You are here

EU misspent over 6b euros last year: watchdog

European Union flags flutter outside the EU Commission headquarters in Brussels, Belgium on Oct 28, 2015.

[BRUSSELS] The EU misspent 6.3 billion euros (S$9.6 billion) in 2014, the bloc's financial watchdog said on Tuesday, urging Brussels to take a "wholly new approach" to make its budget more responsive to shocks like the migration crisis.

Examples of badly spent funds included underused airports of which only around half were worthy of EU funds, and aid paid for farmland in Spain that was actually being used as a motocross track, the European Court of Auditors said in a report.

The independent ombudsman urged the 28-nation European Union to be more flexible and free up unspent funds so they can be used where needed, such as on dealing with the wave of refugees and migrants coming to Europe.

"We call for a whole new approach - we cannot afford to do business as usual," Vitor Caldeira, the president of the independent ombudsman, told journalists as he launched the report.

The report said the so-called error rate for spending fell slightly to 4.4 per cent of the EU's 142.5 billion euro budget in 2014 from a revised 4.5 per cent in 2013, but was still far above the acceptable level of 2.2 per cent.

Mr Caldeira said the report came at a "particularly difficult time", with the EU facing major challenges ranging from the struggle to create jobs and growth and dealing with Europe's biggest migration crisis since World War II.

"Decision makers must align the budget better with the EU's long-term strategic priorities and make it more capable of responding in a crisis," he said.

The EU's budget has long been a source of debate, and particularly now, with the economy only weakly recovering after years of austerity and eurosceptic parties on the rise in many countries.

The European Commission said the rate of misspending continued to go down but said it would work harder to prioritise spending.

"We ought to be able to move resources accordingly to serve our citizens best," EU budget commissioner Kristalina Georgieva said.

The migration crisis has placed a particular burden on the EU's budget as states deal with an unprecedented flow of refugees and migrants from Syria and other conflict zones.

Mr Caldeira said the EU's budgetary system was slow to react to crises like migration, partly as it is planned in seven year stretches, with the current budget lasting from 2014 until 2020.

"The current migration problem would benefit from available funds that have been committed to different areas if they could be used in some more flexible way," the watchdog chief said.

The watchdog said it looks at whether or not money is spent according to EU rules, but does not specifically measure "fraud, inefficiency or waste", with any suspected fraud reported to the bloc's anti-corruption agency.

Spending managed jointly by Brussels and member states had the same level of error as that managed directly by the European Commission, the EU's powerful executive branch, the report said.

It did not give figures for individual countries.

The budget amounts to around one percent of EU gross national income and around two per cent of total public spending in EU member states, it said.