Despite 17 years in a row of the EU Court of Auditors (ECA) estimating that the European Commission’s accounts are affected by material error, MEPs decided to grant the EU executive discharge for 2010, on 10 May. As his predecessors, rapporteur Christofer Fjellner (EPP, Sweden) is ready to give the Commission “more time” to sort its act out despite the fact that the overall estimated error rate for payments has gone up from 3.3% in 2009 to 3.7%. Fjellner, nevertheless, calls upon the EU executive to make better use of the corrective tools it has at its disposal, such as the interruption and suspension of irregular payments. He also believes that Parliament and Council have a “responsibility” of giving the Commission better tools through the revision of the financial regulations currently underway.

In plenary, Audit Commissioner Algirdas Semeta committed to issue later in the year a comprehensive report on the follow up of the EP’s discharge requests and concrete actions taken. This pledge was deemed enough by Fjellner to recommend okaying the Commission’s accounts. Beyond lowering the error rate, the rapporteur identified three other areas of concern that have to be prioritised: improving the quality of data concerning financial engineering instruments (FEIs) and pre-financing as well as strengthening the accountability chain. “A lot of these points can’t be delivered upon in the course of four months,” he said explaining his choice. Instead of taking a radical stance, Fjellner placed the ball in the court of next year’s rapporteur. If there is no notable improvement next year, “that’s another story,” he said. The last time the Parliament postponed okaying the Commission’s accounts was in 2001 and it concerned the Santer Commission that had resigned in 1999 after a corruption scandal.

17TH ADVERSE OPINION IN A ROW

Any percentage of error over 2% is considered by the ECA as affected by material error. Thus by estimating that the overall error rate for payments was 3.7%, for the 17th year in a row, the court has delivered an adverse opinion on the legality and regularity of payments underlying the accounts. “That in itself should be reason enough not to give discharge,” said Jan Mulder (ALDE, Netherlands) in plenary.

Parliamentarians are concerned first and foremost by the increase in the error rate for cohesion, energy and transport up to 7.7%, “the problem child,” according to Fjellner, which totalled around €40.6 billion. MEPs lament that the Commission is unable to impose penalties on member states or regions that have repeatedly failed to implement such funds correctly. They believe that the EU executive’s interruption and suspension policy is not effective enough, not used across the board and that payments are resumed too quickly. Deputies are also disappointed that despite identifying that over two-thirds of all reported quantifiable errors in 2010 came from three member states (Spain, Italy and the Czech Republic), the Commission was unable to improve performance.

MEPs therefore also want to lay some blame at the member states’ door. The Commission is ultimately responsible for the proper implementation of the EU budget as a whole, according to the treaties. Yet, at the same time, member states are in charge of issuing around 80% of EU expenditure through shared management. In light of the fact that the ECA considers that the member states’ authorities had sufficient information available to have detected and corrected at least some of the errors for 58% of the transactions affected by error, Fjellner deplored that “shared responsibility can at worse become no one’s responsibility”. “Our problem is that we don’t give discharge to member states, we give it to the Commission,” he added.

As had been done by his predecessor, Jorgo Chatzimarkakis (ALDE, Germany), for the 2009 discharge, Fjellner considers that improving the accountability chain in the Commission and at member state level through the introduction of mandatory national management declarations is a top priority. This should, however, be dealt with through the revision of the financial regulations.