EU wasted £7bn in 2013, say auditors

The European Union (EU) erroneously spent about 7 billion Euros of its budget in 2013, the European Court of Auditors (ECA) announced on Wednesday in its published annual review.

Kristalina Georgieva, the European Commission’s incoming vice-president for budget, told EU lawmakers in Brussels.

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,” 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.

“Also farmers receiving aid for grassland that was actually covered by bushes or trees.”

The auditors also identified 14 cases of suspected fraud and referred these to the EU’s anti-fraud office, OLAF, for further investigation, while the ECA gave no detail of these cases.

She said that the audit also showed that the worst affected areas were regional policy and rural development.

She noted that 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 had 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 annually 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,’’ ECA member, Lazaros Lazarou, noted.