Presentation of the Court of Auditors' annual report - 2007
The next item is the presentation of the Court of Auditors' Annual Report for 2007.
President of the European Court of Auditors. - Mr President, it is an honour for me to be able to take part in your debate on the Court of Auditors' annual report on the 2007 financial year, which I have already presented to the Committee on Budgetary Control on 10 November.
Overall, the Court's audit opinion on the accounts is now unqualified - positive, if you wish - but the opinion on underlying transactions is broadly similar to that of last year.
On the accounts, the Court concludes that they give a fair presentation, in all material respects, of the financial position of the European Communities and cash flows at the year end. Owing to the improvements that have taken place, the qualifications expressed last year are no longer necessary.
As regards the legality and regularity of the underlying transactions, the Court gives unqualified opinions for revenue, commitments and payments for 'economic and financial affairs' and 'administrative and other expenditure'.
As regards 'administrative and other expenditure', which accounts for EUR 8 billion in 2007, the Court acknowledges the decisions and actions taken by the institutions to further improve financial management based on the recommendations made by the Court, including those taken by the European Parliament. The Court will assess their impact in future years.
However, for 'agriculture and natural resources', 'cohesion', 'research, energy and transport', 'external aid, development and enlargement', and 'education and citizenship' the Court concludes that payments are still materially affected by errors, although to different degrees. Supervisory and control systems covering these areas are judged to be at best only partially effective, although in 'research' and, at the level of the Commission, for 'external aid, development and enlargement', the Court notes certain improvements in the supervisory and control systems.
For 'cohesion' which accounted for EUR 42 billion of budgetary expenditure, the Court estimates, based on the audit of a representative sample of transactions, that at least 11% of the costs claimed should not have been reimbursed. The most common reasons for errors were ineligible costs, over-declarations of money spent and serious failures to respect procurement rules.
For 'agriculture and natural resources', where EUR 51 billion was spent in 2007, the Court found that 'rural development' continues to account for a disproportionately large part of the overall error, while the error rate for EAGF expenditure is estimated to be slightly below the materiality threshold.
But why is this situation persisting, and why are the underlying transactions in a situation broadly similar to that of last year? Well, material levels of errors persist because there is a high level of inherent risk associated with many areas of European Union spending and weaknesses related to supervision and control.
Much of the budget, including in the areas under shared management, is disbursed to millions of beneficiaries across the Union, often under complex rules and regulations, based on the self-declarations of those who receive the funds. These inherently risky circumstances lead to errors by them and also by those paying the funds.
To control these risks, there are several levels of supervision and control: first, at the level of beneficiaries; second, to ensure that the arrangements to check claims are designed and operating effectively, and, finally, supervision by the Commission to ensure that all the systems are working as a whole.
As most errors occur at the level of the final beneficiaries, they can often only be detected reliably by detailed controls carried out on the spot. Such checking is costly, and so, usually, only a small proportion of individual claims are covered.
Again, the Court's audit work on the 2007 financial year found that Member States are not always effective in identifying the shortcomings in the arrangements for checking individual claims. The Court also found some weaknesses in the Commission's conformity clearance in agriculture.
In many areas of the budget, mechanisms exist for recovering incorrectly made payments from beneficiaries or, where Member States have incorrectly administered expenditure schemes, 'disallowing' some expenditure, i.e. refusing to finance it from the budget.
However, there is not yet reliable information on the impact of corrective actions, and the Court concluded that corrective actions cannot yet be considered effective in mitigating errors.
All of this said, it is fair to acknowledge that the Commission has made significant efforts since 2000 to address the weaknesses in supervision and control, mainly through developing and implementing an internal reform programme and, in 2006, launching an action plan to improve the supervisory and control systems across the Union.
Annual activity reports and declarations, a key part of the reform programme, including those relating to cohesion and agriculture, now present a picture that is more in line with the Court's own assessments, but some reservations still appear to underestimate the problems.
Concerning its 2006 action plan, in spite of progress noted by the Commission, the Court finds that it is still too early for their impact on the legality and regularity of underlying transactions to be felt. For example, 2007 was only the first year for which Member States were required to produce an annual summary of available audits and declarations. These can, in time, as outlined in the Court's Opinion 6/2007, stimulate improved management and control of European Union funds. But they do not yet provide a reliable assessment of the functioning and effectiveness of the systems.
This is the current situation. But, looking forward, we need to ask what more should be done, and which measures for the future should be considered. The Court suggests that any such measures need to take the following considerations into account.
First, the benefits from efforts to reduce errors need to be weighed against the costs.
Second, all participants in the budget process need to recognise that some risk of error is unavoidable.
Third, the appropriate level of risk for the different individual areas of the budget needs to be agreed on at the political level by the budget/discharge authorities in the name of the citizens.
Fourth, schemes that cannot be satisfactorily implemented at an acceptable level of cost and with tolerable risk should be reconsidered.
Finally, due consideration needs to be given to simplification, not least in areas such as rural development and research, because well-designed rules and regulations that are clear to interpret and simple to apply decrease the risk of error and enable streamlined, cost-effect management and control arrangements.
The Court, therefore, encourages the Commission to conclude its analysis on the cost of controls, and on the levels of risk inherent in the different spending areas. The Court also recommends the Commission continue in its efforts to improve its monitoring and reporting, including working with Member States so that effective use of the annual summaries can be made in the annual activity reports, and allowing its follow-up of actions to improve recovery systems.
In addition to simplification and making use of the concept of tolerable risk, in its response to the Commission communication 'Reforming the Budget, Changing Europe', the Court suggests applying the principles of clarity of objectives, realism, transparency and accountability when designing arrangements for European Union spending. The Court also encourages the political authorities to explore the scope for recasting expenditure programmes in term of outputs and to critically consider the appropriate level of national, regional and local discretion in managing them.
To conclude, while acknowledging that progress is being made, the Court underlines that further improvements in the financial management of the European Union will depend on the success of ongoing and future measures to reduce risks to an acceptable level and develop cost-effective systems to manage them.
In times of financial turbulence and economic instability, the role of the Court is even more important and relevant. As the external auditor of the European Union, it is our obligation to act as the independent guardian of the financial interests of the citizens of the Union. In presenting this report, it is our objective to contribute towards transparency and promote accountability, both of which are considered essential to securing the trust of European Union citizens in its institutions that keep the Union functioning and give it the direction for the future.
President Silva Caldeira, I would like to thank you for your report and for the always very constructive cooperation between you, and the Court, and the European Parliament.
Vice-President of the Commission. - Mr President, the Commission welcomes the Court's annual report. I would like to underline the very constructive cooperation we have enjoyed with the Court. There is one piece of really good news in the report: the Court has given the accounts a completely clean bill of health, what the auditors call an 'unqualified opinion'. This is a remarkable achievement in only the third year of the new accounting system.
There is a second piece of very good news: the Court acknowledges that we are strengthening our supervisory systems. In 2007, for the first time, there is not a single chapter with a red card on control systems from the external auditor. Many efforts are ongoing in this field. I would like to highlight the annual summaries of existing audits in Structural Funds submitted by Member States for the first time last spring.
The Court recognises these efforts, even if results are not yet translated into significantly reduced error rates on the ground. The Commission is encouraged by this.
It is a fact that on individual transactions the picture remains mixed. For the European Agricultural Guarantee Fund, the largest volume of agricultural expenditure, the Court recognises that this year again the error rate is below materiality level. The same is not true for the rest of the chapter on natural resources, where rural development is prone to a high level of errors. For cohesion funds too, the Court still finds far too many errors.
The Commission is giving the highest priority to reducing these error rates, and it is not shying away from taking a tough stance if needed. In 2008 we have already imposed financial corrections on the ERDF and ESF - the cohesion funds - for EUR 843 million and an estimated EUR 1.5 billion more is in the pipeline.
Allow me to recall that, as far as errors in the underlying payments are concerned, the bar is set very high. At least 98% must be error-free. Nevertheless, we are getting closer: the auditors now say that for all budget areas but one as much as 95% or more of the payments are free from serious financial error.
For external aid and internal policies, such as transport and energy, as well as education and citizenship, the Court does note improvements. Administration and economic and financial affairs fare even better. These areas are in direct management by the Commission, which may partly explain why efforts undertaken have a more immediate impact. So, to summarise: in the Commission's view the Court of Auditors' annual report for 2007 shows that there is steady, gradual progress.
We have come a long way over the last five years. Looking at the progress made, I can assert that the Commission has absolutely no regrets about having set itself the objective of achieving a positive declaration of assurance concerning the underlying transactions. We hope that the European Parliament will recognise the positive developments and continue to support efforts for simplification, better management, and more accountability from the Member States.
on behalf of the PPE-DE Group. - (FR) Mr President, Mr Vice-President of the European Commission, Mr President of the Court of Auditors, ladies and gentlemen, my first words are to thank you, Mr President of the Court, for the immense task you have accomplished with the Court's auditors; I think this is an important document for our information.
As we know, this discharge is the first discharge for the financial perspective 2007-2013. It is the first with the new management, certification and audit control system introduced by the Commission. Finally, it is the last for the period of office coming to a close, because we are starting six months of work and we shall be voting in April before the European elections, at a time when the Commission has promised us a positive statement of assurance. It is now 14 years since we have had a positive statement of assurance, which gives the European Parliament cause for concern.
First, as regards the accounts, I am told that this is an unqualified opinion. Why was Galileo not consolidated? And I cannot hide the fact that I shall never get used to accounts with negative equity of 58 billion. That is one of my concerns.
So this is good news. We must be glad that, for administrative expenditure, we have a positive opinion, with low error rates and, from what we have been told, no fraud. However, the Member States have poor shared management in agriculture, cohesion and the Structural Funds, where there are too many errors - over 60% sometimes in some Member States. The Council is not here and it would be interesting to know what the Member States and the Council think about this situation, when they do not sign the national declarations and given that, with the present difficulties in public finances, the citizens will be demanding.
I think the President is right and we should consider this procedure of discharge with the committees, the Commission, the Council, Parliament, the national parliaments and the national courts of auditors, which are very conspicuous by their absence from this debate.
I should like, with your permission Mr President, to take thirty seconds' speaking time as rapporteur to express my astonishment, as my fellow Members have done, at the fact that the Council is absent. However, I have understood, Mr President of the European Court of Auditors, that you are to present your report to the Ecofin Council in a few days' time and that, as a result, the Council cannot express an opinion before there has been an exchange of views between the various Member States.
This being so and as the finger is being pointed at the Member States on shared management, I trust we shall receive the Council's opinion quickly and I shall take the liberty, Mr President of the European Parliament, of requesting a written question at question time asking for a prompt opinion from the Council, once it has been able to have an exchange of views on this excellent report by the European Court of Auditors.
on behalf of the PSE Group. - (DE) Mr President, I would very much like to congratulate the Court of Auditors for the work which it is submitting to Parliament in the form of the Annual Report for 2007. In a series of constantly improving annual reports, in my opinion this is the best report that the Court of Auditors has so far presented. It is more informative, more colourful, so to speak, and clearer.
Members of the Court of Auditors, I have noted with satisfaction that you have resisted the temptation to add a touch of populism to this year's report.
On the basis of a number of different special reports and, in particular, this report, we will now have to evaluate whether the work done by the Commission in 2007 using European taxpayer's money was satisfactory or not. So far there have been a number of encouraging presentations, in particular from the Commissioner for the Cohesion Fund. The Commissioner for Research has also indicated that the criticism from this House and from the Court of Auditors in last year's report has fallen on fertile ground.
One area where things are still not working well is the cooperative effort to control the European budget which Member States are withdrawing from. Four Member States - Denmark, the Netherlands, the UK and Sweden - are giving an encouraging example of active cooperation. It is satisfying to see that a national court of auditors, such as that in Germany, is beginning to concern itself at a national level with the European money being spent in Germany and we hope that there will be a political debate on this subject.
Since the Wynn and Mulder reports we have been attempting to bridge the gap in the treaty between Article 274 and Article 5 by means of this requirement for national statements of assurance. While we are discussing this subject, Commissioner Kallas, I would be happy for the Commission to take a more helpful and active role in standardising these reports. This is something which your positive approach should help to bring about one of these days.
When we pass judgment on the quality of the Commission's work in our discharge, we will inform the taxpayers whether or not it is acceptable in overall terms. If we expect professionalism from other institutions, we must also take a more professional approach ourselves. I believe that it is both intolerable and ludicrous to hold debates in this House about whether this committee can continue to be a so-called neutral committee or not. It is not acceptable for a control committee to be regarded simply as a sort of add-on committee, because that is not professional. The times have long gone when the budget came under consideration in one place for six months or so and then for the rest of the year another committee was responsible for budget control.
We have not even looked at all the agencies yet and we are supposed to assure our taxpayers that everything is functioning correctly. We need professionalism from the other institutions, but we as a Parliament must also make an effort, otherwise we will not be able to stand up in front of the taxpayers.
on behalf of the ALDE Group. - (NL) Mr President, I should like to thank the Court of Auditors for the report, and I too have noticed an improvement every year, in that the report is more legible and set out in a more readily understood format, amongst other things. Indeed, there is an improvement every year, albeit only a slight one. We can now to some extent take the wind out of the sails of the euro sceptics by saying that the accounts have been approved for the first time. If we look more closely at the improvements in the accounts, though, they are only minor. We have managed to get through by the narrowest of margins. If we read what was written in 2006 and 2007, then there is not that much difference, really, although there is an improvement.
The Commission underlines that, over the years, budget implementation has improved considerably. It claims that, in 2002 and 2003, only 4% of expenditure was approved, compared to over 45% at the moment. This is, indeed, a considerable improvement, mainly due, I fear, to the drastic changes in agricultural policy. Had agricultural policy continued as before, I doubt very much that we would have achieved an approval margin of over 40%. This is a matter of great concern, because the Commission's core techniques do not yet meet international standards and still require major improvements. Progress over the past four years has been too slow to my mind.
It is regrettable that we cannot yet measure the results of the action plan. Initially, the Commission put a great deal of effort into it. It was an excellent method, as we have all acknowledged, but sadly we have not seen enough results.
I share Mr Bösch's disappointment at what the Commission has done with the national declarations. This is all the more surprising because, last year, the Commission stated quite clearly that it was not going to implement the agreement. Luckily, the Commission retraced its footsteps. We cannot forget, though, that this is an agreement that has been signed by the Council, the Commission and Parliament. After all, it is unacceptable for one of the parties to state its disinclination to implement the agreement. I cannot wait to hear the guidelines the Commission has issued to implement the agreement. What are the results so far of the discussions with the Member States to carry out Article 44? We will need to put much of our time and energy into this in the coming months. That is also when we will need to decide whether we want to grant discharge to the Commission in April, or whether we will postpone it by six months.
on behalf of the Verts/ALE Group. - (NL) Mr President, I, too, should like to thank the Court of Auditors, and not least their staff. They have once again done a sterling job. I should like to remind the Commissioner that it is true that, at the start of your mandate as Anti-Fraud Commissioner, you promised and pledged to produce, by the end of your mandate, a statement that confirms reliability of the accounts, as well as the regularity and lawfulness of all accounts.
Have we achieved this yet? Clearly not. For the 14th time in a row, this statement has not materialised. Are we heading in the right direction? Without a doubt, or so says the Court of Auditors, and you are there to defend this stance with tooth and nail. Should we be worried? I think so. You have exactly one year left, though, to make good on your promise, your pledge, and there is a great deal to be done yet, as my fellow Members said themselves.
What has the Court of Auditors noticed? There are flaws in the bookkeeping system, partly attributable to the complex legal and financial framework. According to the Court of Auditors, there is a risk when it comes to quality and financial information. What does the Court of Auditors say about the regularity and lawfulness of payments? Does it sanction the administrative expenses? There are major problems in large sections of the budget, including agriculture, the Cohesion Fund, the structural funds, the Regional Fund, social policy, rural development, research and development, energy, transport, external support, development and expansion, education and citizenship. A representative sample has been made of everything related to cohesion, namely the Cohesion Fund itself and the structural funds. We note that, in its report, the Court of Auditors states that in 11% of the cases payments should never have been made. This is a very serious finding, and something to which much attention will need to be devoted in the discharge.
2007 was the first year - as various fellow Members pointed out - in which the Member States were asked to draft an annual summary of the available inspections and statements, but, according to the Court of Auditors, it does not work. The summaries cannot be compared and they do not contain all the information we need. Despite this, as Mr Mulder pointed out with good reason, there was a pledge, a political agreement. This is something we worked hard for in Parliament. What do we see now? A whole host of Member States are reluctant to lend their cooperation. It is notably the eurosceptic countries that are pulling their weight: the United Kingdom, Denmark and the Netherlands to a great extent. Surely this cannot be? We should indeed remind the Council of its responsibility in this.
Finally, on behalf of the Group of the Greens/European Free Alliance, I should like to underline the political requirement with regard to the Member States, namely that they should indeed face up to their political responsibility for the spending they help manage. This is their darned duty! In addition, we would also like to see more transparency about the end beneficiaries. There may be an attractive website, but I have noticed that a number of Member States, including my own country Belgium, place information on it which is woefully inadequate and wholly intransparent. There is work to be done in that area too, therefore, and we will need to fight for this during the discharge.
on behalf of the GUE/NGL Group. - (FI) Mr President, Commissioner, President of the European Court of Auditors, Vice-President of the Commission Siim Kallas has, generally speaking, done good work to improve budgetary control, and especially to increase administrative transparency. Public awareness of agricultural subsidies is a good example of that.
The European Court of Auditors partly agrees. There are of course areas for comment, particularly on the use of agricultural and regional development aid. Responsibility for these lies mainly with the Member States. Something of a split might be discerned in the Court of Auditors' report: the slightly more correct northern net contributors as opposed to the southern beneficiaries that are rather more prone to abuse. The split is also obviously affected by the volumes of cash involved. In the south there is more to distribute and control than in the north. To ensure that the wrong generalisations are not made, it is important that the Court of Auditors shows precisely in its reports where any abuse has occurred so that confusion and the wrong generalisations are avoided as a result.
I would like to focus attention on something to which the competence of the European Court of Auditors does not extend and which is also a grey area from a national standpoint. This is the Athena Fund set up in 2004, which falls within the competence of the Member States, though not the EU. The Member States pay into the Fund out of their own defence budgets for combined military operations that fall outside the scope of EC competence. These operations work, on the one hand, on the NATO principle of 'costs lie where they fall'. On the other hand, there is this Athena scheme, whose financing is secret. This sort of military operation on the part of EU countries should be brought under democratic control.
When the report by the European Court of Auditors is being considered, our group will be paying special attention to the legality of the Council's budget, which for Parliament has up till now been a grey area.
on behalf of the IND/DEM Group. - Mr President, well, Commissioner Kallas seems to have read a completely different document. I can assure him that as a UK PLC this simply would not do at all. If any UK PLC had filed accounts of this nature for 14 years which have been completely unacceptable, and again this year - and I do not regard the Court of Auditors as having given this a clean bill of health at all, and I have read the document - if the Commission were a board of UK PLC directors I have to say they would now be in prison!
We have a situation here where this Parliament, if Parliament it is, which spends most of the year talking about bendy bananas, knobbly parsnips, standardisation of bottle sizes, and on Tuesday we were even voting on the standardisation of tractor seats, so this absurd organisation spends most of its year doing nothing very much of value. We only have one serious responsibility, and that is to hold the Commission to account on the budget. That is the most serious thing we can do; and it is going to go through again for the 15th year on the nod.
It is an utter disgrace, and let the British MEPs know I am watching very carefully how they vote. I will make sure that it is known back in the UK what they do out here as opposed to what they actually say when they go home.
Mr President, we all know that the European Commission's accounts can never be signed off until - and unless - two major underlying problems are finally resolved. Neither of these problems is new. Firstly, there is no certainty about the opening balances for the accounting system, which was changed in 2005, because a year later there were huge readjustments which made it obvious that no reconciliation was, or is, possible.
Secondly, there is the problem of shared management, which has already been referred to, or in other words the distribution of public funds to recipients who are then held responsible for both using and accounting for them. Even the internal auditors in Member States admit that that system is impossible to operate.
For years, all we have ever heard - and we heard it again today from the Court and from the Commissioner - is well-intentioned talk about improvement soon, managing risk, error rates - trivia! The reality is that nothing substantial changes, and the public is losing patience, and rightly so. Tinkering with the deckchairs on this particular Titanic does nothing to plug the holes in the bottom.
If the Greek figures are to be believed, we still have olive groves in the Aegean Sea. The misuse of funds in Bulgaria is reported to be out of control. In Turkish-held Northern Cyprus, EUR 259 million of public money has been handed over for economic development, but the EU office in Nicosia openly admits it cannot monitor or control it, simply because we do not recognise the Turkish regime. Some of that money has just paid for new pavements in the booming holiday resort of Kyrenia, where the casinos do a roaring trade day and night. The local regime chooses not to raise sufficient taxes and takes the view that if the EU is stupid enough to pay for them, then that is fine by them. Yet that money could have been put to good use.
Not only are the accounts unacceptable, but some of the judgements on how public money is used are unacceptable too.
(SV) I would like to start by thanking the Court of Auditors for a constructive report that is unusually easy to follow. It will, I am sure, form a sound basis for our ongoing work in the Committee on Budgetary Control.
I thought I would restrict myself mainly to the EU's independent authorities, as I am actually rapporteur for them. Some institutions are, of course, growing in terms of numbers, responsibility and how much money they have at their disposal. I would therefore like to suggest that examination of these institutions is also becoming increasingly important.
Every year that I have been here in the European Parliament we have commented on the problems the independent authorities have with regard to planning, implementing the budget, public procurement, reporting and so on, and, unfortunately, it looks like we will have to do the same thing again this year. The same is true with regard to the problem of their requesting more and more money, despite them having trouble spending it during previous years. I think that this raises a number of important questions, as it seems to be a recurring problem. At least for me, it raises questions about responsibility and control. I therefore think that it is particularly unfortunate that the Council is not here to participate in the debate, as I think that we have a joint responsibility to ensure that these decentralised authorities are controlled and monitored.
In addition to these general comments, which are for the most part applicable to a considerable number, although not all, of the decentralised authorities, there are four authorities that I think we have grounds for examining more closely this year. The first is the European Police College, CEPOL, which has again this year received remarks for its public procurement, and this is a recurring problem that has not been addressed. Furthermore, it is even more remarkable that the Court of Auditors has pointed out that money has been used to pay private expenses. Another one is Galileo, in connection with which the Court of Auditors has not yet been able to issue a statement about whether or not they want to give a simple statement of assurance, simply because there is so much uncertainty surrounding the relationship between Galileo and the European Space Agency and the other players involved. Where does Galileo begin and end? Last but not least are Frontex and the European Railway Agency, both of which are clear examples of authorities which overestimate their costs and demand too much money, but nevertheless request more money every year. These are matters that I intend to look more closely at during the discharge process. I hope to continue the constructive cooperation with both the Court of Auditors and the Commission and I am disappointed that the Council is not here to contribute to this discussion.
(PL) Mr President, Mr Caldeira spoke of risk as of an important error factor in the preparation of this report. May I take a moment to focus on European Development Fund issues. The fund provides aid to countries in Africa, the Caribbean and the Pacific. Their risk differs from that of Member States, and is also greater than in the Member States. It is important that the Court has concluded that the transactions underlying the income and commitments for the budget year are lawful and correct. This general conclusion gives us grounds to view the report as a whole with approval.
On the other hand, the number of errors in the transactions underlying the payments is high. The Court has questioned the Commission's dynamic interpretation of eligibility criteria, and the Court's view that the interpretation is flawed must be accepted. The point is that it does not enable Member States to meet standards of reliable public fund management. The Commission should review its position at the earliest possible opportunity. Parliament has in fact already approached it on this matter.
Another issue raised by the report is cooperation with the UN. It highlights the UN's unwillingness or negligence in forwarding the relevant payment documents. The Court indicated three main areas of significant error. They include eligibility of expenses, pre-financing settlement and the payment of incorrect amounts. These errors should and could have been identified and corrected much earlier by the personnel who approved the payments. For this reason, the Commission's explanation that auditing costs are very high, as indicated by the ratio of the costs to the effectiveness of the audits is unconvincing. It is hard to agree with this point of view. Instead, the Commission should aim for greater efficiency and increase the number of its employees. Indeed, we, as Parliament, approached it on this matter a year ago.
In summary, this section of the information provided by the Court of Auditors is mixed. While recognising its overall correctness, I wish to point to areas of significant error. The report includes the Court's recommendations, which must largely be accepted.
(FR) Mr President, Commissioner, I should like to take my turn in thanking the Court of Auditors for its excellent work. There have been a number of Members who, at this very moment, have rebelled against the general use of European funds.
I would like to say that I hope that, when they report our debates and the results of the work of the Court of Auditors, the media will not do what they usually do and talk about the trains which arrived late and say nothing about the trains which arrived on time, because most of the budget of the European Union has been spent advisedly. We must not confuse the wood with the trees.
Having said which, we have noted that the trend in this report by the Court of Auditors has been one of improvement. That is very good news. You also said that there are millions of beneficiaries, which alone illustrates the difficulty and scope of the task.
For my part, I wish to underline two responsibilities. I do not wish to point the finger of accusation at any specific organisation. I simply wish to say that if, in future, we want to do better, those with material responsibility in the matter need to act.
As I see it, there are two categories of people responsible. There is the Commission - and the Court of Auditors has just told us, having said that there are several million beneficiaries, that the first thing to be done upstream is to simplify the rules. We therefore expect, before talking about controls, before talking about a declaration, that things will indeed be simplified upstream for these beneficiaries - especially associations, individuals and so forth.
The second category of people responsible is, of course, the Member States. I and my colleagues in the Committee on Regional Development shall not stop pointing to the responsibility of the Member States under the Structural Funds. It is they who often add to the administrative complexity and, instead of acting as councils, they complicate matters and sit in judgment.
Therefore, over and above this Court of Auditors report, we really expect each of the Member States to facilitate access to European funds and, of course, to introduce more adequate controls over coming years.
(DE) Mr President, Mr President of the Court of Auditors, Commissioner, ladies and gentlemen, after making statements of assurance for 14 years, next year represents an anniversary. We need to consider what we should do on this occasion.
I believe that we are gradually making ourselves look ridiculous. One of the major risks is that this will degenerate into a routine, that no one will take us seriously any more and that the results which we present will not be taken seriously either. The Court of Auditors' Report is an interesting report - the name and shame principle has proved its worth - and I would like to ask the Court of Auditors to continue to provide this kind of clarity.
However, we are now faced with the question of what to do about the Member States which have been part of the EU since 1981 and still do not apply EU legislation consistently. I would like to ask the Commission - and this is one of the lessons which I have learnt from this - to acknowledge that the more consistent the Commission's actions are, the faster we will have improved results. I would also like to see this consistent approach being taken in the area for which the Commission itself is responsible. I am disappointed that there has been so little progress on direct management. I expected the Commission to set a good example and to demonstrate that this is feasible and how it should be done.
One aspect of this report in particular which interested me is the position of the new Member States, but not very much information is provided in this area. I do not understand some of the numbers, for example, your findings on the two new Member States Romania and Bulgaria and what the European Anti-Fraud Office (OLAF) identified there in 2007. OLAF has carried out random samples of all the funds which revealed the percentage of fraud and irregularities in these two countries to be 76%. This is a significant percentage and it is now time for us to take consistent action and help these two countries to achieve better results, otherwise we will never make progress.
This annual report is the last from the Barroso Commission and the first in the new financing period. I would like to congratulate Commissioner Kallas and the Barroso Commission for their work in the field of financial control. The Commission has achieved much more than any of its predecessors. It is thought-provoking that despite all of these activities we have not produced better or faster results. I am expecting a great deal from the new reporting scheme on recoveries and I hope that we will no longer be in the same situation next year of shrugging our shoulders and saying that things should improve by the following year.
Commissioner Kallas, so much praise from Mrs Gräßle is really something to be proud of!
(DA) Mr President, our discussions can be a little abstract at times, so I therefore think that we should start by reminding ourselves what it is we are actually talking about. It is about taxpayers' money. It is about European citizens' money. Money that is used for quite sensible - and sometimes not so sensible - purposes. A common requirement for all the money that is used in the EU's name is that it must be used in a proper and decent manner. Another thing that is common to all the money used is that there are rules that must be followed, and if those rules are not followed, a penalty must be paid.
Unfortunately, we must again this year note that it has not been possible for the Court of Auditors to approve the implementation of the EU budget, that is to say approve the accounts. This is, of course, deeply, deeply unacceptable. The question is, who should the criticism be directed at, where should we point the finger? There is no doubt that the biggest problem lies within the Member States. Unfortunately, there is no doubt that when Member States get a bag of money from the EU they are not so inclined to subject this money to as much control and as many rules as would be the case if it was national money. It is clearly stated in the Treaty that it is the European Commission that bears the responsibility, that is to say it is the European Commission that is responsible for there being little pressure on Member States to introduce the necessary controls. In this connection, it is a pity that the Commission has not met its own objective for us to approve the accounts before the end of this period. We will not achieve this.
However, I would also like to point out that great progress has been made, for example, following pressure from the European Parliament. Last year, an action plan was introduced containing a large number of very specific initiatives, which we will see the effects of - not in this year's report, of course, but in next year's. We can be pleased about this. In this year's procedure, we will, of course, work in a very targeted manner in relation to the areas in which there are still problems. It is, of course, of particular concern that within the agricultural sphere, where there have otherwise been positive trends, we have unfortunately this year seen a somewhat downward evaluation because we do not have a proper hold on things in the rural development funds.
Mr President, I should like to thank the Court of Auditors for its report and the Commissioner and his team for the work they are doing.
This is such an important subject, because there are so many failing and failed states in different parts of the world - I will not list them as they are obvious - and that is where criminality flourishes and spreads to the rest of us. So we have to tackle these problems and I am satisfied that we are moving gradually in the right direction.
I deeply regret that there is nobody present from the Council, because it is the Member States who are failing to do their job in this area. There is not a single person present, and we should try to correct that for next year.
I want to say one word to the absent Mr Bloom from my country, who made a silly speech about 'knobbly carrots' or something and then walked out and did not have the courtesy to listen to the rest of the debate. If he were here, he would hear me remind him that one major British Government department dealing with pensions has failed to have its accounts approved for the last 14 years. So, we in Britain have nothing to be proud of either. One of the things that baffle me about the UK is that the British Government refuses to cooperate with OLAF, which seems to be completely nonsensical and needs correcting. I would love to have an answer from the British Government to that.
My final point is addressed directly to you, Mr President: when we make recommendations about the committees for the new Parliament next year, I think we should consider seriously how to strengthen the Committee on Budgetary Control - give it extra powers and responsibilities, so that we continue to work very hard on this problem.
Thank you, Bill Newton Dunn. The President will, as always, try to do his best.
(DE) Mr President, Mr President of the European Court of Auditors, Mr Vice-President of the Commission, ladies and gentlemen, it has now become a tradition that once again no statement of assurance can be issued about the relationship between spending at a European level and administration at a national level. I can remember discussions with the previous President of the Court of Auditors, Professor Friedmann, who once said to me that, because of the structures, it was not possible to give a statement of assurance. For this reason, we should consider how this instrument can be brought to life with the aim of issuing a statement of assurance, if this is justified.
It is important to make distinctions between a few different issues in this respect. Firstly, a budget that consists of around 95% subsidies is much more susceptible to fraud than a national, regional or local authority budget. This subsidy budget is largely managed by the Member States, which have demanded a great deal more independence from us in the new financing period, because they complained during the last funding period that there was too much central control. Of course, this also means that the responsibility for the budget funds must be transferred to a regional and national level.
The third area is one that I just want to touch on. We must learn to distinguish between fraud and wastefulness. These are things which are often lumped together. It also annoys me when projects are funded with EU money which are not absolutely necessary. However, this is not fraud, but wastefulness. For this reason, those with responsibility for the projects, in particular in the area of structural operations, namely the Member States, should also take responsibility for ensuring that money is not wasted and that only those projects are subsidised which provide genuine added value for the region. Therefore, we should also consider moving parts of structural operations onto interest-free loans. If Member States have to pay back the money, they will only fund the projects that they really need.
(PT) Mr President, I want to start by congratulating the Court of Auditors on its excellent work and also for having made this work much more accessible to all of us here, and even to European citizens in general.
However, I should have liked to see more specific details in the Court's report, with names and cases that were analysed. This is not a question of doing what some Members call 'naming and shaming', but perhaps rather 'naming and understanding'. This is because it is only through a description of specific cases that we can understand the problem. As far as I can see, particularly with the Structural Funds, we have regulatory frameworks that often demand absurd things. This is down to both the Member States and ourselves, and we have to look at these regulatory frameworks in the greatest of detail.
We are also going to be discussing the implementation of the European Parliament's budget in 2007. The buildings here in Strasbourg were purchased in 2007 and, when we bought them, we were absolutely assured that there was no asbestos in these buildings. Only once this purchase had been completed did we find out that there was asbestos in around 50 rooms in this building. This is a serious situation to which we must give our full attention.
That does not mean, ladies and gentlemen, waging war on those who do or do not want to come to Strasbourg. We cannot use a health issue for purposes that strictly speaking have no relevance. However, the health issue does exist and I should have liked the Secretary-General to give clear guarantees that the proposed asbestos removal plan is compatible with the continued use of these buildings.
After several months, I am still waiting for these guarantees. I have read hundreds of pages of reports and looked at innumerable photographs, some of which have been very interesting, but I do not have these guarantees; we really need them because, without them, we cannot be sure that we can work here in total safety.
I should therefore like to point out that, when we give discharge of the European Parliament's budget, this issue must be fully clarified because, otherwise, we will not be able to vote positively.
Mr President, I too would like to thank the Court of Auditors. Having read their report and listened to the debate here this morning, I ask myself: is the glass half empty, or is the glass half full?
The first sentence in the conclusions from the Court states that for 2007 the Court has identified further progress in the Commission's supervisory and control systems, so at least we are going in the right direction. There are improvements in certain areas, but the error rate is still way too high in some sectors, and those have been outlined here this morning.
An extremely important aspect is that, according to OLAF, suspected fraud in the Structural Funds affected 0.16% of payments made by the Commission between 2000 and 2007, and that is a hugely significant figure. However, as a politician on the ground, I see the other side of it. I am constantly being told by community groups, by voluntary groups, by NGOs, of the huge difficulty they have in applying for funding and adhering to strict compliance rules at every single step. I am constantly being bombarded about Brussels red tape and Brussels bureaucracy and, in the middle of citizens and this debate, we have Member States - many of whom need to seriously improve their act - the Commission, which still has some work to do, Parliament and the Court of Auditors.
I believe, however, that the recommendations from the Court will make a difference, particularly in simplifying the basis of calculation of eligible costs and making greater use of lump-sum or flat-rate payments. We are making progress but it is too slow.
So, is the glass half empty or half full? When I consider the full impact of European funding, the improvements that are being made, and hopefully the implementation of the recommendations, my opinion is that the glass is half full.
(ES) Mr President, pursuant to Article 274 of the EC Treaty, the Council has the same responsibility as the Commission for expenditure. We are the budgetary authority.
Mr President, did we invite the Council to this debate? I do not see any representatives. Have they apologised for not attending? Have they given any reason for not being here?
I do not understand. Is it because they do not want to hear for the fourteenth time that the Court of Auditors says that things must improve, given that they are the ones spending more than 80% of Europeans' money? Or is it because they, as the Member States, are happy with what they are spending, whereas here in Parliament we have the cheek to question the errors of an absent guest, because I am assuming that they were invited?
(FR) I shall say it in French. We are in France. Where is the French Presidency? Where is Mr Sarkozy? Where is your representation in this debate?
(ES) We will have to see whether, in the words of Molière, they arrive ere long.
This is unacceptable. All my colleagues on the Committee on Budgetary Control agree with me that this should not happen again. I thought that the excellent French Presidency would also improve this aspect of facing up to the consequences. For it is here where they must face up to the consequences. They cannot spend and then not come here. For it is also the Council, and not just the Member States, that are subject to our scrutiny. However, they are never here because they do not want to keep hearing the same thing.
The solution would be to have national statements.
I have two points to make.
Congratulations, Mr Silva Caldeira. In this latest debate of this parliamentary term, you have produced a very good report. The Court of Auditors, of which you are the President, is partly responsible for things having improved. Please convey our congratulations to all your members, as several of my fellow Members have said.
Mr Kallas, this Commission has improved things considerably. Unfortunately, we have not achieved the ultimate goal of a positive Statement of Assurance, but things are going well.
I have a small suggestion to make: we must simplify. We must simplify and give responsibility to the Member States and then they must come here to face up to the consequences. Simplification and removal of red tape will be the way to improve how Europeans' money is spent.
(HU) Thank you for the floor, Mr President. In my view, for a deputy from one of the new Member States whose absence Mrs Gräßle regretted, the current discharge is important for two reasons. On the one hand, this is the first year of the 2007-13 period, thus whatever observations we make now, will have an effect on future uses. Secondly, this is the year for which the European Parliament and the Commission will give the last discharge, and therefore it is worth preparing an evaluation.
Perhaps my fellow Members will not agree with me, but I nonetheless hold the view that although our main goal, a positive DAS, has not been achieved, we can look back with pride at our joint achievements. The Commission, under its Vice-President Mr Siim Kallas, and Parliament, under the leadership of the COCOBU, not only saw to it that its own invoices and expenditures were all in order, but with a major, sustained effort succeeded in ensuring that Member States that account for 80% of the expenditures are increasingly prepared to cooperate with regard to inspection.
I know that in the area of agrarian and cohesion funds we still have serious tasks ahead in this regard, nevertheless when carrying these out we cannot ignore the changing circumstances in the global economy. In the current crisis, it is crucially important particularly for the new Member States to use EU resources as rapidly as possible, with the less democracy the better. This goal must be attained without thereby increasing the risk to payments. For this reason, I welcome the fact that the European Court of Auditors is also proposing simplification in this area. Now it is up to the Commission and the Member States to implement these. Thank you very much.
(FI) Mr President, I wish to thank the European Court of Auditors and Commissioner Siim Kallas for the important work you have done for the sake of European taxpayers.
A 2% margin of error is permitted in the EU's accounts. I would say that it should be possible for the costs set aside for salaries, rent and other administrative items to be finalised with a far greater degree of accuracy. There should not be any kind of confusion with these. There are other cost groups, however, where achieving an accuracy of within 2% can be difficult. For example, there is a lot of talk at the moment about higher figures in the costs of regional policy. Perhaps we have to be bold enough to recognise that it is not realistic to achieve zero tolerance in these cost groups.
In future we need to be a lot more cost-effective, the application procedure must be simplified, and it should also be possible to transfer accountability and authority to national level. This would be in the interests of European taxpayers, and I hope that the Court of Auditors will act effectively regarding this.
(FR) Mr President, I have no wish to take the floor on behalf of the Presidency, but I would like to respond to my fellow Member Mr Pomés Ruiz. I believe he may not have been in the House when the rapporteur spoke. The Council did not wish to be present in the House before the Ecofin meeting. It was quite intentional. I do not think that there should be an exchange of views prior to that meeting.
On the subject of the report, the key word is, I think, simplification. However, I believe that shared management is indeed a source of complication at the level of European funds and the degree of complication which we have is not, in all cases, due to fraud, especially in the agricultural sector. What we have noted today, especially on the subject of rural development, is due unfortunately to the extremely complex management of European funds.
We voted on the CAP yesterday and we need to realise that environmental cross-compliance, for example, is highly complicated. MEPs are calling for environmental cross-compliance to be simplified, because farmers are working really hard to manage this environmental cross-compliance. The European funds - especially the management of the Structural Funds - need to be simplified and this is a political message which we need to get across. Simplification of the European funds is the key word today and it must be heard.
(BG) My congratulations on the report, which can serve as an operating manual in the complex procedures by which expenses are paid in the European Union. I have drawn a number of conclusions about the report: clarity and ease of understanding - it reflects the new working methods introduced by the Court of Auditors; analysis, which gives grounds for important recommendations, albeit ones that have been around for years; and focus on the results. Let us look beyond the qualities of the report, and evaluate the results regarding the regularity and effect of European Union expenditure. This leads to the following conclusions: weaknesses in Member States' control systems and, to some extent, effective supervision by the European Commission; the distribution of errors in payments made by area is quite high, as are the amounts involved. We need to face the substantial level of errors in particular areas. Important progress has been made, but it is still not enough. The main findings of the report are contained in the recommendations which should improve the system for managing expenditure of European funds: improving control systems at various levels - first, second and third - and the links between them, which is a particular obligation of the Member States; and simplification of procedures to make them easier to control, and also easier to implement risk-free. And as it is often the new Member States that are involved, I believe that better cooperation with and assistance is required in respect to the new members to enable them to set up clear and precise national control mechanisms.
Mr President, I should like to thank the Court of Auditors for its presentation this morning, which was extremely detailed and very useful. Yes, the error rates are too high - and we all strive for perfection - but progress has been made, and the EU generally has made progress, so that is to be welcomed.
The general point I would make is that Member States are perhaps more careful with their own money than with European money, and we need to change that mindset. However, as others have said, we do not need to overcomplicate the rules and regulations concerning compliance, because that puts people off, and particularly those who might need to have access to funding.
I have in my hand here - hot off the presses - the health check on the common agricultural policy agreed in the early hours of this morning. One thing that strikes me very clearly from the presentation this morning is that it was clearly said that, when it comes to rural development, there are big problems in terms of compliance when, under the health check, we are now taking more money from the single farm payment to pour into rural development. There is an issue to be addressed here. At the end of the day, putting money into rural development programmes to address climate change, biodiversity and water management is, in theory, a very good idea, but how does one measure these things and assess value for money? That is something we need to look at very carefully.
I have a concern that this report, as in the past, will be used to beat up on the EU - to say bad things about it - rather than in the way it should be used, which is to say: look, we have made progress and we are pointing to areas where we need to make further improvements, so that we spend European money in a way which is good for the European citizen, and avoid making that overcomplicated.
The most widely-used word in the House this morning was 'simplification'. If it was that simple, then we would already be doing it. While I do not think things are quite that easy, perhaps if those who control and inspect were more in tune with the issues on the ground, then it might help the process someway along. So, I commend the presentation, and let us hope that we continue to spend well.
(PL) Mr President, may I first of all express my approval of the Court's report, which confirms the consistency of its work.
I should also like to point out that these reports are always analysed within a specific context. This context is very relevant just now, since first, we are working on a new shape for our policies after 2013. Second, we are debating methods of monitoring and judging the effectiveness of our policies. And third, we are all working on the European Union's response to the financial crisis and on adapting our tools, methods and instruments to the new challenges.
In this context, if we look at the effects of the report, which focuses on the cohesion policy, our attention is drawn to the fact that where the Commission itself was responsible for specific actions, the report has identified clear improvement. On the other hand, in areas involving multilevel audits and responsibility on the part of Member States, the effects to date, as noted in the report, are slight, because we cannot yet see the direct results of reforms currently being introduced.
May I also comment that when working on new policies we must clearly distinguish - as was noted by Mr Ferber - between errors, abuses and poor management, and how to relate these to the effectiveness of policies. In my view, it is wrong simply to identify an error or the level of error with the ineffectiveness of a specific policy. A simplistic drawing of conclusions may cause us to abandon policies which are absolutely essential in the new situation.
(NL) Mr President, I too should like to add my thanks to the Court of Auditors for the presentation of the annual report and the Commission for its reaction to it. Despite the positive noises on the bookkeeping side, we are actually facing the very situation we did in previous years. It is true that action has been taken in the area of cohesion, including via the European Commission action plan, and the error rate has decreased slightly from 12% to 11%, but this is less than satisfactory, obviously. A twofold picture is emerging where agriculture and other major debit entries on the budget are concerned. Agricultural policy's own error rate is under the critical limit of 2%, not least thanks to the integrated control system. I do believe, though, that we should mete out stricter penalties for those countries that have failed to carry out this integrated control system effectively for more than ten years, and that we should do this by means of progressive financial corrections.
In rural development, on the other hand, the picture is less rosy. This was to me, as Mr McGuinness has already pointed out, a clear appeal to the Council of Ministers for Agriculture, who met recently, not to move too fast when it comes to transferring monies from agricultural policy to rural policy. I have since learnt that whilst the Council did not move as fast as the Commission had liked to see, the proposed modulation is nevertheless considerable.
These are the problems. Now onto the solutions. I have heard the Court of Auditors talk in woolly terms about weighing up control costs, simplification and clear objectives. This is all well and good, but both the European Commission and the Court of Auditors know all too well that the problem lies with the fact that 80% of the outgoings are co-managed by the Member States. It goes without saying, therefore, that the solution should be sought partly via these Member States. Imagine my surprise, therefore, on seeing that neither the Court of Auditors nor the European Commission has mentioned national management declarations. I should like to remind the Commissioner that, in the context of the previous discharge, he promised that he would commit to these statements, and I should like to know whether he has delivered on his commitment and how this is evident, for I have not seen any evidence. Since these declarations are a learning process for us, I think it is important for us to take a closer look at how the present annual summaries and national declarations are put together qualitatively speaking, and to draw the necessary lessons from this. I in any event take it as read that the European Commission will help us in this in the coming months.
(BG) The release of the European Court of Auditors' annual report is a good occasion to analyse what the European Union budget is used for and how it is used. The aim of the EU budget is primarily to improve the lives of its almost five hundred million citizens. It is used to fund projects that have a direct effect on our citizens' everyday lives, such as roads and motorways. As you know, we are currently at a juncture where the 'Eurosceptics' have succeeded in misleading some citizens with empty promises and false assertions. Blaming Europe for everything that doesn't work properly is one of the methods they use. We, however, must do all we can to allow the citizens of the European Union to reap the benefits of membership. We have to send them a strong message that we, as the lawmakers of Europe, want the European Union to function more efficiently and effectively. Only in this way will we stop the Eurosceptics from succeeding.
In this connection I would like to talk of my country, Bulgaria. For many years its citizens eagerly awaited the moment they would be able to call themselves equal citizens of the European Union, and would reap the benefits of membership. Now, as noted in European reports on various issues, despite joining the European Union, many of my compatriots have been deprived of the benefits of community solidarity, due to mismanagement and weaknesses of the government. This was also mentioned in the European Commission's latest report from July 2008, which unfortunately led to a partial freezing of European funds for Bulgaria. This situation upsets me deeply, for there is nothing more I want to see than my compatriots living in a prosperous Bulgaria which has taken its rightful place in a united Europe, without accusations of corruption in high places and without organised crime.
In conclusion, I call upon all European and national institutions to continue in their efforts to correct the failings highlighted in the ECA's annual report, and to fight to continually improve the quality of life of the citizens of the European Union.
(NL) Mr President, 'catch the eye'. I think that this is a topic that catches many people's eye. Surely the lack of approval can be attributed to some extent to the level of errors. Even after so many years, you have to wonder whether it might be the system that is flawed and needs to be fixed. Mr Ferber pointed out that countries that fail to meet the obligations of clarity and own responsibility time and time again must be approached with a different way of financing. This can be done, according to him, by providing funds on the condition that these are not spent definitively until later. This appeals to me. Countries have to choose, certainly when it comes to structural funds, agriculture and rural innovation.
Mr President, as my friend Mr Bloom quite rightly said earlier, it is simply not true to say that the accounts have been fully signed off by the auditors. It seems that about EUR 6 billion cannot be properly accounted for. At current exchange rates that is about GBP 4.7 billion. Britain's net contribution to the EU budget in 2007 was GBP 4.3 billion. The net amount is after the UK rebate and our own money spent in our own country. There is of course no such thing as 'EU money'. An amount of money exceeding the UK taxpayer's net contribution to the EU budget is quite possibly finding its way into the pockets of fraudsters.
This neatly sums up British membership of the European Union: a complete and utter total waste of money. More and more British people are realising that the European Union...
(The President cut off the speaker.)
(BG) I would like to add my congratulations for the report. It is very important for me that it underlines the importance of improving the systems for monitoring and controlling European funds and recommends simplification of these procedures. I fully agree with the findings and recommendations made to the European Commission, because they are exceptionally fitting. I would like to mention here the regrettable example of the ineffective control system mentioned in respect of Bulgaria. My country continues to be criticised for irregularities in the management of funding from the pre-accession programmes by several executive agencies. This is clear evidence that mismanagement on the part of the Bulgarian government has resulted in misuse, and the results that the pre-accession mechanisms aimed for were not achieved. However, I believe that if the Commission had taken and adopted the effective control mechanisms required, this would not have happened. Although this is acknowledged in the Commission's answer on page 51 of the report, it is unclear to me exactly what specific measures need to be taken.
Mr President, Mr Kallas's stated aim at the beginning of his mandate was to achieve a positive statement of assurance, and throughout the different reports we have had from the Court of Auditors in that time, not much, to be honest, has changed. I fear, Mr Kallas, that in your reporting and your take on this current report, there is an experience of Peter Mandelson coming through the fibre of your being. You have had a touch of the Mandelsons - saying that everything is absolutely fine and spinning that the accounts are clean is disingenuous and simply not true.
Blaming Member States is not a decent defence, because Article 274 of the Treaty tells you that the buck stops with the Commission. Who gives the Member States the monies in the first place? Who, knowing where the problems lie - and you are told every year by the gentleman sat beside you - could tighten the purse-strings or cut off money to fund some programmes? Mr Kallas, the buck does stop with you. I am afraid that you have failed.
Court of Auditors. - Mr President, I wish first of all to thank everyone for their kind words about those working at the Court of Auditors, and all those contributing to the result we have debated here this morning. On behalf of all those working at the European Court of Auditors I thank the Members for appreciating what we do to assist the European Parliament as foreseen in the Treaty. That is our mandate. It is our role.
We take good note of the comments and suggestions you have addressed to the Court with a view to it further improving the way it presents its results and its findings and communicates these to you and to the citizens of the European Union. We will strive to strictly apply international auditing standards in all areas, including when taking into consideration the work of other auditors, namely those engaged in the Member States in auditing European Union funds.
I shall finish by saying briefly that we will continue to assist the European Parliament and its Committee on Budgetary Control during the discharge procedure, and that we will again strive for full cooperation with all the institutions. At the end of the day, the important thing is that the result of our work, as I said in my speech, is a sign that the European institutions are accountable and transparent, and that one can have confidence in the European Union.
Vice-President of the Commission. - Mr President, many remarks have been made. We have a long process of discharge and discussions ahead of us, during which all these remarks should receive answers and/or comments.
I would just like to make a comment about simplification, which has been raised many times. Everybody says they are in favour of simplification, but in fact, there are two different underlying opinions. The first is that the recipients of money want to have more of a free hand, while those contributing that money want a very clear understanding of where the money is going. So there is a constant contradiction. Secondly, we have until now - although the past two years or so have been different - always assumed that there is zero tolerance for any error. The rules are therefore elaborated to prevent any error in the millions of transactions that take place. That has also produced some kind of mythological view of the famous declaration of assurance, saying that the underlying transactions of all accounts have errors. In fact, as the Court of Auditors says in this report, 95% of all expenditure is free of errors, except in the Structural Funds, where the level of error is higher. So the vast majority of spending has been done in accordance with the rules.
However, zero tolerance of errors is something we will soon be addressing. The question of tolerable risks has been raised here many times also, and we will also soon present to Parliament a communication on the intensive discussions which are taking place at the moment in the Commission. We have models which clearly show, for instance, that if you want to have zero tolerance - 100% free of errors - then you have the enormous cost of controls. Somewhere there is a point where the errors, costs and risks meet. In this we highly appreciate the Court of Auditors' approach, first of all towards introducing this kind of quantitative travel light which gives a much better picture. Then we will go ahead and see - as one honourable Member said - that maybe in some areas there should be less materiality threshold, and more in others. Then we can have a more reasonable interpretation of the requirement of the legality and regularity of transactions.
The debate is closed.


Passenger compensation in the event of airline bankruptcy (motions for resolutions tabled): see Minutes


Written declarations (tabling): see Minutes


1. Venezuela (


4. Appointment of a member of the Executive Board of the European Central Bank (


Fuel Cells and Hydrogen Joint Undertaking (debate)
The next item is the report by Mrs Locatelli, on behalf of the Committee on Industry, Research and Energy, on the proposal for a Council regulation setting up the Fuel Cells and Hydrogen Joint Undertaking - C6-0446/2007 -.
Member of the Commission. - Madam President, first and foremost, I wish to express my gratitude to Parliament and particularly to the rapporteur, Pia Locatelli, and also to Teresa Riera Madurell, who will be replacing her, for supporting our proposal for setting up the Fuel Cells and Hydrogen Joint Undertaking.
Let me also thank each of the shadow rapporteurs for their constructive support, as well as the Committee on Budgets for its opinion.
The Fuel Cells and Hydrogen Joint Undertaking will have two founding members: the Industry Grouping and the Community. Private industry has established the Industry Grouping, and its members represent a major share of Europe's fuel cell and hydrogen companies, such as car manufacturers, energy providers, developers of fuel cells and developers of their applications. All sizes of companies are represented - from micro to multinationals.
The cooperation between the Commission and industry during the preparation of the regulation has clearly shown the strong driving force of the industry concerned. The assurance from the public side to provide stable funding on a long-term basis will provide additional confidence. As a result, we can expect a commitment of considerable additional resources from the private sector.
In addition to the two founding members of the Joint Undertaking, universities, research centres and other research organisations are presently establishing a Research Grouping that is expected to become the third member of the Joint Undertaking. Representation of the Research Grouping on the Joint Undertaking Governing Board was considered necessary owing to the importance of fundamental research to this Joint Technology Initiative (JTI).
In total, it has been estimated that the creation of this JTI will speed up, by up to five years, the delivery of robust hydrogen supply and fuel cell technologies, developed to the point of commercial take-off within the time-frame 2010-2020.
I also want to mention its relevance to our efforts in the area of energy technology acceleration, as this JTI is a very interesting model for some of the industrial initiatives that we have proposed be set up under the Strategic Energy Technology Plan.
The opinion of Parliament includes a number of very pertinent suggestions for amendments. One example is the underlining of the importance of breakthrough research. Fundamental research will be included in the R&D programme, and that will increase the probability of achieving progress and success.
Another example is clarification of the participation of the Joint Research Centre (JRC) in the activities of the Joint Undertaking. The JRC has wide competence in several areas that are of importance, and its strong future involvement will strengthen the Joint Undertaking's research.
Both the Council and the Commission look forward to receiving your input and opinion, as everyone is eager to move ahead and start implementing this important initiative without delay.
Mrs Locatelli should really have spoken now, being the rapporteur, but she had nominated Mrs Madurell as her replacement; however I do not yet see Mrs Madurell and we are very sorry that she is not here.
I will therefore proceed directly to those speaking on behalf of the groups.
on behalf of the PPE-DE Group. - Madam President, first of all I would like to thank the rapporteur, Mrs Locatelli, for her very thorough and detailed work on this report, which deals with one of the main strategic technologies for our energy future.
I really welcome the initiative of the Hydrogen and Fuel Cells Technology Platform, the key player in achieving success. The concept of JTIs was introduced in the Seventh Framework Programme as a new mechanism to implement long-term, public-private partnership in research at European level. Up to now, four JTIs have been set up in the field of innovative medicines, embedded systems and so on. With this proposal, the fifth JTI will be set up in the field of fuel cells and hydrogen.
Faced with challenges such as electricity security, energy dependency and the often discussed mitigation of climate change, the EU needs to boost the development and deployment of cleaner and more efficient energy technologies. Fuel cells and hydrogen technologies have the potential to contribute significantly towards these goals. The non-existence of a joint European strategy has until now disqualified Europe from keeping up with the Asian countries and the United States.
As regards amendments, I support those which have been tabled in order to strengthen the proposal and to provide coherence with the other JTIs. From my own experience and communication with SMEs, I especially support amendments that put more emphasis on the innovative potential of SMEs and the specific barriers that they encounter, for example in reduced access to research infrastructure. They also need to stress the importance of breakthrough-oriented research. As was mentioned in the Implementation Plan, especially in the early stages research should form an important element of the activities of the JTIs.
In my view, this joint initiative of the public and private sector is the right path to take in order to become more competitive with the USA and other countries which have a tradition and development strategy for hydrogen research.
on behalf of the PSE group. - (RO) I would also like to congratulate the Rapporteur and emphasize the importance of this document. This initiative is extremely important for the research activity. Unfortunately, often funds are insufficient or sometimes inadequately used. The maximum contribution of the European Community to the administrative expenses of this joint undertaking will be 470 million euros. It is possible to provide new funds after 2013 as well, but only for the projects for which a financing agreement is signed by 31 December 2013.
I would like to emphasize the fact that this joint undertaking is extremely useful because it implements and is part of the Framework Programme for Research especially in the field of energy and transport, including aeronautics. I believe this report is extremely important because it co-ordinately supports the research and technological development activities and this initiative will also support the implementation of research priorities in the field of communications and information technology regarding fuel cells and hydrogen, but it will also encourage and increase public and private investment in fuel cells and hydrogen research in the Member States and associated countries.
on behalf of the ALDE Group. - (BG) Europe needs to overcome climate change and ensure security of supply of natural resources. With prices of raw materials and finished goods constantly on the rise, this task is proving to be extremely difficult.
There is a solution, and it lies with new technology which will bring a preventive decrease in green house gas emissions on the one hand, and a more efficient use and savings of raw materials, on the other. This is a way for Europe to be the leader in overcoming global warming and retaining its competitiveness on the global market of raw materials. This requires increased investment in research and new technology, taking into account the potential of each and every Member State.
New technology, hydrogen technology and fuel cell development in particular, will play a key role in overcoming the shortage of energy resources, as well as in environmental protection and meeting the targets set in the Kyoto Protocol. We should consider, however, that these technologies demand the use of metals such as platinum, paladium, gold, which are integral in the design of the new devices and equipment. Only if we implement new, highly efficient and environmentally safe methods to extract and recover these metals, we can have the effective and sustainable development of hydrogen technology and fuel cell development.
Putting a joint undertaking in place should integrate the efforts of all countries which have experience in both the direct development of hydrogen technology and fuel cells, and in developing technologies for the sustainable and environmentally-friendly extraction of the necessary raw materials. It is necessary to encourage these developments in new Member States which have extensive experience in those areas, such as Bulgaria, which has research teams that have been working on such projects for many years now, and have achieved considerable success.
(PL) Madam President, Commissioner, it is hard to disagree with an attempt to establish suitable rules for a joint undertaking in the field of fuel cells and hydrogen technology. Mrs Locatelli's interesting report describes this initiative as a promising example of a public-private partnership for the implementation of a joint technological initiative. Yet in the opinion I have before me, the Council confirms the enormous complexity of the technological challenge involved in the practical application of such cells. The experts are facing an immeasurably difficult task in finding avenues for research that would guarantee a successful outcome. Some scientists, for example, predict the emergence of significant limitations to the practical application of fuel cells. If we accept that hydrogen is only an energy carrier, we must remember that its practical application, in fuel cells for example, requires on each occasion the use of other energy sources for its production. If we overcome that difficulty, further difficulties lie in store, if only the need to find suitable technologies for storing and transporting hydrogen.
I draw attention to this issue with a view to further legislative work on the text on which the European Parliament is delivering its opinion. Let me put it bluntly, and not as some marginal comment: my chief expert says this approach will not succeed.
Member of the Commission. - Madam President, I should like to thank the honourable Members for their comments. I would also like to say that in introducing the Joint Technology Initiatives we are truly starting out with a new concept. I sincerely hope that it works, because this new approach should be instrumental in bringing some new realities to Europe.
What we are introducing is actually a move from financing projects to financing programmes, and stronger support in the private-public partnership, and I mean 'private-public' partnership, because it is clear that initiatives and strategic research agendas are coming from technology platforms which have formed the basis for these Joint Technology Initiatives. Working together is a must, and what I am seeing in these Joint Technology Initiatives is groupings actually coming together on a European Union scale. Some of the major competitors in Europe are coming together so that, in this pre-competitive phase, they are able to pool their knowledge and strengthen Europe on the global map.
I would also like to say, in this context, that this specific technology initiative is extremely important because it relates to the energy sector, and every day we are reminded of the importance of that sector.
One of the most important objectives of the European Strategic Energy Technology Plan (SET Plan) is to accelerate the development and implementation of low-carbon technologies. I know that you are working on your opinion on the SET Plan, and am very much looking forward to hearing your views. As I said earlier, The Fuel Cells and Hydrogen JTI is an interesting model for other areas and will certainly become part of the SET Plan, once it is be approved.
Hopefully we will see the difference this makes in the future. One last thing I would like to mention, as I do not know whether the interpretation was correct, is that the European Commission will contribute up to EUR 470 million for the six years this Joint Technology Initiative is to be implemented and, of course, expects that figure to be doubled by the private sector, which will also contribute to this endeavour.
Mrs Madurell is certainly not here, but I am sure that the rapporteur, Mrs Locatelli, will be in touch because what the Commisioner said is extremely important.
The debate is closed.
The vote will take place on Tuesday at 12 noon.
Written statements (Article 142)
in writing. - (HU) Over the past fifty years the population of the world has doubled, while energy consumption has quadrupled. For this reason, there is no other option but to welcome the Fuel Cells and Hydrogen Joint Undertaking and provide all possible support for its establishment.
I understand Mrs Haug's concerns about the financing of the Joint Undertaking, but financial issues cannot be allowed stand in the way of this initiative. The key words are innovation and change of lifestyle. This, however, costs money, but on the other hand it will bring returns. In modern economies, innovation accounts for 70-80% of annual GDP growth.
Why should we invest in hydrogen? Because it is an intermediate source of energy. 'Supplies' cannot run out; it is the most abundant element in the universe. It can only be considered an alternative to fossil fuels, however, if we can produce it from renewable energy sources at a competitive price, without emitting carbon dioxide or other greenhouse gases into the atmosphere in the process.
In Canada and the USA, the importance of hydrogen was recognised as far back as 2002. Over there, several hundreds of thousands of 'eco-vehicles' are already on the road, and the number of filling stations with hydrogen pumps is steadily increasing. In the European Union, around eighteen thousand eco-friendly vehicles are in operation, while the number of hydrogen pumps available is not even worth mentioning.
If we are to avoid the ultimate collapse, we cannot hold back support for this technology and fuel; we must take action. I would like to use this opportunity to invite my fellow Members to my Greenovation conference, scheduled to take place in Parliament next week, on the afternoon of 28 May. Following the discussions, participants will have the chance to take a ride in a hydrogen-powered bus or car.