Is the European Union good at what it does?

(Filed: 30/11/2003)

Before handing over a new tranche of powers, it is surely sensible to look at what Brussels is doing with the powers it already has, writes Daniel Hannan

Amid all the arguments about the Euro-constitution, we are forgetting to ask a very basic question: Is the EU good at what it does?

Last week, the Court of Auditors published a report into precisely this. For the ninth year in a row, the auditors found so many flaws in the EU budget that they refused to approve it. This ought to have been massive news in Britain: here, after all, is evidence that the institutions which Tony Blair wants to put in charge of our legal system, our energy reserves and our economy, cannot be trusted to administer themselves. Yet most newspapers failed to mention the report at all, and none gave it prominence.

Why are we not more concerned? Partly, I suspect, because we take Euro-sleaze so much for granted that it is no longer newsworthy. Partly, too, because the report was long and difficult. None the less, it ought to matter a great deal: how else can we judge the EU if not by its record? So, on your behalf, I jammed some matchsticks under my eyelids and spent last week doing some concentrated reading.

The most striking thing about the document is that it reveals systemic abuse. We are not dealing with isolated cases of human weakness, but with what Lord Macpherson would call institutional corruption. Despite what many British sceptics believe, there is no evidence that racketeering is more common in southern Europe.

Surveys of farms to corroborate the subsidies being claimed, for example, showed as many irregularities in Sweden as in Italy. Across Europe, whenever people know that a pot of money is waiting to be claimed, they organise their affairs around qualifying for it. And because the money comes from Brussels, national authorities have little interest in stopping them.

Britain is no different. In my own constituency, I have seen European policies turn good men into liars. I have known farmers and fishermen who, although hating themselves for it, have had to falsify documents to meet Brussels rules. For them, the system has been literally corrupting.

The Common Agricultural Policy is famously rotten, of course. But the EU's structural payments, research programmes and foreign aid budgets were also found to be riddled with what the auditors drily call "errors". In fact, when I totted up all the funds which could not be properly accounted for, I found that they came to nearly 92 per cent of the total budget.

Imagine if we ran public companies, or even private societies, on this basis. Picture the treasurer of, say, your local golf club announcing to his AGM that, although he estimated that only eight per cent of the budget had been stolen, it might be anything up to 92 per cent. Would you vote to pass his accounts? Would you want to keep him on as treasurer?

You would if you were an MEP. Although there are some honourable exceptions, the European Parliament as a whole always baulks at withholding money from the Commission. It does so on two grounds. The first has to do with glass houses and stones. Euro-MPs are extremely touchy about their own expenses.

Indeed, several of them are still on non-speakers with me after my last article, in which I ran through some of the figures. One of my colleagues (I won't reveal his nationality) took particular exception to my remark about MEPs employing their wives and sleeping with their staff. He, it emerged during our altercation, did both, and was convinced that I had conceived the piece solely as an attack on him.

Even MEPs whose personal finances are immaculate are reluctant to kick up a fuss about fraud, for fear that it will put their constituents off the EU. For many of them, European integration is an end in itself: they would rather see a policy mismanaged by Brussels than competently administered by national governments. It is, of course, precisely this attitude which encourages much of the wrongdoing in the first place. Thus the cycle goes on.

  • Daniel Hannan is a Conservative MEP