WRITTEN QUESTION P-1567/02 by Christa Randzio-Plath (PSE) to the Commission. Competition/auditing.
Date: 2002-05-28
Institutions: European Parliament, Provisional data
Subjects: European Union, United States, audit, competition, dominant position, economic concentration, financial management, management audit

C 92 E/66

Official Journal of the European Union

EN

17.4.2003

The Commission examined the allegations that have been made by the Israeli authorities on the misuse of
Community funds. It has looked carefully at the evidence provided by the Israeli government (Minister
Naveh) and by the Israeli Defence Forces. The Commission also invited the IMF and the Palestinian
Authority to comment on the allegations. The Commission, on the basis of the material it has examined,
has not found any evidence of Community funds being used for purposes other than those agreed between
the Community and the PA. The Commission takes this matter extremely seriously and will continue to
give utmost priority to the examination of any allegations of misuse of Community funds.

The reform of the financial management of the PA is the objective of several key conditions of the
conditionality attached to the Community budgetary assistance. For instance, conditions aim, inter alia, at
the implementation of the austerity budget of the PA, which has been prepared with the help of the IMF.
They also aim at the control of the payroll and the containment of budgetary arrears. Monitoring of these
conditions is provided in the IMF’s monthly comfort letters, on the basis of which the Commission
evaluates compliance and approves the payments.

(2003/C 92 E/066)

WRITTEN QUESTION P-1567/02

by Christa Randzio-Plath (PSE) to the Commission

(28 May 2002)

Subject: Competition/auditing

As a result of the Enron scandal, the problem of financial stability in relation to the role and position of
audit companies in the US and Europe, too, has become a focal point of public interest.

Over the last few years, the number of large audit companies has continued to decline, thus very much
restricting the ability of large, internationally operating firms to choose or change their auditors.

This is not only an important regulatory and supervisory issue; the fact that there are few actors in the
auditing business (cid:1) only four firms in the US (cid:1) gives cause for concern in terms of competition, too, in
particular since, as the case in point of Enron illustrates, financial market stability can also be affected.

In the European Union, over 80 % of the 100 largest firms in Belgium, France, Italy, the United Kingdom
and the Netherlands make use of only four audit companies; in other countries, that figure is well over
50 %. Though there are large firms operating at national level, they are not in a position to withstand
competition.

Are these not then developments which give cause for concern in competition terms? What is the
Commission’s assessment of competition within auditing in the European Union, given that there are very
few firms competing with each other nationally, does the Commission think that action needs to be taken,
and what measures does it propose in connection with Articles 81 and 82 of the EC Treaty?

Answer given by Mr Monti on behalf of the Commission

(26 June 2002)

The issue of competition in the auditing industry is being closely followed by the Commission both at the
level of structural changes in the number of market players (through the application of the Merger
Regulation, Council Regulation (EEC) No 4064/89 of 21 December 1989 on the control of concentrations
between undertakings (1)) and at the level of the market players’ behaviour (through the application of
In its 1998 decision in case No IV/M.1016 PriceWaterhouse/
Articles 81 and 82 of the EC Treaty).
Coopers & Lybrand,
the audit and
the competitive conditions of
accounting markets. Notably, it found that these markets enjoyed a high level of concentration and may be
prone to issues of collective dominance. It however concluded that there were still enough players active in
the markets (five) to ensure sufficient competition.

the Commission analysed in detail

17.4.2003

EN

Official Journal of the European Union

C 92 E/67

One of the consequences of the Enron scandal has been the collapse of the Andersen Worldwide audit and
accounting network. This has the potential to increase the level of concentration in the auditing industry
further. In the wake of that collapse, each of the national members of the Andersen network is now
seeking to join one of the remaining large four global accounting networks (i.e. KPMG, Pricewaterhouse-
Coopers, Deloitte & Touche Tohmatsu and Ernst & Young). Some of
these transactions may have a
Community dimension and will need to be reviewed by the Commission under the Merger Regulation, as
is the case for the purchase of Andersen (United Kingdom) by Deloitte & Touche Tohmatsu (notification on
29 May 2002). The Commission will
these
transactions with utmost care. At this stage, however, the Commission cannot advance any conclusion
on the likely outcome of the competitive analysis of these transactions. Similarly, the Commission will
continue to monitor closely the nature of competition in the auditing industry.

investigate the competitive consequences of each of

(1) OJ L 395, 30.12.1989, whole text republished in OJ L 257, 21.9.1990.

(2003/C 92 E/067)

WRITTEN QUESTION E-1574/02

by Fernando Fernández Martín (PPE-DE) to the Commission

Subject: Racism between Europeans

(4 June 2002)

I have received news of offences against Spanish citizens on Erasmus scholarships ‘to encourage European
mobility’, who have been victims of physical and verbal aggression in Finland, suffering racist attacks
simply because they are Spaniards.

Apparently, these attacks, involving Spaniards residing in Finland suffering blows, broken bones and insults
from Finnish citizens, are fairly common, exemplified by the incident which occurred in Mikkeli, which
has been reported in the Spanish press. The situation is not improved by the approach taken by the
Finnish police (cid:1) their lack of interest in the victims, their dismissive attitude and their occasional failure to
provide assistance. To crown it all, the Finnish courts impose virtually no punishment for offences of this
kind. Once the aggressors have been arrested and found guilty, they only have to pay a fine of EUR 150.

The Spanish students concerned therefore find themselves helpless in the face not only of their attackers
but also in the face of the Finnish police and courts, and can obtain support only from their own embassy.

If the Commission aware of these racist attacks amongst Community citizens?

Can the Commission provide information about the specific case cited above and the measures which it
intends to take, or could take, in connection therewith?

Answer given by Mr Vitorino on behalf of the Commission

(8 July 2002)

The Commission has not received information on the facts described by the Honourable Member. In any
case, and regarding the facts mentioned, the Commission has no competence to take forward such a
matter, which falls within the responsibility of the Member States concerned.

As regards policy measures which are being considered at Union level to fight against racism and
xenophobia, the Council is now discussing a proposal presented by the Commission in 2001 for a Council
Framework Decision on combating racism and xenophobi (1)
law. Racism and
xenophobia are a very serious concerns and a direct violation of the principles common to the Member
States as stated in Article 6 of the Treaty on the European Union, in particular the respect for human rights
and fundamental freedoms. The purpose of the Commission’s proposal is to ensure that all racist and
xenophobic conducts are punishable by the same penalties in all Member States and secondly, to improve
and encourage judicial cooperation by removing potential obstacles.
the Commission’s
proposal states that the racist or xenophobic motivation should be taken into account as an aggravating
factor when imposing penalties for ordinary offences. This would constitute a direct response to
perpetrators of such offences and act as a deterrent.

in the field of penal

In particular,