Brexit got us off the hook for EU’s waste and fraud
ADEFINITE advantage of Brexit is that we’re no longer tied to the European Union’s wasteful spending. Take the billions the EU borrowed for its Covid Recovery Fund to boost the economies of Southern European countries following the pandemic. We’ve learned that hundreds of millions of euros have allegedly been lost in a series of enormous frauds.
That’s money that will have to be repaid by European taxpayers especially in Germany and the Netherlands but, thankfully not us. How on earth could this have happened?
Well, just as Covid unlocked Government coffers in the UK to cope with economic disruption, so the EU felt it needed to do the same thing. But it did so by borrowing money, for the first time, in the financial markets through the issuing of bonds to raise £580billion. As always, the size of the EU plus its generosity with other people’s money made it especially vulnerable to fraud.
Italian police this month arrested 22 people and seized £600million of assets ranging from luxury villas and Rolex watches to Lamborghinis and Porsches taken from the CRF, which is also known as the Next Generation EU fund.
ITALY is the largest beneficiary of the post-Covid bonanza, having received €191.5billion in grants and loans. The police said the alleged ringleaders set up a series of fictitious companies to apply for the investment money and backed up their claims with AI-generated fake documents. Arrests were made as well in Romania, Slovakia and Austria where fraudulent firms are also said to have operated.
We know criminal syndicates are becoming increasingly sophisticated in their deception. And where there is a rush to meet application deadlines, organised crime has joined the feeding frenzy by recruiting professionals experienced at applying for public funding.
Overall, the number of fraud investigations related to the CRF soared in 2023, according to the European Public Prosecutor’s Office, with more than 200 cases opened.
Tony Murphy, president of the European Court of Auditors, said: “Because of the limited control or lesser control framework compared to the standard EU funding based on multi-year budgeting, the risk of such incidents occurring is high.”
The cut-off date of 2026 is exacerbating the risk by encouraging countries to work as fast as possible to spend the money quickly. The majority of payments are made in the form of grants rather than loans so there is very little likelihood of recovering the money.
It was reported last week that police in Athens were investigating €2.5billion awarded to 10 companies in Greece, including telecommunication and IT firms. The businesses allegedly colluded not to compete so that they could drive up fees.
At the best of times the EU is vulnerable to fraud but with a huge pot of borrowed money that has to be spent quickly, criminals are working overtime to acquire the easy cash. And while such corruption may indeed boost the recipient economies briefly it is being spent on luxury goods not essential infrastructure.
It is also money that the EU has borrowed on the international market which will, in due course, need to be paid back.
The countries most likely to be on the hook will be the most prosperous and financially prudent nations, such as Germany and the Netherlands.
That would also have included Britain had we remained in the EU. The problem with all top-down, redistributions of money is that officials are never careful with other people’s cash.
Easy come, easy go they think – and criminals are adept at exploiting that carelessness.
WE MAY be slow at making the most of Brexit but at least Brexit means we are no longer liable for its extravagant waste. Above all, we don’t have to put up with the mantra that questioning such waste is to question the very notion of European unity.
It is this spendthrift zealotry that will eventually risk the implosion of the EU as wealthier nations withdraw support.
Germany, once Europe’s powerhouse, is faced with low growth and a declining industrial base thanks in part to unrealistic green demands – and it can no longer afford to pick up the tab.
Broad discontent with the EU is encouraging voters towards populist parties in the upcoming EU elections in June.
Thanks to Nigel Farage’s and Boris Johnson’s successful Brexit campaigning, that is one problem that we don’t have to think about.
‘Hundreds of millions of euros have been lost to alleged fraud’