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Algirdas Šemeta

EU Commissioner for Taxation and Customs Union, Audit and Anti-Fraud

"Annual Report of the European Court of Auditors"

EP Plenary session

STRASBOURG, 15 November 2011

Mr President, President Caldeira, Mr Rapporteur,

Honorable Members of the Parliament and of the Court of Auditors,

The Court of Auditors report is published at a time when the discussions on the new multi-annual financial framework, the future sector legislation and the revised Financial Regulation have started.

These discussions will be essential to establish a solid basis among all stakeholders for improving the financial management of the next European programmes.

In this context, it is even more important to have clear and stable criteria against which the Commission's and Member States' performance is measured and assessed.

We need to ensure that our stakeholders receive comparable and consistent information on expenditure, errors, corrective measures and systems performance to allow them measuring progress over the years.

The key messages outlined by President Caldeira demonstrate that, over the years, we made progress in improving the financial management of the EU Budget.

The accounts are clean, all commitments and revenues as well.

As regards the payments, the overall level of quantifiable errors is at 3,7%. For internal policies, external action and administration, the level of quantifiable errors is below the materiality threshold of 2%.

Agriculture is rather stable with a 2,3% level of quantifiable errors. Moreover, the Court says that for 2010, the direct aid, about € 40 billion paid to millions of farmers, is clean.

But Cohesion still deserves serious efforts.

The implementation of the EU budget in the areas where management is shared with the Member States remains a complex issue and reducing errors here was, is and will be our main challenge.

The Commission is continuously acting preventively, providing guidance, assistance and advice to Member States' Authorities on a wide range of technical and regulatory issues. It will continue to do so and intensify its efforts where needed.

But it will also continue to strictly apply correctives measures such as the interruptions and suspensions of payments and financial corrections where national authorities do not address the weaknesses in their systems in a correct manner.

In 2010, the majority of errors concentrated on seven operational programmes in three Member States. The Commission therefore considers that this is not in first place the design of the programmes that is wrong but how they are implemented on the spot.

As President Caldeira said, in the majority of cases, the Member States’ authorities had sufficient information to have detected and corrected at least some of the errors prior to certifying the expenditure to the Commission.

This is unacceptable. It reflects a lack of responsibility and accountability of the authorities involved.

The Commission has therefore addressed this particular problem and confronted the concerned Member States with those findings. I hope that we will receive appropriate responses from them in this regard. I and my colleagues Johannes Hahn and Laszlo Andor will keep you informed.

Another issue raised in the Court's report refers to the Financial Engineering Instruments. Last week, several Members of the Budgetary Control Committee expressed concerns regarding the management of these instruments and their inherent risks at Member States level.

In the meantime, the problems identified by the Court of Auditors in respect to accounting have been addressed and the necessary adjustments have been done before the closure of the 2010 accounts.

Moreover, the Commission has already proposed improving the current legal basis to obtain systematically the information needed from the national authorities.

Honorable Members of the Parliament and of the Court of Auditors,

I am pleased that the European Court of Auditors confirms that the Commission is on the right track.

Despite these rather good results, there remains ample room for improvement, and the Commission takes full responsibility to address these areas together with the other financial actors involved, in particular the Member States.

Several new measures included in our proposals for the next generation of EU spending programmes are inspired by the Court and the Discharge authority's recommendations, especially in policies under shared-management.

Whether these measures will become the EU law depends mainly on the co-legislators, the Council and this Assembly. The Commission will facilitate the negotiations and hope those necessary improvements will be supported.

Ladies and Gentlemen, thank you for your attention.

Dear Chairman, President Caldeira, Mr Rapporteur, Honorable Members of the Parliament and of the Court of Auditors,

I am pleased that the Court's 2010 annual report confirms that our efforts bear results.

Our discussion today indicates that part of our efforts needs to be focused on those European programmes which management is shared with the Member States, in particular in the area of Cohesion.

As we speak, the Commission is giving follow up to the issues identified in the 2009 discharge resolution and to the new findings disclosed in the 2010 Court's report.

For the future, major proposals for the next Multiannual financial framework have been tabled already for Cohesion and Agriculture policies. You will find in these proposals how the Commission has duly taken your recommendations into account.

Other proposals will follow until the end of this year and will include as well the necessary provisions aiming at improving further the financial management of the EU funds.

I am looking forward to a constructive and fruitful debate with all of you, and I would also like to ensure you that the Commission will provide you with all necessary support, as it did in the past.

Thank you.

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