Dear Dirk

Last week, we were told by journalists that Dirk Ahner, the Commission's Director-General for regional policy, had apparently sent a letter to the members of the European Parliament's Budgetary Control committee, criticising Open Europe's 50 examples of waste involving EU funds.

Despite the fact that the letter addressed our publication, and cited extensively from it, Mr. Ahner did not send a copy to Open Europe, and has failed to send us one after repeated requests both on the phone and by email.

In the end we managed to get the letter from other sources. You can read it here.

Here's an excerpt from the letter:

As I committed to do, I have asked my services to investigate their claims on the projects in question. However, it is essential to underline to the citizens you represent that, given the shared management system, the European Commission is not responsible for the selection of the projects... Most of the claims are true, in the sense that European money has co-financed the projects mentioned. However, Open Europe seems to take the view that anything related to tourism and culture is a waste of money, regardless of whether the projects create jobs and are part of an overall development strategy. Some statements are misleading or completely incorrect: just to take an example, the Commission will not pay a cent to the mentioned Slovakian bulletin-board tender (project 49).

Well, we don't take the view that anything "related to tourism and culture is a waste of money", but, as we set out here, the structure and nature of the EU budget often facilitate poor project selection, to a greater extent than national spending schemes do. We also wanted to illustrate how having a massive redistribution scheme involving some of the richest countries in the world sending money back and forth via Brussels (at a huge admin cost) is becoming increasingly hard to justify economically. In addition, we wanted to highlight one of the wider problems with the EU budget (the co-financed part in particular, i.e. the Structural Funds and the Rural Development Programme), namely the blurred line between the spending of public money and accountability.

Predictably, Mr. Ahner passes on the responsibility for the project selection to member states, as the Commission usually does (but then goes on to defend the projects, interestingly).

It is true that the managing authorities in the member states select projects - no one is disputing that - but the Commission runs the policy and does have a thing or two to say about the project selection as well - in addition to being one of the staunchest defenders of the Structural Funds. And some of the people on the ground won't let the Commission off the hook that easily. For example, responding to one item on our list - the ‘gender equal’ wood design centre in Sweden - one of the local officials involved in the project defensively wrote, "The gender-part of that project was just a small part, put there to please the EU officials."

So as a taxpayer, if I'm not happy with the way the Structural Funds are ran and spent, who should I approach? As we've said many times before, the Commission could do itself a massive favour by encouraging member states to scrap the Structural Funds in the most well-off member states - say, those with a GDP of 85-90% of average EU GDP or more - where the value-added of the EU funds, on the whole, is negligble at best. None of these issues were addressed by Mr. Ahner. Anyway, here's our open letter to Mr. Ahner:

Open letter to Dirk Ahner, Regional Policy Director-General, European

Dear Mr. Ahner,

We write to you in regards to a letter you sent to members of the European Parliament’s Committee on Budgetary Control (“Subject: OPEN EUROPE 'fraud and waste' list of projects”, REGIO B1/AM D(2009)). Since the correspondence with the MEPs was addressing material published by Open Europe, we thought it appropriate to respond and also to address some of the claims you make in the letter (see attached document).

First, it is regrettable that the Commission continues to single out Open Europe for criticism, and has not given us opportunity for the right of reply. You sent the letter to MEPs, without copying to Open Europe, and failed to respond to telephone calls as we sought to find a copy of the letter. Despite repeated requests over the phone and via email, your office has still not sent us a copy of the letter. In fact, Open Europe was not even acknowledged when we tried to get hold of the letter. Instead we have acquired the letter from other sources. Your refusal seems to be in violation of the European Ombudsman’s Code of Good Administrative Behaviour.

Of the 17 Regional Development Fund projects analysed, you seem to be saying that one of them is incorrect, in that EU funds were not in the end used for the purposes mentioned: the ‘Bulletin-board tender’, which Open Europe said was indeed being investigated by the Commission. You claim that the point about Lazarote hotels having illegally received EU funds is “incorrect”, but are only able to clarify that “the Spanish authorities removed the hotels from the ERDF programme. This means that the hotels will not receive any funding from the EU budget.” No evidence is provided to show that the hotels did not receive the money – only that they “will” not receive money in the future – so we remain unconvinced by your claim that this is incorrect.

For all the other projects, you either defend the use of funds, or simply state that the example is correct, such as the fact that the Chairman of Porsche received €2,500 in EU rural development funds for a small estate in Bavaria where he goes hunting in his free time. For one or two you quibble over the amounts spent.

It is most concerning that you have spent so much time piecing together this rebuttal, and sent it to members of the European Parliament with an instruction that they “underline to the citizens you represent that, given the shared management system, the European Commission is not responsible for the selection of the projects funded.” There is no acknowledgement of Open Europe’s wider point which is that the waste is ultimately down to the structure of the EU budget (as Open Europe has set out here, for instance: http://euobserver.com/7/28979 ) - and that the budget in general and the Structural Funds in particular are in need of fundamental reform.

Open Europe maintains that all are examples of the EU wasting money, and an illustration of how the EU budget is spent, which was the objective of our report. Your comments represent a different point of view about how public money should best be spent, which Open Europe is seeking to challenge.

We look forward to a more open dialogue with the European Commission on these issues in the future.

Yours sincerely,

Open Europe