10 November 2010 — Ahead of a likely agreement on an increase to the 2011 EU budget tomorrow, Open Europe has produced a list of 50 new examples of ‘EU waste’. The list is by no means comprehensive, but designed to show the types of peculiar projects on which the EU has spent money in the past. They give a light-hearted illustration of what is wrong with the EU budget, and the need for fundamental reform.
Despite its inherent flaws and the absence of any substantial reform of how or where the money is spent, the EU budget continues to rise year on year.
This year, Open Europe has also published a handful of examples of good spending, illustrating that when the EU does focus its attention on where it really adds value, good things can happen.
Open Europe Director Mats Persson said:
“The EU’s budget is irrational, overly complex and hopelessly out of date. Despite the austerity measures sweeping Europe, huge amounts of money are wasted on projects which do nothing to help the EU economy to get back on track.”
“There should be no talk whatsoever of budget increases until the problems with waste and mismanagement in the EU’s spending programmes are stamped out once and for all. MEPs and the Commission need to wake up to the economic reality around them.”
“The tragedy is that Europe could do so many good things with this money, such as channelling more of it towards research and development.”
Click here to read Open Europe’s list of wasteful EU projects: www.openeurope.org.uk/research/top50euwaste2010.pdf
TOP 10 WASTEFUL EU PROJECTS
€411,000 for a dog fitness and rehabilitation centre that was never built
In February 2009, Hungarian firm Gyrotech Commercial and Supplier Ltd was granted roughly €411,000 from the EU's Regional Development Fund, for a project to "improve the lifestyle and living standard of dogs," which included the development of a hydrotherapy system for dogs. The company used the funds to build new offices for the centre, but the offices have remained empty and overrun with weeds and the dog centre has yet to materialise. Despite this, in April 2009, Gyrotech received a further €13,307 from the EU this time for a Web-Shop management project, seemingly unrelated to the proposed dog rehab centre.
€5.25m for fleet of limousines for MEPs in Strasbourg
The European Parliament's records show that in 2009 the EP awarded Biribin Limousines a contract worth €5.25m for transporting MEPs around Strasbourg in chauffeur driven cars. The limousine company's website states that its chauffeurs hold the 'Grand Remise' license, which includes a "confidentiality clause guaranteeing absolute discretion". Estimates show that travelling between and maintaining the European Parliament's two seats in Strasbourg and Brussels already costs European taxpayers €200m and creates an extra 18,884 tonnes of CO2 every year.
€16,000 to Tyrolean farmers to boost their emotional connection with the landscape
A grant of €16,394 was given by the European Agricultural Fund for Rural Development (EAFRD), with an additional €24,119 coming from the Austrian government, towards a project in Austria aimed at raising awareness of the Tyrolean landscape and its diverse features and to "increase farmers' emotional connection with the landscapes they cultivate." The main method of achieving these objectives was interviewing various farmers who were "expected to reconsider their relationship with the landscape and become more aware of their emotional reactions to it compared to their prevailing rational economic ones."
€5,000 on a "Europe Horse" to promote the EU to German children
"Eurogaloppo" the German "Europe-Horse" is a colourful cartoon figure designed for an EU initiative to inform children and teenagers in Niedersachsen of the workings of the EU and their role within it. A booklet has been produced chronicling Eurogaloppo's trip from Germany to Brussels, in which the cartoon horse meets and interviews various high-profile EU figures along the way, including former European Parliament President Hans-Gert Pottering, Chancellor Angela Merkel and European Commission President Jose Manuel Barroso.
Eurogaloppo's questions include asking the Minister for Lower Saxony Christian Wulff "So it's because of the EU that we've lived in peace for so long?" The following exchange with Commission President Barroso is also recorded:
Eurogaloppo: "I have so been looking forward to finally meeting a commissioner!" Barrosso: "Do you mean a commissioner like in a crime programme?" Eurogaloppo: (sheepish silence) Barroso: (grins) "Actually, you are not far wrong. The EU Commission and the crime commissioners of the police have something in common: they are both authorities."
According to the Lower Saxony authorities roughly €5,000 has been spent on Eurogaloppo since 2003 through the EU information centre in the region, while another €40,000 has come from the Lower Saxony government.
€900,000 for a golf course, hotel and spa whose guests include Chancellor Merkel
Counting Chancellor Angela Merkel amongst one of its guests, the Strelasund golf park was given almost €900,000 by the European Regional Development Fund to further develop and enhance the facility, including new machinery for green keeping and a 'wellness' hotel. With a "world-class" 18 hole course, a 9 hole island course, practice course, separate driving ranges, and putting greens, the platinum membership fee for the club is €1,100 per year. The club members are also able to choose between the two hotels and new spa facilities, as well as the many tennis courts and a 'Nordic walking park'. Although the Mecklenburg-Vorpommern region - which struggles with high unemployment - lists the golf course as an example of "best practice" for how to spend EU funds, according to its own website, the golf course only employs 18 staff. It remains unclear whether the EU grant has actually led to any new, permanent jobs.
€7.5m of EU funding for PR campaign for EU funding
Andalucía's regional government has a €7.5m 'communication' budget for the period 2007-13, which aims to "reinforce the message of the achievements in Andalucía thanks to European funds" paid for by the same EU funds that the PR campaign advertises.
The official 'Communication Plan' outlines a campaign including plans for 596 TV adverts, 126 radio adverts and 40 colour adverts in the print media. One of the TV commercials for the campaign - "Andalucía on the move with Europe" - involved 55 actors and extras, according to José-María Siles, a spokesperson for the European Commission's 'Team Europe'.
Canal Sur TV, part of Andalucía's public broadcast service, runs a weekly programme, with an audience of 90,000, in which EU funded projects in Andalucía are explored. Bizarrely, the 'Communication Plan' outlines an agreement with Canal Sur TV which has led to its televised weather reports using stars in the style of the EU flag to represent the sun.
Inspiring people to learn languages through "virtual" swimming
Launched in 2008, the bizarre "swim the language challenge" was designed to teach EU citizens new languages via "virtual language pools". These "virtual pools" were accessible online but also at dedicated stands at high profile real-life European swimming events. The project boasted that it would give "participants the opportunity of learning the language needed to communicate at International Swimming Events by practicing different language areas."
The eventual winner was awarded a trip and accreditation to the Swimming Finals at the Olympic Games in Beijing. The funding fell under the EU's Socrates programme, within EU's 2000-2006 budget, which paid out a total of €172m to various projects over the 2007-8 period.
€1.6 million to the King of Sweden to cover his financial losses
Since 1995, when Sweden joined the EU, roughly €1.6 million (SEK14.7 million) in subsidies have been given to the King of Sweden for a farm estate he leases for a symbolic amount in the region of Flen in Sörmland. In 2009 alone, he was given €209,000 (SEK 1,934,866) in agricultural subsidies from the EU, according to the Swedish Board of Agriculture.
However, Bensor, the King's company that runs the estate, has suffered severe financial losses over the last decade. Between 2000 and 2006, for instance, the company lost €4.9 million, and according to an investigation by Swedish Television this loss has been covered by EU subsidies. "The [EU] subsidies make up a big part of our business, since we have these types of lands. It's the topography and the pastures which don't produce that much meat which give money [from subsidies]", Jonas Kullgren, the land surveyor of the King's estate said.
€5.1m "culture club" for EU bureaucrats in Luxembourg
In 2009, the EU bought the "Foyer Européen" in Luxembourg for €5.1 million. The venue is home to the Cercle Culture des Institutions Européennes - the cultural circle for the European institutions - which is a network of clubs and societies that EU employees can participate in. The bottom floor of the building hosts a restaurant in which EU employees and their guests can dine, while the top floors are used for the various social and cultural clubs. The list of clubs includes the Scottish Highland Dancing club and a wine-tasting club. The space was rented prior to its purchase.
Open Europe is an independent think-tank calling for reform of the European Union. Its supporters include: Sir Stuart Rose, Executive Chairman, Marks and Spencer plc; Sir Crispin Davis, Former Chief Executive, Reed Elsevier Group plc; Sir David Lees, Chairman, Tate and Lyle plc; Sir Henry Keswick, Chairman, Jardine Matheson Holdings Ltd; Lord Sainsbury of Preston Candover KG, Life President, J Sainsbury plc; Sir John Egan, Chairman, Severn Trent plc; Lord Kalms of Edgware, President, DSG International plc; Hugh Sloane, Founder, Sloane Robinson.
For a full list: http://www.openeurope.org.uk/about-us/supporters.aspx
BACKGROUND
On Thursday, national ministers, the European Commission and the European Parliament are likely to strike a deal on an increase to the 2011 EU budget.
Prime Minister David Cameron claims to have won the backing of twelve other EU leaders to block any increase over 2.9%, which would see the EU budget increase to €126.5bn, but Sidonia Jedrzejewska MEP, one of the European Parliament's lead negotiator in the 2011 budget negotiations, has suggested that the true rise to EU spending in 2011 will be at least 4.5% disguised via the use of so-called 'amending budgets' throughout the year.
Increasing the EU budget not only at a time when national spending is being cut across Europe but without proper reform of its structure sends completely the wrong signal to taxpayers.
WHERE IS THE WASTE?
Agriculture
The EU currently spends around €58bn on agricultural subsidies a year. Since the introduction of the so-called Single Farm Payment a large part of CAP subsidies are now based on land ownership or historical entitlements and have nothing to do with actual farming and production. As a consequence, a large number of non-farmers are now receiving subsidies. In recent years there has been a rash of stories about payments to golf clubs, various royalties, pony clubs and a number of large multinationals such as Coca-Cola.
The real winners from the system are landowners, as subsidies allow owners of land and suppliers of inputs to put their prices up by an equivalent amount and so "capture" the money spent on subsidies.
Regional spending
The EU will spend over €40bn on regional or 'cohesion' funding in 2011[34], funding which is supposed to boost employment and reduce gaps in development between regions in the EU. However, much of the money is circulated around the EU's richest countries with London sending money to Paris and Berlin and vice versa. In 2009, over 40% of the money appropriated for EU regional funding was due to be spent in the EU's richer countries (those with GDP at 90% or above the EU average), the vast majority of which can afford to pay for their own regional development.
In addition, the complexity of the funding schemes and the dual responsibility for financial controls between member states and the European Commission leaves far too much room for waste or mismanagement. The EU's auditing body, the European Court of Auditors stated in its most recent report that:
"The regulatory framework of Cohesion is complex, requiring conformity with a variety of EU policies and rules, such as those relating to public procurement and State aid, as well as requirements specific to Cohesion spending...The actors involved in implementing OPs and projects at national or regional level may be either unaware of the applicable rules or unsure about their correct interpretation. This can lead them to make incorrect or unjustified declarations."
Culture and citizenship programmes
Spending public money on culture is always controversial precisely because of the subjectivity involved. While it may sound like a worthwhile way to spend money, it is clear from the EU's many policy documents and the majority of the projects selected that the underlying aim of culture and citizenship initiatives is to promote the idea of further European integration. According to the Commission itself, one of the objectives of the EU's cultural programme is to improve the "external visibility" of the EU and to help convince citizens "to give their full support to, and participate fully in, European integration."
An indication of the focus the EU places on these areas is the fact that more people work for the European Commission's Education and Culture Directorate (497) than in the Internal Market Directorate (469). |
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