Local view for "http://purl.org/linkedpolitics/eu/plenary/2009-04-21-Speech-2-143"
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"en.20090421.19.2-143"2
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"− Mr President, this is the fifth time I have stood before you as you prepare to vote on a Commission discharge resolution. And, for the fifth time, I must admit that – despite unquestionable progress in budget execution – we still do not have a positive DAS.
Article 248 of the Treaty gives the Court of Auditors the task of providing a Statement of Assurance ‘as to the reliability of the accounts and the legality and regularity of the underlying transactions’. It was inserted into the Maastricht Treaty at the last moment without any real discussion about the implications. This has proven highly problematic since.
The so-called negative DAS is part of the Court of Auditors’ opinion. It says that certain areas of expenditure are still materially affected by errors, although to different levels. The Court also states that our annual accounts are reliable and gives many positive and adequate comments about our financial management. As such, the DAS does not sound at all special, compared to how audit opinions are generally phrased.
But we face a highly politicised and often deliberate misinterpretation of this sentence. So I must confess that it has surprised me how difficult it is to convince elected politicians and public opinion that budget management in the European Union is much better than what is reflected in this sentence. So we must do something to end this damaging political assessment of the use of European funds.
For urgent, more guaranteed results, one could imagine three options:
Option one: change the Treaty. The way the current Treaty is phrased, the reasonable public expectation for sound financial management has been undermined – automatically and almost inevitably – every year since the Maastricht Treaty entered into force.
During the Intergovernmental Conference on the Lisbon Treaty, I looked at whether one could fix Article 248 of the Treaty. Together with the Court, we looked at what could be a more realistic task for the Court, perhaps covering the budget over a three-year cycle, rather than annually, and asking the Court to take into account that most Commission control systems are multi-annual, ensuring that errors are corrected over time. We contacted several national delegations: they all agreed; nobody acted.
Option two: I now come to the second option and the most radical short cut to the positive DAS. Under the current Treaty we should perhaps stop allocating funds to management schemes so complex that we cannot meet the current low thresholds for error.
If we cannot collectively handle the current sophistication, then we must simplify. ‘Simplify’ is a nice word which everybody likes. There are millions of transactions to check. How could 480 auditors, based in Luxembourg, however competent, working with a very complex legislative environment, in 27 Member States with 23 official languages, possibly have the basis for issuing a statement each year on the legality and regularity of all underlying transactions in all spending areas?
If you wish simplification to have a quick and effective impact on the error rate, my view is that it means abandoning shared management in some areas. It means reducing the number of transactions from millions to a few thousand.
Taking the example of the Structural Funds, it would mean clearly defining the responsibilities that are currently shared. To achieve that, the Structural Funds could be turned into budget support to the poorer regions. An eligible region or Member State would see EU funds channelled into the state budget, to be spent via national systems, under the exclusive accountability of the minister of finance, and audited by the supreme audit institutions of Member States.
In the draft resolution before you (paragraph 58), the rapporteur…
A Member State would get one annual tranche from the EU budget, and would be accountable to its own citizens and other Member States based on results. Eligibility rules, procurement procedures and absorption rates would no longer be a European problem.
In this radical scenario, we would drop the millions of projects too small and sophisticated to be under arms-length oversight from Brussels. No more small, creative projects ending up being ridiculed in the Euro-sceptic press!
Option three: If you cannot change the Treaty or its interpretation, we could perhaps discuss what it means for a given type of transaction to be ‘OK’. We could set realistic and cost-effective thresholds for what ‘legal and regular’ is.
This is the discussion about tolerable risk. For the moment, the Court applies a uniform 2% materiality threshold across the board. The Court itself has asked for better risk analysis and political agreement on the tolerable risk in various budget areas.
To move this discussion forward, you now have a communication from the Commission on the table. Your rapporteur is suggesting welcoming this communication as a ‘solid methodological basis’ and calls for further analysis, data collection, dialogue and concrete proposals. I would be grateful for this support and suggest we move ahead as quickly as possible. The Council also now seems ready to engage.
Based on your overall political support, the Commission would like to proceed with proposals to set specific tolerable risk levels, budget heading by budget heading. For each future spending proposal, you would be asked to ‘tolerate’ a carefully calculated level of risk, so that the Court – hopefully – would adjust its materiality threshold on that basis.
We must start now. If we wait for a revised Financial Regulation, or indeed the next Financial Perspectives after 2013, this would not be reflected in the discharge procedure for the next five years.
Ladies and gentlemen, today you are preparing to vote on whether to grant discharge for 2007, a year for which the auditors now say that for all budget areas except that the Structural Funds, as much as 95% or more of the payments are free from serious financial error.
This is the best DAS ever, an improvement over last year, for a year with higher payment levels, in an increased number of Member States, the EU-27. Our financial management is steadily improving and it is certainly good enough to deserve discharge. But it cannot stand the test of perfection.
The EU was created to bring peace and prosperity. It has delivered so far. Obviously, looking at the EU’s institutional set-up, it is possible that no auditor was present at its creation and so it is not perfect. But audit perfection is a rare phenomenon anywhere in the world.
‘calls on the Commission without delay [
] to submit its proposals for achieving the objective of a positive DAS’.
Thank you for your attention and please vote in favour of discharge. You will see no complacency from the Commission.
So I will do this, ‘
’.
I will give the three main reasons why, in my view, we did not achieve a positive DAS, although this was the objective set at the beginning of the current Commission mandate.
We probably relied too much at the beginning on Member States sharing our concern about the negative public and political impact of the negative DAS when, in fact, our call for action only really became effective when backed up by the policy of ‘warn, solve or suspend payments’. So there was too much carrot and too little stick initially.
We have also pursued evolution rather than revolution. We put aside more radical solutions, for instance on simplification, in our pioneering attempt to fix the DAS.
Obviously, five years for our Action Plan was not enough. Some results of our Action Plan are only now starting to show their impact. The next Commission will reap the benefits, which without the Action Plan could not be expected.
But your question is, ‘how and when can you guarantee a positive DAS?’ First, I should remind honourable Members what the so-called ‘negative DAS’ is."@en1
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