EU spending mires policymakers

As austerity measures take grip across Europe, the focus has intensified on the European Union’s budget, with an admission of significant problems within the bloc’s huge regional aid programme.

By Stephen Castle (Debate)

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Published: Tue 16 Nov 2010, 10:18 PM

Last updated: Thu 2 Apr 2015, 10:28 AM

A report released by the European Commission called the regional aid programme valuable, but also acknowledged shortcomings. It came a day after the European Union’s financial watchdog highlighted lax controls over parts of the bloc’s 2009 spending, saying 700 million euros, or about $965 million, had been paid out incorrectly from its regional aid budget alone. In a press conference after the report was released, Johannes Hahn, the European commissioner for regional policy, acknowledged the need for better controls and more effective use of funds within his multibillion-euro budget, and added that problems revealed in several scandals in Slovakia were a phenomenon seen “over and over again.”

Separately, a group critical of European integration published a list of EU-funded projects from a number of programmes it identified as wasteful, including one that allocated 411,000 euros for a Hungarian dog fitness and rehabilitation center.Meanwhile, having announced previously that EU civil servants would have a pay cut in 2011, the bloc’s executive changed tack last week, saying that instead they would receive a slight increase.

Together, the developments create a difficult backdrop to a meeting scheduled for Thursday when, during talks with the European Parliament, EU member governments will seek to prevent a proposed 6 per cent rise in the bloc’s budget for 2011.

Many of the bloc’s 27 member governments are making big spending cuts at home, raising retirement ages and increasing taxes.

Ahead of a bigger rethinking on spending priorities after 2013, questions over the use of EU regional funds are growing.

The report from the European Commission said it took “very seriously” criticism of its regional aid programme, also referred to as cohesion programme, which is expected to dispense about 54 billion euros next year — more than one-third of the total EU budget. Though it argues that the programme is a success, the report says some think the policy is “loosely linked to EU priorities, that it spreads resources too thinly across policy areas and that its impact is often difficult to measure.” Asked about Slovakia, where the last government was mbroiled in a series of scandals over EU-funded projects, Hahn stressed the need for tighter controls and better-trained staff in national capitals.

He also said that while the frequency of spending mistakes was declining in the regional aid programme, the problem affected several nations.

The Commission document called for closer alignment between spending projects and the European Union’s economic objectives, better evaluations of programmes and better quality control from member states, which decide on how to allocate much of the cash themselves.

Adding to the debate on EU funds, Open Europe, a group that lobbies against closer European integration, published a list of 10 projects it considers wasteful.

In addition to the money given to a Hungarian company for a dog fitness and rehabilitation center, which was never built, it cited a programme that spent 16,000 euros to help Tyrolean farmers boost their emotional connection with the landscape; 5.25 million euros allocated for a fleet of limousines for members of the European Parliament; and 5.1 million euros spent on a “culture club” for EU bureaucrats in Luxembourg.

When inflation and cost of living was taken into account, the small rise would still lead to a two per cent reduction in living standards, it added.


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