Fraud scandal 'threatens to destroy EU'
By Andrew Gimson in Berlin and Toby Helm in Brussels
<Picture>UK News: Lords defiant on Euro voting
THE scandal of European Union fraud could destroy the organisation, according to the head of the European Court of Auditors - the community's financial watchdog. Bernhard Friedmann, the Court's President, also accused Brussels of telling "untruths" over the misuse of funds from the £65 billion-a-year EU budget.
In an interview with the weekly German magazine Stern, Mr Friedmann said: "If fraud in the European Community goes on as it is, then it could bring down the whole of the EU," . His comments follow recent admissions by the European Commission of multi-million pound fraud and mismanagement in the EU's humanitarian aid budget and disclosures by The Telegraph that Euro-MPs are breaking rules to fund their personal pensions from taxpayers' money.
Mr Friedmann's intervention comes as Brussels braces itself for the release next week of the annual report on EU fraud by the Court, the body charged with monitoring how the community spends its money. The report is expected to be severely critical of the Brussels Commission, the Parliament and EU member states for failing to do more to ensure taxpayers' money is properly spent and accounted for.
Mr Friedmann said that, unlike national budgets, the EU budget consisted entirely of subsidies. "This makes the human spirit inventive. It is already virtually impossible to control from Brussels everything the community takes part in. It will become even harder in the future."
Referring to the investigation carried out by his department into embezzlement of EU humanitarian aid, Mr Friedmann said the headquarters of the humanitarian aid unit, Echo, had tried to whitewash the whole affair, hiding the existence of external employees and over-estimating the value of work carried out. He said: "In some cases they even made financial allowance for people who don't exist. Here the Commission simply told us untruths."
Over recent weeks Brussels has admitted detecting fraud in humanitarian aid contracts worth about £1.7 million during the period 1993 to 1995. More seriously it has also said it has no guarantees on how a further sum of around £420 million from the same budget was spent during that period. Mr Friedmann called on the Commission to take disciplinary or criminal action against those responsible: "It can also not be excluded that the Parliament will refuse to give the Commission approval for the budget."
Mr Friedmann said the trouble with the Commission's own fraud-busting unit, Uclaf, was that it was part of the very Commission it was meant to control. He said that the damage done to the EU's image by fraud was far greater than the financial loss.
Last month, amid furious complaints from Euro-MPs, Jacques Santer, the Commission President, promised to set up a new and "independent" fraud fighting unit to investigate misuse of funds. His action was a admission that Uclaf was not doing its job. But he made it clear that the new body would still be run by the Commission.
telegraph.co.uk |
