Presentation of the Court of Auditors' annual report - 2008 (debate) 
President
The next item is the presentation of the Court of Auditors' annual report.
Vítor Manuel da Silva Caldeira
President of the Court of Auditors. - Mr President, honourable Members, ladies and gentlemen, it is an honour for me to have the opportunity to take part in your debate today about the Annual Report of the European Court of Auditors on the implementation of the budget for the 2008 financial year, which I have already presented to you, Mr President, and to the Committee on Budgetary Control on 10 November.
We have four key messages in this year's annual report.
First, the Court gives an unqualified opinion on the accounts for the second year running. It concludes that the accounts present fairly, in all material respects, the financial position, results and cash-flows of the European Union at the year's end. In other words, the final accounts for 2008 present a true and fair view, although due attention should be paid to addressing weaknesses in the systems of a number of directorates-general of the Commission.
As regards the legality and regularity of the underlying transactions, the second key message is that there has been an overall decrease in the level of irregularity in recent years. But the level of irregularity remains too high in some areas.
As in previous years, for 2008, the Court gives an unqualified opinion on Revenue and on commitments. The picture for payments, however, continues to be mixed.
For Administrative and other expenditure, the Court gives an unqualified opinion as in previous years. The Court also gives an unqualified opinion on education and citizenship, estimating that the error rate has fallen below 2%. This result is mainly due to a high proportion of advance payments in 2008, which have a lower risk of error than interim and final payments. Systems in this area continue, however, to be assessed as only partially effective.
For Agriculture and natural resources, the Court concludes that, except for rural development, payments were, in all material respects, legal and regular. This is the first time the Court gives a qualified opinion and not an adverse one. The overall error rate for this policy group is under 2%, a decrease with respect to previous years. Deficiencies in supervisory and control systems related to rural development contributed significantly to the Court's overall assessment of systems as only partially effective.
The Court also gives a qualified opinion to the policy group Economic and financial affairs due to errors found in transactions relating to the Sixth Framework Programme for Research and Technological Development.
For the policy groups Cohesion, Research, energy and transport and External aid, development and enlargement, the Court continues to give adverse opinions concluding that they are affected by material error, although to different levels.
Cohesion remains the area most affected by error. The Court estimates that at least 11% of the total of EUR 24.8 billion reimbursed during 2008 in respect of the 2000-2006 programming period should not have been reimbursed.
The Commission has claimed that the correction and recovery mechanisms mitigate the effects of the errors. However, the Court considers that Member States do not provide sufficiently complete and reliable information on financial corrections to support this claim. And the Court found cases of Member States replacing ineligible expenditure rejected by the Commission with new expenditure which was also ineligible.
As regards the 2007-2013 programming period, almost all payments are pre-financing, for which there are relatively few conditions. It is therefore too early to say whether changes to rules or systems have reduced the level of errors. However, delays in approving Member States' systems descriptions, compliance assessments and audit strategies have slowed budgetary implementation and may increase the risk that control systems do not prevent or detect errors in the start-up phase.
Although there continues to be a material level of error in Research, energy and transport, remedial measures taken by the Commission have helped to reduce it. Nevertheless, legal requirements remain complex and control systems continue to be only partially effective.
Payments for External aid, development and enlargement also continue to be materially affected by errors, with weaknesses in systems for external aid and development assistance mainly at the level of the implementing bodies and delegations.
Overall, error rates appear to be decreasing but legal frameworks continue to be complex and problems remain in some control systems. Reducing the level of irregular payments further will therefore require the continuing improvement of supervisory and control systems and, where appropriate, the simplification of rules and regulations.
The third key message of the Annual Report is that the Court's recommendations from previous years on improving supervisory and control systems continue to be valid because the relevant measures are part of an ongoing process where it will take time before they can be deemed to be effective.
The priority remains to address the specific weaknesses the Court has found in the areas where the most problems have been detected, many of which I have just outlined.
Particular attention should also continue to be paid to improving the financial correction and recovery mechanisms in anticipation of the closure of the 2000-2006 programming period.
In addition, the Commission should continue to monitor the effectiveness of systems and identify where more could be achieved from existing expenditure controls, or where it would be appropriate to consider revising the programmes or schemes involved.
In the context of such revisions, the legislative authorities and the Commission should consider trying to set a level of residual risk of irregularity to be achieved by the system, that is, the tolerable risk of error, rather than specifying the number of checks to be undertaken, as is the case now.
But there is a limit to the reduction of the level of irregularity that can be achieved by improving the effectiveness of supervisory and control systems.
This brings me to the fourth and last key message of this Annual Report. Simplification remains a priority if further significant and sustainable reductions in the level of irregular payments are to be achieved. The areas where the Court finds too high levels of errors are those where there are complicated and unclear legal requirements, such as eligibility rules. An example of where serious efforts have already been made to simplify the expenditure schemes is agriculture, the main area of improvement found by the Court.
The Court also maintains the view that well-designed rules and regulations which are clear to interpret and simple to apply not only decrease the risk of error but can also reduce the costs of controls.
However, simplification needs to be applied with caution in order to find the right balance between simplification and establishment of policy objectives, avoiding unintended side-effects such as less focused expenditure.
In addition, as the Court has also emphasised, simplification should be applied alongside the principles of clarity of objectives, realism, transparency and accountability when revising or reforming the arrangements for European Union spending. The intended proposals for a revision of the financial regulation, a new financial framework and a reformed budget will provide opportunities for doing so during the mandate of the new Commission.
The entry into force of the Lisbon Treaty will also bring changes to the management of European Union funds and the scrutiny of their use, strengthening the role of this Parliament. These changes will have important implications for the Court's work and should serve to reinforce accountability and transparency, thereby contributing to building the confidence and trust of the citizens in the European Union institutions.
Mr President, honourable Members, this is an important moment of renewal for the European Union, and the intended reforms provide a great opportunity for further improving the financial management of the European Union. At times of renewal and reform, it is also important, however, to remember the lessons of the past. I believe the Court plays a vital role in such circumstances by providing reports and opinions that not only identify existing problems but also make recommendations for the future. The Court therefore looks forward to continuing to work together with its partner institutions to make the most of the current opportunities for further improving the European Union's financial management.
Siim Kallas
Vice-President of the Commission. - Mr President, the Commission welcomes the Court's annual report for 2008. I have already had the opportunity to thank the Court for the very good cooperation enjoyed again this year. We have had a very fruitful dialogue and the report is very constructive.
As you have just heard President Caldeira state, the level of irregularity has decreased overall in recent years. Things really started to improve five years ago, and, since 2004, the 'red area', where the Court finds the most errors and for which it gives a 'red card', has been reduced by half.
For 2008, the report shows a completely clean opinion on the accounts for the second year in a row, as a result of the major achievement of the thorough reform and transition to accrual accounting.
Secondly, for the first time, agriculture, taken as a whole, has now become 'clean and green'. This can certainly be attributed to the substantial simplification efforts of recent years. Thirdly, the policy group entitled 'education and citizenship' has also become green.
For research in general, things are improving and the Court points out that irregularities are essentially linked to the Sixth Framework Programme, which allows hope that the improved and simplified Seventh Framework Programme rules will bring a better result.
Again, as last year, the Court has found no red light for the management and control systems. Moreover, all annual activity reports by Commission services are deemed by the Court to give reasonable assurance, with or without qualifications, that internal control systems ensure the legality and regularity of the underlying transactions. This said, the report also clearly charts the work that still needs to be done.
The 'red area' is now about 30%, corresponding to cohesion spending, which is the one area where the Court has still not found significant progress in the level of irregularities. This was perhaps to be expected, given that in 2008, the Court did not audit payments made under the improved systems set up for the new 2007-2013 programming period. In this regard, the Commission notes that the Court's findings on cohesion largely coincide with our own general assessment.
For the structural funds, the Commission had reservations in 2008 because of deficiencies in the control systems for Belgium, Germany, Italy, Spain, Bulgaria, the United Kingdom, France, Poland and Luxembourg. The Commission is not shy regarding transparency as to where the systemic problems lie. The names of these Member States were published back in June in the Commission's synthesis report.
The Court also reminds us of the essential role of complete and reliable information from all Member States on financial corrections. We need this to prove that multiannual control systems work and to mitigate the effects of the errors detected.
The Court further recommends that the Commission should continue to strive to gain assurance from the annual summaries of all Member States, as well as from voluntary initiatives by certain Member States, in the form of national declarations, or by supreme audit institutions.
The Commission agrees that we obviously need to be able to count on quality inputs from Member States. We see improvements, but we are also considering strengthening the legal base to accelerate the process.
Finally, the Court emphasises the importance of clear objectives, transparent and easy-to-understand rules, and effective supervision. This reduces the risk of error and the costs of control. However, it is not something that can be achieved from one day to the next and, of course, the upcoming reviews of the budget, the financial framework and the financial regulation present opportunities not to be missed.
What we need to do now is to improve assurances obtained from Member States for structural funds, striving for more simplification, which increasingly will require changes to the legislation governing the various programmes. The revision of the Financial Regulation is currently under consultation, and the Commission will make proposals in spring 2010. We also need to define together an acceptable ratio between costs and risk - the so-called 'tolerable risk of error'.
The European Parliament has, in the past, strongly supported the Commission's efforts to achieve a positive statement of assurance. Now that our efforts are becoming measurable, I hope I can count on its continuing backing to move forward.
The 2008 discharge procedure starts in the last days of this Commission and is expected to conclude in the early months of the next Commission. Even though it concerns last year's budget, let us make it a forward-looking procedure.
Ingeborg Gräßle
Mr President, President of the Court of Auditors, Commissioner, today is a successful day for the Court of Auditors, but also for the Committee on Budgetary Control, for the Commission and, above all, for you Mr Kallas. You have a highly successful track record and not all of your colleagues can say that about themselves.
In recent years, we have seen a clear improvement in budgetary and financial management and this improvement is due to the advice and consultancy provided by the Court of Auditors. For this reason, I would like to thank the Court of Auditors very warmly and congratulate it on producing reports that are increasingly easy to understand. The traffic light system is a good solution, because it sends out clear messages. We have succeeded in raising the aspirations of everyone involved by the use of this system. I would also like to thank the relevant offices of the Commission, because their work has been good and they have realised that something needs to be done in these areas. However, 31% of the budget is still coloured in red. We will definitely be focusing on this in the years to come.
There are some areas which are in a better position according to the classification of the Court of Auditors, for example external aid. However, we also know, of course, that external aid is only in a better position because it is not possible to control the budget aid and because the use of the funds, for example, via the United Nations, merits complaints by the relevant Director General, but not even a reserve in his annual report. Our focus will be on the forthcoming 2008 discharge procedure for the structural funds and external aid. There are more than 5 000 external aid positions in the delegations and more than 2 000 in the Directorate General for External Relations and in the development aid department in Brussels. This is something which it would be good to discuss with the new Commissioner for External Relations.
In the case of the structural funds, we have made good progress by naming and shaming those involved, but we have definitely not reached the end of the road yet. We must deal with the problems in this area at source. You have mentioned some of our Member States and I believe that the Commission must significantly increase its efforts with regard to our two newest members, Romania and Bulgaria, otherwise we will have lasting problems there. The Commission's lack of strategy for these two countries is causing considerable concern. They need more support, otherwise the EU, as a community based on the rule of law, runs the risk of ceasing to exist.
I would like to congratulate you and to tell you that you can rely on the solidarity and the highly constructive cooperation of the Group of the European People's Party (Christian Democrats) in the budget discharge procedure.
(Applause)
Bogusław Liberadzki
Mr President, allow me to begin in a very similar way to Mrs Gräßle, with an expression of great esteem for Mr Kallas and the Court of Auditors for their ongoing cooperation, which has meant that from year to year, when we look at the statistics, we see a clear improvement in management of the budget, reporting, annual reports and evaluations. We also see the efforts which are made in these areas to ensure that our budgetary procedures are correct in every respect. Secondly, we see the efforts which are made to reach agreement on areas which do require improvement, and we see that these areas are subsequently improved, starting with procedures and ending at management, monitoring, control and the form of the final report.
We are very concerned about those areas in which no significant improvement has been observed. Mr Caldeira mentioned those areas in his speech. May I return to two of them, which seem to be especially significant. The first area is that of cohesion funds and funds related to regional policy. From our point of view, something which is extremely important is that we receive answers to two questions. Firstly, why is it that the programmes planned and declared by the Commission for the recovery of funds which have been spent improperly, or at least for explaining these situations, have not made any progress? Secondly, it was declared that the year 2008 would definitely be better. However, 2008 was just the same as 2007, so those declarations have come to nothing.
We have a question which we will want to ask during the hearing of the Commissioners: were the measures envisaged properly envisaged, and were the declarations which were made correct and are they still valid?
We welcome every kind of simplification, although not if this means accepting provisions which are primitive. We welcome the formula of advance payment, because this makes it easier for the beneficiary countries to use the funds. After all, the objective was quite simple - get the funds to the user, achieve the intended benefits, and achieve them on time. However, it seems that, perhaps especially during the last two years, some of the funds have been used by beneficiary countries to improve the current result on the budgetary side, although not for implementation in accordance with the area envisaged for financial support.
Therefore, while we evaluate highly the direction in which we are moving, we do have certain reservations concerning some areas, which we will have great satisfaction in discussing during the hearing of the Commissioners.
Luigi de Magistris
Mr President, ladies and gentlemen, I would like to welcome and thank the President of the Court of Auditors, with whom we have worked productively during this period.
As Chairman of the Committee on Budgetary Control, I have always maintained that the role played by the Court of Auditors is fundamental. It is fundamental because the Court operates in a very sensitive sector, which people throughout the European Union watch with great interest and with a critical eye where the transparency, accuracy and legality of expenditure and of the management of public funds are concerned.
I believe that it must be reiterated today that the Court should always be guaranteed independence and autonomy when carrying out its work because this is fundamental if we are to be able to evaluate properly and to make good decisions. Likewise, we ask the Court to put Parliament and the Committee on Budgetary Control in a position to carry out their own work as productively as possible.
We must find the right balance which allows public funds to be spent effectively and efficiently, because these funds are aimed at important objectives such as economic development and job creation. At the same time, there must be severe punishments for serious irregularities and errors, which the Court has also uncovered in the last financial year, whilst an attempt must be made to avoid unnecessary formalities and red tape. As Mr Kallas was also saying, Parliament must strive to find an equilibrium in the tolerable risk of error.
The report, which we have read with great interest, provides some insights, but also includes many grey areas. We must strive to achieve the best results regarding these grey areas.
As my fellow Members have also mentioned, the main problems primarily concern the Structural and Cohesion Funds. It is true that the Court, in doing its job, points out errors and irregularities in relation to these funds. However, those who are able to look deeply into and to analyse matters can see that, behind the errors highlighted, there are even graver issues, as the judicial experiences of several countries in recent years demonstrate. There may be fraud, there may be deception. I am specifically referring to one or two errors revealed such as the contravention of rules on procurement, over-invoicing and so on. We must endeavour to make improvements in this area.
I believe that the Commission should promote Member States which behave in a virtuous manner, and punish and penalise Member States which do comply with the rules. Furthermore, I believe it is very important for OLAF to use the Court of Auditors' suggestions as a starting point and to further improve its work because it is in everyone's interest that it does so. I think it is only through cooperation among various institutions, namely Parliament, the Court of Auditors and OLAF, that we will manage to safeguard the financial interests of all EU citizens.
Bart Staes
There are certainly a great many positive things to say today. For the second time in a row, we can speak of an unqualified opinion on the accounts. The level of the irregularities is decreasing. The traffic light system, whose lights all used to be on red, is gradually showing more and more amber, yellow and, in particular, green. These are all positive aspects.
Another positive aspect is agriculture, which used to be a real source of concern. For years on end, we have regarded IACS - the system ensuring common management of agricultural expenditure - as a good system. We had seen Member States such as Greece failing to take part. These are obviously all things that are moving in the right direction.
All the same, there are sources of concern. These include cohesion, research and development, energy, transport, and the whole chapter on external aid, development and enlargement. In my opinion, therefore, we must try to select a number of issues for attention from the discharge we are addressing today. Cohesion will be one such issue. I would remind the House of the notorious comment in paragraph 6.17 that up to 11% of the expenditure in respect of the Structural Funds, European Regional Development Fund and European Social Fund should not actually have been disbursed. In my opinion, we must ask the competent Commissioners many questions about this and look at the precise state of affairs.
Then there is external aid, development and enlargement; the whole package of funds that we channel to the United Nations. Once again, I read in the Annual Report of the Court of Auditors that - like other organisations - the Court has insufficient or even no access to the accounts of the United Nations, which means that large amounts of European funds channelled to this organisation cannot, in fact, be properly controlled.
A third issue to be addressed is the whole system of comanagement. As the general rapporteur has pointed out, 80% of all European funds are actually spent within the framework of comanagement, by the Member States and the Commission. We must now, once again, exert pressure on the Member States' finance ministers, in particular, to ensure that they shoulder their responsibility and issue a declaration stating that they have done their jobs properly, that their administration has spent funds correctly, and that this has been subject to controls.
I myself am responsible for own resources on the Committee on Budgetary Control. The whole VAT dossier continues to cause me concern. We have published various reports on the subject, including in the previous parliamentary term. According to estimates, total VAT fraud Europe-wide amounts to EUR 80-100 billion. The Court of Auditors has made a number of observations on this, too. Therefore, I should like to devote particular attention to this matter in the discharge.
I should like to finish off by mentioning the discharge for the other institutions. I myself am rapporteur for Parliament's discharge. In my opinion, the key issues in this regard should include public procurement procedures, where problems are apparent. Finally, concerning the Council's discharge, we granted that discharge earlier this week. This Court of Auditors' report, too, raises some very negative points about the Council. In my opinion, we must continually exert pressure on the Council to grant access to its accounts such as to allow Parliament to properly control this kind of ... (speaker moved away from the microphone) too.
Ryszard Czarnecki
Mr President, today's debate is one of the most important debates in the European Parliament, because our voters, tax payers and citizens of EU Member States are very interested in transparency in the operation of European institutions and, in particular, of the European Commission. On the one hand, this is an argument for the eurosceptics, while on the other hand, we do know that in recent years, there have been many irregularities in this area. I will remind you of the situation at the end of 1999 and the beginning of 2000, when the Court of Auditors published devastating criticism of the European Commission, and it was, at the time, absolutely justified. Today, we can see clear progress in this area, but I am drawing attention to the importance of this debate, because if we are looking for sources of greater authority for the European Union and EU institutions, then these principles of transparency are extremely significant. If, last week, that authority was weakened by the way in which the most senior leaders of the European Union were elected, it is regained by debates just such as this one today.
I would like to stress that it would most certainly be good if Mr Caldeira could expand a little on something. He spoke of six countries which return information in the wrong way, and mentioned two large countries, Poland and Great Britain. We are surely justified in wanting to hear details of these improprieties.
I would like to stress that advance payments are a very positive development, but they do also have a certain disadvantage because, in fact, governments often use this money for electoral purposes.
Søren Bo Søndergaard
Mr President, I would like to begin by expressing my satisfaction that there appears to have been progress in respect of irregular payments from the EU budget. This is a good thing, of course. However, it has also been observed, at the same time, that there are enormous problems when it comes to cohesion - and cohesion is the second largest area of the budget, totalling EUR 36.6 billion in 2008. It is a massive problem for the ordinary taxpayers of the EU that at least 11% of the total approved amount should not have been paid out. This is a huge problem. How are we supposed to explain that, year after year - and it really is year after year in this area - billions of kroner are paid out in contravention of the rules or perhaps even in a directly fraudulent way?
In its recommendations, the Court of Auditors focuses on improving control mechanisms and simplifying the rules, and that is a good thing. The question is, however, whether this waste on a massive scale really can be reduced just through monitoring and simplifying the rules, or whether what we are dealing with is fundamental structural failings. Our group believes in solidarity. We support the redistribution of money from the richest to the poorest regions and countries both inside and outside the EU, but, if you read the report, the question is whether the EU has found the right way of doing this. Is it an effective way of working for every country to pay into a system that then grants subsidies to the remotest elements in the individual countries, including the fact that these are paid by the very richest? Everyone knows that the longer a line, the greater the risk of loss somewhere along the way. There is therefore a need for us to have a fundamental debate about the whole issue of cash flows in the EU.
Marta Andreasen
on behalf of the EFD Group. - Mr President, I am sorry to dissent, but as an experienced accountant, I do not share my colleagues' optimism about the opinion of the auditors.
The Court of Auditors' annual report on the 2008 accounts shows no significant improvement. 10 years after the resignation of the Santer Commission, and many promises of reform, the EU's funds continue to be out of control. The auditors state that the accounts are fair but fail to state that they are true, and indeed it is difficult to say they are true if they go on to express concern about the quality of the financial information.
The report reveals that, 10 years after the initiation of the administrative reform, the European Commission does not operate an integrated accounting system, and that directorates introduce transactions in their local systems, some of which have not even been blessed by the chief accountant of the European Commission. Moreover, on the legality and regularity of the EU expenditure, the auditors only cleared 9% of the expenses for the year 2008, a percentage similar to the past. They give an adverse opinion on 43% of the budget, the part that relates to cohesion funds, research, energy and transport, external aid, development and enlargement. For the remaining 48%, they give a qualified opinion.
Such a report would call for the resignation of the board of auditors of any company and its subsequent liquidation, but here nobody is worried. The auditors even identified an amount of EUR 1.5 billion that, in their own words, should not have been paid.
The first argument you will hear is that the auditors are not saying that it is fraud, but only errors. They will say that fraud requires criminal intent, and we have to prove this, and then we need to call the police.
The second argument that you will hear is that the rules are too complex. They have been saying this for years, but the rules have not changed, so should we then blame the European Commission for maintaining complex rules that encourage errors?
The third argument is that it is the member countries which should be blamed for the errors. Well, the treaties clearly specify that the European Commission is responsible for the management of the European Union funds, and in fact, it is the only body empowered to stop payments when it does not receive sufficient evidence that the funds are properly spent.
The fact is that these errors mean that taxpayers' money has been abused. But, to be honest, nobody cares about this. It is just taxpayers' money we are dealing with. It is only the money of people who are now struggling to pay their mortgages and educate their children. But all this is not enough. On top of the EUR 116 billion payments for the year 2008 that have been audited by the Court of Auditors, another EUR 40 billion has gone out of the European Union coffers. Thirty-five per cent of the budget is now hidden in a balance sheet account under the name of 'Prefinancing' and for which the auditors cannot tell the European taxpayers if it has been properly spent.
These additional advance payments have been made precisely in the areas where the Court of Auditors found the biggest number of errors. For how long is this Parliament going to allow taxpayers' money to be abused?
Daniël van der Stoep
(NL) Mr President, on behalf of the Dutch Party for Freedom, I should like to thank the President of the Court of Auditors for the institution's 2008 Annual Report.
After all, this report has made us aware that approximately 11% of the Cohesion Fund for 2008 should never have been spent. This represents EUR 4 billion that has been swept under the carpet. The Council, the Commission and - with a few exceptions - this Parliament too, for that matter, are anxious to remain silent. My party considers this sordid.
I should like to hear what the Commission intends to do about this. How will it make sure that those EUR 4 billion are returned? For example, is it prepared to ask the countries that should never have spent the money to pay it back? If not, why not?
I should also like to hear from the European Court of Auditors whether, in the interests of the transparency of the Commission's expenditure, the Court also examines all the declarations issued by Members of the European Commission. If so, can the Court send those declarations to Parliament, and if not, why not? I should like to hear a response to this from the European Court of Auditors.
Jan Olbrycht
(PL) Mr President, the debate on the vote of approval is more interesting each year, as Members of Parliament probe ever deeper into the details. In this debate it is important, firstly, to ascertain the facts, secondly, to explain the causes of those facts, and, thirdly, to draw conclusions.
As far as the facts are concerned, then it is very interesting for us as Members of Parliament to note the methods employed by the Court of Auditors. However, it is even more interesting that in the results section, the European Commission does not agree with the diagnosis made by the Court of Auditors. During the debate, we would like to clarify the differences of opinion between the Commission and the Court of Auditors. Secondly, it is very important to ascertain if we are dealing with mistakes, if we are dealing with improprieties, or if we are dealing with crimes. Lumping everything together blurs the image, and confuses discussion on the subject as to whether we need to correct mistakes or call in the police.
As for explaining the causes, I would like to draw everyone's attention to the fact that the document which we have before us shows that we have very serious improprieties in the public procurement system. In relation to this, the problem is not only a question of financial movements, but is also one of explaining and simplifying matters related to public procurement.
The final matter concerns the conclusions. There may be very different kinds of conclusions. Firstly, conclusions concerning control methods, conclusions concerning responsibility, but also conclusions concerning future policy. They are the easiest. It is very easy to draw the conclusion that since the money is being spent incorrectly, and we still have doubts in this area, then the best thing to do is to reduce spending on that area of policy. We should be very careful of such conclusions, because financial monitoring is one thing, monitoring of policy effectiveness is another, and a decision on future directions of EU activity is yet another.
Inés Ayala Sender
(ES) Mr President, I would firstly like to thank Mr da Silva Caldeira in particular for presenting this report of the Court of Auditors, which has progressed from being an opportunity for scandal and calls to Europhobia to being a really constructive exercise, with clear motivational messages regarding the capacity for improvement of both the European institutions and the Member States, suggesting the instruments needed to make those improvements.
All of this has taken place without losing any of the growing rigour and professionalism of the Court of Auditors which, moreover, has been the first to apply to itself all the principles stated by Mr da Silva Caldeira. It so happens that I have been a member of the Committee on Budgetary Control at a crucial time, and I thank you for the changes that you have made, because they are a great help to us.
I would, of course, also like to thank Mr Kallas, because he wisely listened to the European Parliament's requirements expressed in the Committee on Budgetary Control, which was not an easy task. The management control system is making progress, and we only hope that it will be extended and deepened.
I support the statement made not long ago that the best statement of assurance ever has been achieved, but although this is a success story for the three institutions present, the Court of Auditors, the Commission and Parliament, there is still a long way to go.
For example, we are still concerned about the obvious contradictions in the report, between the Court of Auditors and the Commission, in the important area of budgetary support and adaptation to national reform plans.
What is also very concerning this year is the control of the third pillar of the European Development Fund, joint management with organisations. My colleagues from the United Nations, the African Union and other organisations have talked about this already. It represents between 6 and 7% of the EDF and, of course, efficient formulas need to be used or found in order to put an end to this intolerable lack of transparency.
As far as staffing is concerned, once again turnover is too high and there are too many temporary staff, which means that the sense of continuity that is so essential for this type of programme is being lost. There is also a lack of systematisation of the controls that come from the delegations. In addition, as the Court of Auditors says, there are significant errors and a high incidence of non-quantifiable errors, which should be improved.
We are, however, encouraged by the path that the Commission and the Court of Auditors have begun to take together in order to arrive at a definition of a tolerable margin of error, which we think is the right way to go.
Jorgo Chatzimarkakis
(DE) Mr President, Mr Kallas, Mr Caldeira, I can see both good things and bad things in the presentation of the Court of Auditors' annual report on the EU budget. First of all, I would like to thank the Court of Auditors for a clearer, bolder and more political report which is easier for us to understand.
The good areas include the management of the budget as a whole. In contrast to recent years, this has improved. This is, above all, the result of better management of funds in the area of agriculture and natural resources, which has been our biggest headache over the last few years.
For the first time, Mr Caldeira, you do not give an adverse opinion in your report and that is good news. The report highlights the fact that wherever the EU itself controls and administers the funds, there is proper budget management. Whether it is efficient is another matter. I would like to congratulate Mr Kallas warmly in this respect. It is to your credit and during your period of office that this visible improvement has taken place. Congratulations!
However, it is now the responsibility of the Member States in particular to improve their control systems. If there is continuing cause for criticism of budgetary management in the EU, this is not at an EU level - as we have now seen - but at the level of the Member States. This is where the problems lie. Cohesion policy, for example, which is implemented by the Member States and which receives around a third of the funds, is the major problem area. You say that 11% is irregular and the non-attached Member said that the figure was EUR 4 billion. That is not correct. It is over EUR 2.5 billion, which you specifically state is taxpayers' money that should not have been spent. We must say this quite clearly and we must introduce clear controls.
However, the consequence is that the European Commission must continue to exert pressure on the Member States and we will support you in this area, Mr Kallas. We must implement a policy of naming and shaming. We must publicly shame the wasteful Member States, which continue to exist, and describe the situation clearly.
Overall, you come to the conclusion that the regulations must be simplified. We would like to support you in this and we would like to add one other request. There must be an increased focus not only on regularity but also on efficiency, to ensure that taxpayers' money is spent correctly.
Reinhard Bütikofer
(DE) Mr President, ladies and gentlemen, I would like to refer to Chapter 7 of the Court of Auditors' report which concerns research, energy and transport.
First of all, I would like to express my considerable gratitude to the Court of Auditors for its thorough work. However, it is clear from this chapter that the Court of Auditors is not able to award good marks to this area in its annual report. This is an area in which expenditure amounts to more than EUR 9 billion. According to the assessment of the Court of Auditors, the error rate is between 2 and 5%. In other words, on the basis of this calculation, between EUR 180 and 450 million has been incorrectly spent. The Court of Auditors' conclusion is that this is 'partially effective' and I see this in terms of marks at school as at best a C minus. In my opinion, it is strange that the Commission does not feel it necessary to give its opinion on this. To me, the Commission's silence seems highly eloquent.
In its recommendation, the Court of Auditors says that the Commission should continue its work of simplifying the financial regulations. I agree with this. The committee responsible has had discussions along the same lines. However, I do not agree that the Commission, in giving its opinion on the Court of Auditors' recommendation, is turning this recommendation on its head. The Court of Auditors says that the aim of simplifying the regulations must be combined with the aim of cost-effective control which will be sufficient to ensure that the money is spent correctly. In contrast, the Commission says that it wants cost-effective control and suggests that there is a tolerable risk of error, which must be taken into account from the start. This is not a reasonable way of dealing with taxpayers' money. The Commission should rethink what it has said and Parliament should support the Court of Auditors in its critical activities.
Kay Swinburne
Mr President, I welcome the report of the Court of Auditors and welcome a clean set of accounts without an adverse report on these accounts for the EU for the first time, especially after so many years of falling foul of this important process and a mission that would have put any private company in breach of multiple EU directives.
However, I would like to concentrate on the area of continued significant weakness, namely the area of structural and cohesion funds. While the Commission may consider it is an achievement that only 11% of the largest part of the budget - cohesion spending - contained errors, I consider it a shocking fact that it has been determined that almost EUR 5 billion of a EUR 46 billion budget should never have been paid out, as described by the Court of Auditors.
I have to say that my region of Wales, already in receipt of structural funds from that EUR 46 billion pot, could happily have spent and accounted for the spending of that additional EUR 5 billion. Wales has not had to return any funds for mis-spending, despite the UK as a whole not receiving a clean bill of health.
Errors seem to be at the level of implementing institutions, and therefore I ask that the European Parliament and Commission call for the individual Member States to provide a thorough audit for the funds received. In Wales, the Welsh Assembly government, via the various institutions, administers EU structural and cohesion funds and, therefore, to conduct a formal audit could not be too onerous.
However, currently, projects which were funded some seven years ago by the EU are only now undergoing financial audit by the Court of Auditors. I am not sure what this achieves. We need an annual contemporary signing-off which can identify errors and ensure compliance to the highest standard.
When taxpayers' money is at stake, as it is across the EU in the case of the regional budget, standards of accountability can never be too high.
Cornelis de Jong
(NL) I should like to say a few things about the European Commission's expenditure in the framework of external relations. According to the Court of Auditors, more errors were made in this field in 2008 than in 2007; and these errors were found in all the areas of external policy.
I find it shocking that many errors are occurring in procurement with regard to projects. The Commission keeps a watchful eye over procurement procedures in the Member States, and so I receive regular cries for help from our representatives in municipalities and provinces concerning complicated, obscure procedures.
The fear of doing things wrong in the eyes of the Commission is great. Yet who is the Commission to monitor our local authorities if it makes errors itself time after time in procurement concerning its own projects? What is the Commissioner's own opinion of this?
The Commission likes to present itself as the 28th donor. I wonder how effective this is, and I find it regrettable, in itself, that the otherwise very good report by the Court of Auditors does not include detailed information on effectiveness, and that this subject is raised merely incidentally in separate reports. Could information on the effectiveness of policy be included in future?
To give an example, I read in the report that, with regard to budget support, there are insufficient controls on compliance with payment conditions. In other words, the Commission has been handing countries a bag of money without applying sufficient controls. What conditions does the Commission actually impose, however? Also, to what extent is it gauging whether budget support is actually helping countries' development? I cannot find anything about this in the report, indeed, nor can there be anything there in view of the approach taken.
On a more general note, when I read how carelessly the Commission spends the funds allocated to it, I really wonder whether we would perhaps do better to leave development expenditure in the hands of the Member States themselves. It is clear that the Commission has taken little notice of the recommendations of the Court of Auditors, and so I wish to ask the President of the Court whether it is not dispiriting to find, year after year, that the Commission has failed to put its house in order in this regard.
Bastiaan Belder
(NL) In respect of the 2008 financial year, the European Court of Auditors has found many errors concerning the Structural Funds, regional development and the research programme. This is due to the rules on grants being too many in number and too complicated.
The European Court of Auditors rightly underlines the importance of simplifying the rules. In October, authorities from four Member States submitted to the President of the European Commission an opinion on reducing the pressure of EU rules. They recommended the establishment of an external, independent commission to reduce the pressure of rules at EU level. This represents a step in the right direction in the context of the better lawmaking strategy. Where does the European Commission stand on this?
Endeavours to improve financial management must not be limited to the simplification of rules, however. Enhanced supervision and control are also needed. The European Commission and the Member States must draw up an action plan to this end. National management declarations to begin with, then, which must subsequently lead to a positive statement of assurance by Europe. Does the European Court of Auditors consider such an action plan to be a useful instrument for improving financial management? In my opinion, such an action plan would help give financial management the political priority it so badly needs. After all, Mr President, ladies and gentlemen, the aim is to ensure that EU expenditure ends up in the right place at the right time.
Philip Claeys
(NL) The latest Annual Report of the European Court of Auditors again gives perplexing insights into the way the European Union handles European taxpayers' money. The Court of Auditors has ascertained on the basis of realistic samples that, in the 2000-2006 period, an estimated 11% of the total amount of EUR 36.6 billion under the Cohesion Fund should not have been disbursed. This means that more than EUR 4 billion in grants has been handed out erroneously.
Looking at the situation in Belgium, the Court of Auditors, too, says that a large proportion of the funds spent in Wallonia - Hainaut, in particular - was misspent. This actually confirms what one of our fellow Members said in this House a few months before the latest European Parliament elections, which was that the European grants had not produced the desired results in Wallonia, particularly in comparison with other European regions, and that it was not only Wallonia itself but also the European Union that was responsible for ultimately approving these projects.
At present, most financial transfers are very indirect, passing through many intermediate stations. Tackling this must be a priority and, at the same time, of course, the existing control mechanisms need to be improved.
Jean-Pierre Audy
(FR) Mr President, President of the Court of Auditors, Mr Vice-President of the Commission, thank you President Caldeira for this very high-quality report, thank you Mr Kallas for all the work you have done, and congratulations on your new appointment within our European Commission. We welcome this.
Regarding the annual accounts, as it did last year, the Court has issued an unreserved positive statement of assurance. I would like to congratulate the accounting officer, Mr Taverne, and his predecessor, Brian Gray, while reiterating my incomprehension regarding the negative equity of EUR 47 billion, which is essentially due to the fact that we are not accounting for the claims that we have on Member States based on the commitments that they have made for staff pensions. I would like to remind you that the total amounts to EUR 38 billion as at 31 December 2008, which is an increase of EUR 4 billion per year.
Regarding the underlying transactions, President Caldeira, please could you make it clear to Parliament whether the Court is issuing a positive or negative statement of assurance? The Court's opinion is divided into five paragraphs, which list opinions by political group, and I am having difficulty distinguishing this from the statement of assurance, provided for in Article 248 of the treaty, which also states that the Court may make specific assessments for each major area of Community activity.
Regarding the content, aside from cohesion spending, the observations are positive. With regard to cohesion spending, there are too many errors. I would also like to ask you whether you think that the number of surveys - for example, 49 for the Social Fund, which represents thousands of transactions - is sufficient for you to establish your opinion. The main problem, however, still lies in the area of shared management with Member States and in the fact that too many errors are due to the complex way in which our European finances operate.
I would like to finish by talking about shared management and the audit chain, and to reiterate my proposal to include the national courts of auditors more in the process since, according to the Council's Decision, we will never have national statements from the governments. Article 287(3) of the Treaty of Lisbon gives you this power to approach the national courts of auditors, President Caldeira. I would like to reiterate this proposal.
Jens Geier
(DE) Mr President, Mr Kallas, Mr Caldeira, ladies and gentlemen, firstly I would like to thank you, Mr Caldeira, for your introduction and I would like to thank you and the members of the Court of Auditors for your report. Parliament will investigate carefully the information you have provided and will act on it in the coming months. I was pleased that the previously unacceptable error rate of the common agricultural policy has fallen. However, after reading the Court of Auditors' report, I have the impression that one Member State, namely Romania, is responsible for the majority of the remaining irregularities. It seems that we must put more emphasis in future on training staff and implementing control systems correctly in the new Member States, if possible, before their accession.
The European Structural Funds, which many of my fellow Members have already mentioned, represent another cause for concern. It is true that the number of irregular payments has fallen when compared with the previous year, but there are still huge problems in ensuring that aid funding is handled without irregularities occurring. I would like to say to the Eurosceptic parts of this House that we are talking about 11% of the total payments and not 11% of the budget. This amounts to EUR 2.7 billion and not EUR 5 billion. I admit that this is still EUR 2.7 billion too much, but we must be accurate for the sake of honesty.
These irregularities relate mainly to excessive payments and the incorrect use of funds. For example, if European Social Fund (ESF) money is used to pay the salary of a public administrator or if European Regional Development Fund (ERDF) money is used to buy a building plot, then the people concerned obviously do not have sufficient information about the correct use of aid funding or the Member States do not have the will or the ability to administer the funding correctly, or perhaps all of the above.
When we revise the application procedure, we must put in place clear, transparent rules which are easier to understand. The Member States must ensure that the applications are monitored more carefully at a national level.
It is clear that any waste or any irregularities in relation to European taxpayers' money is too much. However, anybody who takes an impartial look at the EU and at this report from the European Court of Auditors will find little cause for offence. It offers a number of starting points for our work, which consists of making Europe better and more efficient every day. On this basis we will implement the discharge procedure for the European Commission.
Gerben-Jan Gerbrandy
(NL) I should like to thank the Court of Auditors for its crystal-clear Annual Report, and I wish to express my particular thanks to Commissioner Kallas for the effort he has put in over recent years. In my opinion, he can rightly claim to have made a great deal of progress during that time.
I should like to highlight three aspects of this Annual Report. The first is the fact that the biggest problems still lie with the Member States. Many of my fellow Members have already given the example of regional policy, which I can only underline. Therefore, I should like to put the following question to the Commission with regard to the national declarations that exist in some Member States: could you perhaps come forward with a specific proposal to make these compulsory for all the Member States of the European Union?
The second aspect I wish to emphasise is the volume and complexity of the European rules: another issue that has already been raised by many fellow Members. Can we perhaps start a fundamental debate on the way we wish to spend our funds and the rules underpinning this? In my view, at present, this is based too much on suspicion and too little on trust and, when all is said and done, that just breeds more irregularities.
The final aspect is agriculture. It is excellent, of course, that the whole agricultural sector has received a green light for the first time, but we should not pat ourselves too hard on the back. Rural development is where the major problem lies, and let that now be the very policy area within agriculture where we see major expansion in coming years. Also, the important thing is not only lawfulness but also efficiency as, with regard to the agricultural funds, we are still greatly underperforming in the achievement of our environmental and nature objectives.
Vicky Ford
Mr President, European finances do cause great concern to my constituents and to people in Britain. The UK is, after all, the second-largest net contributor to the European budget, so other Member States might benefit from remembering, when they are debating this money, that a large part of it comes from British taxpayers' pockets.
If there is one single issue that drives a wedge between British people and Brussels, it is a perception that their money may be treated frivolously within the EU. The same is true in other countries as well. This is not just a debate about a set of accounts, but a fundamental breakdown in trust between the institutions represented here and the people we represent back at home.
We must take note of this auditors' opinion. Yes, it is better than previous years, but just as a businessman thinks twice before doing trade with a company that has in any way a qualified opinion, so our residents will think twice about their relationship with the EU so long as qualifications remain.
We cannot pretend it is the auditors' fault. Auditors do not spend money: bureaucracies and governments do, both here and in our home countries. We must clean up their acts.
However, even a clean audit opinion in itself is not enough. Ever since I was 18 years old, I have received a monthly statement from my bank. The numbers add up. The audit opinion would be clean. But I know I have not always spent my money wisely.
If we are to deserve even a shred of respect from our taxpayers back at home, then in this dire economic time, we must treat their money with respect. My message to politicians both in our home countries across the EU and in this unnecessary, expensive second chamber in Strasbourg is that we must stop wasting taxpayers' money.
Hans-Peter Martin
(DE) We need a revolution in democracy! Mr President, Commissioner, welcome to the new world of the Treaty of Lisbon. This represents an opportunity for you. For 11 years, I have been following your reports in this House, and before that as a journalist, and when it comes down to it, they are all very similar. However, now you have the opportunity to look to the future. Make use of the professional competence of this House - we are not gathered here today just by chance in this Chamber; I can see Mr Søndergaard and Mr Chatzimarkakis, Mr Staes and on our side, my fellow-combatant Mr Ehrenhauser - and restructure the work of the Court of Auditors. Take a look at what works elsewhere, for example in Germany, where it is possible to evaluate the cost-effectiveness and meaningfulness of expenditure, and in Austria, and develop a concept, perhaps as part of an initiative report from Parliament, which describes how the things that you do can be done much better, so that you can genuinely fulfil your obligations.
Tamás Deutsch
(HU) Mr President, ladies and gentlemen, in my view, we MEPs owe it to every tax-paying European citizen to monitor with the appropriate attention the proper, justified and legal use of their taxes in the European Union. We owe this to every tax-paying European citizen, regardless of their nationality.
Fellow Members, I believe that the European Court of Auditors carried out a thorough, professional job when they drafted their 2008 report. I would therefore like to thank President Caldeira and every member of the Court of Auditors. I also think that suitable technical cooperation has developed between the European Court of Auditors and the European Parliament's Committee on Budgetary Control, thereby guaranteeing that Parliament can perform its monitoring task in an appropriate manner. Credit is also given to Commissioner Kallas for the definite improvement which can be noted over the last few years in terms of the European Commission's financial management activities.
At the same time, I agree with my fellow Members who say that the Court of Auditors' report contains not only positive points, but also downright appalling and alarming ones. Those items which we must definitely mention include the fact that the Court of Auditors had to declare that the error rate for the use of cohesion funds was 11%. In my view, in order to rectify the errors, we must establish without fail exactly who was responsible for what omissions, when and where, so that we can guarantee that we rectify these errors for the next time.
Edit Herczog
Mr President, when I meet my voters I often describe this institution as a computer, where the Member States provide the hardware, the Commission provides the software, Parliament is probably the keyboard where you can interact, and in that sense, the control by the Court of Auditors is certainly the control panel of the computer. We never purchase a computer on the basis of looking at the control panel, but none of our computers works for a long time without a proper control panel system inside.
I would like to congratulate the Court of Auditors on being an appropriate control panel for this institution and improving, with every year, its own work, but also reminding us to do our own homework on improvement.
What I learn from the Court of Auditors' reports after being here for six years is that we often make mistakes and that we should try to remind colleagues back in the Member States what they have to do. But for me, the most important message is that, when the Lisbon Treaty comes into force, we need to reduce the complexity, to provide better conditions for our expenditure at local level and to get the money in time to those who are applying for it, whether they are small- and medium-sized enterprises, researchers or farmers, back in our countries.
The message for us is that we have to improve skills at local level. We have to further reduce the complexity at European level. We have to go for better cooperation among Member States' auditing systems and we have to work together in the future.
Thank you for the last five years of cooperation.
(The President cut off the speaker)
Olle Schmidt
(SV) Mr President, I would like to thank the Court of Auditors for an excellent piece of work and also Mr Kallas - it is good that you are continuing. Hearing the British Members express their criticism is all well and good, but from what I have seen in the newspapers, a lot of British politicians have been less than honest with their money. This does not, of course, mean that we cannot improve, but it remains to be seen whether the situation in the Member States really is so much better than that in the EU.
In the areas where the EU is directly responsible for the budget, the errors are small. The shortcomings are with the Member States. EUR 2.7 billion is, of course, a very large amount. It is an unreasonably large amount and it is totally unacceptable. It is a large portion of the EU's budget and the Member States have a clear responsibility in this regard. As several of my fellow Members have already said, I think that the Commission ought to ensure that those countries that are refusing to release their financial accounts and submit an auditor's report do in fact do so. As Commissioner or the Commission - you do not, of course, know what responsibility you will have in future - you should ensure that these countries do, in fact, improve so that the information is gathered and the supervision can be monitored. Europe's taxpayers require this. There is also a need for a better and more efficient monitoring system through which it is possible to highlight examples of good practice.
Mr Søndergaard suggested something at the end of his speech which may nevertheless be the way forward, namely to come up with a completely new budgetary system that gives the Member States better control of the cash flows.
(Applause)
Esther de Lange
(NL) Mr President, you may be familiar with the film Groundhog Day, about a man who wakes up to the very same day over and over again? Although I am in only my third year as an MEP, I already feel like the protagonist of that film. Every year, the Court of Auditors comes here to tell us that, unfortunately, it is unable to give us a statement of assurance and, every year, the European Commission does its level best to emphasise every ray of hope.
Admittedly, there has been progress - for example in the field of agriculture - but the underlying problems remain. Of course, you could increase the permitted error rate, as the European Commission is proposing, but that smacks of moving the goalposts. If players fail to score, their coach does not go and widen the goal, but instead sees to it that they play better. This requires teamwork. Indeed, a positive statement can be obtained only through teamwork - between the European and national auditors - and by means of the national management declarations, as has already been said.
Unfortunately, the fact is that some countries are still rather freer with European money than with their own, national, funds; it is easier to go shopping with someone else's credit card than with your own. Yet you will be confronted with the bill, Commissioner. If you and your successor do not manage to get the control activities right, it will be bad not only for budgetary control in the European Union and for you, the European Commission, but also for the legitimacy of us all and of our work.
Therefore, you can be sure, Commissioner, that Parliament will be watching you and your successor very closely in this regard.
Barbara Weiler
(DE) Mr President, Commissioner, Mr Caldeira, ladies and gentlemen, I would like to start by thanking Mr Caldeira and his team. His report will be very useful to us in our deliberations which lead up to the granting of a discharge.
I have a sense of déjà vu, because as far as I can tell, the Council is once again conspicuous by its absence, just as it was last year. I am being so critical because the Council, as one of our major community institutions, cannot and should not stand outside this debate.
We rightly expect all the Member States to provide control and transparency, but we also expect this from our own institutions and the Council is jointly responsible for what happens or does not happen in the Member States.
Of course, the irregularities in the budgets do not affect the Council's budget as severely as they do the agricultural sector, but nevertheless, we will also have questions about public procurement, late payments or overdue payments and repeated overestimating. We will be discussing this with the Council in the next few weeks.
It is true that errors are not the same as fraud and that the recovery of payments is a useful tool. Another good tool is the process of naming and shaming in the area of agricultural policy which has proved its worth in Bavaria and in the rest of Germany. I believe that we should continue to use this method because it has become clear that the Member States and the companies involved react to it.
We expect the Swedish Presidency to be ready to discuss this over the next few days and also...
(The President cut off the speaker)
Anneli Jäätteenmäki
(FI) Mr President, Mr Caldeira, Commissioner, I wish to thank the European Court of Auditors for its admirable work for the benefit of the European taxpayer.
The EU accounts allow a 2% margin of error. I would say that it is salaries and other administrative costs in particular that need to be dealt with more accurately. We cannot allow any uncertainties when it comes to these.
There are, however, other cost groups where it would seem to be difficult, or even impossible, to achieve a 2% margin of error. According to the Court of Auditors, as much as 11% of the total sums spent on cohesion policy are sums that should not have been spent at all. The situation was also the same in the two previous years.
As the situation is such that the 2% threshold cannot be reached, I would like to ask whether the Commission or the Court of Auditors has thought about whether the 2% figure should be reviewed, so that year after year, we do not have to say that there is no way we will achieve the threshold this year and we will not do so next year either. In future, we will have to be more careful and function more cost-effectively than we do now, and the application procedure will have to be simplified.
Czesław Adam Siekierski
(PL) Mr President, an analysis of the Court of Auditors' annual report on budget execution for 2008 leads us to the conclusion that the situation is better than in previous years. Especially pleasing is the fact that it has been possible to extend significantly correct management of the budget. We have observed an exceptionally clear improvement in the case of expenditure on agriculture and rural development, which account for over 40% of the EU budget. This is a crucial change in comparison with earlier reports. It is a result of reform and simplification of the CAP. We now pay out funds based on simple technical requirements.
On the other hand, the Auditors show up some areas of dispute, because they found that among the applications for funds made by Member States in the area of cohesion policy, 11% contained mistakes. I stress that I am talking about applications. It might seem to many people that this unfavourable data is the result of carelessness on the part of the Commission or Member States. There may certainly be a little truth in this, but I think the problem lies elsewhere. The main reason for this large number of financial shortcomings in the area of cohesion and regional development policy is the existence of over-complicated and complex legal regulations which, indeed, the Auditors admit in their report.
I encourage the Court of Auditors further to intensify cooperation with their counterparts in Member States. Finally, I would like to say that we must devote more attention to the problem of education and to giving better information to beneficiaries of EU and institutional policies which implement and manage specific programmes.
In conclusion, in my opinion, the Commission should make every effort, most of all, to simplify financial regulations while retaining basic monitoring mechanisms which prevent abuse. However, very often the beneficiaries of particular European funds struggle with a forest of regulations which are not completely clear, and which, in practical terms, make it impossible to produce accounts which would fully satisfy the Auditors. This should be changed, and I stress: simplify and inform, but also monitor.
Georgios Stavrakakis
(EL) Mr President, I too should like to congratulate the Court of Auditors on their excellent work, as well as the European Commission, and say that I am very pleased, because I can see that the overall situation has improved. I should like to emphasise in particular that this is the first time that agricultural spending is no longer in the red. Things are going better overall, but there are still problems with expenditure on cohesion policy, to which several of my honourable colleagues have already referred. However, I am quite optimistic about the future.
We must also look at the good news. The system for recovering EU funds is working: in 2008, EUR 1.6 billion were recovered and more recoveries are under way, proof that the system is working properly. The percentage of fraud uncovered is extremely low and has been identified in just a few isolated cases. There are only problems in a few Member States, proof that the system as a whole is working well and that the objectives of cohesion policy are being achieved.
In the long term, the system of joint management needs to be reviewed and a greater share of the final responsibility transferred to the Member States, thereby helping to simplify the rules. The Treaty of Lisbon makes provision for this in Article 310, on the basis of which cooperation is allowed in implementing the budget between the European Union and the Member States, contrary to the exclusive responsibility of the Commission hitherto.
Finally, I should like to point out that the Court of Auditors' message on the need to simplify the rules has reached the Council and the Commission and I honestly hope that the changes...
(The President cut off the speaker)
Lambert van Nistelrooij
(NL) The 2008 report once again gives cause for penetrating analysis and action, including on the part of the European Parliament. I thank you for this report. This approach - this cooperation - has led to demonstrable improvements over recent years.
Nevertheless, as coordinator for the Group of the European People's Party (Christian Democrats), I wish to make a few comments on regional policy in particular. Is it true that the 11% error rate in regional policy is based on those three Member States, and how does that relate to your projections? Is it true that most of the shortcomings were found in the procurement procedures? Is it true that it was too soon for the report to reflect the improvements in the expenditure under the new, current, regulation 2007-2013? As you know, many improvements have been made to this over the last year. If that is the case, and in view of those changes - those improvements in the current legislation - we can continue to work in the vein of that upward trend of improvements in the period up to 2013.
It is also important that these improvements in the transposition of European legislation be implemented much more emphatically in the procurement rules, that there be improvements in the powers to overcome obstacles and in enforcement, particularly in the Member States. After all, there is strong friction here in the relationship between the European and national levels. Therefore, we do have to name the countries concerned.
This 11% figure will then be able to change from red, which is unacceptable, to yellow and finally to green. That is why citizens have elected us, to obtain more results and greater clarity in this field. I am also happy to take on board the suggestions for simplification contained in your report.
Christel Schaldemose
(DA) Mr President, the Court of Auditors has my heartfelt thanks for a sound and very serviceable report. Listening to the debate here today, I am put in mind of a Danish saying, where we talk about whether your glass is half full or half empty. This, in other words, is a question of whether you are an optimist or a pessimist. It seems to me that there are perhaps far too many people here today who have been far too optimistic. The Commissioner, too, has been too optimistic. Quite simply, I do not think this is good enough. Had a Danish finance minister been responsible for this budget, where less than half of it can be accepted as error-free and where less than half of it - 47% - is green, the minister in question would, in fact, have been out of a job.
I find it highly regrettable that there are still so many things that need to be done and I find it highly regrettable that things are moving as slowly as they are. I realise that it is difficult and I realise that the rules can be very complicated. I also realise that progress has been made, but it is not good enough. Looking at the speed at which we have improved the green part of the budget, you can see that things are moving too slowly. I call on the Commission to take its share of the responsibility. You have the tools. You need to react more rapidly.
Monika Hohlmeier
(DE) Mr President, ladies and gentlemen, the focus until now has been on the cohesion fund and this is certainly justified because of the size of the budget. However, I would now like to draw attention to an area in which only EUR 2.7 billion was spent last year, but which causes significant problems.
The European Court of Auditors, which I would like to thank warmly at this point, has produced a semi-masterpiece, as it has succeeded in bringing transparency to the fragmented administration in the area of development aid and in clearly identifying the problems which continue to occur. I would not like to go as far as saying that this area has no universal principle and no transparent structures, but it does have considerable problems.
There have been improvements, for example, in the payments for projects, but nevertheless it is still the case that no audits can be carried out on some of the projects because the receipts are missing, not to mention the fact that some receipts are not even provided in the first place or that there are no opportunities for follow-up audits. The subject of budget aid once again involves particular problems because it is not possible to follow up or trace the money and what it is used for. In my opinion, we should carefully consider finally integrating the European Development Fund (EDF) into the general budget, for reasons of transparency, traceability and manageability. This would allow us to combine and coordinate the EDF with other fields, such as development aid, foreign policy, neighbourhood policy and other policies in the same area, so that we could obtain a complete and transparent overview. This is my proposal.
Andrea Cozzolino
(IT) Mr President, ladies and gentlemen, as has already been stated, the European Court of Auditors 2008 report first and foremost gives us some positive news: the percentage of EU expenditure, characterised by high levels of irregularities, has gone down from 60% in 2005 to 31% in 2008. This is a significant result; it signals a positive approach that we must continue to follow.
As far as the Structural Funds, and more specifically cohesion policies, are concerned, there continue to be problems and difficulties. I believe that we should focus our attention on these areas in the coming months and years.
With regard to the Structural Funds, when compared with the Court's analysis of the period 2000-2006, the management and monitoring systems for the period 2007-2013 are giving rise to stricter regulations and greater reliability and transparency in terms of expenditure, as well as to greater accountability on the part of the Member States.
The Court of Auditors strongly emphasises the need for greater simplification. Therefore, much work needs to be done in order to further simplify the rules.
Quality of economic growth and transparency in the use of Community resources are two objectives of the same battle which we need to wage. I believe we need to do this by also making our debates concerning ourselves and, above all, concerning the citizens, more public.
Cohesion policies, the Structural Funds and regional policies are, and will, remain a crucial element of the European project. They have given substance to the European Union's fundamental values. We must work together to guarantee efficiency and transparency in the coming years.
Mairead McGuinness
Mr President, I thank the Court of Auditors in particular for putting forward this morning, in a very clear way, the contents of a massive report giving us the good and the bad - and thankfully not the ugly because, to some extent, we have cleared up the worst aspects of our accounting practices.
I want to concentrate in particular on agriculture which, because it has been given a relatively clean bill of health, has virtually been dismissed in this debate. I do so because I want to caution that we may be going back to the future.
It is worth remembering this morning that agriculture has improved because we have decoupled, to a large extent, payments from production. We are giving the payments directly to active farmers, active producers, and therefore the possibility of errors has been much reduced.
However, through the vehicle of modulation we are now taking that money and using it in the area of rural development, about which serious concerns have been expressed, hence my comments about our possibly going back to the future.
I also worry about how we can account for issues like water management, climate change and biodiversity. Think of the complexity of the rules that will surround all these things - and rightly so - if public money is being spent in that direction, and the difficulties and cost of complying with those particular rules.
We are looking at a review of the European Union's budget thanks to the former British Prime Minister, Tony Blair, whose government does not have a particularly clean record when it comes to its own sets of accounts.
Again, under that review we will be looking at spending money in areas which the Court of Auditors clearly has concerns about, particularly in the field of research and innovation. Let us therefore be very careful that the good work we have done will not be unpicked by what we are about to do.
Peter Jahr
(DE) Mr President, ladies and gentlemen, when I was at school, the teachers often said: Trust is good, control is better.
(The speaker agrees to answer the question of another Member, in accordance with Rule 149(8) of the Rules of Procedure)
Ingeborg Gräßle
(DE) Mr President, I wanted to ask you whether you had noticed that, in the course of this important debate, Mr Martin, who has given us all plenty of advice, entered the Chamber at 10.00, spoke at 10.09 and left the Chamber at 10.12?
Peter Jahr
(DE) I am reminded of two basic rules from my childhood. I was once told: 'When someone speaks to you, let him finish talking. If you ask a question, then at least wait for the answer'. On that principle, it would have been nice if he had stayed in the House, so that he could follow the debate in Parliament. That is my opinion.
The controls and the improvements suggested by the Court of Auditors make a significant contribution to the more effective and more economical use of EU funds. As a Member with an interest in agriculture, I am particularly pleased that the use of funds in the area of agriculture was given a positive assessment and that on average, no significant irregularities were found. However, this is on average and that is precisely where the problem lies. There is a saying in agriculture that on average, the lake was half a metre deep, but the cow still drowned. In other words, when, on average, everything is correct and when the overwhelming majority of countries are able to apply the administrative regulations appropriately, it is then in particular that we must deal with the countries which do not toe the line, the bad guys. It is important to name names in this respect. Mr President, please do not give in. You can be more specific in what you say and Parliament will give you its support.
The situation regarding the error rate in rural development is rather different. Even though the error rate is lower than the previous year, it is still significantly higher than that for agricultural expenditure. However, I must say at this point that the majority of the problems identified are due to the incorrect application and lack of understanding of complex EU regulations. This does not necessarily mean that money is being wasted. We must all work together to modify and improve the EU regulations, so that the Member States can apply them more easily.
Sophie Briard Auconie
(FR) Madam President, ladies and gentlemen, the Court of Auditors' report for 2008 concludes that there has been an overall improvement in terms of the legality and regularity of the European Union's budgetary transactions. Nevertheless, it says that expenditure associated with cohesion policy is still problematic, since it contains the most errors.
The funds available for cohesion policy represent nearly a third of the European budget. It is one of the most fundamental and also one of the most symbolic policies of European integration and of the principle of solidarity that is at the heart of it.
As such, we need to be demanding and ensure that the procedures are applied properly. We do, however, need to take into account the specific characteristics of cohesion policy, which is widely decentralised and therefore managed by regional authorities in the Member States. The errors observed by the Court of Auditors are not a result of attempts to defraud on the part of the project promoters, but a result of the complexity of the conditions for eligibility.
In my view, the solution is not, therefore, to make the procedures more cumbersome, but to simplify them, both at Community level and in the Member States. At Community level, simplification measures are under discussion in the Council and in Parliament. At national level, personally I am working towards simplifying French procedures, in close cooperation with elected representatives and national and local decision makers.
In this period of economic slowdown, it would be particularly unfortunate for project promoters, of which there are still many, to have difficulty accessing the European funding available to them.
Ville Itälä
(FI) Madam President, we are dealing with an important matter, and I want firstly to say that the management of the budget has got a lot better. There are problems, however, and I wish to mention a few of them.
The first is the institutions' policy on buildings and property. When I was drafting the budget for the 2008 Parliament and other institutions, I noticed that things were not really right in this area. I would hope that we can launch a thorough investigation into why the price paid for properties and buildings of the institutions is higher than the average market price. When the study has been completed, we will know whether there is something dubious about all this or, alternatively, that everything is all right.
The second matter I wish to draw your attention to is the situation regarding Romania and Bulgaria, which is something that has already been mentioned here. We know what the problems are, and we have to find ways to help Romania and Bulgaria, so that things can be sorted out. This is also a political issue. After all, what is the point of enlargement if we accept as members countries that cannot organise the management of their budgets adequately?
The third matter particularly concerns external actions linked to the United Nations, though in any case, we need to be able to carry out checks to ensure that the public know that everything is in order.
More than anything, however, we need to realise that the number of areas free of error has risen, and for that we have to thank Commissioner Kallas and the European Court of Auditors. Both have done excellent work.
(Applause)
Seán Kelly
Madam President, a simple question. It has been stated that many of the breaches in compliance are due to a lack of understanding of the procedures and regulations.
Do you accept that this is the case? And, if so, what percentage of breaches would be due to this unfortunate situation, not to deliberate breaching of the rules?
Ivaylo Kalfin
(BG) I, too, would first of all like to congratulate the representatives of the European Court of Auditors for the report which they presented, and Commissioner Kallas for the evidently much-improved effort on the part of the European Commission in relation to European funds expenditure. Coming from Bulgaria, I can see at first hand that the Commission is extremely strict with regard to the expenditure of funds, and its actions definitely have an impact. I would like to raise one issue linked to the fact that this is the last report from the European Court of Auditors under the current treaties. The following report next year will now be based on the Treaty of Lisbon. This contains a number of questions which have been asked and which have still not received an adequately explained response, including with regard to creating the budget and the procedures for spending the budget. I believe that all the institutions, including the European Parliament, along with the Council and European Commission, of course, not to mention the active involvement of the European Court of Auditors, should do their utmost to come up with a response to these issues so that we think the same way on them.
Jean-Pierre Audy
(FR) Madam President, I am not taking the floor under the 'catch-the-eye' procedure; I simply wish to lament the fact that the Council bench is hopelessly empty. The Council is a budgetary authority, and we also note that we have many problems in the Member States. I wanted to express this regret, Madam President.
Bart Staes
(NL) I have been present throughout the debate. One of the most crucial questions I have heard - and I would ask Mr Caldeira explicitly to explain this carefully - is what is the situation with the 11% under Cohesion Policy that should not have been disbursed? Various explanations have been given for this in the debate. Some have said EUR 4 billion, others have said EUR 2 billion, and so on. I think it exceptionally important for the start of the discharge exercise that you explain to us clearly and unequivocally what is really involved here. I should also like to extend my special thanks to Commissioner Kallas for the work he has done in recent years. I think the Committee on Budgetary Control always experienced cooperation with you as very constructive. We did not always agree, but you will probably soon be granted another term of office in the new Commission, a new post, and I wish you all the very best in this.
President
I would like to say to Mr Martin that I saw that he was asking for the floor on a personal matter, and that I will give him the floor, but in accordance with the Rules of Procedure, I will do so at the end of the debate and after the Commission.
Edit Herczog
(HU) Madam President, I completely agree with Mr Audy. The Council is very conspicuous by its absence, as are the leaders of the political parties. As a vice-chair of the Group of the Progressive Alliance of Socialists and Democrats in the European Parliament myself, I felt that the chairmen of the other groups did not think that this debate was important either. However, the Council is the most conspicuous by its absence.
Vítor Manuel da Silva Caldeira
Madam President, I would first of all like to thank all of the MEPs who have spoken. Their comments will certainly be very much appreciated by all those who work at the Court of Auditors and who were behind the report submitted today.
In the time allotted to me in such an intense and interesting debate, it is a little difficult to answer all the questions that have been put to me directly. I would first like to address the question from Mr de Jong, who asked me whether I was discouraged about not being in a position, as the President of the Court of Auditors, to give a positive DAS. My answer would be that, as an auditor, I would be delighted to give such an opinion when the time came, but it is not the job of auditors to be happy with the opinions that they give. Auditors must have a solid basis for their opinions, drawn from evidence on the ground.
To be very frank, as an auditor I prefer giving an opinion such as the one we have given this year. I will not tell Mr Audy whether it is a positive or negative opinion, but it is a realistic opinion that highlights the points on which progress has been made. We have seen that there has been a sharp fall in the number of errors in some areas, in particular in the area of agriculture, but there are also areas where more care is needed. Therefore, rather than being optimistic or pessimistic, as an auditor I prefer to be realistic.
I think that this is the way that our message should be understood with regard to prospects for the future. Several MEPs have asked what can be done to solve these problems. The Court of Auditors has made its contribution in this report and in previous reports by pointing out that its recommendations in relation to improving the supervisory and control systems in the Member States are important, and by stating, with regard to the Commission, that it is equally important to simplify the regulatory framework, which means not making things more complicated than they need to be. We cannot move from a stage in which we want to do everything and control everything - which requires excessive controls - to a stage in which there is no supervision at all. Otherwise, we will not be able to find the right balance to enable us to achieve the objectives of the policies.
Several of you have said that this report does not talk about how efficiently the funds are used. Did the few errors or irregularities identified prevent projects from being completed? Obviously, the Court of Auditors is supposed to give an opinion in its reports regarding the financial statements, which is a clearly positive opinion, and on the underlying transactions of these accounts. This is about whether the transactions comply with the rules that they are supposed to follow.
However, the Court of Auditors also provides you and, in particular, the competent parliamentary committees, the Committee on Budgetary Control, with all of our reports relating to the effectiveness of the policies and whether the funds in the different areas are being used correctly. I hope that you will find significant information in those reports in terms of what could be done better in the context of these policies. However, as it says in our report - and I emphasised this in my speech - it is important to seize this opportunity that the reform of the financial regulation and the new framework for the financial perspective are offering us for the future, and the opportunity that the budgetary reform is giving us to consider some fundamental issues.
Allow me to conclude, Madam President, by saying that our methodology complies with international auditing standards. We consider our samples to be appropriate for drawing our conclusions. Mr Audy asked the following question: are your samples of sufficient size? The answer is yes. Obviously, if we had more resources, we could possibly do more work, but our resources are limited and we are supposed to manage our resources carefully.
Finally, a word on the role that the Court of Auditors and the courts of auditors in the Member States can play in the future. We always work with the courts of auditors in the Member States and with the national auditors by cooperating with one another and trusting one another. This approach is provided for by the treaty - and reaffirmed by the Treaty of Lisbon - and in following it, we are doing our best to ensure that, by and large, we can bring added value to the role of external auditing in the European Union.
Those are my very brief final remarks, Madam President, as I did not wish to take up too much of your time.
(Applause)
Siim Kallas
Vice-President of the Commission. - Madam President, thank you for this debate and for the good words addressed to the Commission. I have two points relating to the past, from 2008 and recent years. Firstly, one important thing was underlined: transparency. I want to remind you that together we have made a big breakthrough. All information about beneficiaries of EU funds is now public and this has also been one of the major changes during this period.
The second fact from the past is that we discussed how much money has been lost and how much money should be recovered, amongst other things. I would like to illustrate this with one number, from what is a very complicated title. It is in Annex VI to our Synthesis report and is the 'summary of waivers of recoveries', which actually means an amount of money which is completely and irreversibly lost. In the 2008 Synthesis report, this was EUR 18 380 363.22, which is under 0.01% of the EU budget. This is lost. We have discussed all these billions which have not been properly managed in the structural funds, but something is recovered finally. The process is not perfect and we have to work hard on this and sometimes errors are corrected. It is a long process and we must take it very seriously.
Now some points for the future. In the very near future, we will start discussions on the new Financial Regulation and the new budget perspectives. Very many things are linked to this process. National declarations and the participation of Member States need a stronger legal basis. We can clearly go ahead with this simplification, discussed so much and so many times here. As President Caldeira has already said, objectives are defined by more than 500 programmes accepted by the Commission, Parliament and Council. Every programme has its own legal basis, its own objectives, and everything must be measured, including the money which has been spent in accordance with these objectives. That is a key issue.
At the last plenary session when we discussed the discharge for 2007, one idea was to reduce the number of programmes and to have bigger projects and bigger programmes which are much easier to survey. This is a key issue and, as one Member said was the case with rural development, you cannot measure objectives - especially in external actions, where you have very political objectives - and say that those objectives are being achieved. This is a key issue, but one within the framework of the future discussions on financial regulations.
Concerning dialogue, which was underlined here as important, I must say that we have tried to do our best to have good dialogue with Parliament, with the Committee on Budgetary Control and with the Court of Auditors. I myself like to debate everything with people with different views, different attitudes and different assessments. That is normal life. What I do not like is that some people deliberately and constantly use incorrect facts. You cannot have a dialogue when the facts are not correct. We can have different assessments, different interpretations and different views, but the facts must be correct. I strongly wish that in our future dialogue, this principle will also be respected.
(Applause)
President
Mr Martin, do you wish to speak at the end of this debate?
Hans-Peter Martin
(DE) Madam President, I am sorry that I have to take this opportunity to make a personal remark which, according to the agenda, I have been given three minutes for. However, I will not need three minutes.
I took a very constructive approach in my speech and in the debate I pointed out very constructively what could now be done on this new basis. In order to be able to come to this assessment, I followed the debate this morning very closely. I was in the chamber much earlier than my fellow Member stated, left later and am now here again. I feel that it is a great pity that Mrs Gräßle obviously feels it necessary to make personal attacks which really are below the belt. I would like her to be constructive and I would like to see fewer incorrect stories by her in the German newspaper the Bild Zeitung. I would prefer to hear constructive suggestions about how we can rescue the situation and how the Court of Auditors can be given the ability to do this. In addition, it is a great pity that Mrs Gräßle, in particular, is the person who unnecessarily makes the work of the non-attached Members more difficult, discriminates against us, prevents us from accessing information, does not allow us the opportunity to work with employees and then feels that it is worthwhile attacking us on the basis of incorrect facts. You should learn about democracy, Mrs Gräßle.
President
We will stop there. The debate is closed.
Written statements (Rule 149)
Elisabeth Köstinger  
It is true that there are still significant deficiencies in some areas, in particular, in the case of cohesion policy, but the fall in the error rate in the area of agriculture and natural resources to below 2% gives me cause to look optimistically to the future. Particularly given that this area makes up the majority of the European Union's spending, the comparatively low error rate of 2% can be seen as satisfactory. In future, we should put all our efforts into two areas. The first of these is cooperation between the Commission and the Member States. The aim here is to identify inaccurate and incorrect data in all the different areas of spending and to correct the errors. The second area involves improving the EU's methods for paying EU money to the Member States and recovering it from them.
Véronique Mathieu  
I would like to congratulate the Court of Auditors on its annual report on the implementation of the EU budget concerning the financial year 2008. I would like to draw attention to the paragraph concerning the European Union agencies, in which the Court of Auditors states that it has issued an unqualified opinion for all the agencies audited, with the exception of the European Police College.
At this stage, it is relevant to recall that we faced a similar situation for the 2007 discharge. The Court of Auditors has published a report containing a statement of assurance with reservations regarding the accounts and underlying transactions of CEPOL, indicating in particular that appropriations had been used to finance private expenditure. The rapporteur asked for the discharge to be postponed for CEPOL, followed by the Committee on Budgetary Control. However, the vote in plenary on 23 April 2009 rejected this proposal by 226 votes for and 230 against, with a massive mobilisation of the Socialist Group in the European Parliament and the Group of the Greens/European Free Alliance.
Given that the Court of Auditors has today raised further problems regarding CEPOL, it is essential that we acknowledge the obvious error that was made in granting discharge in April by voting against the opinion of the rapporteur and of the committee responsible.
