Member States failing to control fraudulent use of EU funds

12.00.00am UTC (GMT +0000) Thu 4th Dec 2003

EU Member States, responsible for implementing 80% of EU expenditure, are failing to control fraudulent use of European funds, according to London's LibDem Euro-MP Baroness Sarah Ludford.

Commenting on the 2002 report of the European Court of Auditors debated today by the European Parliament in Brussels, Sarah Ludford said:

"It is a scandal that for the ninth consecutive year, the European Court of Auditors has been unable to approve the expenditure of the European Union. Although the auditors were able to sign off the European Community's accounts, 80% of the Union's expenditure is implemented by Member States, and this is where the problem lies."

"The Court of Auditors report shows that in 4 Member States, there were errors in half of all claims on farm subsidies, and in as much as 90% of all claims in Luxembourg. These errors are due to farmers claiming subsidies for more land than is actually cultivated or for a different crop to that planted. The Liberal Group proposes that the European Commission should withhold funds from Member States who fail to apply proper controls on agricultural subsidies."

"The European Parliament must hold the European Commission to account in implementing accounting reforms and tackling fraud at EU level. But Member States must shoulder much of the blame for fraud on the EU budget given that most of the fraud occurs at national level. National governments and the EU institutions need to engage with each other to agree on more effective controls and to meet the repeated concerns of the Court of Auditors."