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Auditors give damning assessment of EU Russia aid

Written by: Staff

BRUSSELS, Apr 20 (Reuters) Many European Union projects in Russia use money ineffectively and fail to achieve their objectives, EU auditors said on Thursday and one EU lawmaker called the findings a scandal.

The EU provides funds to Russia under a programme aimed at promoting its transition to a market economy but the European Court of Auditors deemed that the effectiveness of the use of the funds, worth billions of euros since 1991, was ''very low''.

Beneficiaries sometimes accepted assistance they did not actually want because of vague project objectives, unrealistic planning and a lack of dialogue with authorities, according to the special report.

Auditors found no evidence of fraud or criminal wrongdoing, despite an ''irregularity'' involving setting up a theoretical concern to facilitate a project that was a matter for Russian uthorities, said the report's author Jacek Uczkiewicz.

European Commission official Martyn Pennington told the budgetary committee the projects reviewed were drawn up based on procedures in place in the 1990s which had since been reformed.

Russia has been the largest recipient of funds under the EU's TACIS (Technical Assistance for the Commonwealth of Independent States) programme, receiving about 40 per cent of the 7 billion euros allocated since 1991.

Hans-Peter Martin, an Austrian member of the European Parliament who has campaigned against corruption, said the report's conclusions were ''a scandal''.

''It's incredible that no one seems to have noticed this,'' Martin told the European Parliament's Budgetary Control Committee.

''We are talking billions that have disappeared.'' ''All the people who were working on those projects should be deeply ashamed. It's a scandal for the European Union,'' he said, adding that ''dramatic measures'' were needed in response.

LACK OF DISCIPLINE Uczkiewicz criticised ''lack of discipline'' in project implementation and said the court wished to see mechanisms to increase the effectiveness of expenditure.

Speaking at a news conference, Uczkiewicz avoided referring to wastages of public money but said: ''There was ineffective usage of European Community monies.

''Our assessment is not positive. We think the situation is poor and requires a lot of discipline and attention to improve.'' The auditors concluded that out of a sample of 29 projects that were completed by the end of 2003 and worth 56 million euros, 12 did not achieve their objectives and eight did so only partially. They judged the results of only five ''sustainable.'' They highlighted a heating and power project for a city that did not want it and another aimed at harmonising road standards that failed because the EU itself lacked a common standard.

''Blame is to be apportion on both sides,'' Uczkiewicz said when asked about responsibility but he added it was not within the remit of the audit to judge the Russian administration.

Uczkiewicz said any accountability was a matter for the European Parliament.

Pennington said a majority had ''fully or partially'' met objectives and in the past two years there had been evidence of significant improvements in project performance, including sustainability.

''We realise there is along way to go in terms of the findings of the court,'' he said.


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