Hard cash lost in borderline cases

Bending the rules: How funds that were earmarked to promote cross- border harmony ended up in the wrong hands
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The Independent Online


Included in the litany of criticisms levied at EU spending decisions by the Court of Auditors is an attack on Europe's multi-million pound Interreg schemes to foster cross-border co-operation between neighbouring regions such as the border areas of the Republic and Northern Ireland.

Their criticisms show that what is at stake is often not fraud, but questionable decisions over how money should be spent. And those decisions are often far from black and white.

Of the 270 projects included in the 1989-1994 Interreg programme for Ireland, the vast bulk were found to have no real cross-border content and did little to promote reconciliation. In fact, says the court, only 39 managed to qualify for joint financing by London and Dublin, which proves the point.

Interreg is the most important in financial terms of a dozen or so small- scale schemes conceived by Brussels to maximise the role of local groups and grass-roots organisations in the development of their own regions. Other EU initiatives encourage the development of run-down rural areas or former coal-mining districts in decline.

Together the initiatives have been allocated about pounds 10bn for the coming five years, representing three times the amount they received in the five years up to 1994.

Interreg, which received about pounds 600m over the 1989-1994 period, is specifically aimed at fostering co-operation between neighbouring regions of different member states to prepare them for the impact of the single European market.

But the court claims that many schemes artificially grouped projects running independently on either side of the border. Though they would have been eligible for cash, it would have been under different schemes. "These projects could have been carried out within the framework of other existing community interventions," says the report.

"The commission and the member states will have to make a major effort to increase awareness and improve monitoring and assessment if the 1994- 1999 period of this initiative is to have any real trans-frontier impact."

Brussels' officials who directly oversee the implementation of Interreg admitted yesterday that until 1994, the year covered by the audit, "things were a bit lax". But with good reason, they stressed.

Many border roads were sealed off for security reasons and efforts were hampered by the particular difficulties generated by the political situation in Northern Ireland.

In its official reply to the auditors' report, the commission promises to tighten up and cites the appointment of three groups representing local authorities on both sides of the Irish border who are drawing up integrated area plans. It adds "The cessation of violence in Northern Ireland is now giving an added impetus to genuine cross-border activity."

But other regions not affected by armed conflict or security issues are also cited by the court in its broadside against Interreg. European taxpayers funded the Cabeza del Buey highway in Spain in the interests of cross-border co-operation with Portugal - but the court points out that the bypass, which cost pounds 1m, is some 200 kilometres from the border.

The court also noted that few member states bothered to set up joint monitoring committees or to agree on common assessment criteria. This made it virtually impossible to assess the impact of cross-border schemes. Not only were common indicators not fixed but member states had failed to include any substantial evaluation of results.

The findings show that projects financed under Interreg could have been completed just as well under traditional regional aid programmes.