Auditors: EU paid out 7 billion euros in error in 2013

Auditors: EU paid out 7 billion euros in error in 2013
5 November 2014

European Commissioner for the Budget Kristalina Georgieva - © Olivier Hoslet, EPA

Brussels (dpa) - The European Union erroneously spent around 7 billion euros (9 billion dollars) of its budget in 2013, the European Court of Auditors (ECA) announced Wednesday, as it published an annual review.

The figure comes as the bloc is preparing its 2015 spending plans - an exercise that frequently pits thrifty member states against EU lawmakers calling for more expenditure. Rising euroscepticism has also led to a more critical eye being cast on EU funding. "Europe has lost some of its credibility and some of the trust of its citizens, and our urgent task is to rebuild them," the European Commission's incoming vice president for budget, Kristalina Georgieva, told EU lawmakers.

The 2013 audit revealed that 4.7 per cent of budgetary spending was not paid out in accordance with EU rules.

Examples include giving money earmarked for small and medium-sized enterprises to companies that were in fact subsidiaries of larger corporations, or farmers receiving aid for grassland that was actually covered by bushes or trees, the ECA said. The auditors also identified 14 cases of suspected fraud and referred these to the EU's anti-fraud office, OLAF, for further investigation. The ECA gave no detail of these cases. "The commission and the member states must pay more attention to how they spend our taxpayers' money," said ECA chief Vitor Caldeira.

The worst affected areas are regional policy and rural development, the audit showed. The error rate was higher when both the commission and member states were involved in the process of allocating funds. Georgieva pointed out, however, that the EU has recovered a large share of incorrectly spent funding in previous years. "Over the last five years, the average amount of financial corrections was 2.9 billion [euros] per year or, on average, 2.2 per cent of all payments," she told lawmakers.

The ECA also called for a greater focus on whether EU funding is actually delivering results. "There are quite a lot of cases where monies have been spent in accordance with [EU] rules, but ultimately the result did not have a real impact on the lives of citizens," said ECA member Lazaros Lazarou.

Source: dpa.