EUAccounts (Liberal Democrat European Group (LDEG))

Liberal Democrat European Group (LDEG) <info@ldeg.org>

The facts about the European Union Accounts

Discrediting the European Union is now a popular sport in many parts of the United Kingdom and the EU accounts are a regular political football.

Whilst shooting the Commission is, for some, fair game, it does misinform public opinion and prevents British citizens from forming their own opinions based on fact rather than fiction. It would be far more productive to have a public debate about EU spending priorities, the size of the EU budget and how to finance activities at EU level - currently 1% of the combined GDP of the Member States.

It is true that the European Court of Auditors (EU's external auditor) have had reservations about budget implementation for the past 12 years. Whilst 100% perfect accounts is a worthy goal, no public administration operating a budget of £65 billion across 27 countries is going to have a completely clean slate, and if they did they would probably be hiding something.

There is an important trade-off between demands for de-centralised management and the desire for greater budgetary control. In my view, it is far better for the European Commission to give Member States the flexibility and freedom to design and implement their own regional funding programmes and CAP support structures than to control everything to the nth degree from Brussels. 80% of the EU budget is spent by the Member States themselves. The Commission merely sets the framework and priority objectives. The Liberal Democrat group in the European Parliament has campaigned for a number of years now for Member States to retain responsibility for running their own EU-funded programmes but the quid pro quo for this should be some form of budgetary accountability from them each year on the legality and regularity of expenditure under their supervision.

It is important to underline that the accounting reforms of the past few years have been acknowledged by the Court of Auditors as successful and significant in moving to an accruals based approach, in line with modern accounting practices. Furthermore, the ECA refusal to grant a positive assurance does not mean that 93% of the budget was wrongly accounted for but rather that errors were noted in the sampling exercise conducted by the Court's auditors. The Court deliberately targets high risk programmes in its sampling which only amounts to a fraction of total transactions. Extrapolating the findings in these areas thus distorts the true picture.

This has caused the European Parliament to be very critical of the Court's own auditing methodology which sticks rigidly to its global assessment rather than a sectoral approach. So, unlike in the UK, we are unable to point the finger at individual departments as all Commission services are tarred with the same brush. This is unsatisfactory on several counts. It prevents us from focusing on the problem areas, it gives the (false) impression to the outside world that the whole budget is misspent and it lets Member States off the hook when they are chiefly responsible. It is now imperative that we have a serious, fact-based debate on the European Union and its activities rather than what is so often a frivolous and unhelpful scaremongering about run-away corruption in Brussels.

Neil Corlett, Head of Press, Alliance of Liberals & Democrats for Europe, Brussels