Why is corruption and fraud so rampant
in the European Union? Corruption and fraud are much more prevalent across the EU
than they are in Britain for three main reasons. First, despite
some mostly well publicised failings, the standards of probity
and honesty in pub]ic affairs are much higher here than they are
in many other West European countries. Second, the administrative
and financial arrangements in the EU lend themselves to misappropriation
and misuse. Beneath all the communautaire camouflage, competition
for resources is still largely a national contest. Many national
governments are therefore unenthusiastic about rooting out malpractices,
at the expense of other Member States. Third, the structure of
the EU is bureaucratic rather than democratic, providing the electorate
with little control over those practising corruption and fraud,
and almost no capacity to get rid of them, and to replace them
with more honest and capable people.
How much of the EU Budget goes
missing every year? The scale on which the EU budget is misused is hard to credit.
Apart from the fact that about half the EU budget is spent on
the Common Agricultural Policy - itself a deeply irrational and
wasteful use of resources - on a straight accounting basis, staggering
sums are not spent as intended. About 5% of the entire EU budget
is lost to various forms of fraud - from non-existent tobacco
farms to imaginary decontamination plans to help deal with Chernobyl
- while another 5% or so is misappropriated, and not spent on
the programmes for which it was designated. The 10% of the EU
budget which the European Court of Auditors accepts is misspent
amounts to about UKP 5bn every year.
Why has this been allowed to happen? The reason why EU standards of administration and probity
are so poor is that traditions of honest and transparent government
have never been established among the Union's institutions. This
was shown most clearly in the recent report on the probity and
efficiency of individual members of the Commission, following
scandals of nepotism, favouritism, extravagance and bad management
which proved too much for even hardened eurocrats. The final sentences
of the report on the behaviour of Commissioners - an internal
EU document, making its conclusions even more damning - read as
follows: "It is becoming difficult to find anyone who has
even the slightest sense of responsibility. However, that sense
of responsibility is essential .... The temptation to deprive
the concept of responsibility of all substance is a dangerous
one. That concept is the ultimate manifestation of democracy."
What has been the role of the Commission? The recent resignation of the whole of the Commission came
about because the standards which they had set to the EU administration
for which they were responsible were so poor that in the end they
were forced to take collective responsibility for their deficiencies.
This only happened, however, after details of the scale of their
maladministration had been leaked by an EU official, Paul Van
Buitenen, making it impossible for them to continue in office.
Nevertheless, all the Commissioners are likely to remain in post
until mid summer, and Jacques Santer, the retiring President,
has put himself forward for election to the European Parliament,
heading the Luxembourg Christian Democrat list! The Commissioners
ought to have been setting high standards for their subordinates.
Instead, they have been exposed as behaving themselves in ways
which almost beggar belief. Where - anywhere in public administration
Britain - would it be regarded as acceptable to appoint your dentist
to a senior position without any proper recruitment procedure
being undertaken, or to select your brother in law to work in
your Private Office?
What about other EU Anti-Fraud Organisations? The Commission has under its control a number of organisations
which are supposed to be responsible for combatting fraud within
the EU administration. Their record, however, is also atrocious.
An EU Special Report on the main one, UCLAF, was so critical that
it recommended that it should be wound up. Principal criticisms
were that its IT system was "relatively undeveloped";
it had "no standard system under which proceedings were opened,
pursued and concluded"; the filing system was so chaotic
that it "failed to meet the minimum requirements for criminal
evidence"; systematic vetting of staff had "only just
begun", leaving the organisation with a " security problem";
the figures it produced on fraud were "incomplete and misleading";
and the Court of Auditors refers to cases where documents were
"withheld or destroyed".
Why have the Council of Ministers and
the Governments of the Member States done so little about such
problems? A substantial part of the problem is that regrettably the
standards of probity among the governments and senior administrators
in a number of Member States are similar to those exhibited by
the Commission. This puts them in a weak position to criticise
maladministration in Brussels. As a result a version of Gresham's
Law operates. Everyone tends to sink to the level of the most
corrupt and incompetent. Our own government expressed outrage
at the fact that disgraced Commissioners were to receive large
severance payments. Such objections were ignored, and large pay
outs were made. Do those who believe that Britain should be more
and more closely integrated with the EU really understand that
this process is likely to entail the substitution of the lowest
EU standards of probity and efficiency for those built up here
over centuries?
What has been the Role of the European
Parliament? It was a resolution passed by the European Parliament which
triggered the resignation of the Commissioners, but before too
much credit is given for this, the EP's record should be studied
carefully. The fact is that the EP has tolerated and accepted
standards of inefficiency and corruption for years which it should
never have allowed. It has accepted flawed accounts. It has agreed
budgets which it knew were never going to be carried out. It has
failed to pass votes of censure in the past, when it could and
should have done. Again, much of the reason for this is that its
own systems of administration and control are no better than those
of the Commission. Members of the European Parliament are not
in a good position to criticise extravagance and lax administration
when each MEP costs UKP 1m a year, and when systems for the control
of personal expenses, monitoring that they are all paid out for
costs necessarily and actually incurred, are non-existent.
Why has the EU Court of Auditors been
so ineffective? One of the more disgraceful aspects of EU administration
is that not only are there large sums of money in EU budgets which
cannot be properly accounted for, but also the auditing and signing
off of EU accounts often runs years in arrears, as a result of
lax accounting systems, some of them riddled with fraud. Everyone
with any administrative experience knows that it is impossible
to run any organisation efficiently without accurate up to date
accounts. The problem with the EU Court of Auditors is the same
as applies in so much of the rest of the EU. Those able and willing
to set high standards have been dragged down by the much more
easy going attitudes of others, pushing the performance of the
whole organisation down to the lowest common denominator. This
is why the Court of Auditors, itself, incidentally a byword for
extravagance - its parties having the reputation for being the
best in Brussels - has not been up to the job.
What can be done to change the culture
regarding corruption in the European Union? No doubt the resignation of all the Commissioners, even with
the re- appointment of some of them, will lead to improvements
in standards of efficiency and probity, at least for the time
being. Procedures will be tightened up, and those in charge will
be rather more careful than they have been in the past about allowing
flagrant abuses to occur. Whether the whole culture will change,
however, seems much more doubtful. It takes a long time for traditions
of probity and efficiency to develop, and to be genuinely accepted
as the right way to behave. It seems much more likely that, after
a few months, have gone by, it will be back to business as usual
in the EU administration. There simply does not appear to be a
majority of Member States, and people involved in running the
EU, with the determination to stop this happening.
What are the wider lessons to be learnt? The general lessons to be learnt from the recent corruption
scandals in the EU are not new ones. Perhaps the most obvious
is that any organisation with wide powers, whose membership consists
of a self selecting oligarchy, will always tend to become increasingly
self serving. This certainly happened in the case of the Commission.
The real problem with the EU, however, is that there is no countervailing
authority to stop this occurring. The true bulwark against corruption
is democracy - the power to vote out of office those who feather
their own nests. In the EU, despite some democratic forms, the
essential structure is bureaucratic and centralist - as its founders,
who distrusted democracy, always intended it should be. Because
the EU lacks genuine trans- national political parties, it is
very difficult to see how this will change. A sense of a political
community extending across the whole of the EU simply does not
exist. Almost everyone feels a stronger sense of affinity to his
or her own nation than to any pan-EU political group. Until this
changes, which could take a very long time indeed, if it ever
does, the nation states of Europe would be ill advised to surrender
their existing hard won democratic powers to run their affairs
the way they want, and to set their own standards of probity and
efficiency. Britain may not be perfect, but for hundreds of years
we have never had anything equivalent in scale to the exhibition
of corruption, fraud, nepotism and bad management which has recently
been exposed in Brussels. How many people in Britain want to see
themselves governed like that?
