MEPs get to spend their way, for now

Reports find the Parliament is lacking control systems.

How the European Parliament spends its annual budget is being brought to public attention in a way never seen in the institution’s history. The degree of transparency and public scrutiny is long overdue.

Bart Staes, a Flemish Green MEP, is drafting a report for the budgetary control committee on how the Parliament spent its 2008 budget. He has highlighted the ease with which the Parliament can shift funds to pet projects and ensure that none of the €1.6 billion that the Parliament is allocated goes unspent.

Other MEPs are asking additional questions about the reliability of internal controls, highlighting such eyebrow-raising practices as handing envelopes of cash to leaders of visitors’ groups.

Internal and external reports

Critical reports by both the Parliament’s internal and external auditors have forced MEPs to pay back €3.34 million in incorrectly claimed allowances since 2007.

The cumulative impression is that the Parliament does not have an adequate system of internal controls. Yet it will not have escaped the notice of other EU institutions that MEPs have been insisting for years on ever- higher standards for the European Commission and member states.

Last Thursday (25 February) MEPs voted to hire 150 extra staff and increase the monthly allowance for assistants by €1,500 to €19,040. The cost of the extra staff and the increase in the allowances will be €13.4 million.

The official justification for the changes is that MEPs face a heavier workload because their powers are extended under the Lisbon treaty and they need expert advice in a wider range of policy areas.

Budget changes

These changes will be put into a proposal by the Commission to amend the EU’s overall budget, to be published in mid-March. So will there then be a show-down between the Parliament and the other EU institutions? If not, why not?

There will not – primarily because the Parliament has so much money that it can pay for the extra staff and allowances by moving funds from elsewhere in its total budget for 2010, mainly by running down a reserve for buildings.

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Both the Staes report and the staff increases show that the Parliament enjoys much greater freedom than the Commission or the Council of Ministers to alter its budget. The Parliament decides to take on an extra 150 staff while insisting that the Commission has a zero-growth recruitment policy. Last year, the Parliament used the threat of withholding approval of the Council secretariat’s spending in 2007 to force the Council of Ministers and the presidency to provide more information about the Council budget.

Member state irritation

The national governments of the EU’s member states are becoming increasingly irritated by the Parliament – and not just over the budget. They were annoyed that the Spanish government, which holds the presidency of the Council of Ministers, caved in to the Parliament’s demands that MEPs should be given passes to enter the Council’s buildings. They feel that Commission President José Manuel Barroso made too many concessions when he promised to give MEPs the documents that the Council receives, at the same time.

Nevertheless, the view in the Council is that this is the wrong time for a show-down with the Parliament. MEPs are just discovering and flexing powers acquired under the Lisbon treaty. The decision to vote down an EU-US deal on sharing data on bank transfers was an uncomfortable reminder of how they can make life yet more difficult. The Council will need the agreement of MEPs on changes to the staff and financial regulations if the European External Action Service is to be set up and start work on time. The thinking in the Council is that a major inter-institutional clash now would undermine the argument that passing the Lisbon treaty was essential for the EU to work more effectively.

All of which means that, for the moment, the Parliament is likely to get its way on its budget. There is unlikely to be a fight at this stage over the Parliament’s spending plans. The 39-year-old deal that allots to the Parliament a 20% share of all the EU’s administrative spending is unlikely to be challenged by the Council of Ministers. But the MEPs may yet be storing up trouble for themselves.