The Commission tries to stop the ‘party’ with the structural funds

Press conference by László Andor, Member of the European Commission, in charge of Employment, Social Affairs and Inclusion. He presented the Code of Conduct to boost partners' role in planning and spending European structural and investment funds. (EC Audiovisual Services, 07/01/2014).

Press conference by László Andor, Member of the European Commission, in charge of Employment, Social Affairs and Inclusion. He presented the Code of Conduct to boost partners’ role in planning and spending European structural and investment funds. (EC Audiovisual Services, 07/01/2014).

In a long awaited move, the European Commission boosts the role of trade unions, the employers’ organisations and the non-governmental organisations of civil society in allocating and monitoring the spending of the European Structural and Investment Funds (ESIF). What is at stake relates to the resources bestowed by the European Union to the European Regional Development Fund (ERDF), the European Social Fund (ESF), the Cohesion Fund (CF), the European Agricultural Fund for Rural Development (EAFRD) and the European Maritime and Fisheries Fund (EMFF).

The total amount to be spent along those EU budgetary lines during the seven years (2014-2020) exceeds the astronomical amount of €325 billion, including more than €70bn to be invested in human capital via the European Social Fund. Yesterday the Commission came up with a package of Common Standards, “to improve consultation, participation and dialogue with partners such as regional, local, urban and other public authorities, trade unions, employers, non-governmental organisations and bodies responsible for promoting social inclusion, gender equality and non-discrimination during the planning, implementation, monitoring and evaluation of projects financed by the European Structural and Investment Funds (ESIF)”.

The new regulation

To this effect, yesterday the Commission adopted a Regulation outlining, for the first time ever, a common set of standards to be applied immediately by Member States in the form of a European Code of Conduct on partnership. The obvious reason for this new legislation is the strong criticism exercised by the European Court of Auditors, on the legality but more so, on the effectiveness of EU subsidies/money spent by member states. On many occasions the ECA has concluded that the EU money is spent with “little interest in the results achieved”. On top of that, in many member states there is a public outcry about the non-transparent way the EU structural funds and allocated and spent.

Until now, once the resources of the European Structural and Investment Funds mentioned above are allotted to each member state, spending becomes the only target. The ‘absorption’ of those funds by national governments is invariably an end in itself. As a result those national ‘dowries’ are allocated by governments on regional, local and sectorial levels in rough, non-transparent and rather unfair ways. According to the ECA criticism, the whole affair of monitoring and controlling the ‘absorption’ of the subsidies accorded to member states from the ESIF was restricted to direct deliberations between national and Brussels bureaucracies. The civil society plays almost no role at all in the regional, local and sectorial distribution of resources.

Civil society light

Representatives of trade unions, employers’ organisations and other civil society entities have very embarrassing experience in relation to the way EU money is spent in their countries. It was not by accident that the President of European Economic and Social Committee, Henri Malosse, when meeting with the European Council president, Herman Van Rompuy, ahead of the upcoming summit on 24 and 25 October had a lot to say about citizens losing confidence to EU institutions.

Malosse stressed to Rompuy that, “The EESC…underlines the weight of Europeans’ expectations in the field of economic and social policies and expresses its expectations of tangible and rapid achievements that would enable Europe to restore public confidence”. Obviously, the EU’s economic and social committee, having vested and legitimate interests on the way structural and investment funds are spent, is expressing above its reservations about the way the Union’s economic and social policies are applied by member states .

No need to mention that amongst the EU economic and social policies, the most visible by citizens are the projects, the activities even the persons who are favoured by the EU’s structural and investment resources. If the allocation of EU money were justified in the minds and hearts of citizens, there would have been no problem. Unfortunately, it seems that is not the case. That’s why the EU is losing the confidence of the hundreds of millions of lay people in the 28 member states.

Implicating workers and employers

In view of all that, the Commission now has decided to boost the implication and the role of workers, employers and civil society representatives in the distribution and allocation of resources on national level. Hopefully, the meticulous application of this Common Standards Regulation will shed light in the way structural and investment funds are allocated by member state bureaucracies. The target is to make the allocation, control and the disbursement mechanisms more transparent.

The problems are more acute in member states with slack and unreliable public administrations. In Greece, Spain and Italy for example there are unbelievable stories going around, about the way the EU structural and social funds are spent. The common denominator in all those affairs is that the final recipient of funds has to ‘oil’ the gears of the public ‘machinery’, which approves the inclusion of a project in a ‘European Programme’ and subsequently pays the subsidies. In all those steps ‘oil’ seems to be needed. Hopefully, if the civil society representatives are included in those structures, the under the table ‘negotiations’ and the kickback market would disappear.

All in all, confidence and credibility are easily destroyed and very painstakingly restored. Today in Greece, Italy, Spain and elsewhere in the Union the public administration services implicated in the application of the EU programmes are totally unreliable, non-transparent and have lost the confidence of citizens. It will be very difficult to restore it. Even this week in Athens, there were Press reports about a senior retired politician and an active party leader being accused of having misappropriated EU funds. Reportedly, they unduly used EU development funds to build their private country villas. Alas there is no end to such incidents that the Commission is trying now, if not to stop altogether, to at least mitigate the phenomenon.

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