For the March edition of Democracy Drinks Liberties teamed up with the Open Spending EU Coalition to ask - are EU citizens getting value for money? To answer this question we were joined by Sándor Léderer, Director of K-Monitor (Hungary), Adriana Homolova, a Freelance Data Journalist (Czech Republic) and a growing audience of concerned citizens, plus engaged non-profit staff.
To kick off the evening, Liberties’ Executive Director, Balazs Denes, who was moderating, circulated a photo around the room that had been published the same morning by Hungarian media. The photo was of a canopy walkway built in the middle of nowhere using an EU grant of HUG 60 Million (€165,000). Why, might you ask, would the EU dedicate a significant sum of money to construct such a pointless structure?
The answer: corruption. When the grant was won by a Fidesz mayor Filemon Mihály, the land (also owned by Filemon) was surrounded by forests, which have since been cut down. The walkway is a grotesque monument symbolising the misuse of EU funds.
EU Spending: A Black Box
Our guest speakers both agreed it is problematic that the expenditure of EU funds under shared management is left exclusively to member states.
Due to only a very basic level of transparency being required, the EU has little insight into whether the money it distributes to member states is actually being spent as promised. For watchdogs like Sandor and Adriana who report on whether EU citizens are actually getting value for money, they are forced to rely on the data that member states voluntarily disclose. According to Adriana, the information available on how EU funds are spent “leans on the levels of transparency of EU individual member states.”
Interestingly, higher levels of transparency doesn’t necessarily mean lower levels of corruption. According to Sandor, although it is often presumed that Western European countries have a higher level of transparency, Eastern European member states are better at publicly disclosing how public monies are spent. However, because law enforcement isn’t willing to pursue discrepancies, it falls to journalists and NGOs to investigate potential corruption leads.
The fact that Orban and his cronies were openly pocketing EU grants, yet Hungary continued to benefit from the EU shared budget, illustrates just how dire the situation the mismanagement of EU funds has become. According to Sandor, “We need to take every opportunity to improve the situation.” The rule of law conditionality mechanism is a good tool to prevent politicians from grossly misusing public funds, but we need to go further.
More transparency, everywhere, all at once
Discussions about transparency have become fraught in recent months. While a vocal audience agreed that more transparency can only be a good thing, it should be equal on all sides. If certain sectors are held to higher stands of transparency than others, it creates an unfair disadvantage.
In the wake of Qatargate NGOs have been targeted as needing increased clarity in how they are funded, which would subject them to significantly higher levels of scrutiny than corporate lobbyists. Meanwhile, a recent judgment by the EU Court of Justice struck down public access to beneficial ownership databases because it interfered with the right to privacy, making it harder to trace the true owner behind shell companies.
However, the discussion left little doubt that member states cannot be left to their own devices when it comes to spending EU money. To improve EU oversight, Sandor recommends the setting up of a dedicated EU body to analyse how EU grants are spent by member states. The EU has been eulogising that EU funds should be only be spent to further EU values - it’s time they put their money where their mouth is.
Democracy Drinks is an informal networking event for civil society colleagues, which Liberties has been organising in Berlin since 2019. Each month we invite a special guest to discuss a pressing social issue affecting democracy. The events attract a lively mixture of people from NGOs, international institutions, think tanks, national governments and representations, academia, public affairs consultancies, social businesses and active citizens.
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