The European Union Fails on Financial Accountability

By Khanbhai, Bashir | Contemporary Review, November 2002 | Go to article overview
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The European Union Fails on Financial Accountability


Khanbhai, Bashir, Contemporary Review


THE Eastern Region, comprising the six Counties in the East of England (Norfolk, Suffolk, Essex, Cambridgeshire, Bedfordshire and Hertfordshire), has a population of about 5 million -- larger than some Member States of the EU -- and is represented by a total of 8 Members of the European Parliament (MEP).

In June 1999, I was elected as one of these MEPs. In my first year in Parliament I was appointed as the UK Conservative Delegation Spokesman on the Parliament's Committee on Budgetary Control. Like the Public Accounts Committee in the House of Commons, this Committee has the right to check any EU institution for financial misappropriation, fraud and corruption. The Committee plays an important role in identifying and highlighting corrupt practices and economic mismanagement. Regrettably, its task is undermined by the European Commission which continues to withhold information and documents relevant to investigations by classifying them as 'confidential'!

In 1999, there was considerable concern amongst Members of the European Parliament as they were expected to assess a new team of Commissioners after the fall of the disgraced Santer Commission. Neil Kinnock, former Labour Party leader and now the Vice President and Commissioner nominee for reform of the EU, was expected to deliver radical change that would transform the EU's economic management and restore credibility to the new team of Commissioners.

Sadly, Mr. Kinnock and his Commissioner colleagues have failed miserably. They have failed to adopt internationally accepted accounting practices; failed to adopt the recommendations of the 'three wise men' appointed in 1998 at the time of the crisis in the Santer Commission and failed to deliver on what they promised on appointment as Commissioners in 1999.

What are the functions, competencies and responsibilities of the EU institutions? Why is the European Commission unable to reform its financial management and work efficiency? What changes are required to ensure accountability, transparency and value for money for EU taxpayers?

The European Commission initiates and drafts legislative proposals, implements the decisions taken by the Council of Ministers and Parliament, administers EU funds (e.g. European Social Fund, Cohesion Fund) and monitors the implementation of EU law by the Member States. It is run by a President and 19 Commissioners nominated by the Member States (two from the five larger States and one from each of the other smaller Member States). Commissioners are expected to act independently without national bias and take decisions on the basis of collective responsibility.

Public perception, especially in the UK, is that the European Commissioners are overpaid, incompetent and arrogant in their use of political power, for which they have no elected mandate. There are 360 million European citizens in 15 Member States and yet we cannot find 20 men and women with the relevant professional competence and real-world work experience to be Commissioners. European citizens, I believe, expect European institutions, especially the European Commission, to be managed by men and women who have been captains of industry with a proven track record of professional competence and integrity - not unsuccessful national politicians shunted out of sight. These Commissioners need to be chosen with care and be well rewarded. They must be given powers to introduce private sector work discipline for the staff of all EU institutions. They should be given a limited time frame to achieve radical reform to dismantle the 'job for life' culture of EU employees so that the staff contract is for 2.5 years, ren ewable to 5 years, subject to review of performance. Pay linked to performance in line with the private sector for equivalent job specifications must be the norm. There should be no room for national quotas, fast track for friends and family, and incompetent staff.

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