Local view for "http://purl.org/linkedpolitics/eu/plenary/2007-11-29-Speech-4-010"
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"en.20071129.3.4-010"2
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"Mr President, the Commission welcomes the Court’s report and the comments from President Weber.
At the Ecofin meeting earlier this month, I also called on Member States to fulfil their responsibility to provide annual summaries of audit and declarations by 15 February 2008. That was the deal we reached with Parliament and the Council when adopting the revised Financial Regulation.
The annual summary has to be more than just another reporting exercise without added value. It must provide real analytical information for the Commission to use in giving assurance to the Court and Parliament about the state of controls in each Member State.
The 2006 discharge hearing that the Committee on Budgetary Control has organised for 18 December 2007 for the main Structural Fund Commissioners will be attended by representatives of the national budgetary control committees. The Commission welcomes that innovation and hopes it will help mobilise commitment at national level to improve the management of EU funds.
We need to follow a policy of warn, solve or suspend. The Commission has stated its intention to suspend Structural Fund payments where the Commission cannot obtain the necessary assurance that Member State systems are working well. That may lead the Commission to take a few unpopular decisions, but it has reached the conclusion that progress will be too slow if we do not display a sense of urgency.
Before concluding, let me say a few words about how the media covered this year’s report. Over the last two weeks, the Commission has been asked by journalists to comment on two main points. First, it has been asked to comment on the Court’s findings that golf clubs and other bodies not formally associated with farming received EU subsidies last year. An otherwise serious newspaper ran the headline ‘EU aid for poor misspent on golf clubs’. It managed to get three facts wrong in only eight words. Let me clarify. Firstly, farm subsidies are not aid for the poor; secondly, the aid in question was not spent on golf clubs, but as subsidies for eligible agricultural activities – in these cases on adjoining land owned by different owners. It follows that, thirdly, the money was not misspent, but was in fact both legal and regular expenditure, which the Court is not questioning. Rather, the Court has drawn attention to a policy issue and to the end result of an agreed policy: the introduction of the single-payment scheme.
We welcome such discussions and, as honourable Members will be aware, this Commission has worked hard to achieve full transparency on the beneficiaries of EU funds, which it believes is leading to better-informed policy discussions, such as the common agricultural policy health checks launched by my colleague, Marian Fischer Boel, earlier this month.
The same approach lies behind the Commission’s initiative of sending the supreme audit institutions in all Member States a complete list of all the payments made to recipients in that Member State.
Regrettably, in some media reports, this golf club issue has entirely overshadowed the Court’s statement that agriculture is an area in which the Commission and the Member States have made most progress, and for which the Court came very close to giving an overall green light. That is why I felt a need to clarify this today.
The second issue is that 12% of Structural Funds, according to the Court, should not have been reimbursed. Most journalists have picked up on the Court seeing this as a problem when almost EUR 4 billion was paid out last year. This point also needs explaining. There is no clear picture as to whether the funds were lost or stolen, and whether the errors are systemic or one-off errors. It therefore falls to the Commission to explain the 12%. In this speech I have given some explanations, and pointed to some of the problems we face and the action we intend to take.
My colleagues, Commissioners Hübner and Špidla, will elaborate further in their Committee on Budgetary Control hearings next month.
Overall, the Court’s Annual Report for 2006 gives a more positive assessment than its 2005 edition. Thanks to the Court’s system of traffic lights, it is now possible to measure progress in detail. The Court’s report sets out, from one spending area to another, where our systems are considered satisfactory and where the errors found are below the Court’s materiality threshold of 2%.
As a final remark, I wish to stress that, despite some of the media coverage, we believe the Court report does in fact help us to focus on the real issues. The Commission is working hard to ensure that improvements are made on these key points.
Comparing this with previous years, the Commission is pleased that in total the Court has now given its green light to over 40% of total payments, compared to roughly a third last year and only 6% two years ago. That is real progress towards our common goal of getting a positive Statement of Assurance (DAS).
The Court also reports improvements in internal policies, such as research programmes, and external actions. The Court said that our 2006 accounts are true and fair in all material respects, except for certain small overstatements, comprising 0.13% of operating expenditure. The Court recognises that the Commission has made considerable efforts to address the weaknesses in the management of the risks to EU funds.
Overall, though, there is, again, a negative DAS concerning the legality and regularity of transactions. While we are moving in the right direction, I would therefore like to focus on the major stumbling block on our road to a positive DAS. The big remaining challenge is to ensure that structural policies are properly implemented. For spending on structural policies – EUR 32.4 billion in 2006 – the situation remains similar to previous years, and the Court has again identified the material level of error.
The most frequent errors were claims for ineligible expenditure and failure to carry out tender procedures, as well as a lack of evidence to support the calculation of the overheads or the staff costs involved.
The Court goes on to say that it is reasonably confident that at least 12% of structural and cohesion fund payments in 2006 should not have been reimbursed. We agree that there are real problems in this area. The Commission’s own synthesis report for 2006 stated that it did not have confidence in the systems for managing Structural Funds in parts of Italy, Latvia, Slovakia, Slovenia, Spain, Sweden and the United Kingdom. Reserves were expressed by the directors-general in their annual activity reports.
The Court looked at a sample of 19 regions in 2006, and found none to be fully effective. The Court found various control systems to be ineffective in England, France, Germany, Greece, Italy, Poland, Portugal, Scotland, Slovenia and Spain, and for the Interreg project between Austria and Hungary.
We believe things will improve under the new legislation, but this will not reduce the continuing high risk for payments made to the 2000-2006 programmes, where the situation remains critical up to their closure in 2009-2010. We need to act together on this state of affairs. I have written to the Council President, the Member States and the European Parliament, setting out the additional efforts the Commission will make."@en1
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