Billions in EU misspending eyed as group faces budget talks

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Billions of dollars were erroneously spent by the European Union last year, paid out to projects that didn’t meet the exacting rules for getting the money, an audit released Tuesday found. The annual report estimated the total amount of misspending topped $6 billion.

The European Court of Auditors “found too many cases of EU money not hitting the target,” the court’s president, Vitor Caldeira, said in a speech Tuesday in Brussels.

“These problems matter more than ever,” he added.

The spending mistakes included financial subsidies for pasture land going to forested areas, money for training electronics employees going to other kinds of workers, and excessive costs claimed for research projects, Caldeira said. Only two areas of the budget were totally free from mistakes.

The European Commission pointed out that despite the striking sum, the rate of spending errors is under 4% -- an overall drop from five years earlier when errors were estimated to exceed 7%. Outright fraud remains rare.

But even the accidental misuse of EU money is under the microscope as Europe scrapes through a financial crisis. Members of the international body contribute money to be invested across the region. Wealthier nations in the bloc are pushing to freeze or pare back its spending as they suffer cuts at home; others want a budget hike.

Euroskeptics seized on the report as evidence that less money should be sent to the EU. ‘If this report, outlining as it does the continued gross mismanagement of EU funds, doesn’t set alarm bells ringing in Downing Street then nothing will,” argued Marta Andreasen of the UK Independence Party.

EU Audit Commissioner Algidras Semeta turned the focus back on the countries that make up the union. The bulk of EU funds are managed by national governments that distribute the money.

“A little more effort by member states to control projects properly and retrieve misused funds could go a long way, particularly in this time of economic difficulty,’ Semeta said in a statement Tuesday. Countries could also back a European Commission proposal for simpler, easier-to-follow funding rules, Semeta said.

The EU is slated to undertake budget talks later this month. Countries in the international body are expected to lock horns over whether the EU should freeze, reduce or ramp up its spending as the crisis continues.

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-- Emily Alpert in Los Angeles

Photo: European Union Audit Commissioner Algidras Semeta, shown at a news conference in September, says EU member nations need to do more to control projects wrongly funded by the alliance. Credit: Olivier Hoslet / European Pressphoto Agency.