Contradictory results in Court of Auditors report on the impact assessments of the Commission

A report by the EU Court of Auditors (that was so far confidential but now released by the Council) is generally positive about the way the EU Commission assesses the impact of its programmes. At the same time, the report leaves serious doubts about this conclusion.

For time reasons, I just took a look at the executive summary. But in there one can clearly see the contradiction between different conclusions drawn.

It starts very positive:

"On balance, particularly in recent years, the audit has shown that impact assessment has been effective in supporting decision-making within the EU institutions. In particular, it was found that the Commission had put in place a comprehensive impact assessment system since 2002.

Impact assessment has become an integral element of the Commission's policy development and has been used by the Commission to design its initiatives better. The Commission's impact assessments are systematically transmitted to the European Parliament and Council to support legislative decision-making and users in both institutions find them helpful when considering the Commission’s proposals."

So while this sounds good, the summary continues like this:

"Impact assessment reports do not easily reveal their key messages to the reader and comparing the impacts of the various policy options presented in an IA report is often impossible.

Also, due to a lack of appropriate data, the quantification and monetisation of the impacts of the different options assessed were weak and the analysis often did not provide an adequate basis for a comparison of policy options. In addition, comparing different options was made difficult because of the way in which they were presented in the impact assessment reports."

In other words, the Impact Assessments are a nice innovation but they are largely worthless because they are unclear and not based on good data.

So Impact Assessments have been introduced but they cannot be an effective tool because their results are blurry as much EU language in decisions and reports is blurry and indefinite. Great!

French finance minister praises EU co-operation in Jon Stewart's Daily Show

In an excellent English, and with true conviction, the French finance minister Christine Lagarde yesterday praised EU work and co-operation in the times of the economic crisis in the US-American comedy news "The Daily Show with Jon Stewart".

The Daily Show With Jon Stewart	M - Th 11p / 10c
Christine Lagarde
thedailyshow.com
Daily Show Full Episodes Economic Crisis Political Humor

This is excellent ambassadorship for the European Union, not like some of her UMP colleagues!

Barroso more expensive than Obama (and not worth the money)

Open Europe recently stressed that Barroso earns more than Obama and will receive pensions and other payments right after leaving the Commission that will reach about one million Euros. The story has been taken over by EUobserver.

From Puisney:

[...] les salaires qui s’élèvent à environ 236.000€ par an par commissaire, 296.000€ pour le président Barroso. Soit plus que le président américain Barack Obama (400.000$, soit 293.000€). Pas mal pour un super secrétaire représentant même pas élu au suffrage universel !

Very good remarks, indeed, given the recent salary bashing. Especially the comparison of a directly elected president and a quasi-secretary (although slightly polemic) is very pertinent to me.

In fact, we are paying a lot of money to somebody who is doing a bad job (and might be re-elected because of this) - and we cannot do anything about it!

The slowness of the EU Council during the financial crisis

On 04 April 2008, the

Memorandum of Understanding on co-operation between the Financial Supervisory Authorities, Central Banks and Finance Ministries of the European Union on cross-border financial stability

was signed, and one of the issues is the creation of so-called "Cross-Border Stability Groups:

5. The cooperation at a cross-border level can be enhanced further by the establishment of Cross-Border Stability Groups to focus on the issues relating to potential problems in specific firms, markets or infrastructures that are significant for all members of the group.

Now, almost one year later, I read in a draft Key Issues Paper for the Ecofin Council as a contribution to the Spring European Council, as prepared by the Economic Policy Committee and the Economic and Financial Committee (PDF) the following sentence:

[T]he establishment of "Cross-Border Stability Groups" among relevant Member States is important for ensuring effective cooperative arrangements among authorities, both in the short and longer term.

Does this mean that in one year nothing has happened? If this is such an important element that it was among the 11 lines of the MoU of 2008, why is there nothing but one sentence in a 14 page document of 2009?

I know that this just a minor issue, but its one of these many issues that take years and years, keep diplomats, administrators and ministers discussing but which in fact never develop.

Waste of time. Political deliberation for the sake of political deliberation. Lack of follow-up, lack of speed, lack of consistency.

Aaaaahhh!

CEE countries united for EU rescue plan

The countries of Central and Eastern Europe (see the discussion: Is there something like CEE?) in the European Union will have a separate co-ordination meeting ahead of the EU summit on 1 March.

They are afraid to ignored in the possible EU rescue plan, and will try to form a common front against the old and rich(er) EU member states.

I am not sure whether this is a good sign.

It hints to the fact that behind the scenes there is not much unity, that in the administrative and diplomatic levels of the Council member states are bargaining. It is a bad sign, because it means that a unified approach to the financial crisis will not be the result of shared interests but of political games.

It is a bad sign, and I hope it will not get too ugly.


Read also (21 February 2009): Barroso will join the CEE meeting

EuroparlTV costs 60,000 Euros per hour

German tech news site Heise.de reports that the online TV of the European Parliament (criticised from the beginning) - EuroparlTV - has had only 150,000 visitors so far, less than 40,000 per month.

That's not very much, taking into account that according to Austrian calculations one hour of broadcasting costs 60,000 Euros.

How to solve this problem? EuroparlTV has already decided: They will spend more money on a marketing campaign...


Read also: Oh what a turn off by Bruno Waterfield (17 February 2009)

Getting rid of public money: An international perspective

Something I have heard today from a colleague working for an international organisation:

Damn, I still have 20,000 Euros on this travel costs budget line of programme XYZ - and since I cannot transfer them to another budget line, I have to find ways how to make people travel around in order to be able to spend that money before the programme finishes!

This kind of attitude makes me really angry: People working for an public organisations and are using public money are looking for ways how to get rid of this money just in order not to have anything left.

It shows an absolute lack of understanding about what kind of money they are using and spending. It shows that the incentive system build into some public (national or international) organisations is totally wrong and contributes to excessive spending and especially miss-spending of resources that could well be used for better purposes.

Not to talk about the doubling of work of certain organisations without producing better results.

European Parliament elections 2009 (38): Germany's Left party spends 3 Million on EP campaign

According to the FAZ, the German Left, whose leader is also the head of the European Left, will spend 3 Million Euro for its European election campaign in Germany, expecting/hoping to win around 10% of the vote.

For a comparison: This is about 4 times the budget of the European Left in 2007 (published on their website), and 60% of the budget the German Left party plans to employ for Germany's parliamentary election in September this year.

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Under the category "Tracking: European parliament elections 2009" I am following up national and European activities on the path to the European Parliament elections 2009.

For an overview over all articles in this category have a look at the overview article.

For the five newest post see also the sidebar.

TACIS funds for Russia were a waste of money (updated)

For years, the European Union has been financing assistance programmes in its geographical and political neighbourhood, especially in the former Soviet Union, including Russia.

The main financial aids for Russia under the EU-Russia Cooperation Programme came from the so-called TACIS (Technical Assistance for the CIS countries), in place from 1994 until the end of 2006 for the main CIS country.

Thanks to a newly published document of the Council of the European Union, I found the conclusions of the Council (doc) from its meeting on 17 July 2006 where it

"Notes with concern the main conclusion of the audit that the efficiency of the use of TACIS funds in the Russian Federation has been low. It regrets that the objectives were not met in a number of the audited projects and that projects were deemed sustainable in only a few cases. It also regrets the lack of a real dialogue between the Commission and the Russian authorities and the consequent lack of a sense of ownership on the Russian side. Given the size and duration of the programme, the audit results can only be seen as disappointing."

Using "disappointing" in a diplomatic document sounds rather strong, and the assessment that major parts of the TACIS programme in Russia have been a failure raise the question whether sticking for 12 years to a programme and projects that do not have any considerable effect was necessary and right.

This question is especially relevant since under the European Neighbourhood Policy (ENP) and other technical assistance programmes, the European Union is still financing an huge number of activities in the countries of the former Soviet Union.

Are these effective, efficient, helpful? Or is the European Union sticking to programmes and activities that cost a lot of money but remain without relevant impact? These questions have to be answered, and I am afraid that they are not seriously raised, especially not publicly.

In order not to be misunderstood: I am in favour of supporting democratic developments - technical and political - in the EU neighbourhood, including Russia. But I am in favour of a self-critical assessment of what we are financing, how useful it is, and how we can improve it.

And I am against waiting for 12 years to realise that what we are doing is full of good intentions but without any considerable effects!

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(Updated on January, 6. First version published on Januar, 3.)

On the request of Petr, here some more details on the TACIS programme and the evaluation of its implemenation in Russia:

The objectives of TACIS, which in the case of Russia is now run under the European Neighbourhood and Partnership Instrument, were the following:

• assistance for institutional, legal and administrative reform (development of the rule of law, support for effective policy-making, support for justice and home affairs activities, etc.);

• support for the private sector and assistance for economic development (promotion of small and medium-sized enterprises (SMEs), development of the banking and financial systems, promotion of private entrepreneurship, etc.);

• assistance in addressing the social consequences of transition (reform of the health, pension, social protection and insurance systems, assistance for social reconstruction and retraining, etc.);

• development of infrastructure networks (transport networks, telecommunication networks, pipelines, border crossings, etc.);

• better environmental protection and management of natural resources (alignment of standards on Community norms, sustainable management of natural resources, etc.);

• development of the rural economy (land privatisation, improvement of distribution and access to markets);

• support for nuclear safety. (source)
  

The assessment made above, and the conclusions by the EU Council are based on the SPECIAL REPORT No 2/2006 concerning the performance of projects financed under TACIS in the Russian Federation issued by the European Court of Auditors in March 2006 in which it concludes that out of 29 projects assessed (out of a total of 275 worth 56 million Euros) only 9 fully achieved their goals and only 5 produced sustainable results.

The audit report noticed the following shortcomings in the project planning and implementation:

• Objectives not achieved or achieved only partially (only small projects successful)
  
• Poor application of the Project Cycle Management System
  
• Long project-planning schedule
  
• Unrealistic underlying assumptions and objectives
  
• Imprecise or missing objectives
  
• Unsuccessful selection and involvement of beneficiaries
  
• Rare national co-financing
  
• Delays in implementation
  
• Ineffective steering committees
  
• Equipment not used for the purposes of the project
  
• Purchases free of VAT from domestic suppliers impossible
  
• Poor dissemination and poor sustainability (e.g. discontinuation of project websites)
  
• Lack of evaluation
  

I recommend reading the full ECA report in order to get the full picture. It seems as if a good part of the problems are self-made problems by the Commission which did not apply proper planning and evaluation, while the rest are related to internal shortcomings in the Russian Federation. However, since those activities usually should be joint (i.e. "partnership") projects between the Commission and the beneficiary - in this case Russia - it is not always useful to distinguish between the partners when it comes to the responsibility for (partial) failure.

The report - and the subsequent harsh assessment of the EU Council - show that although the European Union and its Commission have high standards and high expectations, the implementation of policies - here: foreign aid - is not very effective, which means that we spend millions of Euros in high expections but low results.

My personal and professional experience in the field of international work so far is quite similar - high expections plus a lot of money lead to rather low outcomes - which raises concerns about whether the report on TACIS money for Russia does not represent a more general picture about how the Union and other international organisations are working in the field (and back in their headquarters).

Out now: European Court of Auditors Report for 2007 - supplemented

There it is: The European Court of Audiors report for 2007 (PDF). I won't be able to give a full account of the 300 pages, but let's have a look on some specifics.

According to the press release, the area most affected by misspending is social cohesion:

As in previous years cohesion policies (42 billion) are the area most affected by errors. Following the Court's sample estimate at least 11 % of the value of reimbursed cost claims should not have been paid out.

If I understand this correctly, then the European Union is spending more than 4.5 billion Euros to much on its social cohesion policy. Or in other words: A lot!

One of the reasons for misspending seem to be overly complicated legal and administrative provisions:

The Court also calls for due consideration to be given to simplification - for example in rural development and research. Well designed rules that are clear to interpret and simple to apply decrease the risk of error.

This is also the main point that the President of the Court of Auditors, Vítor Caldeira (CV), stresses in his speech: He asks for further simplification.

But regarding simplification, I would like to point out that neither the report, nor the press release, nor the published speech by the Court's president are very citizen-friendly - neither in terms of presentation nor in terms of language.

What do we learn? We learn that some things are better than in the past; we learn that the EU is spending too much money in several areas; we learn that the control mechanisms can be improved; and we also learn that a balance between efforts and results of control has to be maintained. Interesting, but rather empty.

All in all, the report lacks an executive summary, and it lacks a clear presentation of past shortcomings and necessary future changes.

Is anyone expecting citizens or smaller non-governmental organisations to comb through this technical language? - You may ask why? Well, maybe because it concerns all of us, and maybe because a simplification of the presentation would ease our understanding of how the European Union and its institutions are (not) working.

But maybe, this is yet just another administrative document, and we should not care about it too much, right?!

Supplement:

The EUobserver article covering the reports brings some interesting voices, inter alia from Commissioner Kallas, that demand a tougher stand of the Commission towards the member states when it comes to the mismanagement of funds.


Related articles:
- Daniel Hannan: "EU budget rejected"
- Me: EU budget committee criticises EU agencies
- Me: Boring: The European Ombudsman and his 2007 report

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By the way: If you would like to be the next Secretary General of the Court of Auditors - now is the time!

European Court of Auditors report to be published today - updated

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UPDATE: For a discussion of the 2007 report, read the follow-up article!
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According to several sources, the European Court of Auditors will publish today its report on the 2007 (mis-)spending of the European Union and its institutions.

I have tried to reach the Court of Auditors' website, but right now it is either offline or too busy - in any case I do not have access to it for the moment.

But as soon, as I will see the report, you will get my commentary!

Update:

Now the website is accessible again. According to the press briefing (pdf), the report is already accessible to journalists now, but may not be published before 14:30 (Brussels time; at this time, the report will appear on the Court's website). The official presentation will be at 16:00.

The Great Juncker: Back to the nation state (updated)

Jean-Claude Juncker, Prime Minister of Luxembourg and head of the informal group of EU countries that use the Euro as their currency, was the "star" in an interview at France 2 last week.

Cédric Puisney, the European who is never satisfield, was so kind to give access to the full report in his article, including discussions in the European Parliament, a short presentation of the functioning of money laundering, and from minute six of the video you can see the interview with Mr Juncker.

The interviewer starts with a reference to a statement made by EU Council President Nicolas Sarkozy, in which the latter addresses Juncker directly (in his function as Prime Minister), demanding that if the EU will ask from other countries to close tax havens, some of their own countries (which means, inter alia, Luxembourg) will need to implement better and more transparent rules themselves.

In the interview (in French), Juncker tries to defend his country against the comparison with "classical" tax havens like the Bahamas. However, he looks pretty much in a defence position, trying to discredit the report of France 2 and not really reacting to the argumentation of the news presentor David Pujadas.

Only in one of the last sentences he admits that the common position of other European countries regarding the bank secrecy is not in accordance with the position of Luxembourg (or, vice versa...), which is why the country did not participate in a reunion of finance ministers discussing these questions.

Altogether, a report and an interview well worth seeing, because they reflect the changements the European Union is going through in these days of crisis, and because they present Juncker not in his typical positive European light, but in a national defence position, something that does not suit him too well.

Update:

I just read in an article from Le Monde that the day after the interview had been aired, the Information Director of France 2 excused the report and the interview. Ridicule...

European leaders look to the United States (supplemented)

With ironic amusement and disbelief I am looking at our European leaders who themselves are looking with fear in their eyes to the United States of America, hoping for the US taxpayer to save the world.

When you hear the European Union's trade Commissioner say that everyone is waiting the US to react on the crisis, and when the Commission's spokesman Johannes Laitenberger is quoted that the crisis is US made and that therefore the US has a "special responsibility" to solve it, this does not sound like self-confidence.

It rather sounds like the little brother is looking up to his big brother, waiting for guidance although the whole family is in troubles.

It is a sign that our own leaders where relying on strength and stability of a global system de facto dominated by the United States without taking preventive measures for a scenario that was kind of foreseeable. Already during university my political economy professor told me that the US economy was based on massive debts and that sooner or later it would crumble.

And French International Monetary Fund managing director Strauss-Kahn says that his organisation had warned in April that the crisis would reach 1 trillion US-Dollar losses, but "people did not want to listen".

So please, nobody should tell that what happens today is totally unexpected, except for the fact that the mortgage gambling made thinks worse than expected.

Now individual countries like Ireland take their own measures to save their banks - with taxpayers money. The German, British, and Benelux governments step in with massive guarantees for major banks in their countries. And the European Central Banks opens its doors to provide the Euro area with money (which doesn't even work) - and asks other banks to so, too. Mhhh, money!

That is rationally handled panic.

And in this time, someone like Sarkozy is looking for Europe to "take a greater hand in global decision making".

Our stock exchanges are just waiting for the United States to take a decision on the "big bailout" (cf.: "Big Bang") - but Europe wants to lead the world. Our economies will decline because US consumption will drop significantly - but Europe wants to lead the world. British bankers cry on the streets because their US mother companies fell apart - but Europe wants to lead the world.

My interpretation of this situation is that this is not only an economic crisis. It is a crisis that shows that the political systems were not prepared for a foreseeable situation. They have to react with massive measures because they did not have any plan for more sound reactions. It is not a failure of the market economy, it is the failure of leadership.

And so everyone is looking to the United States of America. At home, we correct the cosmetics, pump in liquidity into our own markets, but the real fear factor is this funny little world power between the Pacific and the Atlantic Oceans. Europe cannot solve the crisis on its own, it has to hope and wait for his big brother. And the US-taxpayer.

The European polity only is made to correct cosmetics. It is made to make things look nice and clean. But it is not made to solve huge problems that occur with a quicker speed than the speed of our institutions - it can only hope that through its cautious work some problems do not even arise. But the Georgian crisis and the world financial crisis show that we are quite far away from being optimistic even in that respect.

European leaders look to the United States. They lead the cosmetics, but they are led but an half-dead body below the make-up that will not be healed by paint. It needs some tougher pills... let's hope that the US will find some - our leaders won't!

EU budget committee criticises EU agencies

A rather critical text containing a draft Council resolution on the financing of the differenct decentralised agencies of the European Union has been forwarded to COREPER these days.

Following a report by the European Court of Auditors (Special Report No 5/2008) the draft COREPER resolution

NOTES WITH CONCERN the general findings of the Court that the audited decentralised agencies do not plan their activities adequately nor, for most of them, have at their disposal sound tools for monitoring their activities, and that the reporting of the activities and the evaluation of the results need to be improved.

The phrase "notes with concern" is rather alarming, and it looks as if the observed agencies are in quite some troubles.

According to the Court of Audiors' report these agencies are:

• the European Environment Agency;

• the European Food Safety Authority;

• the European Medicines Agency;

• the European Maritime Safety Agency;

• the European Network and Information Security Agency;

• the European Foundation for the the Improvement of Living and Working Conditions;

• the European Agency for the Management of Operational Cooperation at the External Borders of the Member States; and

• the European Agency for Safety and Health at Work

The executive summary of the 49 pages long report remarks that:

"IV. The agencies did not make ex ante evaluations of their programmes, nor did they draw up multiannual programming documents intended to enable them to set medium-term result and impact objectives together with performance indicators.

V. While the agencies all drew up annual work programmes, these provided little precise information concerning the resources to be allocated to the various actions and the results expected.

VI. Monitoring tools were still fairly rudimentary in most of the agencies. Information on the use made of the resources allocated to their activities was often scattered. It would be of benefit to promote to all agencies the best practice monitoring systems identified in certain of them. The Commission's role could be reviewed in this respect.

Both, the Auditors' report and the strength of the draft EU Council resolution show that the planning and execution of the work - and especially the financing - of the respective agencies of the European Union is inappropriate and needs revision.

In fact, these should be issues European media take more serious. As in this case, both the Court of Auditors' report and the planned Council conclusions are public, and I would expect the mainstream journalists to follow up on this.

But I doubt that anybody cares if the European Union is poorly organising and supervising its activities - apart from some strange Eurosceptics concentrated around a little island on the western shores of the European continent...