THE HANDSTAND

MARCH 2003

EUROPEAN UNION news:

“Friends of Clean Accounts” Urge Greek Presidency to Watch over Reform of Accounting System

Sir

On 18 December the European Commission issued a communication on the reform of its accounting system. The reform is to last at least until 2005 and includes the appointment of a new chief accountant as well as a new committee on accounting within the Commission.

But the reform is too late and too little to ensure correct handling of the EU funds - the taxpayers money.

A group of MEPs from different national and political backgrounds, who have gathered under the name of “Friends of Clean Accounts”, will bring up the question on the Commission Accounting system, as the European Parliament is going to approve the 2001 accounts of the EU. We have major reservations about the proposed reform, and we urge the Greek Presidency to bring up the matter in the Council. In detail we like to point out the following problems:

         The Commission is promising to have an accounting system to support the Accounts as they are presented today, but only for 2005. This means that the accounts that will be presented for 2002, 2003, and 2004 will not be supported by an official accounting system. A situation that would not be tolerated from any organisation in the world.

        The new financial regulation does not bring any formal change into the accounts. They will be presented in general terms as they are today. Adopting accrual accounting only for the general accounts will not resolve the issue. According to an independent analysis, the introduction of an " integrated accounting system" is needed. This requires the use of double-entry accounting in order to ensure that the processing of each transaction will modify the general and the budgetary accounts at the same time.

         In response to the Court of Auditor's criticism, the Commission has been promising for years to reform the accounting in accordance with international standards and that the computer system will have to be adapted. But when and how? What is new in this communication

         Together with this communication the Commission announces the New Financial Management Structure to be implemented in line with the new Financial Regulation as of January 2003. The Financial Regulation announces the elimination of the Financial Controller and the verification of the invoices by the Accounting Officer before he approves payment ( this last one being totally unacceptable in any organisation). It is already unbelievable that the new financial regulation - created in the context of the massive resignation of President Jacques Santer’s commission due to financial mismanagement - may weaken the controls to such a degree.

The “Friends of Clean Accounts” have serious doubts about the proposed reform and we ask the Greek presidency to take these doubts into consideration and to watch over the Commission’s proposed reform. The “Friends of Clean Accounts” also want to approach their national parliaments in order to point out the seriousness of the problem to their respective national governments.

Jens-Peter Bonde, MEP (JuniBevægelsen/EDD)

Rijk van Dam, MEP (ChristenUnie/EDD)

Chris Heaton-Harris, MEP (Conservative Party/ PPE-DE)

Dr. Gabriele Stauner, MEP (CSU/PPE-DE)

TO REMIND YOU OF THE CASE PREVIOUS :
EUOBSERVER / BRUSSELS - An explosive letter obtained by the EUobserver castigates the Commission's accounting system as "vintage public sector in the 60's" and characterises the accounts department in DG Budget as "haunted by a profound lack of qualified staff, a host of vacancies/absentees in crucial functions [and] an entrenched mindset." Dated 21 May 2002, the letter is addressed to Neil Kinnock's cabinet, the administrative reform commissioner. On May 27 2002, Ms Marta Andreasen, the wayward chief accountant, whose complaints about the Commission's accounts system are supported in the letter, was told she was to be suspended from her job.
Mr Muis, former vice-president and controller of the World Bank, went on to say that Ms Andreasen's comments on the system were "factually substantive and correct" and that she is "raising the right questions." The former chief accountant criticised the Commission for not having a generalised double-entry book-keeping system for the annual 98 billion euro budget, for having insecure computers and for having unqualified accountants to supervise the book-keeping - in short for having a system massively open to fraud Ms Andreasen was transferred from her post as chief accountant to the personnel and administration department, after sending a letter to Commission president, Romano Prodi, expressing her concerns about budget failures. From there, however, she went public with her complaints. This led to her being suspended from her duties.



The "Old Europe" needs a new government
GIACOMO FILIBECK - "Neither France's nor Germany's government seems to have come up with a solution to the problem, even if both countries have offered the old Europeans an outburst of pride." (President of the European Youth Convention and of the European Youth Forum.

- While the whole of Europe (including the 13 candidate countries applying for membership in the European Union) is busy deciding its own future within the European Convention, France and Germany have uttered a clear and decisive NO to the war of George W. Bush. This they have done as they celebrate the 40th anniversary of the signing of the Elysée Treaty marking the reconciliation between their peoples.

The US Secretary of Defence, Donald Rumsfeld, said there should be no concern about two countries that were 'Old Europe'. Well, 'wise' would have been the more appropriate word, European Commission President Romano Prodi replied. The Continent, he noted, was able to emerge from the ashes of war and rebuild what is today a Europe of peace and prosperity that does not want to again pay the price it has already paid. Indeed, 'wise'. In this way, we young Europeans feel proud, for a day, to be a part of the old, wise Europe.



The 'old' Europe

But have France and Germany spoken on behalf of Europeans, both young and old? Unfortunately they have not, because more than one European leader has already informed us that he would not hesitate a single second to obey the orders of the American General. These leaders represent a variety of identities, from UK to Spain, to Italy's Silvio Berlusconi who seems to have a poor memory of when together with France, Germany and the Benelux countries, Italy helped lay the first stone to build the 'old' Europe referred to above.

Nevertheless, we believe that the overwhelming majority of Europeans, not just the French and the Germans, do not at all agree with this senseless war, which could lead to an uncontrollable destabilisation of the entire Middle East.

European voice

But who gives Europeans a voice? No one. Although in words virtually everyone seems to agree that Europe needs a common foreign and security policy, nobody really seems prepared to draw the consequences of this. This boils down to saying that Europe needs to have a government that can decide (meaning one that responds to a majority of States and citizens) the lines of a truly European foreign and security policy. A real European army also needs to be created (in the form of a rapid intervention force) that is under the leadership of the European government, which gives this policy credibility and effectiveness. Lastly, Europe has to have a single representative on the UN Security Council.

European leaders remain profoundly divided
Until such time, the 'old' Europe will not speak with one voice and will continue to turn the other cheek when 'slapped' in the face, generating frustration and mistrust among its own citizens. These citizens are perfectly aware that those deciding peace and war are not the leaders they elected but an American President satisfying the needs of his own Administration and deaf to the wishes of public opinion in Europe. We must also not think that the temporary European agreement to extend the inspections has changed anything. European leaders remain profoundly divided, and their apparent unity will immediately fall apart as soon as a decision has to be made whether or not to intervene militarily.

Two Presidents do not solve the problem
Neither France's nor Germany's government seems to have come up with a solution to the problem, even if both countries have offered the old Europeans an outburst of pride. The joint project that the two presented to the Convention, whereby Europe would have two heads or two Presidents, does not solve the problem of government and keeps security policy in the hands of the national governments. They decide by unanimity and are subject to the blackmail of vetoes dictated by national interests often at odds with one another.

A draft federal Constitution
Who then can fulfil the expectations of Europe's citizens? Who can give them back the hope of deciding our future? Only the European Convention can do that. It was born of the desire to bring Europe's citizens closer to the institutions, and the Convention has to courageously act as interpreter of this desire, adopting a draft federal Constitution that gives life to the first democratic government of Europe, as called for by the European Youth Convention.

Popular referendum in all the States of Europe
Nonetheless, as the whole story of European unification has demonstrated, for there to be courageous and innovative decisions there needs to be an end to unanimity. Without the elimination of unanimity, Europeans would not elect today a Parliament and would not be walking around with a single currency. For this, if the Convention is to propose a Constitution capable of responding to the concerns and worries of Europe's citizens, the Convention will have to adopt its own draft by a majority and ask that it be submitted the same day to a popular referendum in all the States of Europe.

The States where the citizens approve the new European Constitution will in this way form a federal vanguard in a larger confederated Union. This vanguard will not be a closed group but an open community that the other European States will be able to join at any time by ratifying the Constitution. So out of the seed of old Europe will grow a new Europe whose citizens will again be able to decide their own future, supporting wisely a future of peace.


GIACOMO FILIBECK - President of the European Youth Convention and of the European Youth Forum

Written by Giacomo Filibeck
Edited by Sharon Spiteri