11. Management of European Monetary Institute and European Central Bank
(1998)
A5-0395/2000
European Parliament resolution on the report of the Court of Auditors on the operational effi-
ciency of the management of the European Monetary Institute and the European Central Bankfor the financial year 1998 together with the replies of the European Central Bank (C5-0319/
2000 :dash 2000/2163(COS))
The European Parliament,
Rdash having regard to the report of the Court of Auditors (C5-0319/2000)(
1),
Rdash having regard to Article 248 of the Treaty, Article 17(4) of the Protocol on the Statute of the Euro-
pean Monetary Institute and Article 27(4) of the Protocol on the Statute of the European System ofCentral Banks and of the European Central Bank, both annexed to the Treaty,
Rdash having regard to Rule 47(1) of its Rules of Procedure,Rdash having regard to the report of the Committee on Budgetary Control and the opinion of the Committee
on Economic and Monetary Affairs (A5-0395/2000),
A. whereas the primary objective of the European Central Bank is to maintain price stability, it shall
without prejudice to this objective support the general economic policies in the Community;
B. whereas on 1 June 1998 the European Central Bank replaced the European Monetary Institute set up
on 1 January 1994and took on the latter’s assets and liabilities;
C. whereas, according to the European Court of Auditors’ report, the European Central Bank had not yet
been asked to exercise the usual functions of a Central Bank during 1998;
D. whereas expenses since the establishment of the EMI amounted to ECU185 million in total, with
ECU96 million spent on staff costs and ECU77 million on other administrative expenses;
E. whereas the Court of Auditors has identified management weaknesses as regards the extraordinary
bonus paid to staff, budgetary monitoring and project monitoring;
F. whereas the replies of the European Central Bank to the observations of the Court of Auditors are
inadequate and do not give any indication of actions it intends to take to remedy shortcomings, eventhough it is incumbent upon the ECB to do so;
G. whereas the Court of Auditors noted as regards the extraordinary bonus that, although the maximum
bonus was 13,5% for the period of 18 months from 1 July 1997 to 31 December 1998, someemployees of the European Monetary Institute/European Central Bank received bonuses of up to38% of their annual basic salaries for a period of 54months, covering the entire period of operationof the EMI (i.e. 4,5 years);
H. whereas, although the EMI Council set a figure of DEM1,9 million as the total for the extraordinary
bonus, the total amount distributed was DEM2,8 million;
I. whereas the Court of Auditors notes that the transfer of the shortfall of DEM900000 to the extra-
ordinary bonus budget was not authorised by the EMI Council;
J. whereas the Court of Auditors notes that, by decision of the EMI Council of 24March 1998, the
extraordinary bonus was paid on top of the normal merit bonus distributed every year since 1996;
(1) OJ C 133, 12.5.2000.18.9.2001 EN C 262/69 Official Journal of the European Communities
Tuesday 16 January 2001
K. whereas in its replies to the observations of the Court of Auditors, the European Central Bank stated
that the extraordinary bonus was merely an acknowledgement of, rather than a compensation for, thehigh number of extra hours worked by EMI staff;
L. whereas a question was raised as regards the extraordinary bonus during the hearing of the President
of the European Central Bank at Parliament on 20 June 2000;
M. whereas the Court of Auditors notes that the services responsible for budget monitoring did not carry
out any reconciliation of the expenditure outturn and the expenses shown in the profit and lossaccount, either for the EMI or the ECB;
N. whereas, in its replies, the European Central Bank acknowledges that the reconciliation for 1998 was
not available because of the non-availability of homogeneous data due to differences in accounting
principles, in charts of accounts and in IT systems in use;
O. whereas the Court of Auditors notes that project monitoring procedures need to be improved, in
particular as regards the assessment of the state of progress of projects;
P. whereas the Court of Auditors notes that the current management information system does not allow
any overruns of resources or time limits to be pointed out in good time, citing the case of the foreigncurrency reserves subledger (FCRS) project;
Q. whereas the Court of Auditors notes that the contract, for a firm of consultants engaged on the FCRS
project as from the beginning of July 1998, was not signed until 2 October 1998;
R. whereas the Court of Auditors noted that, by the end of 1998, the European Central Bank had not
designated a full-time manager for the FCRS project, although filling this post was essential for mon-itoring the work of consultants;
S. whereas in its report for the financial year 1997, the Court of Auditors noted that in the case of the
FCRS project, the project suffered from a poor definition of requirements, a delay in the planning andinadequate control of expenditure, and referred explicitly to the case of a consultant who was given
the responsibility for heading the project without being subject to any particular scrutiny by senior
management;
T. whereas the European Central Bank has stated that it will not allow the European Anti-Fraud Office,
OLAF, to conduct internal investigations;
U. whereas, in its conclusions to the Cologne summit of 3/4June 1999, the European Council invited the
European Central Bank to consider as soon as possible the terms under which OLAF might carry outinternal investigations;
V. whereas in its report 1/1999 to Parliament, Council and Commission(
1), the Supervisory committee of
OLAF called for legal proceedings to be brought against Community bodies that had not implementedEuropean Parliament and Council Regulation (EC) No 1073/1999(
2) before the end of 1999;
W. whereas on 14January 2000, the Commission initiated legal proceedings at the European Court of
Justice(3) against the decision of 7 October 1999 of the European Central Bank(4) regarding the non-
application of Regulation (EC) No 1073/1999;
Issue of wage moderation and size of extraordinary bonus
1. Regrets that the European Central Bank, whilst pursuing its policy of price stability in Europe, has
paid an extraordinary bonus of 38% to some of its own employees, and calls for bonuses in the next fiveyears to be in line with its inflationary target and thereby set an example for wage moderation;
(1) OJ C 360, 14.12.2000.
(2) OJ L 136, 31.5.1999, p. 1.
(3) Court of Justice, Case C-11/2000.
(4) OJ L 291, 13.11.1999, p. 36.C 262/70 EN 18.9.2001 Official Journal of the European Communities
Tuesday 16 January 2001
2. Notes that granting such bonuses represents current practice in the banking sector, to which EMI/
ECB employees belong, but that the procedures followed in granting and funding the extraordinary bonuspaid deserve to be criticised;
Cooperation with OLAF Anti-Fraud Office
3. Welcomes the creation of the ECB Anti-Fraud Committee on 1 January 2000, which is composed of
three independent persons with experience in central banking, fraud prevention and detection, and justiceand policing, and expects the Court of Auditors to report on progress in subsequent annual reports;
4. Welcomes the public commitment of the European Central Bank, in its annual report for 1999, to
establish a cooperative relationship with the European Anti-Fraud Office OLAF but regrets clear incompat-ibility between this commitment and the decision by the ECB itself to prevent OLAF from carrying out
internal investigations, pending the ruling by the European Court of Justice;
Need for strict hands-on management
5. Calls upon the European Central Bank to provide an adequate response to the problems identified by
the Court of Auditors concerning the allocation of an extraordinary bonus, budgetary monitoring andproject management, to give itself the means to resolve the problems concerned and to ensure that suchsituations do not recur;
Court of Auditors
6. Regrets the length of the contradictory procedure which resulted in the publication of the report for
the financial year 1998 in May 2000;
7. Calls on the Court of Auditors to ensure that its annual report on the operational efficiency of the
management of the European Central Bank is published before September of year N+1, where year N isthe one under consideration;
8. Calls on the Court of Auditors to report on progress by the European Central Bank in its manage-
ment of information technology systems and list all financial and performance audits carried out by the
European Central Bank;
*
**
9. Instructs its President to forward this resolution to the European Central Bank, Council, Commission
and Court of Auditors.
12. Financial assistance to SMEs
A5-0335/2000
European Parliament resolution on the report from the Commission to the European Parliament
and the Council: Growth and Employment Initiative :dash Measures on financial assistance for inno-vative and job creating small and medium-sized enterprises (SMEs) :dash As at 31 December 1999
(COM(2000) 266 :dash C5-0507/2000 :dash 2000/2245(COS))
The European Parliament,
Rdash having regard to the Commission report (COM(2000) 266 Rdash C5-0507/2000),
Rdash having regard to the Commission communication on the Fifth report of the Commission on the
implementation of the Decision on the provision of Community interest subsidies on loans for smalland medium-sized enterprises extended by the European Investment Bank under its temporary lendingfacility (the SME Facility) (COM(2000) 376),18.9.2001 EN C 262/71 Official Journal of the European Communities
Tuesday 16 January 2001