EP calls on Romania and Bulgaria to better manage EU funding

The European Parliament called in particular on Bulgaria and Romania, in a report adopted yesterday, to build up their administrative capacity to manage EU funding, remove existing or potential conflicts of interest in fund management and improve the supervision and transparency of public procurement procedures at central, regional and local levels.

In 2008, in Romania and Bulgaria the estimated amount affected by irregularities increased by 152% and the amounts recovered were 15.6% down on 2007, while in the other central-European countries that joined EU in 2004, the amount affected by irregularities grew 8% in 2008. In the European Parliament resolution, deputies urged Romanian and Bulgaria "to build up their administrative capacity to manage EU funding, remove existing or potential conflicts of interest in fund management and improve the supervision and transparency of public procurement procedures at central, regional and local levels and swiftly introduce and notify to the Commission the necessary precautionary, corrective and/or disciplinary measures; acknowledges and supports the steps taken by Bulgaria and Romania to improve shared management and financial control standards in response to the Commission's recommendations".

The annual report on the protection of communities' financial interests and the fight against fraud was compiled by Andrea Cozzolino, member of Budgetary Control Committee. The report notes that the financial impact of irregularities, as far as they have been identified, fell from Euro1,024 million in 2007 to Euro783.2 million in 2008, and calls on the Commission to take appropriate action with a view to recovering those funds. Even if the number of irregularities in certain spending areas, such as structural funds and for agriculture dropped in 2008 from 2007, the report stresses that a better management of EU funding is an important duty of the Member States. The report also includes recommendations for fighting tax evasion and proper management of pre-accession funds for Romania and Bulgaria.

The European Parliament welcomes the actions taken by Romania and Bulgaria to improve joint management and financial control standards, as a response to the Commission recommendations.

Public procurement sector is the one most open to risks of mismanagement, fraud and corruption and that such unlawful activities distort the market, increase the prices and fees paid by consumers for goods and services and spread mistrust toward the European Union, EP deputies said.

The report calls, therefore, on the Commission and the Member States to consider the current rules on public procurement carefully and make proposals for their improvement; acknowledges too that progress has been made towards greater transparency concerning the beneficiaries of EU funds and calls on the Commission to develop a system whereby lists of beneficiaries are published on the same website, irrespective of the managing authority concerned, giving clear, comparable information from all the Member States in at least one of the EU's working languages. It also asks the Commission to intervene to ensure that all Member States furnish reliable, uniform information on beneficiaries of EU funds which must be included in the Early Warning System and the central exclusion database.

In order to protect the financial interests of the Union, stopping tax evasion and illicit activities that go through offshore havens is necessary. The deputies are thus calling on the Commission "to consider banning companies which operate through offshore havens from making business agreements with companies residing in the European Union if their offshore location will unilaterally delay the adoption of cooperation agreements with the Union".

Moreover, European deputies urged the Council Presidency to give the Commission a mandate to negotiate and complete in the shortest possible time anti-fraud agreements with Andorra, Monaco and San Marino and to negotiate a new, further-going agreement with Switzerland.The institution agreed on the creation of the European Prosecutor's Office for combating crimes affecting the financial interests of the Union.