"For 500 million Europeans in times of austerity"

...That was how EU Budget Commissioner Janusz Lewandowski presented his 2012 EU budget proposal, tabled today.

With such a heading it must include lots of belt tightening, better targeting and some relief for those European governments whose budget is already incredibly strained, right?

Unfortunately, not.

To the surprise of no one, the proposal includes increasing the budget by 4.9% (€6.2bn), around 2% more than average inflation in the EU. I don't know about you, but we wouldn't usually describe that as austerity.

Needles to say, given that all EU members are trying to cut spending, increase taxes and impose varying austerity levels onto taxpayers, we have a feeling that Lewandowski's proposal won't be met by cheers in many countries. Below we have a breakdown of what we estimate each country’s increased contributions to the EU budget will be under the proposal - based on the projected national share of contributions for 2011, as forecast by the Commission (it's a moving target since you're never be quite sure what the actual contributions are until the money is paid out.)

We're looking at a €769m (£680m) increase for the UK. This is dwarfed by the €1.2bn that is added to Germany's EU bill for next year under the proposal (quite apart from the €100bn+ in loan guarantees that the country's taxpayers are already liable for through the bail-out packages). The French, who are beginning to realise that they are now net contributors to the EU budget, are on the hook for an extra €1bn - not exactly pocket change. The Netherlands, whose Government is now asking uncomfortable questions about the EU's external aid (partly as a result of our recent report on the topic) are on the hook for another €309 million. For all the contributions see table below (click to enlarge - these figures are gross contribution, meaning that in reality some countries might actually get more cash back than what they pay in, for example Spain).

Comically the Commission's press release outlines the fact that "bills must be paid", alluding to the fact that the Commission has committed to various projects which still are running. This argument is weak. Although it's true that the EU budget can't run a deficit, meaning less room for manoeuvre compared to national budgets, there's no reason whatsoever why the Commisison, MEPs and member states can't come together to prioritise and re-shuffle, since funds are clearly getting tighter. Just as national governments are forced to prioritise. As we note in our response to the proposal, there's plenty of fat to cut in the EU budget, from the 50 or so EU quangos, to paying non-farmers not to farm, to recycling 'cohesion' funds between some of Europe's richest regions. And, seriously, does Europe really need projects like these...(click link for examples)

We're sorry, Mr. Lewandowski , this proposal is neither for "500 million Europeans" nor for "times of austerity". In fact, it's quite the opposite.

"Knife-attack" on two seat parliament

Libya is burning on the EU's doorstep.

The dangers of the sovereign debt crisis still loom large over the eurozone - Portugal is likely to need a bail-out soon.

EU member states are working out how best to help Japan deal with the aftermath of the worst earthquake in the country's history.

Meanwhile, trust in the EU is at an all time low in many countries across Europe.

Mundane issues such as these should not, of course, distract from the really important issue - maintaining MEPs' €180 million/20,000 CO2 a year Strasbourg seat (in addition to their ordinary seat in Brussels and their secretariat in Luxembourg).

At least, that's how France sees it. The French government has said it will challenge the decision at the ECJ, taken by a majority of MEPs to scrap one - we repeat just one - of Strasbourg's annual sessions (the EP holds two plenary sessions in the autumn to compensate for MEPs' extended holiday season.)

The French Europe Minister Laurent Wauquiez explains why:

"The parliament building in Strasbourg is the symbol of a Europe closer to citizens, a Europe that is proud of its symbols. The government will not accept the knife-attack on the contract which is in the treaties."

Well of course. Now it all makes sense.

EU green fatigue

An increasing number of countries in Europe are beginning to suffer from what can best be described as 'green fatigue'. In fact, the mood has changed radically since March 2007 when EU leaders agreed to their ambitious green targets.

This is particularly obvious in Germany, Europe's industrial powerhouse and paymaster.

Over recent days, the EU's directive on biofuels (soon to be overtaken by the Renewables Directive) has been absolutely hammered in the German press. As it stands, the Directive requires gas stations to sell fuel with 10 percent ethanol content - which has triggered boycotts, due to drivers’ fears that the new fuel will harm their vehicles.

Der Spiegel notes:

"All EU countries were supposed to have introduced E10 by the end of 2010, but only France and Germany have complied. And problems have not been limited to Germany. Because of slight differences in the E10 biofuels used in France, the ADAC, Germany's largest automobile association, is recommending that German drivers avoid E10 fuels should they cross the border into France."

In a comment, Handelsblatt criticises the Directive, arguing that due to rising food prices and environmental concerns "In 2008, EU Energy Ministers opposed extending the share of biofuels to beyond 10 percent". But, it notes:

“That isn't the end of the story however...Stable or falling prices for farm products, about which the agricultural lobby - led by France - is complaining, will be a thing of the past. The ones who need to pay, are consumers. In Europe, but especially in developing countries."

It concludes: "to burn food in order to obtain fuel is just a crazy idea."

We've warned against the EU's biofuel policies on several occasions, for example in January 2008, when we wrote that allocating more resources to biofuels would be a serious mistake:

"Biofuels are only likely to achieve between 0.9% and 1.1 % reductions in total EU emissions. This is a serious misallocation of resources. If the huge expense of achieving the miniscule reduction in greenhouse gases through biofuels were to be redirected towards reforestation projects, almost 28% of the EU’s total emissions would be saved. Even if it were to be redirected towards (relatively cost inefficient) renewables (at current costs), these funds would deliver a 2 – 5% reduction."

Meanwhile, the European Commission has just announced that EU climate policy will cost €270 billion annually, over the next 40 years. This is a massive amount. But the Commission is still intent on raising the EU's targets from the current levels of 20%.

FAZ comments:

"The ability of European industry to compete internationally will be undermined as a result of unilateral climate change targets. Energy-intensive production, for example of metals, is merely being transferred to third countries (...) without improvements to the world's climate. The Commission doesn't ask itself these fundamental questions."

To be fair, Germany's Commissioner in charge of the energy brief, Günther Oettinger, has been very critical of his own institution's attempt at raising CO2 targets. "I believe 20 percent is the right, middle way," he said, warning that if the EU would go it alone, "than we not only lose jobs, taxes and social contributions. We will also have no reduction of CO2 levels."

He seems to have lost, though, as the Commission has just announced that it will be pushing for a 25% target, up from 20% compared to 1990 levels.

Still, opposition to the EU's green agenda - agreed at a time when Europe's economy was booming and the EU was looking for a new role for itself (the 'world peace' theme was getting a bit dated) - is clearly growing.

The EU's fisheries policy gets battered

If there ever was a competition for the worst EU policy, the Common Fisheries Policy would probably end up on top. The policy simply has to go.

So it's encouraging that the EU’s Fisheries Commissioner Maria Damanaki yesterday did the right thing and called for an end to the CFP-mandated practice of throwing back dead fish overboard if fishermen's quotas have been exceeded:

"I consider discarding of fish unethical, a waste of natural resources and a waste of fishermen's effort. But I would like to go further – since our stocks are declining, these figures are not justifiable anymore. If we continue with our policy, then we will soon face a situation where the production capacity of marine ecosystems is at risk”.

This is of course hardly a revelation; groups from across society and the political spectrum have been warning about the economic, social and environmental catastrophe that is the CFP for a long time.

To give only a couple of examples of what Europe's fishing industry has come to under the CFP :

· 80% of Europe’s fisheries are considered to be overexploited or in danger of collapse

· 1.3 million tonnes of seafood are thrown back every year in the North Atlantic alone, including two out of every three haddock caught to the west of Scotland

· The value of fish that thrown back every year by the Scottish fishing fleet alone was estimated at £40m, resulting in higher prices for consumers.

Momentum against the CFP is building, and the recent “Fish Fight” campaign fronted by TV chef Hugh Fearnley-Whittingstall has brought the issue to a much wider audience, helping to put pressure on the EU for reform. While Damanaki’s pledge is good news, this time it must be followed by concrete action. After all one her predecessors, Joe Borg, called the discards policy “morally wrong” and pledged root-and-branch reform back in 2007, but to no avail.

The common sense void in which the CFP exists is a big reason why hostility to the EU is growing, exemplifying Brussels’ painful inability to reform its policies as the circumstances around it changes (on this one, it's not the Commission's fault as a handful member states, most importantly Spain, continue to block reform). It is so detested that it even managed to unite such diverse groups as climate change sceptic Conservative MPs and Greenpeace activists.

Although dumping the discards policy will not solve all Europe’s fishing problems, it's certainly the right place to start.

Mean journalists ganging up on Brussels

An internal commission newsletter reveals what European Commission President José Manuel Barroso thinks about criticism of the pay and perks enjoyed by EU staff.

In what is seen as a direct response to revelations that 2,000 EU officials, earning between €124,000 and €185,000 a year, were also entitled to three months off work on full pay last year, Presidente Barroso said:

"The European civil service is often attacked for its apparent 'privileges' when this is not the case and I am always defending this."

Adding that he "cannot accept populism against the European civil service", while paying tribute to EU officials, describing them as a "great asset to Europe".

Sure, EU officials can do a good job but please! Not a week goes by without media across Europe lamenting the various excessive ways in which EU officials are compensated for their work. In Barroso's world, one is led to believe, this is just a case of mean journalists ganging up on Brussels (despite the Commission spending around €8 million a year on entertaining, training and 'informing' journalists. What has the world come to when you can't even buy some decent coverage?)

Only today, Danish newspaper Politiken reported that on average, salaries across Europe have fallen by 5% since 2008, while for EU officials they have increased by 4% during the same time period. One in five EU officials has an annual salary of around €135,000, or more - which seems high even to us. Between 1,100 and 1,600 make more than the Danish PM.

It would be strange if media did not report on this.

Barroso should take a stroll down the hallway in the Berlaymont building and have a chat with his colleague, Budget Commissioner Janusz Lewandowski, who understands the need to cut at least some of the EU institutions' expenditure.

Progress?

UK Chancellor George Osborne yesterday refused to sign off the EU budget for 2009 in a routine vote in Brussels. This was a purely symbolic - but still important - gesture to protest wasteful spending in the EU. A spokesperson for the Treasury said that

The Chancellor has put Europe on notice that we can't afford not to put Europe's house in order.

The UK government is talking up EU budget reform, which can come back and bite them if they fail to deliver (remember the budget freeze promised by Cameron, which sort of back-fired?), but is also showing political will to get something done. That's a good sign.

Osborne was joined by Sweden and the Netherlands in abstaining in the vote. The reason for the Dutch absention was, as the country's Finance Ministry bluntly put it, that "€2 billion has disappeared" from the EU budget, which strikes us as a pretty valid reason.

Last year only the Netherlands abstained from the budget vote, meaning that we're looking at progress this year.

With this rate, all member states will refuse to sign off the annual budget by 2022 or 2016 (depending on how optimistically you count).

We're not exactly holding our breath though.

A Royal Extravagance

Spot the odd one out…

• Buckingham Palace in London
  
• Palacio Real de Madrid, Spain
• Stockholms slott, Sweden, and
• The Louise Weiss building in Strasbourg, France.

We’re guessing that most people will not ever have heard of the last one. It’s in fact, the infamous seat of the European Parliament in Strasbourg – better known as the reason for the European Parliament’s utterly ridiculous ‘travelling circus’.

The European Parliament's 216-mile monthly trek to Strasbourg beggars belief. But no matter how many citizens, MEPs or even EU officials complain, the out-of-touch people at the very top refuse to bow their heads to listen.

In an interview with Euractiv, European Parliament President Jerzy Buzek got the chance to explain why he defends the Strasbourg seat.

Strasbourg is a symbolic place. Symbols are important

€200 million a year is an expensive symbol, but Buzek sticks to his guns:

We can also ask whether for some member states it is right to keep a monarchy. But for these countries that has an historical meaning and it is still an important part of public life and interest

Right...Perhaps that explains the European Parliament’s, at times, interesting take on democracy (i.e. voting to ignore the outcome of the Irish referendum on the Lisbon Treaty). He continues,

So, why would we eliminate Strasbourg? It is the very symbolic place of the European Union. It is indeed very important as it represents the essence of our main value: solidarity

Apart from the bizarre parallel that Buzek is trying to draw between Europe's monarchies and the two-seat European Parliament, what kind of 'solidarity' is he talking about? And with who exactly? Scrapping Strasbourg would save over €200 million a year and 20,268 tonnes of CO2 emissions, so he certainly can't be referring to solidarity with taxpayers or the environment (but who cares, eh?)

What's next, horse drawn carriages for Buzek and his mates and a regal eurocrat wedding?

If the EU did satellites, they'd probably be...Part II

Back in October we estimated, based on leaked reports from a couple of European governments, that the EU's mismanaged Galileo project - aimed at creating a global satellite navigation system – was way over budget (and possibly ten years behind schedule).

We said that the EU Commission was under-estimating the deployment cost of the project and would in fact need an extra €1.5 billion to €1.7 billion, on top of the existing €3.4 billion, to keep the party going. In addition, we noted that the annual operational cost of Galileo could be in the area of €750 million.

Following our investigation and other reports in the media, the EU Commission hit back (as it usually does) with Industry Commissioner Antonio Tajani himself denying - with a straight face - that the project was over budget in any way. In his words:

I don't know where these figures come from

Tajani described the estimates as "exorbitant" and "unimaginable", and insisted that the deployment budget (which is only part of the cost) remained at €3.4 billion.

Well, we're forced to admit, it turns out that our estimates weren't quite correct.

In fact, as Mr. Tajani and the Commission finally admitted today, the Galileo project needs not another €1.5-1.7 billion as we claimed, but an extra €1.9 billion of taxpayers’ cash to cover the booming deployment cost. At the same time, the Commission now puts the annual operation cost at €800 million (not €750 million as we foolishly thought).

We do apologise to the Commission for having misrepresented the cost of the project.

But what's going on here? Either Tajani lied to taxpayers back in October or he displayed extraordinary incompetence. We're not sure what's worse.

And it turns out that the leaked estimates were more or less spot-on (we're now eagerly awaiting Tajani's appearance on the Commission's euromyths list for spreading 'half-truths', 'rumours' etc.)

Just to reiterate how badly managed this project has been from the very start. According to our under-estimates from October, the total cost of Galileo from start to completion, and then running it over a 20 year period, is a staggering €22.2 billion – a cost which will be borne entirely by taxpayers and which now has to be revised upwards yet again.

Under the original estimates (from 2000) this cost would have been €7.7 billion, of which only €2.6 billion was to be borne by taxpayers and the rest by private investors (the private investors pulled out in 2007, citing lack of commercial prospects). The project has been beset with delays and cost over-runs at every single stage of its history.

Perhaps it should come as no surprise, then, that even people who are benefitting from the project are raising doubts. According to American diplomatic cables, released by WikiLeaks (first revealed last week by Norwegian paper Aftenposten), Berry Smutny, the CEO of OHB Technology, a company that has a £475 million contract to build 14 Galileo satellites, is claimed to have said:

I think Galileo is a stupid idea that primarily serves French interests.

Ouch.

Mr Smutny also told US officials that in "his opinion the final cost [for the deployment cost] will balloon to around" €10 billion before all is said and done.

It's not getting any better.

Tajani is now asking European governments to cough up yet more cash to cover the shortfall. Sensibly, the UK Government is saying No - and will probably be joined by several other Governments. And they are right. Not a single penny more should be given to the Galileo project until we see a final, robust analysis of what the project will finally cost relative to the benefits it will generate.

Of course, Tajani is keen to point out that the satellite is expected to bring €90 billion to the European economy over 20 years. This has been revised down radically from the Commission's ridiculous original estimate of €275 billion per year in revenues worldwide by 2020 (in addition to the equally delusional 3 billion users and the creation of 150,000 new jobs).

Forgive us for not quite trusting Tajani on this one.

How many eurocrats does it take to open a visitors centre?

...apparently, a lot them.

Opening a visitors centre should be a fairly simple matter one would think. But not so. The European Parliament's planned centre is already three years behind schedule and spiralling costs look set to go 35% over the original budget (some estimates even claim twice the orginal cost).

The ambitious centre had an initial budget of €15.3m, but €23m has already been paid out since 2007 and it’s not even finished yet. EU officials now claim that they can finish the job for a hefty €31.6m. Good use of taxpayers’ cash? Hmm…

European Voice quotes Parliament officials admitting they have little expertise in projects of this scope. “It would have been better” to have hired external specialists to set up the centre, says Francesca Ratti, former director-general for communication in the Parliament's secretariat. The Parliament simply lacked the capacity to manage this hugely complex project, she said.

Isabelle Durant, a Belgian Green MEP and vice-president of the Parliament, who is in charge of the project is hitting back: “Yes, it is expensive, but the costs are justified” (sure they are...)

We're now being assured that the centre will open this year, but seriously, how difficult can it be - it's not like this is the Galileo project....

What the EU ‘didn’t’ do for you in 2010

If you were wondering what the EU actually did for you in 2010, have a look at this taxpayer-funded video released by the Commission just in time for Christmas.

"What has the EU done for you in 2010?"

On a long list of claimed achievements, such as "fair trials" and "boosting jobs", we were struck by this claim, which was followed by flashing images of euro notes and a euro symbol:

“Securing a sound economy and stronger financial markets"

Can this really be serious? Of all the years to spin this line they chose 2010 - the year when the flawed construct if the Single Currency nearly brought the entire European economy to its knees, forcing multi-billion euro bail-outs.

Or maybe they just got this mixed up with the EU's wish list for Santa. While they are at it, why don’t they just say world peace?

Message to the Commission: Denial won't reduce waste

You remember the non-existing Hungarian dog fitness centre which received €400,000 in EU subsidies? We highlighted the project at the top of our list of 50 examples of EU waste.

Well, from the Hungarian press we now learn that the Hungarian Development Agency - the national body responsible for the distribution of the EU's regional development funds - has asked the company Gyrotech Ltd (which, bizarrely enough is an IT company) to pay back the money it received in 2007 for the project to the European Regional Development Fund. The original grant was aimed at "improving the lifestyle and living standard of dogs."

Hungarian economic magazine HVG credits Open Europe for bringing the case to the attention of the international press.

If the money will in fact be paid back, this is good news and shows that it’s possible to fight EU waste. As a result of efforts to shed some light on these funds (by Open Europe and others), EU waste was detected and the money which was misused is now being reclaimed. Everyone happy?

Not the European Commission, it appears, which didn't quite seem to appreciate Open Europe's efforts to ensure that the EU budget constitutes good value for taxpayers' money and contributes to growth and jobs in Europe.

Note the differing responses:

The Hungarian National Development Agency – which admittedly should have been more prudent when giving grants to the project in the first place - investigated what went wrong and claimed back the money.

The European Commission:

“We don’t consider this to be credible research”. Our list, with the dog fitness centre at the top, was apparently “based on a loose collection of unverified secondary sources”, according to the Commission.

And, “It is regrettable that Open Europe did not even approach the commission to verify any of their so-called facts…it is very easy to pull out a few of the less orthodox projects from thousands funded by the EU and present them in a onedimensional manner for ridicule.”

The Commission does indeed look pretty ridiculous when it makes statements like this, and it turns out that the number one item on the list, the dog fitness centre in question, was a clear case of undisputable EU waste and that the project is now forced to refund the cash.

It’s not that hard to verify actually. The first-hand source (the Hungarian Regional Development Agency), detailing the grant, is right there in the footnotes of our report – all you have to do is to click on the link and voila!

The same goes for almost all the other projects we’ve highlighted, apart from a handful, such as the case of the two fishermen who received a €500,000 grant from the EU and the Swedish government to scrap their boat under a scheme to reduce over-fishing. It then used the grant to buy a new boat, under a separate set of rules, and carried on with their fishing business. In this case, the fishermen themselves were widely documented to have admitted that this was exactly what had happened.

Instead of going on its counterproductive rant, the Commission should thank anyone who tries to identify waste and who proposes reforms to stamp it out.

We’re not holding our breathes though.

Meanwhile, the Financial Times and the Bureau of Investigative Journalists have made European taxpayers and transparency campaigners a great service this weak by shedding some additional, and much needed light, on the EU's structural funds. See here, here, here, here, here, here, here, here, here, and here for example.

Some of the findings have included:

• Only 10% of the earmarked funds for 2007-2013 have actually been paid out to date, due to difficulties in many member states to find money for co-financing projects at a time of austerity in Europe (showing how poorly equipped the structural funds are to respond to changing economic circumstances in Europe, in turn undermining their ability to foster "convergence")
  

• €12mn of EU funds have been spent on a port which lays idle in Gran Canaria.

• More than €3mn of public funds – including an estimated €1.5m from EU structural funds – have been allocated to tobacco companies in Europe. The funds have gone to help equip cigarette factories and to fund training projects. Under the Framework Convention this is in breach of WHO guidelines on tobacco control. Paradoxically, the EU also spends more than €16mn a year on antismoking campaigns.

• Some big beneficiaries of the structural funds include McDonald's, which received funds to train staff in an affluent region of Sweden, in addition to IBM, Coca-Cola, and Japan Tobacco International. This is despite the fact that the funds are specifically meant to help small and medium sized companies, particularly in poorer regions.

• Structural funds have been allocated to companies relocating factories from west to east Europe, despite this contravening EU rules.

The Commission has resorted to its trade mark 'nothing-to-see-here' and 'it’s-all-only-a-misunderstanding' response. Indeed, denial remains the most predictable of the Commission's responses.

To be fair, the Commission has at least one sensible proposal for improving the targetting of the structural funds - linking more of the funds to actual performance and achieved targets (as outlined by Commissioner Hahn).

More stuff like this and fewer defensive rants, would serve to improve both the effectiveness of the funds as well as the image of the Commission itself.

Giving people the wrong ideas?

Presenters on Hungarian radio station NeoFM's daily morning show, "Bumerang", have joined the long line of people trying to make sense of the bizarre projects that have received EU funding. Listeners have been asked to choose their favourites amongst our list of examples of EU waste and send in any of their own.

Polling highest is the example of €500,000 given to two Swedish fishermen to scrap their fishing vessels, only to find them later applying for further EU subsidies to buy new, smaller boats, which were subject to a different set of EU rules. Other contenders included Hungary's very own €411,000 dog "rehabilitation centre", which never materialised and the €16,000 given to Tyrolean farmers to boost their emotional connection with the landscape.

But the exercise may have produced an unintended side effect. This is what the presenters had to sat at the end of the show, "We are so stupid! Why aren't we also applying for EU funding to raise the popularity of European Radio. We'd only need €100,000."

What do a dog fitness centre, a €5.25m fleet of limousines, a cartoon horse and 'virtual language swimming' have in common?

Yep, you've guessed it, it's that time of year again. Today we've published yet another list of wasteful EU projects, the third such list in as many years (you can find the previous ones here and here).

One of our favourites is "Eurogaloppo" the cartoon horse which was dreamt up in order to teach German schoolchildren about the EU. A booklet was published chronicling Eurogaloppo's journey to Brussels on which he met several high-profile EU leaders, including Chancellor Angela Merkel and former European Parliament President Hans-Gert Pöttering.

The cartoon horse also bumped into Commission President Jose Manuel Barroso, seemingly unable to contain his excitement:

Eurogaloppo: “I have so been looking forward to finally meeting a commissioner!”

Barroso: “Do you mean a commissioner like in a crime programme?”

Eurogaloppo: (sheepish silence)

Barroso: (grins) “Actually, you are not far wrong. The EU Commission and the crime commissioners of the police have something in common: they are both authorities.”

The top of the list is however reserved for the aforementioned "dog fitness centre", designed to “improve dogs’ wellbeing”. Perhaps the biggest crime of all, or maybe not, is that the dog rehab centre is yet to be built, despite receiving €411,000 of EU funds.

Hungarian media have noted that apart from new office buildings that remain derelict (click here for photographic evidence), the centre remains a distant dream for the local dog population. For now dogs in the area will have to put up with the kind of equipment pictured, which we can all agree doesn't compare to the "hydrotherapy" promised by the new centre.

All joking aside, the list is well worth reading ahead of tomorrow's likely agreement on an increase to the 2011 EU budget as a reminder of the kind of waste inherent in the EU's outdated and overly-complex budget.

Of course not all EU spending is bad, and we pick out a few good examples at the end of our list. But until the EU budget is reformed around more rational priorities (rather than used to subsidise farmers and redistribute large amounts of money among the EU's richest countries) and had the fat trimmed from it, we make no apologies for pointing out its flaws and mismanagement.

The right priorities

This one is from back in August but still:

Apparently, Peterborough City Council has lost out on £1,325 from the EU, meant to go towards a YMCA initiative aimed at encouraging young people to volunteer in local communities, known as the Red Triangle project.

The reason? The Council failed to display the EU logo on the few hundred business cards that were printed as part of the project.

As Jonathan Martin, chief executive of Peterborough and Cambridgeshire YMCA, put it:

It’s a shame that no song and dance has been made about what a success the project was. It seems all the noise is about a lack of logos on some cards.

The craziest part here is not the amount lost but that someone, somewhere along the long, complex chain of EU funding actually could be bothered to spend time and taxpayers' resources to work out that the failure to display the EU logo on a few hundred business cards should cost Peterborough City Council exactly £1,325...

Nice to know that you're expected...

The publication of our annual list of examples of EU waste seems to have become a much-anticipated occasion in Brussels.

As L'Express reports today, an internal document prepared by EU Tax Commissioner Algirdas Semeta reveals that the Commission expects us to "publish a list of 'absurd' EU projects" on the eve of the publication of the EU Court of Auditors' annual report, due for 9 November. The Commission is reportedly investing extra energy in preparing its defence.

All this attention could seriously make us blush...

The EU's problems with agency-itus

The past week has seen the EU come under immense pressure, from press and politicians from across member states, as negotiations for 2011's budget come to a head. However, criticisms have seemed to fall on deaf ears, as the Commission and the European Parliament have continued to push for an overall 5.9% increase in spending.

We released a new report yesterday examining one of the growth areas that provokes serious cause for concern: EU agencies and committees.

While the UK government has announced that it wants to scrap some 190 quangos as part of the spending cuts, the Commission - cheered on by MEPs - has proposed a staggering 8% increase to the budget for EU agencies from 2010 levels.

This would see the EU's annual quango-budget rise by €180mn to €2.4 billion in 2011. The extra cash would be used to fund five new agencies, taking the total number of EU quangos - including the Economic and Social Committee and the Committe of the Regions which are the mothers of all talking shops - to 52. Extra cash will also be sprayed on the existing EU agencies.

And what do taxpayers get in return?

It's Brussels worst kept secret that many of the EU's agencies do not add much value: some duplicate eachother's work; many duplicate work being carried out by the core EU institutions; some deal with issues that shouldn't concern the EU in the first place; while others have no impact on actual policy whatsoever. A worrying number of them tick all of these boxes.

It's also not clear who these agencies are actually accountable to.

We identify eleven agencies and committees which could be downsized or abolished altogether without citizens noticing any difference whatsoever. If combined with 30% efficiency savings, to mirror austerity measures in member states, the EU could save €709mn per year starting in 2011.

First on the list: the Committee of the Regions and the Economic and Social Committee.

If the EU did satellites, they'd probably be...

It is hard to think of a better example of how not to run a large-scale infrastructure project than the EU's Galileo satellite system. In a new briefing we set out the latest cost over-runs and delays to a project that is now expected to be completed a decade late and cost taxpayers over €22bn to launch and run over a 20 year period. In 2000, it was projected to cost taxpayers only €2.6bn (UK taxpayers' share has gone from £385 million, under the original estimates, to £2.95 billion, under the revised figures).

This is an overspend which could rival with the previous UK government's handling of the defence budget for incompetence.

The scale of the strategic mistakes made in Galileo's development is simply shocking. The German government has admitted that "All in all, it is assumed, based on the currently available estimates, that the operating costs will exceed direct revenues, even in the long term." The reason for the astronomic rise in costs is primarily due to private investors withdrawing from the project, unconvinced by the project's commercial viability in a market where it is competing with US, Russian, Chinese and now also Indian and Japanese alternatives. Despite this, the European Commission saw a market of potentially 3 billion users and some €275 billion per year by 2020 worldwide. This looks ridicolously optimistic now.

The story behind the Chinese competitor is particularly sobering. Initial Chinese investment in the project was spurned and eventually withdrawn over fears that the Chinese government was a little too interested in the security related aspects of the project. But, due to the delays, China went ahead with its own system using the very radio frequencies the EU wishes to use for Galileo. So the EU is now in the absurd position of having to ask China's permission to run its secure 'encrypted' signal on Chinese frequencies.

With the European Commission's EU budget review expected tomorrow, we can expect the usual calls for more investment in research and development as a way of modernising and redirecting the EU budget. Spending less money on the CAP and Structural Funds would certainly be welcomed but, on this evidence, the EU's R&D spending leaves a lot to be desired.

Well done Margot

Credit where credit is due.

Regular readers of this blog will know that we're not the biggest fans of the former Commissioner for Propaganda Communication, Margot Wallstrom. Margot and her office too often acted like outright lobbyists trying to promote ever closer union - including spinning facts on the Lisbon Treaty and trying to silence and slander dissenting voices - rather than civil servants charged with providing factual information (they are funded by taxpayers after all).

But Margot, who now holds a UN position - Special Representative of the Secretary-General of the Secretary-General on Sexual Violence in Conflict - has recently done a rather principled thing. Unlike most of her former colleagues, she turned down the controversial 'transitional allowance' that Commissioners are entitled to for three years after leaving office. We've looked at this issue before, but the transitional allowance is again hitting the headlines, as it emerged that ex-Commissioners such as Charlie McCreevy and Peter Mandelson receive hefty pay-outs from the EU despite holding lucrative jobs or making money from book sales.

The allowance is worth a lot of money - for Margot it would have been up to 60% of her final annual Commission salary for three years, or the difference between her current salary and her salary as a Commissioner (€270,376).

Now, Wallstrom won't starve - having made €2,991,313 during her ten years in Brussels and with an annual pension of €113,486 - but you still have to give her credit for doing the decent thing here (given that she did turn it down for ethical reasons and not, for example, because she makes more than what she did as Commissioner in her new role, which would be a scandal in its own right).

So well done Margot - as taxpayers we salute you.

Questionable EU priorities

On Friday, the Commission opened up a new fund of €1 million for think tanks and NGOs to further research how to "promote active European Citizenship".

The €1 million fund comes under the 'Europe for Citizens' project, which has a colossal seven year budget of €215 million (2007-2013) and is projected to cost €32.5 million in 2010 alone. As we've argued many times before, these kinds of funding streams are shamelessly biased towards groups which more or less share the Commission’s political agenda of further integration and/or defending the EU status quo.

And sure enough, the project description openly admits that also these fresh funds are designed for organisations which promote “an ever-closer Europe”.

The core objectives of this latest proposal include:

(a) to foster action, debate and reflection related to European citizenship and democracy, shared values, common history and culture through the activities and cooperation of think tanks and within civil society organisations at European level;

The emphasis on democracy is not a bad thing, but is, as ever, ironic. Most citizens across Europe don’t particularly want an elite-driven ever-closer union, artificially created by like-minded bureaucrats in Brussels; and most governments in Europe are forced to take tough decisions on spending, including cutting down on vanity projects – knowing that they will face their electorates and taxpayers for every spending priority they make.

This self-reflecting contradiction in the EU’s communication/citizenship/we-are-the-world spending programmes hasn’t dawned on the Commission yet.

Is even virtual democracy too dangerous for the EU?

A lot of attention has been paid in recent weeks to the European Parliament-funded virtual reality experience, Citzalia, which recreates life in the Parliament online.

As its weblog states, it is "a role playing game and social networking forum wrapped in a virtual 3D world that captures the essence of the European Parliament." All for the tidy sum of €275,000.

In The Sunday Telegraph, Christopher Booker made the suggestion that "We are given virtual democracy in exchange for real power”.

However, it seems that even "virtual democracy" cannot be trusted by the EU.

The Guardian reported that in the new taxpayer-funded virtual world, "Avatars of European commission officials will also wander the halls 'correcting' mistaken views about the EU." The developer stresses that "there won't be any censorship, but there is a huge risk that misinformation could be fed in. They won't be editing for views, but having these people in can sort of correct things."

Given the EU's inability to accept what voters tell it in the real world, it is hardly surprising that Alles tonenit cannot trust ordinary citizens (who, let us not forget, are paying for this through the EU budget) to have their own debate online, without the need for EU supervision (sorry, "correction").