Budgetary control : 1996 discharge raises issue of confidence in the Commission

Parliament has the power, after examining the report drawn up by the EU Court of Auditors, to “give a discharge” to the Commission in respect of the implementation of the budget (see Article 206 of the Treaty). In order to protect the taxpayer's money it checks that budget funds have been spent economically, efficiently and in accordance with principles of sound financial management. For the purposes of the discharge it can ask the Commission to provide it with any necessary information. The Commission must then make every effort to respond to Parliament's observations.

Having identified various shortcomings in the Commission's implementation of the 1996 budget, Parliament decided on 31 March 1998, on a proposal by its Budgetary Control Committee, to postpone its decision on the discharge. It asked the Commission to provide it by the autumn with full, satisfactory explanations of a number of points, namely the lack of action taken in response to its recommendations (e.g. on computerised transit control and the BSE crisis), the lack of democratic accountability in the fight against fraud inside the EU institutions, the mismanagement of expenditure on the main foreign policy programmes, the lack of any precise information on the outcome of measures to support SMEs and, lastly, staff management problems.

The Budgetary Control Committee regarded the Commission's answers as insufficient. Its report to Parliament on the Commission's budget management was highly critical, although it did propose (by a slender majority of 14 votes to 13) that the discharge be given. On 17 December 1998 Parliament accepted the committee's assessment but rejected, by 270 votes to 225, the proposal to grant a discharge. The rejection of the proposal to grant a discharge (as in 1984) meant that the procedure was not concluded. The matter was referred back to the Budgetary Control Committee and Parliament will have to look at it afresh.

At all events, these developments raised a crucial question: leaving aside the accounting aspects of the discharge issue, did the Commission enjoy Parliament's political confidence?

Committee of experts set up to look at the Commission's management

Once the proposal to grant the discharge had been rejected, the issue of parliamentary confidence in the Commission moved to the fore. As the Treaty contains no provision for a vote of confidence in the executive (i.e. the Commission), on 11 January 1999 Parliament debated two motions of censure designed to bring about diametrically opposed results. The motion tabled by the Socialist Group was in fact intended to express confidence in the Commission, while the other, signed by MEPs of all political groups, sought to sanction the Commission and thereby oblige its members to resign.

During the debate the Commission had to reply to questions from MEPs regarding the measures it planned to take in order to deal with the crisis of confidence that had arisen. Its response was disappointing.

On 14 January 1999 Parliament adopted a resolution (by 319 votes to 157, with 54 abstentions), calling for a committee of independent experts to be set up with a mandate "to examine the way in which the Commission detects and deals with fraud, mismanagement and nepotism". The committee was instructed to deliver an initial report by 15 March 1999. Parliament would then decide on its response to the committee's findings. In the same resolution Parliament called on the Commission to throw full and unrestricted light on any supposed cases of fraud and, if responsibility were proved, to take whatever measures might be necessary, even if this meant the removal from office of the Commissioners responsible, as provided for in the Treaty (see Articles 159 and 160). In addition, the Commission was asked to submit proposals as soon as possible for far-reaching reforms of its organisation and working methods.

Parliament thus opted not to censure the Commission. The only censure motion tabled in the end (the Socialist Group's censure motion having been withdrawn following the adoption of the resolution) was rejected by 293 votes to 232 with 27 abstentions.

Damning report forces Commission to resign

In the late afternoon of 15 March 1999, the committee of five independent experts delivered its initial report to the President of Parliament, José María Gil-Robles, and the President of the Commission, Jacques Santer.

The report was severe in its judgment of the Commission's management. It stressed the responsibility of the Commission as a whole, as well as of individual Commissioners, for fraud, irregularity or mismanagement in their respective spheres of competence. The experts did not point to any cases of fraud which could be laid at the door of individual Commissioners or any cases in which Commissioners had profited personally. However, they did say it was "a serious admission of failure" that "undoubted instances of fraud and corruption in the Commission have thus passed 'unnoticed' at the level of the Commissioners themselves". The protestations of ignorance on the part of the Commissioners concerning problems that were often common knowledge in their services were "tantamount to an admission of loss of control by the political authorities over the Administration that they are supposedly running", which itself implied that they bore "a heavy responsibility".

Late on the night of 15 March the Commission responded to the report's conclusions by resigning - the first time this had happened in the Community's forty years of existence.

Parliament's Conference of Presidents (which is composed of the President of Parliament plus all the political group chairmen) took note of the Commission's resignation. The very next day it called for the outgoing Commission to be replaced swiftly, before the European elections in June. Mr Gil- Robles then discussed this matter as well as a possible timetable with the Council President-in- Office, Gerhard Schröder.

On 23 March in Brussels, Parliament adopted a resolution, by 442 votes to 33 with 53 abstentions, in which it said "the institutional crisis represents an opportunity to reinforce the political and democratic dimension of the EU". Bolstered by the experts' report, Parliament called for "a new, strong, politically responsible and efficient Commission" and for Commissioners to have "individual executive responsibility". It called on the European Council at its extraordinary meeting in Berlin [24-25 March] to put forward "a precise and reasonable calendar" for appointing the new Commission and also "as a matter of urgency to put forward their candidate for the post of President of the Commission and subsequently for those of Commissioners".

The Commission, whose practices and procedures will be the subject of a second report by the Committee of Experts, which is to be drawn up by early September and is to contain recommendations for change, must for its part, says the resolution, "initiate an ambitious and thoroughgoing programme of radical reform of its financial management and financial control procedures" to ensure transparency.

On 24 March the European Council nominated the former Italian Prime Minister, Romano Prodi, to be President of the Commission. Under the Treaty, the EP must be consulted for Mr Prodi's nomination to be confirmed. Parliament intends to play its part to the full and will give its approval at the May part-session.

Further information: Georgios GHIATIS - tel. 02/284 22 16; email: gghiatis@europarl.eu.int