The Guest Blog



Guest post by MEP Benedek Jávor.

Cohesion policy is an important tool of solidarity within the European Union. Since the 2004 accession wave this European flow of sources contributed on an altering level to the convergence, and at the same time in the majority of the so-called new Member States, it represented a dominant effect on their economic and social circumstances. Most of the infrastructural investments and development projects in the region were co-funded by the EU. Money transfer could reach 5-6% of their GDP annually – it is hard to imagine how these economies would perform without this funding.

Still, during the discussions on the next Multi-annual Financial Framework, there are more and more talks about the efficiency and effectiveness problems of cohesion policy. The discussions include suggestions by amongst others the European Commission to link cohesion policy to conditionalities related to the rule of law including the European Public Prosecutor’s Office, or to the participation in the common European policies likes the migration policy frame.

These proposals are based on the following three partially independent findings:

  1. Over the recent years, European Institutions have learned the hard way that they do not have proper and effective measures to implement and enforce European fundamental rights and values in its Member States.
  2. The same Member States are highly dependent on the EU’s financial transfers. In this situation, more and more existing conflicts are proposed to be solved with a suspension of EU funding or linking the access to European money to different political conditions.
  3. Concerns are also raised regarding efficiency and effectiveness problems of the cohesion policy, as there is growing empirical evidence at least in some of the Member States of institutionalized grand corruption involving cohesion funds.

While the proposal might seem a good idea from Brussels, it is essential to understand that the potential suspension of payment punishes not only the governments but the citizens of these countries should not suffer due to actions of their government. Furthermore, cohesion policy is a part of a much more complex economic system of the common market, a tool to compensate less competitive economies for opening their markets and to moderate unbalances of capital flow. Cohesion policy is clearly not a political but an economic tool, therefore, to manage economic and fiscal inequalities. To solve political problems, like deficits in some Member States in the area of rule of law, the EU should find political solutions, procedures and institutions, instead of using the European funds as a tool of punishment, cutting Member States off of the access to a fundamental element of a just and fair European economy. The belief, that the necessary political consensus cannot be created and/or the lack of courage to set up the proper political institutions and procedures cannot create the bases for an easier but unfair technical solution.

Institutionalized corruption, however, hinders the core of the aims of cohesion and is clearly needs a quick answer: spending EU tax-payers’ money to financing political oligarchs or organized crime from the EU budget must be stopped. Currently, however, the Commission does not have sufficient tools, especially vis-a-vis MSs. Political dialogue has proven to be difficult on the rule of law issues. OLAF and recommendations of the EU semester are ineffective against state driven corruption. We need real measures, biting dogs, not only barking ones.

In February, Commissioner Jourová talked to Rzeczpospolita about the rule of law conditionality stating that “The mechanism will include the necessity of an independent and effective justice system that would guarantee an effective fight against corruption and abuse while using EU funds and an effective audit system,”.

In my view, ensuring effective fight against corruption should be a core set of policies in the next MFF. There should be institutional guarantees and conditionalities linked to fighting corruption and the institutions should have the power to issue sanctions. Still, we should be very careful to hurt as much as possible the corrupt elites, without causing disproportional damages for societies and economies of MSs.

Unfortunately, some of the most critical MSs from the perspective of misuse of EU funds (e.g. Hungary, Poland), did not join the EPPO, and there are no legal tools in the hands of the EU institutions to force them to do so. Since corrupt elites often exercise a considerable degree of control over law enforcement, the role of EPPO will be essential in holding the perpetrators of corruption related to EU funds accountable. Therefore, requiring EPPO membership of those countries who benefit from EU funds should be one of the primary elements of the package.

However, EPPO cannot scan systematically the spending of EU funds. Also, there is a need for procedures which monitor, evaluate and analyse corruption in MSs as well as their anti-corruption performance. If the level of corruption surpasses a certain level in a MS, and the effective steps are lacking, direct management could be a way to ensure that the funds are properly used, namely not only in total respect of the financial regulations but also in the most efficient and effective way and they do not serve as a cash-machine for corrupt politicians and their business fellows. Direct management is in my view the only way we can ensure that the honest final beneficiaries can continue to enjoy the benefits of cohesion policy, while state-driven corruption is cut at the roots. Either the EC could make at itself (set up offices for CP management in the MSs, responsible directly to the EC) or contract it to independent management groups.

I believe this is the only way to break the cycle of institutionalized corruption and to restore the trust of citizen’s in the European Institutions.

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