MEPs expressed their dissatisfaction with the Commission's handling of the Ecu 77 billion budget for 1996 by withholding clearance of the accounts. This follows on from a recommendation from the Court of Auditors stating that it could not accept that all the funds had been managed properly.
James Elles (UK, EPP) singled out numerous weaknesses, including the slow response in tackling fraud in the tourist sector, and the illegal cross-border trade in tobacco and alcohol in a Europe without customs controls. Furthermore a computerised control system, designed to monitor payments from the Ecu 20 billion farm budget, due to be operational in 1996, was still not operational at the end of the year. The result was that it was impossible properly to check this expenditure.
Mr Elles wants the Commission to carry out an investigation into the farm budget and report where fraud is suspected. He also found fault with the management of aid programmes to Eastern Europe and the allocation of funds to small firms. While each area with poor controls may not on its own justify withholding approval, Mr Elles felt the culmination of errors left Parliament with no alternative but to demand a further explanation. The House agreed.
Speaking for Council, UK Secretary to the Treasury Helen Liddell agreed with Mr Elles's remarks but drew a different conclusion. She felt the best way forward was through better co-operation and contacts between the member states and the Commission with a view to improving the situation and achieving the highest standards.
Replying for the Commission, Erkki Liikanen undertook to do all in his power to come up with the answers before September. The Commission was actively looking at ways of strengthening UCLAF, the EU's antifraud squad, and improving co-operation with national authorities. Measures were being taken to tackle weaknesses in the management of CAP funding. He, too, acknowledged criticism of weaknesses in the aid budget, and said that responses were being made to these points.