the error rate of misspent funds fell fractionally to 4.7 percent from 4.8 percent in 2012, this is still well above the 2 percent threshold under which ECA could classify payments as error-free. Spending on administration was the only part of the budget to fall within the threshold, with an estimated 1 percent error rate.

In total, EU spending in 2013 reached €148.5 billion.

Regional policy and funds for rural development had the highest error rate, with 6.9 percent and 6.7 percent of monies going astray respectively.

The most common errors included the over-declaration of land by farmers and payments being made to firms which had been classified as small businesses despite being owned by a large company.

In one example offered by the court, a Sardinian farmer was compensated for not using environmentally harmful plant protection products on artichokes but was found to have used the products repeatedly during an on-­the-­spot visit by the ECA.

While the figures are not surprising the Court of Auditors' report is a constant source of embarrassment for the EU institutions.

The European Commission is legally responsible for all EU spending, but it says its hands are tied since around 80 percent of spending is controlled and paid out locally by national governments and local authorities.

ECA president Vitor Caldeira laid most of the blame at the door of national governments. The error rate "would have been much lower in many areas" if governments "had done what they should have to prevent irregular reimbursement requests from being presented," he said.

He added that EU spending per citizen worked out at €290, of which €13 had been misspent.

However, Caldeira also called for a change in culture away from spending EU money for the sake of it. In a statement, the ECA said that "priority was given to spending the money - ‘use it or lose it’ - rather than to achieving good results".

"The choice of projects to receive EU funds focused first on disbursing the EU money available, secondly on complying with the rules," it added, which is a "fundamental flaw in the design of much of the EU budget".

"This is not peanuts", said Ingeborg Grassle i, the German MEP who speaks for the centre-right EPP group on budgetary control. She added that a number of EU countries were continuing to "fleece the EU".

Ryszard Carnecki i, a deputy in the conservative ECR group, commented that "European governments are largely to blame for these failures, but the commission is responsible for the budget and needs to get a grip."

For her part, Spanish centre-left MEP Ines Ayala Sender i warned that the EU would face €26 billion of unpaid bills by the end of 2014 and needed to "find a solution to make sure that the EU does not commit itself above what it can pay".