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EU Corruption and Waste

EU Spending is Riddled with Corruption

"Opportunities for fraud are open and they are taken advantage of. The most elementary precautions are neither taken nor even contemplated. The reverse is the case. People such as myself, who attempt to bring openness and accountability to the system, are pursued, suspended and dismissed."

(Marta Andreasen. Whistle-blower and ex Chief Accountant to the European Commission.)

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Global Vision Paper Finds That Millions Of Taxpayer Money is Being Wasted By EU:  Feb 08

Matthew Elliott and Dr Lee Rotherham unearthed a staggering £101 billion of government misspending in the UK - all paid for the taxpayer – in The Bumper Book of Government Waste 2008.   Building on their previous research, a new paper for Global Vision investigates one of the major culprits behind the growing mountain of waste – the European Union.  In a highly bureaucratic culture open to abuse, fraud and corruption, Elliott and Rotherham found that:

  • The European Parliament recently spent €830,000 replacing filing cabinets to transport documents during the seven hour trek from Brussels to Strasbourg, because the old ones tended to fall over and injure the removal men.  The two-seat European Parliament itself cost an estimated €205 million in 2006.
  • Shared out evenly between absolutely every EU national, the CAP costs everyone £210 each in payments alone. This, of course, ignores the higher food bills that follow.  And yet the food mountains still exist. The UK still has 13,500 tonnes of cereal, rice, sugar and milk sitting in silos and warehouses, plus 3,500 hectolitres of alcohol including wine. Last year, the UK spent £1.38 million buying up some more or storing its current stock, though we also sold some off.
  • The Commission spent around €106 million in 2003 on interpreter services, and the European Parliament another €57 million. Auditors found that permanent translators were spending on average 33 days on ‘implicit stand-by duty’ – i.e. physically present at the building but not actually needed for anything. A high proportion of these days – 130 interpreters a day, or a quarter of the staff interpreters – occur in the slow month of August. As a result, about 15,000 interpreter days, corresponding to about 15% of the workforce’s working days, weren’t used. Even the temporary staff, or ACIs, were sitting around unused for a total of 6,000 days. Since each day costs an average of €865, that meant a waste of €18 million on having interpreters drinking espressos. 6,300 half-days were lost when interpreters were booked but not told in time by MEPs or officials that they weren’t needed – about 8% of total interpreter use, or €6 million in costs at the European Parliament alone.
  • The Commission miscalculated the asset value of its buildings by €188 million, the total lease liabilities by €254 million, and the accumulated depreciation value by €23 million.  Furthermore, at the close of 2004, the EU’s pensions liabilities were estimated at an astounding €26 billion.


1 Million Euros a day stolen from EU

According to the German magazine Der Speigel, fraud committed in Brussels amounts to 1 million euros per day. There are currently 400 investigative procedures pending against EU officials. The Commission claims that corruption is no more widespread in Brussels than anywhere else, but the budget expert for the German CDU in the European Parliament, Inge Grassle, describes this view as "laughable". The magazine quotes UK MEP Daniel Hannan as saying "If the European Commission were a company, all the commissioners would be in prison". All Commissions since 1999 (when Jaques Santer's team all resigned over corruption) have promised to fight corrupton, and all have failed. The present anti-corruption commissioner, Siim Kallas, was himself embroiled in a major financial scandal in the 1990's (at least he has practical experience). Even the Commission admits that 320 euros have been stolen - nearly 1 million per day. The true figure is probably much higher - see below.

( European Journal, Oct 07; Der Speigel 27.8.07)


EU fails to have its accounts signed off for the 14th consecutive year – Might not be signed off before 2020

Eurofacts, 15 September 2008

European Voice reports that Siim Kallas, the EU Commissioner for audit, has announced that the European Court of Auditors will not sign off the EU's 2007 accounts – marking the 14th consecutive year in which the EU has failed to have its accounts cleared.

Auditors will say they found only a slight improvement in the legality and regularity of payments between the financial years 2006 and 2007. The Court is to publish its annual report on the EU's accounts on 10 November, but Kallas will brief his fellow Commissioners on 23 September that another negative verdict is imminent.

Speaking to MEPs, Kallas admitted that there were “real and unquestioned” weaknesses in 17 areas including research policy, the European refugee fund, structural funds, external actions and rural development.

For the Common Agricultural Policy - which amounted to 12.4 bn euros in 2007 - the auditors found that rural development expenditure, was “particularly prone to errors” because of the complexity of rules for complying with the programme. For the Structural and Cohesion Funds, worth 45.5bn euros in 2007, the auditors found that there had been an improvement, with 46% of projects free from error, compared to 31% in 2006. But in terms of financial impact the situation is almost unchanged. The Court estimated that 11% of the total amount reimbursed to member states should not have been reimbursed, compared to 12% (or 4 billion euros) in 2006.

With the Court’s verdict, MEPs have concluded that the European Commission will miss one of the declared objectives of José Manuel Barroso – to have its accounts signed off. Jan Mulder, a Dutch Liberal MEP and a member of the Budgetary Control Committee is quoted describing the improvements made under the Barroso Commission as “extremely slow. At this rate we'll achieve a positive DAS in 20 years' time.”


The Whole EU Commission was Forced to Resign

The entire European Commission, led by Jaques Santer, had to resign after an EU Committee of Independent Experts reported evidence of administrative failure, financial irregularities and nepotism. It found that millions of pounds worth of funds from the humanitarian aid office had disappeared, while no accounts were available for some £17 billion in structural aid projects. The report gave details of fraudulently altered tender specifications, inflated fees, illegal payments, open fraud, evasion of tax and social security obligations, paid personnel who could not be accounted for, and a pervasive sub-culture of petty graft, favouritism and criminality.

The Dutch official who reported the fraud to the Commission was promptly suspended from his post and subjected to disciplinary action. This action led to his dismissal.


Cost of Just One EU Directive

Christopher Booker in the Sunday Times of 13 May 07 reports that the huge cost (£65 billion) imposed on the water companies by the need to comply with three "water purification" EU Directives has taken up most of the funds available for capital spending. Only £14 billion was left to spend on infrastructure, including stopping the leaks which waste a large proportion of the water they pump. No one in this country can do anything about this, so naturally the Government has hushed it up.


Commission under investigation for fraud worth £30 million.

The EU's anti-fraud body OLAF is investigating a scam within the EU bureaucracy following allegations that during a four year period, European Commission employees have provided false contracts potentially worth £30 million for cleaning services never carried out. The allegations come three months after three Italians, including a European Commission official, were arrested in a case of suspected corruption involving tenders of building contracts. (IHT BBC EUobserver DW Independent Le Monde , 4 June)


Fraud in the Common Agricultural Policy

The Common Agricultural Policy, itself a totally inefficient waste of resources, is riddled with corruption. About 5% of the budget is lost to various frauds, from non-existent tobacco farms to imaginary decontamination plans to deal with Chernobyl. Another 5% is misappropriated. The cost to EU taxpayers is over £5 billion pa.


EU Waste

The EU wastes huge amounts of money. It spends more per head on the average EU cow in subsidies than the amount per head which 2.8 billion of the world's poor have to live on every day. Surely such sums could be better used to improve the environment, fight world hunger, and help provide clean water and basic health care to the world's poorest countries.
Source: "A Cost Too Far?"   Civitas, 2004


Fraud and Waste in Foreign Aid

The EU's £7 billion foreign aid budget is grossly mismanaged. Much of the money does not arrive at its destination.


Fraudsters steal £2million a day

The European Anti-Fraud Office has put the cost of all EU fraud at 4.4 billion between 1999 and 2005. Italian MEP Christiana Muscardini, who made the figures public, suggested that the blame could lie with multi-billion-pound EU subsidies. Auditors have warned for years that there is no proof that payments end up in the right hands.

(Daily Mail 14.2.07)


Marta Andreasen - whistle-blower

In 1999 Marta Andreasen, who is Spanish, was the first qualified accountant to be appointed the EU's Chief Accountant (her predecessors included an architect and an engineer). Appalled at what she found, she refused to sign the EU's accounts. Within weeks she was suspended by a fax from Neil Kinnock. He was then the EU Commission's Vice President in charge, ironically, of cleaning up its affairs after the corruption scandal that forced the resignation of the entire EU Commission in 1999. The suspension lasted 2 years and for all that time Mrs Andreasen was obliged to live in Brussels yet forbidden to enter any EU building.

Eventually (and inevitably) Mrs Andreasen was sacked, on the grounds of 'disloyalty'. She has since dedicatedly toured Europe, explaining to the public exactly how chaotic accounting is within the EU, and the EU's inability to apply even basic accounting rules to itself.

We have seen and heard Marta Andreasen speak on a couple of occasions. Her transparent honesty and commitment to the truth are most impressive. Her story illustrates just how ruthless the EU is in protecting its corrupt system from investigation.

(In part:- Sunday Telegraph 27.1.07./ Times 12.6.04)


Two Smiling Dentists

Giovanni Lupo's neighbours in the Southern Italian town of Cosenza would often wonder how the 56 year old dentist could afford to drive a Ferrari Testarossa during the week, while cruising on a 70ft yacht at the weekend. Filling teeth seemed to be equally lucrative for his colleague Gennaro Mortati, 51, who owned a fleet of 55 cars including a replica Formula One Ferrari.

The two men were convicted of taking EU subsidies of more than €50 million (£34 million) by fraud between 2000 and 2004. The EU even granted the two men another €17 million to set up another false company whilst on bail.

Calabria has been earmarked as a 'primary objective' region by the EU.   A report in August 2006 found that €118 million of the €341 million granted to the region in 2005 had been stolen by fraudsters from all over the country. Inspectors from Brussels found that all 28 projects they examined were scams.

(Sunday Telegraph/Open Europe 29.8.06)


Something Rotten.......?

Joseph Dahul, the new leader of the European Parliament's biggest political group, The European People's Party, is under investigation for misuse of public funds in France. He was placed under investigation in 2004 for allegedly diverting money to finance the Farmer's Union, the FNSEA, and to pay his own staff.   These allegations have only recently been unearthed by UKIP MEPs.

(Financial Times 12.1.07)


If they don't Steal it, they Waste it- a moving story

Once a month, all M E Ps travel from Brussels to Strasbourg, together with their retinue of interpreters, assistants and general bag carriers. The cost of this caravan - the removal of 732 MEPs back and forth between the two cities - is approx. €200 million.   In addition, between 1998 and 2004 the European Parliament paid about €6 million in rent for an empty building, the Belliard complex in Brussels. In early 2006 it was revealed that the Parliament paid between €32 and €60 million too much to rent property in Strasbourg.

(Die Welt 15.9.06/Frankfurter Allgemeine Zeitung 8.9.06/European Foundation/E U Court of Auditors.)


EU Cash melts away after Cold War

Up to €5 billion out of a total of €7 billion (£4.9 billion) given to the former Soviet Union in aid since 1991 has been misspent. Of 29 projects in Russia alone, investigated by the European Court of Auditors, only 9 achieved their objective. Only 5 had any lasting impact. For example:

  • The investigators highlighted a heating and power project for a city that did not want it, and another aimed at harmonizing road standards between the EU and Russia, which failed because the EU itself had no such common standard. Road-testing equipment supplied by the EU was unused.
  • One project invented a region on paper to meet the criteria for receiving EU funds.
  • An EU-funded laboratory remained unused because the recipients did not have premises to store equipment, while another was unused because the recipients could not afford the materials needed to run it.
  • EU-funded technical equipment was sold off by the recipients, because they did not know how to use it and did not have the necessary internet connection. Fitness equipment aimed at helping children ended up being used by Russian soldiers.

(The Times 21.4.06)


Completely Bulgared

The European Court of Auditors has released a hard-hitting report criticising Brussels for failing to ensure effective spending of EU funds in Romania and Bulgaria. 'Phare funds' are channelled by the European Commission to candidate states in order to prepare their administrations for accession, as well as to boost economic competitiveness. But a large part of the cash ends up in a black hole, as the court found, in an audit which covers projects initiated from 2000 to 2004, involving €511 million of Phare cash for Bulgaria and €1.4 billion for Romania.

"At the time of the audit, for over half of the investment projects audited, the assets were not, or were only partially, being used for the intended purpose," said a court member.

The court criticised the commission for its 'overall management of investment projects.' The report lists a number of non-functioning, half-finished and in some cases apparently useless investments, including:

  • The Bulgarian public prosecutor's office was granted a €1.8 million computer system, but 37 work stations were not used and were put in a store room instead.
  • A Romanian tourism development area was found to contain, 'an empty, degraded Olympic-size swimming pool,' while a newly-built asylum centre was reported to have an occupancy rate of 7.6 per cent.



Why do we keep pouring money into this corrupt and wasteful EU? If we leave, they could go on stealing and wasting their own money, but not ours.


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