Mr President, Honourable Members,
Thank you for inviting me here today and for your constructive and detailed contribution to the consultations on the Transparency Green Paper.
The overall results of the consultation on chapter 3 "Disclosure of beneficiaries" are encouraging � for me at least. Of the some 80 contributions received to date, almost 60 are clearly in favour of the proposal to introduce an obligation on Member States to disclose beneficiaries of EU funds.
Indeed, the arguments for transparency are compelling:
- It will increase public understanding of EU-financed expenditure. More knowledge and understanding builds a greater connection between European citizens and the EU institutions and policies which exist to serve them. This will lead to more informed citizens and more legitimate policy outcomes.
- It will facilitate new research into the impacts of EU policies. Transparency will enable researchers to conduct new evaluations on the effectiveness of EU expenditure policies, which will help to improve policy outcomes.
- For farm payments, it will strengthen the �social contract� between local communities and farms in their area. Local people would witness the provision of �public goods� by farming and underpin the legitimacy of state support for the agriculture sector rests. As Agriculture Commissioner Fischer Boel has put it: �They receive public money to produce the public goods we want � a pleasant, well-tended countryside with high environmental standards.�
But there are also arguments against disclosure. Indeed, in the consultations, 11 were against and 10 are somewhat difficult to classify. I include your contribution is this category. Indeed, in your contribution, as well as in others, a number of concerns are raised. These concerns should be studied carefully.
Would disclosure be an invasion of privacy?
Disclosing EU farms payments cannot be compared to disclosure of the identity of people receiving social welfare payments (pensions, unemployment benefit etc).
Unlike welfare payments, there is no upper limit on farm payments nor is there any time limitation on farm payments.
Unlike welfare payments, there is no social stigma associated with farm payments.
In my view, therefore, this is not an invasion of privacy. I note that at least the German Data Privacy Protection Officer and the European Ombudsman seem to agree � based on much greater expertise!
Would disclosure create excessive bureaucracy?
I fully agree with your points concerning the efforts already consented by farmers and agricultural organisations in terms of providing information to the control authorities. Indeed the ETI would not place further burdens on them, but rather place the onus on governments to be more transparent.
So far, 12 member states have managed to publish without excessive bureaucracy.
By way of example, the Bavarian State Government gave us some estimates that they would need 2 additional personnel to ensure transparency. Frankly, considering that Bavaria receives some � 1.2 Billion million annually for the EU budget, I believe this is a reasonable investment.
But I actually think that in most cases, the information is already stored electronically for accounting, audit and control purposes, and could be easily published.
By being open, you would also save the time currently wasted on justifying refusals of access to information...
Some have suggested a threshold. Is that a good idea?
While we can discuss pragmatic solutions, some have suggested disclosure should only apply to payments above � 2 Million or recipients with more than 250 employees (SMEs). For me, this would be counter-productive transparency. This is not about showing that a few wealthy farmers receive some very high amounts.
If anything, this is about showing the diversity and spread of EU funds in general, and a � 2 Million or SME threshold would give the completely opposite image. If anything, this high threshold could undermine public support!
Setting a threshold can only be justified if necessary to limit disclosure of irrelevant detail. For instance, the Commission recently decided (as part of the new implementing rules of Financial Regulation) only to publish contracts and tender results of more than � 25.000. The main argument was proportionality and workload.
Would disclosure compromise commercial secrets?
Under existing EU case law, receiving EU subsidies is not a business secret. In any case, if you want to know for farm subsidies, you can estimate the field size, count the cows or sheep and do your own calculation...
I simply cannot see how this would impede companies from applying for funds. On the contrary, if you receive EU funds, it means your company had a good idea or a good project worth co-financing. There is competition for EU funds, and any company qualifying through our selection procedures should be proud.
In any case, companies, who would only accept the taxpayers money under conditions of secrecy, are free to decide to not to apply for the funds.
You say the CAP should not be singled out for transparency
The Commission fully agrees. It should not and it is not. As you say in your consultation reply, transparency should apply to all policies and not only the CAP. That is indeed the aim of ETI, which covers all shared management funds, and is supplemented by a commitment on the Commission's side to increase ease of access to information on centrally managed funds.
Beyond disclosure, you want better information on the CAP
I know my colleague Mariann Fischer Boel shares your view that the EU institutions need to explain the rationale behind CAP policies better. And I know she's working relentlessly to do just that. And indeed, this is also one of the reasons why she has supported the ETI for the beginning: it is difficult to communicate credibly to the public on the rationale and the effects of the CAP and of other policies such as the structural funds, if a significant part of the information is kept secret. This creates mistrust which no set of anonymous statistics can dissipate.
Should it be a pre-condition for disclosure to have the consent of the beneficiary?
I don't think this would work. Also, how do you reconcile this with your own views that disclosure should concern all sectors and all level of public support? And what incentive would you grant those who disclose the funding they receive?
In conclusion
The Commission supports greater transparency for all EU funds. So does the European Parliament, the European Ombudsman and, judging from the consultations, the general public. So far, only 4 Member states [Greece, Poland, Germany and Finland] have specifically rejected.
When considering our proposal, I really hope everyone will take a long term view at what is needed to build public support for the EU and the things we fund over the EU budget. The Commission believes increased transparency is part of the solution.
Pre-Opening Wheat Market Report