The Commission led by Jacques Santer was forced to resign in March 1999 when it became clear that it no longer had the confidence of Parliament for its management of EU finances.
Austrian Social Democrat MEP Herbert Bösch was at the heart of events in 1999 and now chairs the Budgetary Control Committee. We spoke to him about what has changed as he prepares for a new budget battle. In 1999 he was a member of that Committee and had written a report calling for the Commission's anti-fraud office to become more independent.
"The first big eruption"
Mr Bösch called the events leading up to the resignation of Jacques Santer's Commission as "the first big eruption" in European affairs. He said the Commission's first reaction was to ask 'Who is the parliament?', failing to read its mood and appreciate the depth of the crisis.
He went on to say that "in European terms it was a revolutionary thing that happened". He told us however: "I think parliament was too shy after 1999 really to use this power". He attributes this to the fact a European election took place later that year which brought in many new members and also to the progressive enlargement of the Union which "weakened the status of integration". "We were 15 in 1999 now we are 27" he remarked.
He also believes that the complexity of EU finance means it takes time for a new budgetary control committee to settle down and become familiar with each other, the issues and the procedures - hence what he sees as a tendency for stronger reports near the end of a parliamentary term.
Independent anti fraud office - OLAF - established
Speaking in an interview for European Navigator in February 2008, Nicole Fontaine, who became Parliament's President in the aftermath of the crisis in 1999, said the affair demonstrated that the European Parliament had achieved an "extraordinary political maturity".
In her view, the affair ranks as one of the key formative moments of the EP alongside the "first election under universal suffrage and the obtaining of the co-decision legislative procedure".
According to Bösch, another key outcome of the Commission's 1999 resignation was the creation of the independent antifraud office with teeth - OLAF: "We created OLAF, I am proud of that, we showed we were not the twins of the Commission: We are the budgetary authority, so we went to the Council to say we want to create a new anti-fraud unit".
There were however many other practical steps that came out of it. The Commission later pushed through reform with a new financial regulation of 2002 to make payments more transparent and budget managers more accountable and the staff reform of 2004 tightened up loopholes exposed by the episode.
Tuesday, 21 April, budget discharge
Budget issues will again be debated by the Parliament as next Tuesday MEPs will debate the budgetary discharge for 2007. Mr Bösch said that the Committee would probably recommend delaying the discharge to fellow Members - especially concerning administrative expenditure at the Council of Ministers.
He is concerned that the administrative expenditure of the Council of Ministers is being used to pay for operations under the Common Foreign and Security Policy. He believes Parliament should have stronger oversight over this money.
Finally, in a message that could be for his fellow MEPs, Mr Bösch told us that: "Parliament should be aware of this power and not try to tame it, this is nonsense! Citizens are not afraid of too much power of the Parliament, they are afraid of too much bureaucracy and a Parliament that has not enough power."
