EU suspends funding for Bulgaria, Berlusconi's immunity law passed

ircoha

http://news.bbc.co.uk/1/hi/world/europe/7520736.stm

The European Commission has suspended EU aid to Bulgaria worth hundreds of millions of euros because of concerns about corruption and organised crime.

http://www.rte.ie/news/2008/0723/berlusconis.html
he Italian parliament has approved a law giving Prime Minister Silvio Berlusconi immunity from prosecution.

Spot the difference:mad:

bugler

I'm not sure what the EU is moving towards, but it ain't democracy.

seamus

The difference is:
Bulgaria apparently has strong links between its politicians and organised crime as well as massive problems with internal checks.

Italy's PM is under investigation for possible corruption charges and he's frozen the ability to prosecute him while he's in office.

The EU has no remit to interfere in the parliamentary process of Italy. I don't know what you're trying to point out here - what do you expect the EU to do?

Now I (and the dogs on the street) can see exactly what Berlusconi is doing, but he's not saving himself from any kind of investigation - as soon as he's out, he can be investigated.

You're confusing actual crimes being committed in Bulgaria with a halting to a legal process which is investigating an innocent man in Italy. If you have proof that Berlusconi is in fact a criminal, then you may be onto something.

Tim Robbins

bugler wrote: »

I'm not sure what the EU is moving towards, but it ain't democracy.

I'm not sure you're differentiating between EU law and Italy!!
But I agree with your sentiment, corruption is wrong.

kmick

Im delighted with the news on Bulgaria - the money they got in effect goes straight into the pockets of the mafia. Italy is also very corrupt but is I imagine a net contributor to the EU. Berlusconi is a crook of the highest order. So is Bush, Mugabe, most of the central european leaders, Bertie etc. Its rather depressing if you dwell on it for too long.

bugler

I'm not sure you're differentiating between EU law and Italy.

I couldn't give a toss about either law. Or indeed law in general (I spent long enough studying it).

A large, important EU country is headed by a guy who'd be less out of place in an oil rich African backwater. He owns the media, he can halt his own prosecution. Nevermind what this tells us about Berlusconi, what does it tell us about Italy? He probably be dead or too ill by the time any charges might be brought against him.

Sarkozy has shown his democratic credentials. And these are the guys we (with our already maggot ridden political system) are to tie ourselves to? These are our peers?

How many straight faces will be at the next EU meeting in which Italians condemn the weakening of the judiciary in some Arab country? Will Sarkozy be able to control his sniggering when France next chides the failings of the Africans electoral system?

auerillo

I assume everyone else sees the irony and the hypocracy in the Eu, an organisation where fraud is so widespread that their accounts have not been signed off by auditors for years, lecturing Bulgaria for fiddling the books.

While I think the EU is in many ways a force for good, sometimes they get my goat up with their snactimonious hypocracy.

Scofflaw

auerillo wrote: »

I assume everyone else sees the irony and the hypocracy in the Eu, an organisation where fraud is so widespread that their accounts have not been signed off by auditors for years, lecturing Bulgaria for fiddling the books.

Not really, since the books do get signed off every year.

cordially,
Scofflaw

a5y

auerillo wrote: »

in the Eu, an organisation where fraud is so widespread that their accounts have not been signed off by auditors for years...

Scofflaw wrote: »

Not really, since the books do get signed off every year...

OK, I'm confused now. I've no idea about the inner workings of the EU budget and I don't follow current events. Are the EU's accounts audited and scrutinized thoroughly or not?

Scofflaw

a5y wrote: »

OK, I'm confused now. I've no idea about the inner workings of the EU budget and I don't follow current events. Are the EU's accounts audited and scrutinized thoroughly or not?

They pass the standard audit every year - so the accounts are a 'true and fair' account of the EU's money. However, every year for the last 13 years they have received a 'qualification', which means that they have not passed the full test.

The Court of Auditors is obliged by the Treaty of Maastricht to provide on an annual basis its declarations of assurance:

* on the reliability of the EU accounts (i.e. whether every euro paid to and spent by the EU budget was properly recorded in the books);
* on the legality and regularity of the underlying transactions (i.e. whether the payment was made on time, whether the documentation is complete, whether all legal requirements were met, whether the best and cheapest offer was selected, etc.).

Ever since the first DAS in 1994, the Court has declared the EU accounts as reliable (i.e. it has given its positive statement of assurance – or a ‘clean bill of health’ - on the EU accounts). On the other hand, so far the Court has not been able to give a complete positive assurance on the underlying transactions, which is often wrongly interpreted as a negative opinion on the accounts as such.

Many experts say openly a positive DAS on all the underlying transactions is technically impossible (see also Methodology of the audit). The EU test is quite unique, and much tougher than in the private sector or national systems. Private companies are audited for the reliability of their books, but not for the regularity of their transactions. And national budgets en masse are hardly ever subjected to a single annual assurance by auditors. In the UK system for instance, as many as 500 accounts which form the central government budget receive each a separate declaration.

Most of the errors and problems are in the bits of the EU budget that is channeled through national civil services (in particular the CAP money). Three quarters of the EU budget actually flows through the national governments:

For the last eleven years we have grown used to the news headlines ‘Auditors reject EU accounts again’ or ‘EU accounts fail to pass muster.’ Basically, Euro-sceptics like to blame Brussels for this problem, because the European Court of Auditors has refused to sign off the Europe’s books again. In fact much of the blame should be addressed closer to home, since over 80% of EU spending is conducted by national and regional authorities. Brussels, itself has done much to improve, within its remit, its standards of accountancy and governance, but it is national governments that have resisted the significant reforms required to resolve this issue.

Putting it bluntly, unless member states are prepared to surrender parts of their sovereignty to Brussels, on their spending of European taxpayer’s money, accountancy reforms will only have a marginal affect on improving the accountability of how the EU budget is spent in member states.

So, far from it being 'irony and hypocrisy' that the EU is "lecturing Bulgaria for fiddling the books", that's actually addressing the problem of EU accounting - because the national governments largely are the problem. If Bulgaria mends its ways, the EU moves another step further towards both passing the audit as per present, and receiving the 'assurance' on top which it currently lacks.

It's convenient for Eurosceptics to represent this as 'failing the audit', which implies no-one knows how the money is being spent, but the audit is OK every year. The money is going where it's supposed to be going - fraud in the EU accounts is less than 1%, most of which is recovered. What they haven't eliminated is late payments, overpayments, underpayments, errors on the documents, and the like - in other words, they haven't eliminated the possibility of fraud, which is the goal.

It's also convenient for Eurosceptics to represent this as an EU problem, but it's actually a national problem.

Anyway, that's how it's possible for Auerillo and myself to make these completely contradictory statements - the EU accounts pass their audit every year, but fail an additional standard they've set themselves, largely as a result of irregularities in the paperwork of the national civil services handling the money.

cordially,
Scofflaw

oscarBravo

Scofflaw wrote: »

Anyway, that's how it's possible for Auerillo and myself to make these completely contradictory statements - the EU accounts pass their audit every year, but fail an additional standard they've set themselves, largely as a result of irregularities in the paperwork of the national civil services handling the money.

The difference is, you set out the actual situation, presenting both sides of the story. Despite having had both sides set out - repeatedly - over the past couple of months, auerillo continues to peddle the blatant less-than-half-truth about the auditors never having signed off the books.

This leads one to question auerillo's agenda in this matter - why repeatedly peddle lies which have been repeatedly countered?

Scofflaw

oscarBravo wrote: »

The difference is, you set out the actual situation, presenting both sides of the story. Despite having had both sides set out - repeatedly - over the past couple of months, auerillo continues to peddle the blatant less-than-half-truth about the auditors never having signed off the books.

This leads one to question auerillo's agenda in this matter - why repeatedly peddle lies which have been repeatedly countered?

Well, they're good lies. Very simple to state, and the explanations necessary to refute them are complex, dull, and technical - as per the above.

cordially,
Scofflaw

thehighground

oscarBravo wrote: »

The difference is, you set out the actual situation, presenting both sides of the story. Despite having had both sides set out - repeatedly - over the past couple of months, auerillo continues to peddle the blatant less-than-half-truth about the auditors never having signed off the books.

This leads one to question auerillo's agenda in this matter - why repeatedly peddle lies which have been repeatedly countered?

Below is a link to a news report from the BBC headlined "EU accounts failed for 13th year" from the end of last year. Perhaps you or Scofflaw would like to point out the less-than-half-truths in it.

From what I know of your average company audit - most reputable auditors would have resigned from auditing a company accounts that included that note after 2 years. A Government Auditor should have an even higher standard of accountability.

Scofflaw blames various governments and CAP for the problems - but it was the EU who came up with a claim system what was unworkable and far too complex and bureaucratic, with slight errors in the form filling causing major problems and hardships for some people who were depending on these payments.

So, do you think this is ok then that -

The IACS system, which covers 70% of agriculture spending, "is effective at limiting the risk of irregular expenditure"

At least 12% of regional development aid was affected by errors, including money paid out to ineligible claimants

Significant errors were found in internal spending, mainly due to claimants inflating costs

http://news.bbc.co.uk/2/hi/europe/7092102.stm

Hitman Actual

thehighground wrote: »

Below is a link to a news report from the BBC headlined "EU accounts failed for 13th year" from the end of last year.

After a quick read of that link, it seems to agree entirely with what Scofflaw pointed out in his post. I don't understand your argument.

thehighground

lenny_leonard wrote: »

After a quick read of that link, it seems to agree entirely with what Scofflaw pointed out in his post. I don't understand your argument.

Depends on your standards of what is acceptable - I think that 13 years of funds going astray (including fraud) is rather a long time for that to be happening. Much of the CAP was just way over the top bureacracy (jobs for the boys, maybe?)

This failure to come up to standard would not be acceptable in a normal business and reputable auditors would resign as auditors from the accounts - they just would not keep auditing accounts that they knew there was problems with.

The EU auditors seem to be political appointments - Marie Geoghegan-Quinn - for instance!

Scofflaw

thehighground wrote: »

Below is a link to a news report from the BBC headlined "EU accounts failed for 13th year" from the end of last year. Perhaps you or Scofflaw would like to point out the less-than-half-truths in it.

See below - the article isn't actually too bad, but the headline is.

thehighground wrote: »

From what I know of your average company audit - most reputable auditors would have resigned from auditing a company accounts that included that note after 2 years. A Government Auditor should have an even higher standard of accountability.

Indeed - and the reason the Court of Auditors has not thrown in the towel is because the accounts pass the standard audit tests - what they fail is an additional test that no-one else uses. It's been pointed out that UK government accounts would receive the same qualification if they were audited to the same standard:

Since 1994 the Court has been required to provide a "declaration of assurance" (Cf. positive assurance). This has proved a problem due as ever since then they have been unable to provide it due, refusing to endorse large parts of the budget despite on declaring the accounts to be "reliable". This has led to media reports of the EU accounts being "riddled with fraud" where as the problems centre more on errors in paperwork despite correct spending. Hence the system has drawn criticism due to creating this perception. The Commission in particular have stated that the bar is too high and that only 0.09% of the budget is subject to fraud.

The EU had to issue a press release on 24 Oct 2006, to answer to the falsehood that "Annual accounts have not been certified by the external auditor since 1994"[13]: "Myths or facts – what do you prefer?"[14] [15]

Terry Wynn MEP who served on the Parliament's Committee on Budgetary Control has also backed these calls stating that it is impossible for the Commission to fall within these standards. By comparison, the Auditor General for the United Kingdom stated that there were 500 separate accounts for the UK and "in the last year, I qualified 13 of the 500. If I had to operate the EU system, then, because I qualify 13 accounts, I might have to qualify the whole British central government expenditure". Despite the problems, the Barroso Commission has stated that it aims to bring the budget within the Court's limits by the end of its mandate in 2009.[12]

Speaking from personal experience, the Irish government's accounts don't even approach such a standard. Government departments have buildings they are paying for maintenance on, even though the buildings have been sold, because the database of building ownership is out of synch with the building maintenance database.

thehighground wrote: »

Scofflaw blames various governments and CAP for the problems - but it was the EU who came up with a claim system what was unworkable and far too complex and bureaucratic, with slight errors in the form filling causing major problems and hardships for some people who were depending on these payments.

The EU doesn't dictate the claim systems, as far as I am aware - that is up to the national government. CAP has improved, apparently, in recent years, but there's still a lot of problems in the structural funds, which are also processed through national civil services.

By the way, the fact that "slight errors in the form filling cause major problems" is the flip side of trying to achieve the complete positive assurance on the accounts - incorrectly filled forms being allowed for claims is exactly the kind of 'irregularity' that leads to the qualification of the accounts in the first place.

thehighground wrote: »

So, do you think this is ok then that -

The IACS system, which covers 70% of agriculture spending, "is effective at limiting the risk of irregular expenditure"

At least 12% of regional development aid was affected by errors, including money paid out to ineligible claimants

Significant errors were found in internal spending, mainly due to claimants inflating costs

It's not OK, but it is, once again, a national issue. The EU has suspended regional development aid to bits of England for irregularity before.

thehighground wrote: »

http://news.bbc.co.uk/2/hi/europe/7092102.stm

Now, the BBC article is more slanted at the top than the bottom - the top of an article is usually the 'editorialised' bit. So, at the top we have:

The auditors for the EU have refused to sign off the bloc's financial accounts - for the 13th year in a row.

A report by the European Court of Auditors (ECA) criticises nearly every major area of the EU's expenditure.

The auditors say there are weaknesses across the board and complain of neglect and presumed attempts at fraud.

That brief summary makes it sound like the EU accounts are riddled with fraud and neglect. At no point is it made clear that the statements refer only to the 'positive assurance', and that there is no part of the EU budget that fails a standard audit.

The European Commission has blamed member states for audit failings, and says it has suspended £1.2bn in payments to English regions.

And the EU is attempting to shift the blame.

Errors of legality and regularity still persist in the majority of the EU's 106bn euro annual budget (£75bn), according to the Court of Auditors. Its President, Hubert Weber, calls on the commission to lead by example in making improvements.

The report explains that much of the misspending is caused by poor knowledge of complex rules but presumes that fraud also exists.

Again, the frightening phrase "errors of legality and regularity" means things like late payments, incorrect documentation - and the way it's phrased there suggests that that affects the majority of transactions, rather than, as the case actually is, affecting some transactions in the two-thirds of budget areas.

Further, 90% of the irregularities are at the final claimant level (source: Auditor's Report) - that is, where individual claimants are dealing with national civil services. Again, there's a choice at that level between refusing to pay out on a claim unless it's perfectly filled in (which prevents 'irregularities') or doing so (preventing 'hardship').

To quote the Auditor's Report:

VII. In the Court’s opinion, except for the effects of the matters described in paragraph VIII, the ‘Final annual accounts of the European Communities’ present fairly, in all material respects, the financial position of the Communities as of 31 December 2006, and the results of their operations and cash flows for the year then ended, in accordance with the provisions of the Financial Regulation and the accounting rules adopted by the Commission’s accounting officer.

The vital phrase there is "present fairly, in all material respects, the financial position of the Communities as of 31 December 2006, and the results of their operations and cash flows" - which is the opposite of what is implied by "EU fails its audit".

For completeness, this is Para VIII referred to:

VIII. The Court’s audit has identified errors in amounts registered in the accounting system as invoices/cost statements and pre-financing which have the effect of overstating the accounts payable by some 201 million euro and the total amount of long and short term pre-financing by some 656 million euro.

(Just to put that in perspective, those two figures between them represent 0.5% of the EU budget.)

In summary, the EU accounts are not 'riddled with fraud', and do not 'fail normal audit standards' - they are riddled with badly filled in paperwork, originating largely from the interface between national civil services and the claimants they deal with.

It's not ideal, but it's a far cry from the picture painted by the tabloid headlines.

cordially,
Scofflaw

Hitman Actual

thehighground wrote: »

Depends on your standards of what is acceptable - I think that 13 years of funds going astray (including fraud) is rather a long time for that to be happening. Much of the CAP was just way over the top bureacracy (jobs for the boys, maybe?)

This failure to come up to standard would not be acceptable in a normal business and reputable auditors would resign as auditors from the accounts - they just would not keep auditing accounts that they knew there was problems with.

The EU auditors seem to be political appointments - Marie Geoghegan-Quinn - for instance!

Most of that was dealt with by Scofflaw (thankfully!), but regarding the auditors, they appear to be an extremely qualified group, if you look at their bio's.

Scofflaw

thehighground wrote: »

Depends on your standards of what is acceptable - I think that 13 years of funds going astray (including fraud) is rather a long time for that to be happening. Much of the CAP was just way over the top bureacracy (jobs for the boys, maybe?)

This failure to come up to standard would not be acceptable in a normal business and reputable auditors would resign as auditors from the accounts - they just would not keep auditing accounts that they knew there was problems with.

Quite true - but, again, briefly, the point is that the EU meets those standards every year.

Final quote, from a House of Lords report:

10. What is indicated by a lack of a positive Statement of Assurance has been a matter of some dispute during our inquiry. This lack of a widely understood definition was recognised by Mr Josef Bonnici, the Member of the European Court of Auditors responsible for the Statement of Assurance. He told us that the Court's worry was that "it can sometimes be misunderstood" (Q 83). There was, however, unanimous agreement among those we took evidence from that, as Ivan Lewis MP put it, "it is wrong that it is presented as mainly being about fraud because that is not accurate" (Q 44).

11. We share the concern raised with us by the European Court of Auditors that their decision not to give a positive Statement of Assurance can be misunderstood. We recognise that the lack of a positive Statement of Assurance does not necessarily indicate that high levels of fraudulent or corrupt transactions have taken place. We do not seek to detract from the importance of the issue, nor from the evident underlying problems which have resulted in 12 successive qualified audit opinions. However, we consider that a more accurate reflection of the substance of the Court's annual audit and the Statement of Assurance would be achieved if these two functions were more clearly separated. In addition, the single Statement of Assurance should be split into a series of statements on each of the different spending categories.

So, while it is a terribly attractive misrepresentation, a misrepresentation it remains. There issues, but they are neither the kind of issues the myth implies, nor are they found in the place the myth seeks to pin them.

cordially,
Scofflaw

K-9

This thread should be a stickey!

tolosenc

ircoha wrote: »

http://news.bbc.co.uk/1/hi/world/europe/7520736.stm

The European Commission has suspended EU aid to Bulgaria worth hundreds of millions of euros because of concerns about corruption and organised crime.

http://www.rte.ie/news/2008/0723/berlusconis.html
he Italian parliament has approved a law giving Prime Minister Silvio Berlusconi immunity from prosecution.

Spot the difference:mad:

Bertie was crooked as my grandmother's nose, and did all he could to delay and postpone investigations into his dealings. So was and did Haughey.

Spot the blatant, unfounded dig at the EU by a no voter just trying to score some points.