Brussels, 10 November 2008
'The Commission welcomes the auditors' constructive analysis and will continue efforts to improve its financial management to address the weaknesses identified. I do hope the report will also mobilise member states to do their job better so that errors on the ground are prevented and corrected', said Siim Kallas, vice-president of the European Commission responsible for administration, audit and anti-fraud measures.
Undue payments recovered
The Court found the highest rates of error in structural funds, which are managed by the member states. 'The Commission shall not hesitate to take a tough stance and suspend payments until all member states implement adequate corrective measures. And where errors have financial impact, we shall recover the money', concluded Siim Kallas. In the structural funds, the total financial corrections imposed by the European Commission on member states only this year amount to EUR 843 million. Another EUR 1.5 billion is expected to be recovered by March 2009.
Clean accounts, better controls
The Commission welcomes the Court's clean opinion on the accounts, as well as a more positive evaluation of the control systems: in 2007 for the first time there is not a single policy area with a red card for the system's inefficiency.
Direct subsidies to farmers are regular
As far as errors on payments are concerned, the bar is set very high: at least 98% must be error-free to get a green light from the auditors. This is the case now e.g. for direct payments to farmers (European Agricultural Guarantee Fund) or administrative expenditure.
For most other budget areas, ranging from research grants to humanitarian aid, between 95% and 98% payments are error-free.
Structural funds, i.e. payments to EU regions and to boost employment, managed on the ground by member states, remain the only policy area that the auditors have flagged up as 'red' (meaning that the error rate exceeds 5% of payments), despite some improvements in the control systems
Simplification and transparency: less scope for errors
Simplification of unnecessarily burdensome rules is taking place, e.g. flat rate payments are more widely used, thus avoiding complex calculations where errors were more likely.
More transparency in how the funds are distributed is also under way. Information on beneficiaries receiving funds directly from the Commission is already easily available online through Financial Transparency System (http://ec.europa.eu/grants/search/index_en.htm). And all member states will have to disclose information on who they give EU money to:
Get your facts straight! EU spending – a myth-buster:
Statement from Danuta HÜBNER, European Commissioner for Regional Policy: