WRITTEN QUESTION E-2275/01

by Erik Meijer (GUE/NGL) to the Commission

(31 July 2001)

Subject: Prevention of EU subsidies circulating between the richer Member States

1. Will the recovery of substantial ESF payments from the Netherlands give the Commission an opportunity to review critically the extent to which and the way in which subsidies from EU funds are allocated to the Member States, particularly in view of the fact that current methods of allocation will become even more difficult when the EU is enlarged to include many new Member States with a standard of living lower than the current EU average?

2. Does the Commission share my view that the circulation of funds between the richest Member States requires comparatively extensive administrative cooperation and control from Brussels and distorts democratic decision-making and freedom of choice at local and regional level and that, in the longer term, this approach has few advantages over a situation in which the projects concerned are financed totally from national funds or with monies decentralised by the Member States to lower levels of government?

3. What does the Commission intend to do to prevent undue payments in the future? Is it envisaging even more controls and bureaucratic procedures, which require a great deal of time and human effort and create annoyance on all sides, or is it thinking of simplifying and limiting the regulations?

4. Does the Commission see any possibility of eventually ending or significantly reducing payments to Member States with an above average per capita income and reducing the amounts they receive from the funds, as a result of which the available resources could be fully targeted at the poorest regions and emergency situations and, in addition, could possibly be used for cross-border development projects, tackling large-scale environmental problems and creating large-scale infrastructure?

Answer given by Mrs Diamantopoulou on behalf of the Commission

(10 October 2001)

1. One of the key objectives of the recasting of the Structural Fund Regulations is to improve the implementation of the Funds for the period 2000-2006. The fresh importance placed upon well-defined management and control systems should help ensure increasingly efficient and correct use of the Funds. In this respect, the Commission has gained experience from dealing with cases of irregularity (such as that involving European Social Fund (ESF) assistance in the Netherlands) which will lead to the recovery of overpayments of Community funding made during the 1994-1999 programming period. During the 2000-2006 programming negotiations, the Commission was particularly keen that the management and control systems for the projects involved should be strengthened in order to minimise the risk of such irregularities happening again.

The problems which arose in certain Member States and regions during the period 1994-1999 should not, therefore, have a direct impact on the principles governing the distribution of the Funds for the period after 2006.

2. The Commission's workload during analysis and negotiation with Member States on the 2000-2006 programming was directly related to the quality of the proposals received from national or regional authorities, regardless of the level of prosperity of the Member State receiving the funding. Moreover, the Council Regulation focuses upon both the decentralisation of implementation and the building of stronger partnerships. This should allow for increased involvement of the public, private and voluntary sectors, on a regional and national level, in the drafting, negotiation, execution and monitoring of projects which are cofinanced by the Structural Funds during the period 2000-2006, widening the social basis for Fund assistance.

3. The provisions laid down in Articles 38 and 39 of Council Regulation (EC) No 1260/1999 laying down general provisions on the Structural Funds(1), along with the related implementing regulations, should limit the number of unjustified payments in the 2000-2006 programming period. Moreover, compared with the previous period, the role of the Member States in the management and financial control of projects cofinanced by the Funds has been significantly strengthened. In the context of greater subsidiarity, it is first and foremost the responsibility of the Member States to ensure the efficiency and correctness of transactions, and to prevent, detect and rectify any irregularities that may occur. The Commission will ensure that the management and control systems set up in the Member States satisfy the regulatory requirements. Moreover, the Commission reserves the right to suspend repayments to Member States when the legitimacy of certain expenditure is called into question, and, where appropriate, to make individual or systemic financial adjustments.

4. Upon publication of the Second Report on Economic and Social Cohesion(2) last January, the Commission began discussions on the future of the Structural Funds in an enlarged Europe. At the Cohesion Forum which took place on 21 and 22 May, more than 1 700 key players had the opportunity to reflect upon and exchange their ideas on the aims of future economic and social cohesion policy. Finally, this matter was also discussed for the first time during the meeting in Namur on 13 July 2001 between the Member of the Commission with special responsibility for Regional Policy and the Netherlands Ministry of Economic Affairs. Discussions will continue over the coming months before proposals are presented to the Council and Parliament on the economic and social cohesion policy to be pursued in an enlarged Europe from 2007 onwards.

(1) OJ L 161, 26.6.1999.

(2) COM(2001) 24 final.