EU audit finds €5.2bn irregularities

Official auditors found substantial errors in European Union spending last year, providing new ammunition to those seeking to stop an increase in the bloc's next long-term budget.

The European Court of Auditors, which is responsible for checking the finances of the EU's institutions, said today it had found irregularities affecting 4 per cent of total spending during 2011, equivalent to around €5.2 billion.

The biggest problems were in outlays on rural development, fisheries and health, the Luxembourg-based court said in its annual report, which ran to more than 240 pages.

The overwhelming majority of errors arose from "misapplication or misunderstanding" of the EU's complex rules, the auditor said, although a handful of cases of suspected fraud were reported to the EU's anti-fraud office.

"With Europe's public finances under severe pressure, there remains scope to spend EU money more efficiently and in a better-targeted manner," court president Vitor Caldeira said.

"Member states must agree on better rules for how EU money is spent, and member states and the Commission must enforce them properly."

Politicians in Britain have pointed to evidence of waste and inefficiency in EU spending to push for deep cuts to the bloc's proposed budget for 2014-2020, which covers a total of €1 trillion and is in the process of being negotiated.

"You would think that after 18 years, a more mature EU could have its accounts signed off, but no. The EU - a byword for corruption and waste - has failed again," said Godfrey Bloom, a member of the European Parliament and spokesman for the eurosceptic British party UKIP.

The court said governments shared the blame with the European Commission, the EU executive, for failing to establish effective systems to detect and correct spending errors.

"There needs to be a greater degree of commitment on the part of national authorities to the management and control of EU money," the court said.

The Commission sought to deflect the blame to EU capitals, and urged governments to back its proposals to simplify EU spending rules for the next budget period, which it said would be easier to enforce.

"A little more effort by member states to control projects properly and retrieve misused funds could go a long way, particularly in this time of economic difficulty," EU audit and anti-fraud commissioner Algirdas Semeta said in a statement.

It is the 18th time in a row that the European Court of Auditors has given the EU a less than clean bill of health when it comes to financial probity.

Some members of the European Parliament said that underscored the need for a single commissioner to be put in charge of overseeing EU spending.

"It is risible that the Commission wants a five per cent increase in the budget yet nearly four per cent of spending is affected by error, said Martin Callanan of the European Conservatives and Reformists group, which includes representatives from Britain's Conservative Party.

"Before asking for more taxpayers' money, perhaps the commission should prioritise better spending of the money it already has."

Reuters