Thursday, 12 November 2009

Open Europe publishes 50 new examples of EU waste

Today, the EU's accountants – the European Court of Auditors (ECA) – have published their annual report on the EU’s budget. The ECA has refused to give the EU’s accounts a clean bill of health for the 15th year in a row, owing to fraud and mismanagement in the budget. Like last year, the auditors did sign off the Commission’s own accounts, saying that they accurately represented how much money was raised and spent.

Although the ECA’s report is about the management of the accounts, the occasion represents an opportunity to take stock of the EU budget as a whole. Because while mismanagement of the accounts continues to be problematic, arguably the most important issue is the fact that the EU budget is hugely wasteful and irrational in terms of what the money is actually spent on, and where the money is spent.

The budget is dominated by two failing policies which even the current UK Government is essentially opposed to: the Common Agricultural Policy, and the so-called Structural Funds. The sheer size and complexity of these two top-down spending programmes means the EU's budget is wide open to waste and mismanagement, regardless of whether the blame lays with the Commission or the member states. The budget therefore represents extremely bad value for taxpayers' money.

To illustrate this, 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 EU money has been wasted in the past. They give a light-hearted illustration of what is wrong with the EU budget, and the need for fundamental reform.

Open Europe Research Director Mats Persson said:
"The Commission tries to put the blame for fraud and waste on the member states, but the real problem is the EU budget itself. The EU’s spending programmes are overly complex, irrational and hopelessly out of date. Until they are subject to root-and-branch reforms, or scrapped altogether, waste and fraud will continue.

"Too often, EU money is wasted on inefficient projects which are based on unrealistic expectations or for which there is no real demand. Because of the way the EU’s spending schemes are set up, bizarre or wasteful projects can receive funding which never would have received money if subject only to national spending priorities. Unfortunately, the focus of the EU budget is to get the money out of the door, not to spend the money wisely.

“Surely, in a recession, we can think of better ways to spend £100 billon a year?"
To read Open Europe’s 50 new examples of EU waste see here:

Here are the top five examples of EU waste:

€173,000 for a luxury golf resort €173,274 in EU funds were given to the luxury golf resort, Monte da Quinta Club, in the Algarve, Portugal, where guests can choose between “the comfort of a villa with garden and private pool, or be dazzled by deluxe suites”. There is also a luxury spa, health club, several restaurants and bars, shops and a hairdresser.

€2,500 for Chairman of Porsche’s hunting retreat Wolfgang Porsche, supervisory board Chairman of Porsche, received €2,500 in EU rural development funds for a small estate in Bavaria, Germany, where he goes hunting in his free time.

€100,000 for a luxury Spanish hotel chain €99,877 in EU funds for 2009 alone were granted to Tils Curt, a chain of luxury restaurants and hotels across Spain, established in 1880. The funds were given as part of the Regional Development Fund.

‘Donkeypedia’: the blogging donkey As part of the EU’s €7 million ‘Year of Intercultural Dialogue’ initiative, the European Commission ran an art education project called “Donkeypedia”, in which a donkey travels through the Netherlands, and primary school children meet and greet the donkey. The aim of the project was
"creating a reflection of all European identities. What are the similarities, what are the differences? What is it that makes Europe as unique as it is? Donkeypedia will try to make this feeling tangible by interacting and in dialogue with its surroundings while walking a European route through several countries and collecting data to support this image."
The donkey, named Asino, also maintained a blog throughout the walk. One entry reads:
"We started really early today, Cristian slept in a bed in a house. It was a crazy morning waking up. I was under a chestnut tree sleeping in sand, when I opened my eyes there were animals all looking at me. I was embarrassed! Now I understand a little how people from different cultures may feel in the Netherlands."
€80,000 for a Swedish ‘virtual city’ in Second LifeIn early 2008, Sweden’s third largest city, Malmo, was given an EU grant worth 800,000 Swedish kronor (€80,000), to create a virtual version of itself in 'Second Life' ­- a virtual fantasy world inhabited by computer-generated residents. The project was an attempt to reach out to young people and envisioned some of Malmo’s most famous buildings - such as its library and university - to be mirrored in Second Life. In addition, the project included plans for a virtual 'citizens' office', in which City officials could do their work and meet with those inhabitants of Malmö who were active in Second Life (the number of Malmo residents active on Second Life is thought to be very small).

In May 2009, Malmo was launched as a 'virtual city'. By then, the budget had been busted – and the project had been subject to massive criticism, as Second Life was no longer regarded as the future of social media – particularly not amongst young people. One of the politicians involved in the project said:
"Malmö wants to be at the forefront of IT, but we’re aware that Second Life is probably not at the absolute forefront anymore."
Joakim Jardenberg, of Swedish IT company Mindpark, added that he thought the project was a 'bizarre joke' at first.
"Second Life has never been particularly popular in Sweden. Facebook would have been a better tool"
. In March 2010 the project will be evaluated. If virtual Malmo does not have enough visitors by then, the project will be shut down.