"EU financial management needs to be improved," warns president of Court of Auditors

A new management culture based on performance with simple rules and clear objectives - Vítor Caldeira, president of the European Court of Auditors, is very outspoken about how the EU should improve its finances. The Court has just released a report on how the EU's budget for 2012 was spent, but Mr Caldeira believes there is much that can be improved. We asked for his ideas in an interview following a meeting of the budgetary control committee on 5 November, where he presented the report.

European Court of Auditor President Vítor Manuel da Silva Caldeira
Vítor Manuel da Silva Caldeira

The error rate in EU spending has been increasing in recent years. Do you see progress in the EU's financial management?


The financial management of the European Union needs to be improved. Our major concern is how to improve things for the 2014-2020 financial period. The error rate has increased over the last three years, it is true, but the most important thing is to see what we can do so that the next programming period delivers a new management culture based on performance, with simple rules, clear objectives, and assessing outcomes that provide value to the European citizens.


You spoke in the meeting about recovering money whenever there are errors. How can this be achieved?


Financial corrections, as such, do not always mean that the money is taken back from the beneficiaries [who have not complied with the criteria]. In some instances, you transfer money from one project that is not eligible to another project that is eligible. For member states, there is no net correction: they have the same amount of European funds. We need a system that imposes net corrections to create incentives for member states to better respect the rules.


Reactions from MEPs


We also asked MEPs what they thought about the ECA's annual report and whether there is now better control over EU spending. Markus Pieper, a German member of the EPP group, responsible for the 2012 budget discharge of the Commission, commented: “The overall error rate has increased for a third year in a row… Noticeable problems persist, especially in Spain, Greece and Italy. For granting discharge I will urge the Commission to take greater responsibility including imposing financial losses on member states, which are unable to establish an effective control system. Over the last few years Romania, Poland and the Czech Republic exposed increasing problems."


Meanwhile budgetary control committee chair Michael Theurer, a German member of the ALDE group, added: "In the majority of cases member states had sufficient information available to have detected and corrected the errors… The Commission must provide more guidance to member states, but also be put in the position to inflict financial 'punishments' on repeat offenders."


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