Conflict of interest and corruption affecting the protection of EU's financial interests in Member States (debate)
Speaker: Monika HOHLMEIER (Germany, Group of the European People's Party (Christian Democrats) / Christlich-Soziale Union in Bayern e.V.)
Date: 2019-12-17

  Monika Hohlmeier, Verfasserin. – Frau Präsidentin, Herr Kommissar, liebe Kolleginnen und Kollegen! Zunächst einmal ein herzliches Grüßgott.
Madam President, the Committee on Budgetary Control (CONT) has posed five questions to the Commission regarding measures against the misuse of EU funds in cases of conflict of interest and corruption affecting the protection of the EU’s financial interests in Member States. 
Let me start by providing some context to the questions that we have posed to the Commission. In certain Member States, the systemic risk of semi—legal systems enabling conflicts of interest, irregularities, misuse of funds and fraud is widely present in important policy areas such as agriculture and cohesion. We have cases where politicians allegedly systematically use their power and the influence they have over the implementation of EU programmes in their countries to enrich their companies, friends, family, or themselves.
Conflict of interest constitutes in itself a serious threat. We see cases of single bidding in public procurement companies building up monopolies because other companies are thrown out of the competition. We are now facing problems that are beyond project level, so we need to go above this level to tackle them. We need to establish a clear definition of what constitutes a systemic risk and conflict of interest. We need the same legal definition and uniform interpretation of conflict of interest and systemic risk at European and Member State level.
These cases threaten to undermine citizens’ trust in the EU institutions and have a negative impact on the implementation of policies. Therefore, our credibility is at stake. European funds must benefit European citizens at large. Audit procedures concerning conflict of interest and other cases of corruption, fraud or systemic failures must be accelerated so that punishment follows swiftly. Additionally, preventive measures must be reinforced.
Currently, there is a lack of preventive measures that are effective and in place. If national management and control systems fail, the Commission must receive the possibility to assume decision—making and impose corrections immediately. The CONT Committee has actively monitored the situation since its fact-finding delegation of April 2014 and has been expressing its serious concern about cases of conflict of interest. CONT repeatedly requested in its discharge resolutions and other oral questions, most recently in December 2018, that the Commission take action regarding cases containing risk of irregular use of EU funds in several Member States. 
We welcome the fact that the Commission has carried out comprehensive audits regarding the application of EU law. We are alarmed that the auditors detected serious deficiencies in the functioning of the management and control systems and severe cases of conflict of interest. The audits carried out by the Commission confirmed Parliament’s position, laid out in its resolution on conflicts of interest and the protection of the EU budget in the Czech Republic in 2018. They welcome the fact that, since 2018, no payments from the EU budget and the European Structural and Investment Funds have been made to companies directly or indirectly owned by Prime Minister Babiš, following the alleged conflict of interest revealed by the Commission’s auditors. They found that Mr Babis is the beneficiary of funds received by the huge industrial conglomerate.
Yes, I would like to underline that there are still open questions about subsidies in the area of agriculture. Furthermore, we cannot accept the fact that projects affected by serious, sometimes fraudulent, irregularities are simply withdrawn from EU funding. Yes, the EU budget is no longer directly affected, but the core problem has not been solved. The local taxpayer has to foot the bill when contributing to the national budget. EU funds meant to help citizens should go where they are most needed and not into the pockets of oligarchs. CAP money belongs to those who farm the land. In the case of land grabs, when land is taken by force, there is clearly a rule of law issue. 
Therefore, we attach great importance to the rule of law conditionality. Rule of law is the basis for shared management. All Member States signed the Copenhagen Criteria, and they must be dedicated to the rule of law. Threats to the independence of the judiciary system, arbitrary or unlawful decisions by public authorities, limited availability and effectiveness of legal remedies, and failure to implement judgment or limitations on effective investigation and prosecution should lead to the reduction or suspension of EU funding. 
We call on the Commission to take all appropriate measures at its disposal to protect the EU budget, including the revision of current procedures to increase transparency and to be more effective. We urge the Commission to recover all funds that have been paid out illegally. We insist that the Commission should propose a specific mechanism to support farmers confronted with land—grabbing malpractices, giving them the opportunity to lodge a complaint with the Commission.
In the context of the negotiation on the next Multiannual Financial Framework, we call on the Council to take all necessary and appropriate measures to prevent conflict of interest effectively. We call on the Commission and the Member States to fight all forms of conflict of interest and to evaluate the preventive measures taken by the Member States to avoid such a situation. We need to clearly define the minimum standards of the rule of law. Please let’s start to work on these serious issues.