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E.U. budget riddled with fraud

Brussels: Golf clubs, railway companies and city councils, some of them in Britain, are skimming off millions in E.U. aid intended for farmers, according to an official audit which found that at least € 4 billion of money was wasted or mismanaged.

The review of last year’s budget by the European Court of Auditors, the E.U.’s financial watchdog, found widespread mismanagement and waste in the €107 billion budget, albeit on a lesser scale than in previous years and involving less outright fraud than before.

Supplying ammunition to eurosceptics, the court was unable to give the budget performance a clean bill of health for the 13th year in a row, and accused the governments of individual European countries, who are responsible for overseeing 80 per cent of spending, of failing to ensure the money was spent properly.

“EU citizens are entitled to expect EU funds to be properly managed and controlled,” said Hubert Weber, president of the Luxembourg based court which audits the budget every year. “Reasons for the errors include neglect, poor knowledge of the often complex rules, and attempts to defraud the EU budget.”

In contrast to past years when the biggest scandals surrounded abuse of the contentious Common Agricultural Policy, which accounts for half the spending, this year the watchdog found the most glaring scams involved the disbursement of regional aid or structural funds — Brussels’ redistribution policy aimed at helping the poorer parts of the union.

But the court found that at least €4 billion had gone to projects which did not qualify for the money. On farm spending, notoriously prone to fraud, the court found that in many instances the wrong persons were benefiting from a reformed subsidy system based on the size of landholdings rather than livestock or output volumes.

A scheme intended to reward farmers was mistakenly enriching landowners not engaged in agriculture, the report found. — © Guardian Newspapers Limited, 2007

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