Bill
Rammell: I am aware of the action that has been taken, and
to which my hon. Friend refers, and we should credit the fact that
Bulgaria, as a nation, is immeasurably different and has a different
governance system from the one that existed in the 1990s. However,
there is an important point to make: I am not going to get into the
business—the Government will not either—of
second-guessing the Commission, which rightly has the responsibility
for policing the progress that has been made. If it is true, as the
Bulgarian authorities claim, that changes have been made, the
Commission needs to see evidence of it and the impact on the
ground.
Mr.
Francois: May I ask the Minister a specific question about
the suspended funds? The Foreign and Commonwealth Office explanatory
memorandum, which is on page 15 of the bundle before us, notes that the
EU’s payments to Bulgaria under the PHARE programme for
institutional reform prior to EU entry, and the SAPARD programme, which
relates to agriculture, have both been suspended. The memo also states
that a decision on whether to suspend the ISPA cohesion fund for roads,
which is worth €879 million in total, and of which, according to
the memo, about €156 million has been paid out so far, will be
reviewed later this year. Given that and the Minister’s earlier
reference to cohesion funding, has a decision been made about whether
to continue to pay out from the ISPA fund? On what criteria is the
decision based?
Bill
Rammell: There is a review, and my understanding is that
it is commissioned for later this year in respect of the ISPA funding.
In respect of the PHARE funding, it is important to draw a distinction:
€220 million of PHARE funding is definitely lost, because the
money had to be spent by the trigger date in November; and a further
€340 million of contracted but unpaid PHARE funds remains
frozen. That is the programme with which there have been particular
concerns, and it is right that the funds remain frozen until the
Commission, on our behalf, is convinced that the appropriate procedures
and safeguards are in place to ensure their effective
disbursement.
Mr.
David Heathcoat-Amory (Wells) (Con): May I have in euros
from the Minister the total sum that has actually been spent in
Bulgaria? I think that I heard him give a percentage of the total
allocation, and he referred to a number of other programmes, but it is
quite difficult, and I have tried, to tot up the number of programmes
on which cash has been spent. By my reckoning, the total comes to well
over €1.2 billion, excluding the cohesion and regional funds,
but perhaps the Minister has a more accurate figure for the
aggregate.
Bill
Rammell: I believe that the right hon. Gentleman’s
estimated figure of approximately €1.2 billion is accurate. If
it is not, I shall confirm the figure later in the sitting. It is a
very substantial sum of money, and there clearly were irregularities in
the disbursement of the funds. That is why the freeze has taken place,
and that is why it should remain in place until we can receive the
reassurances that we are looking for.
Jo
Swinson: I should like to press the Minister a little more
on the review of the situation, because he mentioned that the
Bulgarians clearly believe that their actions are having an effect, and
that the Commission is conducting a review. He also said that the
review is due later this year, but we are already on 16 December. Is he
really saying that the Commission will suddenly produce a report to put
before us within the next 15 days? Do we have a date when the review
will be available so that Members, and anyone else who is interested,
can scrutinise it?
Bill
Rammell: No. I am sorry; the hon. Lady misunderstands me.
The Commission’s review will take place during the course of
next year, and that review will depend on the progress that the
Bulgarian authorities have made on ensuring that the safeguards are in
place.
Jo
Swinson: Further to that point, the European Scrutiny
Committee’s document, which was published in the middle of this
year, said that the Commission would review progress later this year,
clearly meaning 2008, which is what I thought the Minister was
referring to. Has something changed since the European Scrutiny
Committee was informed that the Commission would review progress this
year—in 2008?
Bill
Rammell: My clear understanding is that that was not the
time scale for the review. The decisions and actions were rightly taken
by the European Commission. The timing of the review will depend to
some extent on the progress of the Bulgarian authorities. It is right
that that should
happen. Mr.
Ken Purchase (Wolverhampton, North-East) (Lab/Co-op): My
hon. Friend mentioned earlier that the condition of making funding
available was that there be robust systems to ensure that exactly what
we are discussing would not happen. My hon. Friend the Member for
Barnsley, West and Penistone identified many serious difficulties in
Bulgaria in the 1990s. In advance of making the funds available in such
quantities, why did the Commission not recognise that Bulgaria was in
no position to take advantage of them in a proper and robust
way?
Bill
Rammell: I genuinely think that commitments were made on
behalf of the Bulgarian authorities. The view reached across the
European Council was that there was sufficient progress for the
annexation process to start. The review mechanism is a means of
ensuring
that the standards are being adhered to as the accession process
proceeds. The Commission has reported serious concerns so the funds
have been frozen. It is critical that we act on that and the Commission
has been charged with doing
so. Mr.
William Cash (Stone) (Con): Will the Minister comment on
the report of the Court of Auditors of 24 and 25 September 2008? Its
opinion demonstrates that there is
“a material
level of error of legality and/or regularity”
in a range of matters
including agriculture, natural resources and cohesion. Does he agree
that it would be better if the report contained specific questions
relating to individual countries? It is difficult from the document to
see where difficulties arise, particularly as the Commission cannot yet
demonstrate that its actions to improve supervising control systems
have mitigated the risk of error in large areas of the
budget.
Bill
Rammell: I agree that it is unacceptable that for the 14th
year in succession the European Court of Auditors has been unable to
give a positive statement of assurance on the majority of budget
expenditure. I recall from my days serving on the European Scrutiny
Committee with the hon. Gentleman that that was a huge bone of
contention. It remains so today. It is critical that such issues are
addressed. I will feed back his view that it would be more helpful if
the Court of Auditors made it clear to which countries particular
problems and abuses
relate. Member
states have the overriding responsibility to tackle fraud in the EU. If
we are to reinforce that responsibility, the Court’s report must
make it clear which member states are doing what they should be and
which are not doing things as well as they
should.
Mr.
Purchase: Following on from that answer, I am not saying
that a whitewash is in progress, but it is important for the future
that we know what happened. Given the level of gangsterism that was
prevalent in Bulgaria before it entered the EU, was it not perfectly
obvious that it would be extremely difficult to guarantee that the
funds would be used properly? Is it not the case that those consumed
with the idea of widening allowed themselves to be taken in? They let
themselves believe that it would be all right on the night, when all
the evidence—even up to the day of accession—showed
clearly that Bulgaria would not cope with membership of the EU at that
level.
Bill
Rammell: I respect my hon. Friend’s views, but I
genuinely do not believe that that was the case. A decision was taken
to enable Bulgaria to accede to the European Union and, as part of that
agreement, the co-operation and verification mechanism was put in place
for exactly that purpose—to identify the degree to which the new
member states were meeting their responsibilities. At the earliest
opportunity, the Commission identified that that was not taking place.
In those circumstances, it is right that the funds have been suspended.
We now need to test properly—several hon. Members have referred
to this—the degree to which the renewed commitments on the part
of the Bulgarian authorities are having a genuine
impact.
Jo
Swinson: Obviously, we have two reports on the
co-operation and verification mechanisms. Does the Minister not see
that, by their very nature, those mechanisms are a slightly clumsy way
of securing the achievements that we want? To quote the European
Scrutiny Committee, “those being monitored”
were “on
the same terms as those doing the
monitoring”. Full
members of the European Union are monitoring other full members of the
European Union—they are of the same status—so by its very
nature that process provides less of an incentive than there would be
if a potential member state were being monitored by the European Union.
Does the Minister not see a slight difficulty with that and does he
draw any lessons from the speed at which Romania and Bulgaria joined
the EU, perhaps with a view to doing it differently or at a different
pace for some of the other countries that are seeking to
accede?
Bill
Rammell: On whether there are any lessons to be learned, I
think that I am right in saying that there was cross-party consensus on
enlargement of the European Union and the accession of the A8 countries
and Bulgaria and Romania. I take the hon. Lady’s point, but I am
not sure whether there is an alternative mechanism to test out and
verify the degree of progress. There is not some independent authority,
although one could argue that the Commission should take on that role;
it certainly reports. However, I think it right that the ultimate
judgment is made by member states. There is a degree of probity and
integrity in the structure of the European Union and the existing
member states. They have a vested interest in ensuring that we use the
tool of the co-operation and verification mechanism to ensure that new
member states come up to the standards of the existing
ones. Mr.
Crispin Blunt (Reigate) (Con): The Minister referred to
irregularities in what has happened to European Union funds, and the
hon. Member for Wolverhampton, North-East talked about widespread
gangsterism. What proportion of the €1.2 billion so far expended
does the Minister think has ended up in criminal hands, or has ended up
with the causes to which the European Union wanted the funds to
go?
Bill
Rammell: I cannot provide the hon. Gentleman with an
off-the-cuff classification of those elements of expenditure, but I
will try to do that in the course of the sitting. It is right to tackle
such problems, and the actions that are being taken by the Commission,
with the support of member states, are the most effective way to do
that.
Mr.
Heathcoat-Amory: The hon. Gentleman said that he would
provide us with an estimated figure for total expenditure later in the
debate, and I look forward to that, but my estimate excluded the
regional and cohesion funds, which is a very big allocation—more
than €5.5 billion for the current period. The report
before us is silent on the amount spent under that programme, although
it says that implementation of a number of operational programmes is
progressing. It goes on to say that the Commission has severe problems
with the way in which the money has been spent. Could the Minister
include
in his estimate the allocation under the regional and cohesion funds,
because that may take it well beyond the €1.2 billion estimate
that I gave
him?
Bill
Rammell: Let me give the right hon. Gentleman some detail.
The PHARE programme for institutional reform is worth €650
million overall, of which €450 million has already
been contracted. The SAPARD programme for agriculture is worth
€445 million, of which €235 million has been
paid out. The ISPA infrastructure cohesion fund is worth €879
million, of which €156 million has been paid. That
means—like the right hon. Gentleman, my memory was
mistaken—that €841 million has already been paid
out.
There are
several other programmes in the initial phase of implementation, which
means that only advance payments have been made at this stage. The
Commission is examining the management of those projects. As I said
earlier, in relation to structural funds, of which something like 2.5
per cent. of the global total has thus far been committed, the
Commission is sending a mission to Bulgaria early in the new year to
look at the oversight mechanisms for the distribution and disbursement
of those
funds.
Mr.
Francois: May I ask about the implications of what has
happened in Bulgaria and Romania for the further enlargement of the EU?
The European Scrutiny Committee’s report on EU enlargement in
relation to Romania and Bulgaria concluded, on what is page 24 of the
bundle before us, that
“the best way of
ensuring the integrity of EU enlargement policy is to ensure that
candidate countries are fully able to take on the responsibilities of
EU membership, and fulfil the values that underpin the EU, before
accession takes
place.” Will
the Minister assure us that what has been learned from the experience
in Romania and Bulgaria will be put into place in relation to the
future accession to the EU of Croatia and other potential candidate
countries in the
Balkans?
Bill
Rammell: I can give the hon. Gentleman that assurance. If
one looks at the historical development of the accession process within
the European Union, one sees that we used to work collectively on the
basis of target dates for countries to come into membership, whereas
the approach is now very much conditions-based; there is a will in this
regard. Although there is cross-party consensus on the merit of further
enlargement of the EU, we are now rightly saying that the conditions
for entry must be met before countries can come into membership,
however strong the relevant
principles.
Mr.
Cash: The Minister says that there is overarching
agreement on enlargement, and I personally am in favour of enlargement.
I am not, however, in favour of the European Union as it stands. The
Minister will know that I favour an association of nation states. I say
that because in 1993, the European Council referred specifically to the
criteria for membership including the rule of law, a functioning market
economy and a stable democracy—I am sure that he anticipates
what I am about to say. If the European Union itself fails in those
respects and the European Commission is incapable of
exercising the degree of judgment required when new member states are
due to come in, the problems that we get, which impose themselves on
our taxpayers—they eventually pay the bill—must prompt us
to ask whether we can have a different European Union in which we do
not simply close the door after the horse has bolted, but have a system
that works effectively in the interests of our
taxpayers.
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