The IX European Parliament’s legislature (2019–2024) starts with many new faces in the Budgetary Control Committee
In the May 2019 European elections, over 450 of the 751 Members of the European Parliament were newly elected. The EP’s Budgetary Control Committee (CONT) — which is the ECA’s main interlocutor in the EP — is no exception as regards this significant turnover. María-Luisa Sánchez-Barrueco, (1) Senior Lecturer in Law at the Deusto Law School in Bilbao, and Paul Stephenson, Assistant Professor at the Faculty of Arts and Social Sciences at Maastricht University, (2) have taken a closer look at the role, activities and composition of the CONT of the IX EP legislature.
By María-Luisa Sánchez-Barrueco, University of Deusto, and Paul Stephenson, Maastricht University
Power to grant discharge
Since 1977, following the 1975 Brussels Treaty, the European Parliament (EP) has been vested with the power to grant discharge to the Commission, although the final decision is taken upon a non-binding Council recommendation. Armed with its various types of audit reports, the ECA enjoys a privileged audience with these two discharge authorities.
In the European Parliament, the Committee on Budgetary Control (CONT) is responsible for holding the managers of the EU budget to political account. Although over two thirds of the EU budget is managed by the Member States, national or regional authorities are not subject to the political dimension of financial accountability: they cannot be questioned by and are not answerable before the EP. CONT’s discharge reports represent the fundamental basis upon which the Parliament’s plenary takes the decision to grant discharge. In seeking to carry out its core task, CONT draws on various sources of evidence, including witness accounts, data collected via own initiative control missions, and crucially, the ECA’s annual and special reports. When ECA reports are presented to CONT, they are assigned to one or several MEPs for follow-up, leading in most cases to a CONT committee resolution.
Increasingly, ECA special reports and reviews are also presented to other EP Committees. The CONT committee secretariat is fully supported by the EP’s Policy Department D, which is continuously involved in the committee’s work: attending meetings of CONT coordinators and political group advisors; participating in committee delegations; writing and briefings for hearings and country reports for the delegations; and of course, preparing the briefing for the annual CONT visit to the ECA. In addition, the EP’s ‘think-tank’, the European Parliamentary Research Service (EPRS) plays a role in collecting, digesting and synthesising relevant data sources on behalf of MEPs, providing contributions (briefings) on the individual requests of MEPs.
The CONT’s workload and output has been impressive during the last legislature, as illustrated by the hugely insightful ‘Balance Sheet of Activities during the 8th Legislative Term (July 2014 toJune 2019).’ Overall, the Committee adopted 324 reports, 64 opinions and produced 151 working documents, mainly in the context of the discharge procedure. As the reports states (p.3), ‘in analysing the performance of the different spending areas, the Committee continued its fruitful cooperation with the Court of auditors and cooperated increasingly with the specialised committees of the Parliament in charge of the relevant policy areas.’ Moreover, ‘the Committee further intensified the interinstitutional cooperation, notably with OLAF.’
As well as the joint meetings held with other standing (policy) committees in the EP to discuss EP special reports, CONT held 18 public hearings, carried out 17 missions across the EU and held 35 hearings in the context of various nomination procedures. In addition, with the support of Policy Department D of the EP, it held 19 workshops and commissioned 25 external studies, including our very own (with Hartmut Aden) on the establishment of the European Public Prosecutor’s Office (EPPO).
The new look of CONT: leadership, party affiliation, seniority, geographical representation, demographics and gender
Following the recent European elections in May 2019, a new CONT will now press ahead in its work, dealing extensively with the ECA’s audit findings, conclusions and recommendations during the 2019–2024 period. Elections brought about significant changes to the composition of CONT, and taking due account of them might help the ECA in foreseeing what lies ahead, and most notably, in anticipating the different political sensitivities its reports might face.
30 MEPs have been attached to CONT for the IX legislature, although this composition will undergo slight changes if and when Brexit is implemented. As such it is a middlesized committee, compared with others such as LIBE (68 full members), which has implications in terms of the size of its committee representation whenever the EP negotiates with the Council.
What does the new CONT committee look like? First of all, former CONT chair Ingeborg Grässle (EPP, from the German CDU) has not been reelected to the EP. She served as MEP for three full parliamentary terms and was always attached to CONT, first as a regular MEP, then coordinator of the EPP group, then CONT chair between 2014 and 2019. Grässle established a reputation as an independent and vocal advocate for financial accountability. Arguably, she was not the typical EPP politician and did not bite her tongue when it came to delicate issues concerning the management of EU funds at the national level. Some may have sighed in relief to see her go, but certainly not those who advocate greater accountability and transparency of EU institutions. The new CONT chair, Monika Hohlmeier (also EPP, from the Bavarian CSU), follows in Mrs. Grässle’s footsteps. There are also four vice-chairs: Isabel Garcia Munoz (S&D), Caterina Chinnici (S&D), Martina Dlabajova (Renew Europe) and Tamas Deutsch (EPP).
The renewal of CONT is not limited to its leadership. A figure that strikes the external observer is that 57 of MEPs in CONT (members and substitute members) have been elected for the first time to the European Parliament, which is in line with the overall turnover (453/751). Such a high rate of renewal will surely impact the work of the committee. From those MEPs which had been elected already before the 2019 elections, five MEPs (some 16%) have served for a single previous term (including vice-chairs Chinnici and Dlabajova), around one fifth of them have spent 10 years at the EP (including the new chair Hohlmeier and vice-chair Deutsch), and for two members (the Polish, Czarnecki and the German, Pieper) this is their fourth term — so in terms of institutional memory and assuring continuity in committee practice, one might arguably look at this group of MEPs.
From a geographic perspective, it is quite striking that as many as 13 countries, or nearly half of all Member States, are not actually represented in CONT: Estonia, Slovenia, Luxembourg, Slovakia, Latvia, Lithuania, Malta, Denmark, Sweden, Croatia, Portugal, Greece. This includes several mid-sized Member States. By contrast, other Member States have several CONT members: five MEPs from Germany, four from Italy, three from France, and two from Czech Republic, Romania, Poland and the United Kingdom.
Though there may be substitute members for the committee from these nonrepresented member states, one must nonetheless ponder whether this is really a desirable composition if we want all soon-to-be 27 Member States to take a keen interest in financial accountability when only half are represented? What does this say about democratic representation? Yes, checks can be made in the plenary — CONT setting the agenda of what the plenary will and won’t discuss — but it raises concerns about geographic representation, and as such, given the non-representation of many member states in the committee, about geographic fair spread and the degree to which MEPs of certain Member States are properly engaged in scrutiny, and by extension, informed about financial control and audit within the context of deliberating policy performance. Many Member States without MEPs in CONT are net recipients of large amounts of Structural Funds — and in these cases, who is feeding back directly to their relevant constituencies?
From a demographic perspective, around a fifth of the members are in their 30s and a similar number in their 40s respectively, around 43% in their 50s, and around 13.3% in their 60s. The youngest CONT member is 30 (from the UK, Heaver) and the most senior is 70 years old (from Poland, Legutko). From a gender perspective, the composition of the committee,, with around 37% women, is slightly less balanced as the whole EP (the number of women MEPs increased from 37% to a new ‘high’ of 41 %).
From a political ideology perspective, the current CONT committee faithfully reflects the rather fragmented EP composition that resulted from the 2019 elections. The EPP and S&D are equally represented, with around 20% each, whereas the rest of political groups have around 13% (RENEW, the former ALDE), around 10% (ECR, Greens, I&D) and some 7% (EUL/NGL and non-attached). There was a concern prior to the EP elections that there would be a large increase in the number of MEPs from Eurosceptic parties, and that, their increased numbers would affect the effective functioning of committees but this does not appear to have materialised. CONT’s memberships includes three MEPs (French, German, Italian) from the newly formed ‘Identity and Democracy’ group.
Implications of MEP origin and office for financial accountability
From a financial accountability perspective, it is relevant to consider CONT members according to whether or not their state of origin is a net contributor to or net recipient of the EU budget. Taking into account the figures made available by the Commission on member state contributions as a percentage of GDP, then some 60% of CONT members have been elected in Member States who pay more into the EU budget than they receive. However, this figure must be qualified after looking at the top and bottom ends of the scale. Considering net contributors and recipients in absolute terms, the top tier of net contributors (Germany, UK, France, Italy, Netherlands) make up 20% of CONT, just as for the top tier of net recipients (Portugal, Hungary, Romania, Greece and Poland). Overall, this might seem to be a good indicator that sufficient relevance will be given to ensuring the proper accountability of EU funds.
Another dimension worth looking at is whether the MEPs represent parties in government or in opposition. The balance swings gently towards parties in opposition, with just 43% of CONT members from government parties, perhaps a sign of the shifting political landscape across the EU. How these figures will affect the political stance of MEPs is uncertain at present. In principle, it seems safe to hypothesize that parties in government from net contributing Member States — with a lot at stake financially and politically by way of budgetary transfers to the EU — might be more inclined to impose tougher controls on financial management. In so doing they might come up against their opposition parties who will be even more vociferous when it comes to ensuring there are appropriate controls in place to prevent financial mismanagement and corruption. In this regard, CONT’s two MEPs from Romania and the one from Hungary represent the government, whereas the one from Bulgaria opposes it. Let’s see how active they are!
If we look at the educational background of CONT members, there is variation in their academic disciplines. MEPs have degrees in business, economics and administration (around 20%), law (around 17%), political science , and communication and journalism (both around 10%). Most CONT members have come to the EP from national politics at national/regional/local level. By way of exception, there is a former European Commissioner (Cretu), a former head of Transparency International, Germany (Freund), and a former public prosecutor from Italy (Chinnici). Of course, any parliament would not be complete without the odd outsider and the CONT committee in the IX Legislature is no exception with both a cabaret artist and a twice-convicted advocate of the legalisation of marijuana.
Further institutionalisation to protect the EU’s financial interests
With the newly established EPPO set to be up and running in mid-2020 through differentiated integration (22 Member States only), it’s reassuring to know that the committee will have some insight into public prosecution at the national level as the scope of CONT’s mandate broadens to take in another new EU body whose work it will need to monitor and scrutinise. Ingeborg Grässle would surely be pleased to see the further institutionalisation of financial control and developments, which should ultimately benefit CONT in its quest to protect the EU’s financial interests. A task it has undertaken since its early days as a sub-committee of Budgets, when Heinrich Aigner — then chair the Parliament Budget Committeee — pushed in the early 1970s for the establishment of the ECA.
In short, it’s an exciting time for the new formation of the CONT committee, with plenty to keep it busy, getting to grips with the latest ECA annual report, but also, over the next few months and beyond 2020, hopefully taking a retrospective look and what the EU budget truly achieved for 2014–2020, and what can be learnt about budgetary spending and financial control mechanisms in order to continue to strengthen financial accountability mechanisms and procedures for 2021–2027.
(1) She is the author of various publications on the ECA, such as: Sánchez-Barrueco, María-Luisa (2015) ‘The Contribution of the European Court of Auditors to EU Financial Accountability in Times of Crisis’, Romanian Journal of European Affairs, 15(1): 70–85; Sánchez-Barrueco, María-Luisa, El Tribunal de Cuentas Europeo. La superación de sus limitacions mediante el principio de colaboración (Dykinson:2008)
(2) His work on the ECA includes: Stephenson, P. (2017) ‘The European Parliament’s use of the European Court of Auditors’ special reports in the scrutiny of EU budgetary performance’. In: De Feo, A. and Laffan, B. (ed.) Scrutiny of EU Policies: contributions to the workshop organised by the RSCAS, 27 February 2017, Florence: European University Institute, 44–51. (available free of charge at: http://cadmus.eui.eu/ handle/1814/48867)
This article was first published on the 4/2019 issue of the ECA Journal. The contents of the interviews and the articles are the sole responsibility of the interviewees and authors and do not necessarily reflect the opinion of the European Court of Auditors.