Agricultural and regional subsidies in the EU also flow to those close to political leaders. In a report by MEP Petri Sarvamaa, Parliament called for the Commission to intervene in the distribution of money to European oligarchs.
In recent years, some European countries have developed “unprecedented oligarchic structures” involving members of governments and high-level politicians.
That is what the European Parliament is saying in the report (you switch to another service), which MEPs will vote on in plenary tomorrow. The rapporteur is a Finnish mayor Petri Sarvamaa (Kok, EPP.) It calls on the Commission to prevent budget resources from falling into the wrong hands more effectively.
More than € 100 billion of EU budget money is spent each year on agricultural and regional aid. They are intended to support farmers to produce and areas to develop. However, hundreds of millions of euros in subsidies are going into the wrong hands.
There are many types of fraud – the use of forged supporting documents, laundering of public tenders, overpricing of a project, conflicts of interest or corruption.
For example, European rural development funds have been used in several countries private villas (move to another service) building for policy makers. In the Czech Republic and Poland, half of all public contracts were awarded to only one tenderer in 2019.
The EU Commission will carry out inspections of control mechanisms in five Member States next year, namely Bulgaria, Romania, Poland, Cyprus and Malta. The aim is to ensure that systems can reliably detect conflicts of interest.
Agricultural subsidies to oneself or a related party
Some of the money obtained through injustice ends up in the pockets of people close to those in power. New York Times (switch to another service) studied the use of agricultural resources in nine EU countries a few years ago. The most egregious cases of corruption were found in Hungary and the Czech Republic.
The Prime Minister of Hungary Viktor Orbán has concentrated and distributed wealth to its neighbors through agricultural subsidies. The country’s opposition claims (go to another service) he also intends to use EU subsidies in his election campaign next autumn.
Former Czech populist prime minister Andrej Babiš on the other hand, it has used tax haven financing to acquire real estate in France, according to recent revelations in Pandora ‘s papers. On Monday, he was told he would have to to court (you switch to another service) Misuse of EU agricultural funds.
In Bulgaria, the EU Public Prosecutor’s Office arrested (moving to another service) last week by the former prime minister Boyko Borissov in cooperation with local authorities due to suspected corruption. Borissov and other ministers were released a day after his imprisonment, and an investigation into their involvement is pending.
In Bulgaria, there are uncertainties regarding the use of agricultural subsidies, cohesion funds and recovery funds for the treatment of the corona pandemic.
According to the Sarvamaa report, the distribution of EU agricultural funds is “unequal” in Hungary, the Czech Republic, Bulgaria, Slovakia and Romania. The local system favors large farms. Their owners sometimes have close relations with the political parties in power in their home countries.
– One of the key problems in the control of EU funds is that the regulations in force do not make it possible to find out completely who is directing the money and where, Sarvamaa summarizes.
New database introduced
One of Parliament’s key demands is that a common and interoperable control system be set up in the EU. Data from all member states would be entered in the database in the same, comparable way.
Parliament called on the Commission to tighten up the rules of the Financial Regulation so that those responsible for financial flows could also be identified in each Member State.
In addition, MEPs want a precise definition of professional conflict of interest to be added to budget use laws.
– It is not possible for the same person in both Member States to sit on both sides of the table, ie for example, that the decision-maker receives benefits through the bulwark companies, which he makes his own decision on, Sarvamaa describes.
A “professional conflict of interest” is also one in which an administrative official has the opportunity to “tamper with decisions” and present them to the government. According to Sarvamaa, Parliament now wants to close these loopholes.
Oligarchy, or sparse power, means an administration in which power accumulates for a small elite based on origin or wealth.
After the collapse of the Soviet Union, enriched industrial billionaires are called oligarchs in Russia because they exercise power outside the democratic system.
There is also a group of business thugs in Ukraine who became rich and gained political power after the country’s independence from the Soviet Union in 1991.
World Population Review website (go to another service) according to it, there are ten countries in the world this year whose form of government is oligarchy.
What is the EU oligarchy like?
In the EU, oligarchs are more subtly organized than in “official” rare powers, Sarvamaa describes. In the EU, unlike in Russia, the acquisition of power and resources takes place within the framework of democracy and Western rule of law.
– It happens in such a way that there is a huge concentration of holdings on certain parties. These so-called oligarchs, or people who aspire to be such, operate in such a way that they set up various front companies and often seek to influence decision-makers, indirectly, in order to direct money in the Member States to these companies.
In the EU’s political context, the term ‘rare power’ is used to show the exceptional influence of the wealthy and authoritative, as well as the power of leading economic, financial and industrial actors.
Parliament will vote on the Sarvamaa report on Thursday. It will probably go through. In committee, it was supported by 42 Members and opposed by three MEPs from the right-wing ID group, one from the Czech Republic and two from France.
You can discuss this topic until 11pm on Thursday.