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SPEECH/00/131

Speech by Michaele Schreyer

Member of the European Commission responsible for Budget, Financial Control and the Fight Against Fraud

Discharge 1998

Parliament, Strasbourg

11 April 2000

Madam President,

Ladies and Gentlemen,

Today, for the second time this year, we are debating the discharge to be granted to the Commission in respect of the implementation of the budget in a past financial year. Two and a half months ago you granted the Commission discharge for the 1997 budget year. You attached to that discharge a great many far-reaching demands that represented a strong incentive and impetus for the reform of the Commission as was evident in the Commission's White Paper. I would like once more to extend thanks on behalf of the Commission, in particular to the rapporteur for that exercise, Ms Van der Laan and, in this connection, also to Mr Van Hulten, the rapporteur on the reform.

Today you are debating the discharge for 1998. For this purpose Parliament is required by the Treaty to examine the accounts and financial statements, and the annual report of the Court of Auditors together with the replies of the institutions under audit.

The Court of Auditors presented its report on the 1998 financial year in November last year. In it the Court issued a statement of assurance in respect of revenue and the management of commitment appropriations. The Court did not give a positive assurance in respect of the legality and regularity of payments.

The Court considered that the number of errors and failures detected was too high. As Commissioner for the budget, I am bound to agree that in some areas the shortcomings in the implementation of the budget are not acceptable.

For that reason I immediately took steps, together with my departments, to work out an action plan containing precise measures with precise deadlines for individual sectors which is designed to reduce the number of errors found.

Nearly 90% of all the errors detected or extrapolated by the Court concern the Member States. The vast majority of payments from the EU budget are made not direct from Brussels but via the Member States' authorities. This decentralisation of budget implementation has a great many advantages, but in return it demands close cooperation.

As rapporteur on the SEM 2000 measures and decentralised management, Mr Kuhne has looked at these matters in great detail. I would like to thank him for the work he put into the report.

In its debate on the budget discharge for 1998, the Council - which incidentally recommended that the accounts be signed off - also touched on this matter and the suggestion was even made that the Member States should themselves set a target for reducing the number of errors in spending EU funds.

The Commission will be stepping up its efforts to draft the financial rules in such a way that they are easier to use for the authorities in the Member States. It will provide guidance and information about the rules and control requirements, but also - whenever necessary - use financial corrections in refunds to Member States as a financial lever, as is possible in agriculture.

The fact that the error rate for agricultural expenditure is well below the rate for the Structural Funds can be attributed to the possibility of making financial corrections. My colleague Franz Fischler will go into this in more detail. I must also express my appreciation to Mr Mulder for his report.

The Court of Auditors made no critical remarks on the budget of the European Coal and Steel Community and I would like to thank the rapporteur, Mr Khanbhai, for his report and Mr Cariga for his working document on own resources.

The Court also gave a statement of assurance for the implementation of the European Development Fund, but did make some critical observations. Overall a clear reduction was seen in the error rate for the Fund in comparison with past years. The Commission sees in this no cause for complacency. For this essential financial tool for development policy the Commission is still striving to secure even more satisfactory results, in particular from the point of view of getting assistance to recipients quicker. That too is something that the rapporteur, Ms Rühle, underlined in her report.

Madam President, Ladies and Gentlemen,

The overlap of the legislative powers, budgetary powers and control powers of the individual institutions is far more pronounced in the European Union than in the Member States. Cooperation is essential to the operation of European policies, and for this a clear and reliable distribution of roles is of great importance.

Hence the importance of the current talks and negotiations between Parliament and the Commission on the agreement that will cover the question of access to confidential information and the proper handling of such information. The chairwoman of the Committee on Budgetary Control, Ms Theato, has played a very responsible role here. I believe that it is the responsibility of all concerned to see that these negotiations are concluded quickly with mutually satisfactory results.

The Commission has committed itself to transparency and openness.

By this it means action and not just words.

As the discharge procedure has progressed I have laid all the confidential audit reports before the Committee on Budgetary Control, or supplied them to the rapporteur.

The Commission has given full answers to questionnaires, even though this was a departure from the practice followed by rapporteurs in the past.

This Commission has nothing to hide; it considers itself bound to support Parliament in the performance of its duties.

But we also need procedures to protect the confidentiality of information, and above all the principle of due process which rules out any premature condemnation of persons; the same principle must apply in the case of Commission staff too as it does to the staff of other Community institutions and to all citizens.

Madam President, Ladies and Gentlemen,

The report approved by the Committee on Budgetary Control asks the Commission to answer a number of questions and to take a number of measures by 15 May. I would like to thank the Committee for the resolution it has drafted and for the urgency with which it demands a response.

Some of the points made are concerned with what are being called the "old affairs", that is to say incidents of irregularity or suspected fraud in past years.

Let me make it quite clear that the Commission is doing everything in its power to combat fraud. It is seeking not only to prevent fraud in the future but also to clear up cases that have arisen in the past. This Commission is not afraid of anything that may come to light.

In what has come to be known as the Cresson/Berthelot case it has handed papers over to the courts;

it has brought disciplinary proceedings;

the immunity of a former Commissioner has been lifted;

investigating judges have of course been given access to the Commission premises;

and steps have been taken by the Commission to recover the EU money at issue.

But let me say once again that the Commission wants to see due process, and that of course means that it cannot influence judicial proceedings, even where it may be unsatisfactory that they should last so long. And it also means that any penalties and orders for recovery will have to comply with the principle of proportionality, even when it comes to claims made by the Commission or recoveries by the Member States.

The Court of Justice made this very clear once again a few weeks ago in its judgment in the case of the cement cartel, where it halved and in some cases cancelled the fines imposed.

Madam President, Ladies and Gentlemen,

My colleague Franz Fischler will be going into the question of the agriculture budget and the discharge in more detail shortly. But let me say here that a letter advising the Commission that if it takes a certain course a firm will have to close, and that jobs may be lost, is not something I would regard as an attempt at illegal intimidation or indeed corruption whether such letters come from Parliament or from a Member State, whether they come from France, Ireland, or Bavaria, Ms Stauner.

Of course decisions must be taken following a procedure which is clear and verifiable. And of course the Commission will very carefully digest the findings of the Court of Auditors in the case, as is demanded of it in the resolution.

I cannot go into the points made in the resolution individually at this stage. But the Commission will be informing Olaf of your request immediately, and on the question of an administrative enquiry I have taken steps to launch an investigation.

The prime concern evident in the resolution is the need to reduce the rate of error in the execution of the budget. I can assure you that the Commission is genuinely pursuing this aim to the full.

That is why we have proposed the action plan, in which precise measures are given precise deadlines,

that is why we are completely overhauling the Financial Regulation (and I will be reporting to the House very shortly on this matter),

that is why the European Anti-Fraud Office is being strengthened, and

that is why the Commission has launched a process of reform of its entire financial management,

strengthening the responsibility of everyone handling the taxpayer's money,

improving efficiency, with the stated aim of winning back trust in European institutions;

the Commission will take every step to make the reform, a success and it would certainly be a welcome development if all European institutions were to open themselves to reform of this kind.


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