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14 January 1999 Edition

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Workers in struggle: Is this the real EU?

Corruption, cronyism and fraud. These are just three of the charges levied at the door of the EU Commission by the European Parliament this week. After all the hype of the single currency launch in early January another side of how EU institutions operate came into public view.

The glossy veneer of the EU Commission as an upstanding efficient and just institution is well and truly chipped as the ongoing deliberations between the EU parliament and the Commission show just how undemocratic and seedy the inner workings of the EU's bureaucracy are. The European Parliament is threatening for only the fourth time since elections began in 1979 to censure the unelected EU Commission who administer and control the institutions and apparatus of the EU.

Censuring the 20 EU Commissioners is the only power the elected parliament has over the EU Commission. The censure motion has arisen because the parliament voted in December against signing off the EU's accounts for 1996.

The parliament voted against endorsing the 1996 EU accounts after an Assistant Auditor at the EU Commission, Paul van Buitenen, leaked a dossier of Commission documents showing details of financial mismanagement and fraud in EU funded programmes.

The EU Court of Auditors are sifting through the 40 boxes of documents which they say contain ``significant new information relating to serious frauds''.

Paul van Buitenen has been suspended from his job at the Commission on half pay, with further threats from the Commission that he will also lose his pension. The Commission had claimed that van Buitenen ``suffered from paranoid delusions'' after he claimed in a letter to his department head that the purchase of sniper rifles by the security bureau of the Commission made him fear for his life.

However last week the Commission's Thierry Daman confirmed that two high velocity rifles had been purchased, even though such weapons have not being used for training purposes since 1995.

Daman claimed that ``the bureau is authorised to have weapons in order to protect senior officials and visitors'' even though security for such people is the responsibility of the Belgian police.

This week the 20 EU Commissioners have had to attend the parliamentary debate which could decide their future. A censure motion passed by a two thirds majority would mean the sack for the 20 commissioners even though only two of the 20 are implicated in the charges of fraud and mismanagement.

Edith Cresson and Manuel Martin are the two in question but EU rules prevent the parliament singling out individual commissioners, leading to the so-called ``nuclear option'' of sacking the entire Commission.

Commission President Jacques Santer, in an attempt to stave off criticism, has agreed to a series of minor reforms in how the Commission operates. Addressing the parliament Santer made the amazing admission that tackling fraud ``had been neglected in the past''

Now Santer has promised a new code of conduct for commissioners, their staff and commission officials as well as curbs on political patronage. A new independent committee involving MEPs would be set up to help the fight against fraud.

Whatever the outcome of tomorrow's vote by the 626 MEPs it is clear that the EU is not being run in the interests of its citizens. It is also clear that the EU Commission is in parts a secretive, corrupt institution run by its own unelected officials in their own interests. These are the very reasons that republicans have for years been opposed to the growing power of the Commission.

It would be a mistake to believe that Jacques Santer's concessions this week will bring about real change in the EU Commission. They fail to deal with the real problems of the EU. They are lack of accountability and an absence of democratic structures.

Reform is not enough for the EU Commission. It should be a case of back to the drawing board for the EU member states.

EU dictates economic policy

The EU Commission could demand the repayment of hundreds of millions of punts in unpaid taxes.
Even though the EU Commission cannot root out fraud, inefficiency and mismanagement within its own bureaucracy it can highlight inefficiencies and ineptitude in the activities of member states. It can also interfere in a domestic state's economic policies.

A prime example of uncovering ineptitude in the last week is the failure of Bertie Ahern and Ruairi Quinn during their respective tenures as Dublin Government Finance Minister to apply for permission from the EU Commission to permit the granting of tax incentives on urban and rural renewal schemes.

Under EU rules the tax breaks are considered to be a form of state aid. The EU Commission could demand the repayment of hundreds of millions of punts in unpaid taxes.

The failure of the Dublin Government to clear the renewal schemes gives a prime example of how great a role the EU plays in domestic Irish policy formulation.

It is the Commission that has decided that tax incentives are state aid, a form of state aid that they now want to end. So here you have it, the unelected EU Commission is formulating its own economic policies. Worse still, it is interfering in another state's policies, dictating what form it should take. It amounts to just another reason why the EU Commission should be disbanded.

£576 million share option

Spare a thought this week for Michael Eisner, the chief executive of media giant and entertainment company Walt Disney. Eisner had his year-end bonus cut to a mere $5 million. This is in addition to his $764,423 salary.

However this was not all that Eisner took home last year.

He also managed to take home a cool $576 million after he sold 7.3 million shares in December 1997. It is nice to see ordinary workers doing well. One wonders what sort of share options the workers in Disney World take home. Somehow the nine figure bank account of Michael Eisner doesn't seem likely.

£60.7 million profit

Michael Eisner was not the only one exercising share options in the news this week. Abbey National, the British financial services sector company sold the nine percent share it accumulated in the Irish Permanent Building Society last week.

The share sale made Abbey National a £60.7 million profit on the purchase price of the shares bought in 1994. It all goes to show that if you have substantial cash resources, all it needs is to invest the resources and wait. For now the rest of us will have to go to work as usual and make the profits that the Abbey Nationals of the world will sit back and wait to hatch.

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