EU transfers fuel corruption, white collar crime
“There is a case for reforming the long-term EU budget”
Courtesy of Open Europe
On October 21th 2019, Open Europe’s Pieter Cleppe gave evidence to the Committee on EU Affairs of Germany’s Parliament in Berlin, discussing the long term EU budget 2021-2027, which is currently being negotiated. A briefing provided by Pieter Cleppe detailing how the EU multiannual budget can be reformed can be found here (and the German version here).
In his statement to German MPs, Cleppe argues that the new long term EU budget, or “Multiannual financial framework “ (MFF) already amounts to more than 1 Trillion euro over seven years. For the next period, from 2021 until 2027, the EU Commission wants to increase this to 1.279 billion euro, or 1.11% or 1.14% GNI. Certain cuts are planned for agricultural and regional spending, but he recommends imposing more drastic cuts, in particular to the 300 billion euro in so-called “direct payments”. Thereby, agricultural landowners receive EU funds per hectare of owning or using agricultural land, resulting in the likes of the Queen of England, wealthy Spanish families and industrial concerns receiving taxpayers money with virtually no benefit to taxpayers in return.
He stresses how Brexit actually offers the EU an opportunity to implement reform, as the loss of the UK budget contribution could be used as leverage to finally end this system of “direct payments” to owners of agricultural land, combined with deregulation for the farming sector, so Europe’s farmers can become more competitive, following the successful example of New Zealand.
He further points to research demonstrating that EU regional transfers have failed to develop the economies of the EU’s poorer member states and, in return, risk worsening corruption in the member states receiving them. He wonders if instead of launching “rule of law” procedures against EU member states with a weaker democratic tradition, the EU shouldn’t start with no longer transferring vast resources to member states with higher levels of corruption if the EU wants to promote the rule of law in these states. He quotes Italian Central Bank research concluding that EU cohesion funds “significantly increased the number of white-collar crimes” in Southern Italy. He also explains Open Europe’s compromise proposal, to focus regional funds to EU member states with income levels at or below 90% of the EU average, something that would already deliver considerable savings.
Finally, he highlights other wasteful spending within the EU institutional machinery and the problematic monthly “travelling circus” of the European Parliament between Strasbourg and Brussels. He argues that this all will not bankrupt the EU, but it inflicts great damage on the EU’s reputation, noting that to tackle this should be made a priority, as a first step for the EU institutions to regain trust.
Pieter Cleppe is the Head of the Brussels office of Open Europe (Open Europe Brussels VZW). He is a frequent contributor to the broadcast and print media across Europe, frequently discussing EU reform, the refugee crisis and the eurocrisis. A trained lawyer, Pieter previously practiced law in Belgium, and has worked as a cabinet advisor and speechwriter to the Belgian State Secretary for Administrative Reform.