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Ladies and gentlemen,
It is a special honour and pleasure for me today to accept the award of the Taxpayers Association of Europe Prize for the year 2000, and thus join the select group of those who have been honoured by the TAE with its highest award. I am aware of the significance of this award and express my heartfelt thanks for this great honour. At the same time I regard it as an incentive to pursue my work.
I also regard it as a great honour to be presented with the European Taxpayers Award together with the esteemed Prime Minister of Estonia, Mr Mart Laar. I value this as a particularly positive signal that you are sending his country in the context of the enlargement of the European Union. As this new millennium gets under way, the European Union will be able to embrace Estonia as a new member of its family. It will be welcome among us.
I am also particularly pleased to see once again a former Member of the European Parliament, His Imperial Highness Dr Otto von Habsburg, who is respected across and beyond all the political groups. I am deeply honoured, Dr von Habsburg, that you gave the eulogy, and offer you my warmest thanks.
At today's presentation ceremony I should like to speak about the issue of protecting European taxpayers' money. In particular, I should like to outline the work of the European Parliament's Committee on Budgetary Control, which has done much to help protect EU finances. I must also mention that the good work done by the committee, and the contribution it has made, stand jointly to the credit of all its past and present members, its past and present secretariat officials and all the other officials and staff involved with the 'CoCoBu', as we refer to the committee within Parliament. They all merit considerable praise and recognition, and I am grateful for the opportunity to chair this committee for the third time.
In June 1961 Chancellor Adenauer, one of the founding fathers of a united Europe, described his vision of an integrated Europe in the following terms:
Our objective is to work towards ensuring that the borders of the nation states in Europe will gradually disappear. Our objective is that Europe will one day become a common home for all Europeans, a house of freedom.'
Like every family home, our European house has to be adequately financed, and needs the requisite 'housekeeping money' for this, otherwise the hearth and kitchen will be cold. In addition to this is the fact that the European family is continually expanding, through new Member States, and our European house thus has to be enlarged and extended.
In order to turn this common goal of a united Europe as a house of freedom into reality, in 1970 the Heads of State and Government reached agreement, in the Treaty of Luxembourg, on having a common 'European kitty' and a financial regulation. European resources come from Union citizens in the form of taxes, and are entrusted to the administrators responsible in Europe.
In the short history of the European Union, its budget has grown steadily. While the six-Member Community spent around ECU 10 billion in total in 1969, by 1980, with nine Member States, the figure had risen to over ECU 30 bn, and by 1992, with 12 Member States, to over ECU 60 bn. The EU budget for 2001, covering 15 Member States, is estimated at EUR 97 bn in total.
The continuing expansion of Community expenditure is logical, because an increasing membership naturally increases the size of the budget; in addition, new tasks are increasingly being transferred to the Community by the Member States, and also new Community tasks are being created which also have to be financed.
The right to adopt the budget and the right of budgetary control are among the fundamental democratic rights of any parliament. The drafting of the budget and budgetary control were originally the exclusive preserve of the Council of Ministers. The then German MEP, Dr Heinrich Aigner, was tireless in his efforts to ensure that the right of control over the implementation of the European budget was ultimately transferred to the European Parliament. This was a success for democratic control within the European Community.
Since then, the European Parliament has formed part of the European Union's budgetary authority, alongside the Council of Ministers. It thus has a responsibility for planning and approving the budget, and for budgetary control. The Committee on Budgets and the separate Committee on Budgetary Control are responsible with regard to deliberations and recommendations on the setting of the budget and with regard to the discharge for the Commission by Parliament, meeting in plenary.
Decision-making in the budgetary procedure rests with the Council and Parliament; the Council has the final say on the use of resources where compulsory expenditure is concerned, and Parliament has the final say on non-compulsory expenditure. The budget is enacted by the European Parliament, through the signature of its President.
Budgetary control, on the other hand, is purely a matter for the European Parliament; the Council merely delivers a recommendation. Under the responsibility of its Committee on Budgetary Control the European Parliament exercises political scrutiny over the legality and regularity of EU revenue and over the appropriate use of the expenditure authorised. The Commission is responsible for administering and disbursing EU resources.
In recent years, when financial restrictions have been combined with deep cuts in the Member States' national budgets, there has been an increasing emphasis on ensuring that resources are used properly and efficiently. This is also true where the common EU budget is concerned: European taxpayers' money must be used to good purpose, to further the work of European integration; it must not be wasted or misdirected owing to irregularities, let alone lost through out-and-out fraud.
It is no secret, however, that in human history the misappropriation of taxpayers' money and irregularities relating to State subsidies have existed for as long as taxes have been raised and subsidies have been granted. Unfortunately, therefore, the European Union budget is not immune to fraud either. Irregularities and fraud committed against the Community budget and affecting EU revenue occur in the form of the evasion of customs duty, smuggling and VAT evasion. Under the Commission's responsibility, 85% of EU expenditure is now administered by the Member States. According to official estimates more than 80% of offences relating to expenditure occur within the Member States.
European Union citizens rightly demand that, as taxpayers, their money should be handled as if it were in trust, i.e. that it should be administered efficiently, protected against illegal access and used in an appropriate manner to further the process of European integration. Finding appropriate and effective measures to protect the Community budget has become an important issue, which needs to be resolved. This is also a matter for the European Parliament's Committee on Budgetary Control.
To implement the European Parliament's political and parliamentary powers of scrutiny, which are guaranteed by the Treaties, the committee is responsible for drawing up the relevant reports to be voted on in plenary. The reports by the European Court of Auditors form the basis of its work. In addition, it cooperates closely with the Committee on Budgets in drawing up the resolutions on the new budget estimates as part of the annual budgetary procedure.
In general terms, the work of our committee can be divided into three main areas:
Preparation and implementation of the discharge procedure (ex post control) on the basis of the Court of Auditors' annual report, special reports and statement of assurance. The procedure is completed by Parliament's resolution on the discharge for the Commission;
Monitoring of expenditure during the current financial year, which comprises checking the regularity of expenditure and the flow of resources. This includes assessing the efficiency of the various types of Community financing and programmes, and also of the implementation of measures financed by the Community, for example; it also covers the examination and political evaluation of the European Court of Auditors' special reports and opinions;
The Committee on Budgetary Control places particular emphasis on the fight against irregularities and fraud committed against the Community budget.
Initiatives by the European Parliament have brought about continuous progress in protecting the Community's financial interests. The positive results of the CoCoBu's work are a considerable achievement. Let us take a look together at its development, with the protection of the Community's financial interests particularly in mind.
The long road towards a uniform approach to combating fraud is not an easy one, and many a stumbling-block has impeded, or still impedes, the way. In the past, Parliament frequently had to assert itself against the Member States' national interests.
The first milestone was reached in 1989, with the judgment of the European Court of Justice in a case of fraud relating to Greek maize. The judgement endorsed the European Parliament's demands for Member States to be required, in accordance with Article 5 of the EEC Treaty, to punish breaches of Community law in the same way as breaches of national law.
In the same year, 1989, the CoCoBu was able to record a further success on the road towards Community action to combat fraud. In response to consistent pressure from the European Parliament, the central unit for combating fraud, known as UCLAF (Unité de la Coordination de la Lutte Anti-Fraude), was set up within the Commission and made accountable to the Secretariat-General.
Precisely ten years later, the independent European Anti-Fraud Office, known as OLAF (Office de Lutte Anti-Fraude), arose from the former UCLAF and officially started operating on 1 June 1999. The Treaty basis for OLAF is to be found in the Council and Parliament Regulation of May 1999 and the Interinstitutional Agreement between the Council, Parliament and the Commission of May 1999.
I am particularly pleased to welcome OLAF's Director, Mr Franz-Hermann Brüner, among us today.
Over these ten years the CoCoBu has some achievements to its credit, and I should just like to mention a few of its successes here.
The Maastricht Treaty of 1993 saw the first step towards satisfying the European Parliament's demands for the Community's financial interests to be protected. The newly created Article 209a provided for the following:
1. the obligation for the Member States to protect the Community's interests on an equal footing with their own financial interests;
2. the obligation for the Member States to cooperate in this field. One difficulty remained, however: since the level of protection provided varies considerably from one Member State to another, the principle of placing national and Community interests on an equal footing remained relatively ineffective.
The criminal protection of financial interests, unlike their administrative protection, lies outside the Community's remit, since it remains a matter for the Member States. In order to respond to the European Parliament's demands for approximation in the field of criminal law to simplify cross-border cooperation between the Member States and the Commission, the Cannes European Council in 1995 signed a Convention on the protection of the Communities' financial interests. The Convention concerns the approximation of criminal law and judicial cooperation, and defines the elements constituting fraud. It was supplemented by two Protocols in 1996 and 1997. Unfortunately, it has still not been ratified by all the Member States, and therefore cannot enter into force.
A step forward was made with the Council Regulation of November 1996 concerning on-the-spot checks. It provides for close cooperation between national authorities and between them and the Commission. It places Commission inspectors on the same footing as Member States' inspectors, thereby conferring on Commission reports the same value as evidence before the courts as reports by the Member States. UCLAF's powers of control and inspection were thus regulated in detail. This was always a matter of great interest to the CoCoBu.
In its resolution of 19 September 1996 the European Parliament reiterated the call that it made to the 1996 Intergovernmental Conference, namely for a legal basis permitting the adoption of anti-fraud legislation under a codecision procedure to be included in the new Treaty on European Union.
Some progress with regard to the protection of European taxpayers' money was achieved in the 1997 Treaty of Amsterdam, which entered into force on 1 May 1999, in the shape of the new Article 280 of the TEU. The following were created:
1. a legal basis for Community legislation for the prevention of and fight against fraud affecting the financial interests of the Community. These measures do not affect the application of national criminal law or the national administration of justice;
2. a requirement to ensure cooperation between national administrative authorities (including authorities responsible for prosecution) and the Commission.
A further milestone was reached at the Helsinki European Council in December 1999. Point 24 ('Combating fraud') of the Conclusions is worded as follows: 'The establishment of the European Anti-Fraud Office (OLAF) marks an important new step in the fight against fraud. The Commission will present by June 2000 a communication with a view to further developing a comprehensive strategy for the protection of the financial interests of the Community.' This communication provided the basis for my most recent report, which was adopted by the European Parliament in plenary last December.
Our work over the past ten years has not always been easy, but we have achieved a few successes in securing protection for European taxpayers' money. During this period our committee has regularly sought dialogue with national parliaments and international experts, particularly in the academic and practising legal field. Four public hearings have taken place since 1995, and these have made a definite contribution to shaping the content of our work.
The Committee on Budgetary Control played a decisive role in connection with the events which culminated in the resignation of the old Commission as a body in March 1999. In 1998 the European Parliament, guided by the Committee on Budgetary Control, had refused to grant the Commission a discharge for the 1996 financial year, accusing it of mismanagement and nepotism. It was really no easy matter for us to come to this judgment on the old Commission, but unfortunately we had no alternative. This abrupt end brought with it the hope of a healthy fresh start.
The Committee on Budgetary Control is critically and constructively involved in the far-reaching administrative reform of the Commission being undertaken by Neil Kinnock, Vice-President of the new Commission, with priority being given to internal control and management functions. Our primary objective is to have a strong, responsible Commission which is well able to master the future tasks of the European Union in this new millennium.
Where the future is concerned, our committee has new projects, based on the proposals in the 'Corpus Juris' research study, for the establishment of a European financial public prosecutor.
The theme of the hearing held by the Committee on Budgetary Control on 22 November in this connection was strengthening the protection of the EU's financial interests. The aim was to continue the political debate among decision-makers at European and national level and to highlight new ways in which European taxpayers' money might be protected against misuse in future in an enlarged European Union.
The main focus of the conference was provided by the speakers' contributions and discussions concerning the establishment of a European public prosecutor, as I had proposed in my parliamentary report early in 2000. That report, on introducing protection under criminal law of the Union's financial interests, had been adopted by a large majority of the European Parliament in plenary in Strasbourg on 19 January 2000. Parliament's resolution has since been taken up by the Commission in its work.
The activities of a future European financial public prosecutor would be limited to the sphere of protecting the Community's financial interests, and would be carried out in close (and effective) cooperation with the public prosecution authorities of the individual EU Member States. The European financial public prosecutor would be able to submit formal evidence and charges to a national public prosecutor, who would then submit the case to the competent national court. The application of national criminal law and the national administration of justice would thus remain unaffected by these measures. Instead, the jurisdiction of the Member States would be extended to cover the protection of EU finances, in line with subsidiarity.
This demand for the creation of a European public prosecutor in connection with the protection of the Union's financial interests was enshrined in the opinion that the European Parliament submitted to the Intergovernmental Conference. We are very disappointed that the Nice European Council, under the French Presidency, did not come up with any reaction to it. The European Parliament and the Commission will not give up the fight, but will continue to work together on this issue.
As you can see, ladies and gentlemen, there is still much to do, and I promise you that I shall continue my commitment to the cause of protecting the Community's financial interests.
European taxpayers' money should be spent effectively to further the work of European integration, and should not be channelled into the accounts of international fraudsters. So under my chairmanship the CoCoBu will continue to keep a sharp eye on the regularity and effective disbursement of EU funds, and seek to put a stop to wastage. We want Community finances to be in order and Europe to become, as Konrad Adenauer envisaged, a common home for all Europeans: a house of freedom which is managed responsibly and well!
Thank you once again for the great honour that you have done me today in giving me this award. I shall always remember this delightful ceremony.
Thank you for your attention.
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