MEPs' great hope for more EU democracy and transparency to be decided by... a secret ballot

Own-goal alert.

When selected as the Socialists' candidate for the European Commission President, Martin Schulz claimed that:

“I want to be the first President of the Commission who is not the result of a backroom deal in a Brussels office."

This is the main argument advanced by supporters of the spitzenkandidaten process (including by the current front-runner, Jean-Claude Juncker) i.e. that having the Commission President nominated by the largest political group within the European Parliament is more transparent and democratic than the previous process whereby EU leaders agreed the Commission President amongst themselves. For the first time, voters would be able to directly determine who would get this crucial post., and be able to hold politicians to account for their choice.

However, when the Parliament itself comes to vote on the appointment, as per its rules of procedure, the vote is held by, wait for it, a secret ballot: 

Rule 105 : Election of the President of the Commission

1. When the European Council proposes a candidate for President of the Commission, the President shall request the candidate to make a statement and present his or her political guidelines to Parliament. The statement shall be followed by a debate.

The European Council shall be invited to take part in the debate.

2. Parliament shall elect the President of the Commission by a majority of its component Members.

The vote shall be taken by secret ballot.

Although this is not a new development - Barroso was confirmed by secret ballot - this time it was supposed to be different. It is hard to stress just how absurd it is for MEPs to decry a "stitch-up" by national leaders and then refuse to allow themselves to be subjected to scrutiny. If the idea is to make the appointment process more transparent and to 'put voters in charge', how can voters hold their MEPs to account when they do not know how they voted? How will - for example - Labour voters know if their MEPs will follow the party line and vote against Juncker should he emerge as the European Council's preferred candidate?

For all the laudable talk about democracy, transparency and accountability, critics will be forgiven for thinking that this is about the European Parliament trying to carve out more power and influence for itself within the EU structure. Yet another reason to drop the spitzenkandidat charade and allow national leaders - who have a much stronger democratic mandate - to make this decision.

MEPs miss an opportunity to do their job

Last week, the European Parliament had the opportunity of doing what most other elected bodies in the free world consider a core task: making sure taxpayers' money is spent in a transparent, accountable and regular way.

MEPs were asked to provide discharge to the 2012 EU budget, in which according to the European Court of Auditors, the rate of error rate had increased to 4.8% compared with 3.9% in 2011 and affected every area of EU spending. The COA's own benchmark for acceptable levels of error is 2%. Of the total €138.6bn spent by the EU in 2012, €6.7bn was affected by errors.

However, MEPs voted to approve the discharge report, drafted by German CDU MEP Markus Pieper, with 488 votes in favour, 121 against and 10 abstentions - effectively signing off the budget.

The report admits that: 

"For the 19th time in succession, the Court of Auditors was unable to grant a positive statement of assurance regarding the legality and regularity of the payments underlying the accounts". 

(Yes, we know the Court of Auditors signed off the Commission's own accounts, so no need for any Commission officials reading this to make that well-worn point). The MEPs provided various justifications for nodding through the budget despite the errors, including:

"a distinction must be drawn between errors and fraud, and [the EP] considers that, in the vast majority of cases, errors stem from administrative mistakes, many of which are linked to the complexity of Union and national rules, which can be corrected".

They have a point. Errors and fraud are not the same thing - though the line can be awfully blurred. However, we doubt the average taxpayer would be entirely content with that explanation. The bottom line is that the cash should not have been paid out. As we've argued before, the high level of error is primarily due to the nature of the EU budget itself - it's size, complexity, confused objectives etc - and this will persist until it's fundamentally reformed.

What's interesting about the MEPs' behaviour is that they are a lot less forgiving when it comes to the spending by European Council/Council of Ministers - i.e. the member states.The EP decided to postpone the approval of the Council's accounts "because of its lack of cooperation".

EU Anti-Fraud Commissioner Algirdas Šemeta reacted to the EP's decision by saying that "The EU budget is the one of the most transparent and accounted for public budgets in the world", while arguing that "For the past 5 years, the overall error rate has been consistently below 5%. In other words, over 95% of all EU spending is in line with the rules."

The Netherlands, Sweden and the UK- three of the biggest net contributors to the EU budget collectively responsible for 20% of the funding - take a radically different approach. They again voted against discharge in the Council of Ministers, regretting that

"the overall error rate in recent years has increased to 4.8 %, being significantly above the acceptable threshold of 2 %."

Surprisingly, Labour and Lib Dem MEP, but also Dutch VVD MEP Hans Van Baalen voted against the position taken by their member states in the Council.

Not inspiring confidence.

German election update: Lucke hits back

An interesting story caught our eye in today's Welt concerning next month's German elections. Bernd Lucke, the head of the anti-euro Alternative für Deutschland party (seemingly undaunted by a recent attempted assault on his person) has written a letter to German President Joachim Gauck asking for access to documents in which the German government has simulated different scenarios to save the euro, citing Germany's freedom of information laws. The move fits with the party's theme of "having courage for the truth" (Mut zur Wahrheit), which it accuses other German political parties of lacking.

This comes after the same request addressed to the Chancellery, Bundesbank and German banking supervisor Bafin was rejected on the basis that the information is held by the eurozone's network of central banks, and therefore falls outside the scope of German law. Lucke has criticised such "questionable" behaviour on the part of German officials, while noting that the Bundesbank's refusal to reveal the information shows that it is de facto supporting the German government when it should be a politically independent actor.

While we're not expecting the information to become public soon, the documents would certainly make for interesting reading as they would reveal how the German government assessed the costs of a breakup, and therefore whether its subsequent policies for dealing with the crisis have indeed been 'alternativlos' as Merkel has argued, or whether alternative policies were jettisoned due to the short-term political and/or economic implications.

Sign In, Sod Off... and Slap!

SISO? What could this mysterious four-letter acronym stand for? A complex and bureaucratic way in which MEPs claim expenses back from the European Parliament? Hardly. SISO stands for 'Sign in and Sod Off'.

MEPs receive various forms of allowances (and some expenses), one of which is the daily allowance, intended to cover expenditure on food and accommodation for every day that they are physically present in the European Parliament, be it in Brussels or Strasbourg.

The idea, of course, is that they do work. However 'SISO' involves MEPs rocking up at the EP - signing in - a pre-condition of claiming the €300 of daily allowance - before promptly sodding off without doing any actual work. That's not exactly how the daily allowance was intended to be used.

There have been cases of this practice being captured on film in the past, and while it always makes for hilarious viewing, it remains a PR disaster for a body already struggling with legitimacy.

We hadn't heard about any cases of SISO for some time, so we thought the practice might have stopped. Alas, that might not be the case. At his own peril (as he soon came to find) GeenStijl reporter @TomStaal, decided to take a trip to European Parliament to see for himself. But Staal got a lot more than he bargained for...

The video below shows Staal confronting two MEPs, Czech MEP Miroslav Ransdorf (from the EP's far left GUE group) and  Italian MEP Raffaele Baldassarre (of the European People's Party) after the two have allegedly signed in and left straight away.

Now, we must stress that we haven't seen the whole chain of events and since the MEPs in question aren't exactly keen to talk, we don't know their side of the story either. So we're NOT saying they are necessarily guilty of signing in and sodding off - the jury is still out on that.

But, regardless, the MEPs' reactions aren't exactly dignified. 

shortened version / credit to Geenstijl reporter Tom Staal

To clarify for those who are unfamiliar with Italian hand gesturing, two gestures feature in the video:

1. ‘Lei chi è? Cosa vuole?’ (Who are you? What do you want?): Fingers and thumb come together with hand shaken up and down repeatedly – the arm can also move and the speed varies depending on how angry you are.
   
   
2. ‘Calma, calma’ (Calm down, dear): Move your hand (or both of them) as you were pushing something invisible down, with the palm(s) directed towards your interlocutor. This is the gesture actually made by the other Italian guy - the one in the dark suit - not the MEP himself. 

There should be no doubt that when push comes to shove, MEPs aren't afraid to throw their weight around - literally. So is this a case of unfair and overly aggressive investigative journalism, or a slap on the face of European taxpayers? You decide.

If it's the former, then it's ironic that Baldassarre's most recent activity in the EP is listed as "decriminalising defamation"...

Another blow in the bank bonus debate - but there's something far more fundamental at work here

Yesterday saw the opening salvo of what is sure to become a heated debate over the new ‘technical standards’ for the EU’s banker bonus rules.

Why is this so important? Well, these rules will essentially determine how far reaching the EU's already controversial bankers' bonus cap will be. But this decision also encapsulates a range of other issues that will have a defining impact in the way Europe is governed in future - and whether there's a future for the UK in there somewhere.

With that in mind, the first draft produced yesterday to launch a period of public consultation on the standards would have been particularly worrying. The key points are:

Standard quantitative criteria: related to the level of variable or total gross remuneration in absolute or in relative terms. In this respect, staff should be identified as material risk takers if:

 (i) their total remuneration exceeds, in absolute terms,  €500,000 per year, or
 (ii) they are included in the 0.3 % of staff with the highest remuneration in the institution, or
 (iii) their remuneration bracket is equal or greater than the lowest total remuneration of senior management and other risk takers, or
 (iv) their variable remuneration exceeds €75,000 and 75% of the fixed component of remuneration.

As the numerous press reports today have highlighted, these are far more wide ranging than many expected and are likely to further raise concerns that these rules will have a substantial negative impact on the City of London (and therefore the UK economy). (For background on these concerns see here and here). There are several different things going on here:

Are the EU agencies already exceeding their mandate? As we flagged up at the time of their creation, there's a substantial risk of mission creep under the EU's three supervisory agencies - EBA, ESMA, EIOPA - due to the fluid nature of these bodies. Remember, under the ECJ court case which allowed these agencies to be established under the EU single market (via QMV and co-decision), they should be blocked from having any type of decision-making powers. But EBA's standards on remuneration comes worryingly close to legislation.

Politicisation of ‘technical standards’: Related to this, and as we also flagged up at the time, technical standards have a worrying tendency to become politicised - which clearly is the case here. This type of stuff should be decided through political negotiations and defined within the regulation. Any necessary technical background and info should be provided for and incorporated, even is this means delaying the legislation slightly.

Need for non-eurozone safeguards ASAP: Though this isn't strictly a eurozone vs non-eurozone issue, it does illustrate just how vulnerable the UK and other outs could be to eurozone caucusing in banking / financial rule-making. This is also exactly why the UK and other non-eurozone countries need to ensure that the agreement in principle for double majority at the European Banking Authority - that Open Europe first floated - are held up and pushed through.

Trade-off between "single rulebook" and control: The UK says it likes the EBA since it contributes to a single rulebook for the single market, and can, for example, contribute to stamping out protectionist implementation of banking rules in Europe. This is all true. However, it does, of course, assume that the UK itself is writing the single rulebook, which may or may not be the case.

Democratic accountability: As the Times noted today, with central banks such as the Bank of England (BoE) and the ECB taking over financial supervision they must become more transparent and accountable. In this case it is unclear what role the BoE played in drafting the rules or whether they raised the concerns pushed by the government and firms in the UK.

What next?

Again, this is only a first draft. The public consultation is open until August, after which the EBA will review the evidence and provide a new draft - so a lot of the issues we highlight below should be considered with this in mind. There will then be a vote in the EBA with the final standards needing to be submitted to the Commission (which will approve or reject them) in March. One final interesting point here is that any vote in the EBA could come close to coinciding with the introduction of any double majority rules, although there are a lot of hurdles to overcome before then.

Expect a summer of furious lobbying and behind the scenes discussions as the UK and others make a final push to water down these proposals.

"Why EU mandarins refuse to learn"

Has anything changed since the 15th century?

Die Welt’s Foreign Affairs Editor Clemens Wergin today has a blistering op-ed on the current state of affairs in Europe, entitled “Why EU mandarins refuse to learn”. Here are the key parts:

“The disastrous decisions regarding the future of Europe have been completely without consequences. Despite all the mistakes made the system appears to be incapable of adapting. The tanker remains on the wrong course.”

“It belongs to the biggest disappointments for convinced democrats that up until now, neither on the European level or on that of the nation states, there are no noteworthy efforts to clarify the causes of the euro crisis… The Bundestag has also not covered itself in glory. There has been no cross-examination of Hans Eichel and Gerhard Schröder why they agreed to let Greece join the euro despite the fact that already then there was a strong suspicion that the Greek figures were problematic.”

"Democracy is adaptive and able to correct itself. However this is out of the question in the worst crisis to hit Europe after the war. Here, the euroscepticism of many of the continent’s citizens is justified. They see that in this crisis that this Europe is not created on transparency, enlightenment and accountability. This creates the impression that they are dealing with a conspiracy of the elite, conspiracy against common sense."

“EU elites are afraid of washing their dirty laundry for fear it will portray the European project in a bad light… It is part of the pride and ethos of a democratic polity to clarify failures and to draw consequences.”

“With the exception of the changes to the eurozone’s regulatory framework forced through by the Germans there have been no intentions of rethinking the fundamental assumptions of the EU… One gets the justifiable impression that nothing can divert EU mandarins from their current path and their pre-conceived opinions. The euro has not worked? Ok, let's try an even higher dose of community building… In Brussels they mourn over bad poll numbers and believe that this is only down to national populists who have wrongly explained Europe.” 

"With Portugal, Spain and Greece there was once the quiet hope that good European governance would be diffused via a kind of osmosis process from the EU headquarters in Brussels into the periphery. That has worked only in part. In some respects, the abundant money from the EU’s structural funds has had the opposite effect to that which was intended. They have strengthened clientelistic structures and made people there believe their system somehow works. Ultimately, politicians always had enough money via Brussels assistance to distribute to cronies and voters. As long as money was available, many people profited from this system. Then along came the crisis which showed that it just does not work and carries with it significant competitive disadvantages.” 

"At present, the EU is obviously not an adaptive system. Nothing is solved, no one is held accountable. Responsibility for consequential mistakes is lost somewhere between the many capital cities and the corridors of Brussels. As long as this does not change, one should not be surprised by the bad reputation that this European undertaking enjoys among citizens."

 Taking no prisoners. For German speakers, it's worth reading the entire piece. 

Open Europe Berlin: one to watch!

This is exciting stuff. As we've argued repeatedly, the future of Europe will largely be decided in Germany, as that country goes through a very dynamic, internal debate.

Which is why Wednesday's  launch of Open Europe Berlin gGmbH, Open Europe’s new independent partner organisation, was so incredibly timely. 220+ journalists, policy-makers, business leaders, academics, diplomats and others crowded at a packed Hotel de Rome in Berlin, to listen to OEB Director Prof. Dr. Michael Wohlgemuth and the keynote speaker Otmar Issing, former chief economist at the ECB.

The message from the podium no doubt struck a chord: the future of Europe isn't alternativlos – without alternatives to ever more centralisation. In his welcome address, OE Berlin Director, Prof. Dr. Michael Wohlgemuth argued that:

“We stand for a Europe governed by the rule of law and a Europe of citizens, not of bureaucrats… We are Europe-friendly but we place emphasis on measures that made Europe free & prosperous, not central planning… the current crisis measures will lead to institutional sclerosis & harmonised lack of responsibility, a clear case of ‘moral hazard’… Instead we stand for a liberal & competitive Europe; a democratically controllable decentralised arrangement within a clear rules based system.” 

OE Berlin Director Prof. Dr. Wohlgemuth delivering his opening remarks

In a keynote address entitled “More Europe – what kind of Europe?”, the former ECB Chief Economist Otmar Issing noted that “A think tank contributing fresh thinking on Europe is sorely needed and deserves support.”

Otmar Issing and event moderator Karen Horn

In his speech, Issing argued that:

“Placing too much value on a currency, whether it is the D-Mark or the Euro is not a good idea. It cannot be maintained at any cost...I welcome solidarity when it is about helping the weak get back on their feet. However, the fiscal union is a false interpretation of solidarity…The fiscal union is a clear case of wrong incentives. I do not believe that ‘more Europe’, a political union, is an alternative to the present state of affairs.” 

Instead, he said that failures within the euro were structural and were not caused by ‘financial speculation’, and that member states had to deal with their own problems rather than trying to move them to the European level. Issing also criticised the EU Commission’s “deeply absurd” rush towards establishing a banking union. He added that the proposed ‘Chinese wall’ between supervision and monetary policy at the ECB was “illusionary”.

The full video of the launch event is available here (auf Deutsch).

The crowd mingles at the Hotel de Rome

For German media coverage of the launch, see here.

Open Europe London Director Mats Persson outside OE Berlin office on Oranienburger Strasse in Berlin's Mitte district

A triumph for European Parliamentary scrutiny?

As the only directly elected component of the EU machine, taxpayers and citizens have a right to expect that MEPs will stand up for their interests in Brussels, scrutinising the decisions and spending of the other EU institutions.

In recent months, the parliament’s budgetary control committee, marshalled by Monica Macovei MEP, the former Romanian Justice Minister, has been very critical of three EU agencies in particular – the European Environment Agency (EEA), the European Food Safety Agency (FSA) and the European Medicines Agency (EMA) – for “using public money for questionable purposes and for tolerating conflicts of interest in top management”, an an issue we also highlighted in our recent short report on this topic.

Consequently, the Parliament voted to postpone the discharge of the agencies’ 2010 budgets, a strong signal of disapproval by EP standards. However, as the Parliament magazine reported yesterday, German socialist MEP Jutta Haug, the parliament's rapporteur on the EU agencies in the committee - the very person who should be taking the lead on this issue - wrote to the agencies telling them they did not need to co-operate any further with MEPs. In the letter to Catherine Geslain-Lanéelle, director of the FSA, she wrote that:

"I am of the opinion that during the during the 2010 agencies' discharge procedure, the committee has exceeded by far its competences… Consequently, I should like to invite the FSA not to reply to inquiries beyond the comments voted in plenary." 

Could you imagine a UK MP undermining their colleagues by writing to the head of a public body urging them not to co-operate further with a parliamentary investigation into how they spend taxpayers' money?
  
Undermining even this much welcome, even if relatively modest, attempt by MEPs to inject greater scrutiny and transparency into EU spending will surely only further exacerbate the disconnect between what is happening in the real world and the EP bubble.

Et tu, technocrat

According to the latest news from Italy, it looks like not even the country's technocrats are immune from scandals. Carlo Malinconico (whose surname means 'melancholic' in Italian, see picture), an EU Law Professor serving as Undersecretary to the Presidency in Mario Monti's cabinet, has resigned this morning following allegations that he had his holidays paid for by a dodgy Italian builder.

According to wiretaps analysed by Italian prosecutors, between 2007 and 2008 Malinconico spent a couple of weekends at the five-star luxurious Hotel Il Pellicano in Porto Ercole (part of Italy's glamorous Argentario peninsula in Tuscany) without paying a single cent. The roughly €20,000 bill was, it turned out, footed by Francesco De Vito Piscicelli, an Italian builder who, along with other Italian entrepreneurs, is involved in a scandal over several tenders illegally obtained at the time of the latest G8 summit held in Italy in 2009.

Malinconico decided to resign, but it is still unclear whether a specific investigation will be launched over his relationship with Piscicelli & co. He maintains that, at the time, he wanted to pay the entire bill and that, when he realised that he would not be allowed to do so, he was so annoyed that he immediately cancelled all future reservations at Hotel Il Pellicano. Malinconico also says that he had no clue about who had paid for his holidays and that he is now ready to pay his fair share, if need be (maybe a bit late now).

Given that Monti's technocratic government was put in place precisely to move away from the dysfunctional politics that has haunted Italy over recent years, this episode, reminiscent of the Berlusconi years, is concerning. On the positive side, at least the mis-step is being forcefully dealt with, showing that perhaps lessons are being learnt...

Et tu, technocrat - as the Romans might have put it.

" A step backwards for transparency"

The bulk of the cost of regulations in both the UK and Europe stem from the European Union, as we've showed in our extensive research on the subject. But this isn't even the end of the story.

Many key decisions on the actual substance of EU laws and regulations are being taken during an uber-opaque process called “Comitology”. As we've noted before, Comitology involves special committees consisting of Commission and national experts deciding on how EU legislation should be implemented - usually behind closed doors - after the proposal has been agreed by national governments and the European Parliament.

The Lisbon Treaty - the document, if you remember, that would lead to more transparency in Europe - is introducing new rules for the Comitology procedure, effective from 1 March 2011. The new rules were meant to improve and simplify the system, but are now universally acknowledged to have made the situation even worse (we explain why here).

Political consultant Daniel Guégen, who is one of the foremost experts on this topic, makes the slightly worrying observation that as a result of the reform, power in Brussels “is shifting from the political level to the bureaucratic level.”

Even the European Commission concurs. Mario-Paulo Tenreiro, who is responsible for institutional questions at the Secretariat General of the European Commission (exciting job), says:

I must admit that for the general public the new rules are a step back for transparency...Hundreds of thousands of decisions will be taken by these Treaty articles every year.

Apart from the complexity and opaqueness of the new rules, Euractiv reports that the reforms are also causing legal uncertainty. According to Wolfgang Heusel, director of the Academy of European Law (ERA), this means that "courts will have to have the last word" on how EU legislation should be implemented.

Does this matter? Absolutely! As much as 50% of the actual substance of all EU rules is decided during the comitology stage after the law has already been agreed by Ministers and MEPs, according to Dutch academic research. So we're not talking about fixing little details.

Are the Coalition and other governments around Europe keeping up? We fear not.

Ahead of the last General Election, Ken Clarke (then Shadow Business Minister, now Justice Secretary) managed to give an entire key note speech on regulation and how to improve it, without mentioning the EU once.

Il faut le faire, as the French say.

If the EU did satellites, they'd probably be...Part II

Back in October we estimated, based on leaked reports from a couple of European governments, that the EU's mismanaged Galileo project - aimed at creating a global satellite navigation system – was way over budget (and possibly ten years behind schedule).

We said that the EU Commission was under-estimating the deployment cost of the project and would in fact need an extra €1.5 billion to €1.7 billion, on top of the existing €3.4 billion, to keep the party going. In addition, we noted that the annual operational cost of Galileo could be in the area of €750 million.

Following our investigation and other reports in the media, the EU Commission hit back (as it usually does) with Industry Commissioner Antonio Tajani himself denying - with a straight face - that the project was over budget in any way. In his words:

I don't know where these figures come from

Tajani described the estimates as "exorbitant" and "unimaginable", and insisted that the deployment budget (which is only part of the cost) remained at €3.4 billion.

Well, we're forced to admit, it turns out that our estimates weren't quite correct.

In fact, as Mr. Tajani and the Commission finally admitted today, the Galileo project needs not another €1.5-1.7 billion as we claimed, but an extra €1.9 billion of taxpayers’ cash to cover the booming deployment cost. At the same time, the Commission now puts the annual operation cost at €800 million (not €750 million as we foolishly thought).

We do apologise to the Commission for having misrepresented the cost of the project.

But what's going on here? Either Tajani lied to taxpayers back in October or he displayed extraordinary incompetence. We're not sure what's worse.

And it turns out that the leaked estimates were more or less spot-on (we're now eagerly awaiting Tajani's appearance on the Commission's euromyths list for spreading 'half-truths', 'rumours' etc.)

Just to reiterate how badly managed this project has been from the very start. According to our under-estimates from October, the total cost of Galileo from start to completion, and then running it over a 20 year period, is a staggering €22.2 billion – a cost which will be borne entirely by taxpayers and which now has to be revised upwards yet again.

Under the original estimates (from 2000) this cost would have been €7.7 billion, of which only €2.6 billion was to be borne by taxpayers and the rest by private investors (the private investors pulled out in 2007, citing lack of commercial prospects). The project has been beset with delays and cost over-runs at every single stage of its history.

Perhaps it should come as no surprise, then, that even people who are benefitting from the project are raising doubts. According to American diplomatic cables, released by WikiLeaks (first revealed last week by Norwegian paper Aftenposten), Berry Smutny, the CEO of OHB Technology, a company that has a £475 million contract to build 14 Galileo satellites, is claimed to have said:

I think Galileo is a stupid idea that primarily serves French interests.

Ouch.

Mr Smutny also told US officials that in "his opinion the final cost [for the deployment cost] will balloon to around" €10 billion before all is said and done.

It's not getting any better.

Tajani is now asking European governments to cough up yet more cash to cover the shortfall. Sensibly, the UK Government is saying No - and will probably be joined by several other Governments. And they are right. Not a single penny more should be given to the Galileo project until we see a final, robust analysis of what the project will finally cost relative to the benefits it will generate.

Of course, Tajani is keen to point out that the satellite is expected to bring €90 billion to the European economy over 20 years. This has been revised down radically from the Commission's ridiculous original estimate of €275 billion per year in revenues worldwide by 2020 (in addition to the equally delusional 3 billion users and the creation of 150,000 new jobs).

Forgive us for not quite trusting Tajani on this one.

Say what you see

Strong stuff coming out of the Lib Dem conference in Bournemouth today... Hat-tip Spectator Coffee House Blog.

Chris Davies MEP gets worked up over the issue of politicians fiddling their expenses:

"I hate the dirty, cheating b******s, who have taken every opportunity to fill their private pockets with public money. I despise them for dragging down the reputation of my Parliament and all its members. I want them exposed. I want them punished. I want them thrown out."

We don't know exactly who he's referring to but in the past he has singled out disgraced ex-Conservative MEP Den Dover, who apparently still owes the taxpayer £500,000 in "unduly paid expenses", saying that some people see him as "no better than a thief".

Davies' comments are a useful reminder that the problem of MEPs and their expenses is still to be resolved. Since July MEPs have been governed by a new Members' Statute, governing rules on expenses and allowances for MEPs, which offers some very small improvements.

For instance, whereas in the past, MEPs did not have to produce a single receipt for the more than £360,000 available to them every year in allowances (on top of their salary), MEPs must now produce receipts for one chunk of that, which is their travel expenses (although the rules now state that all travel can be by business class). As well as that, MEPs' staff in Brussels are now directly employed, and paid for, by the European Parliament.

MEPs may also no longer employ direct family members (although if they were already working for them in July, they may carry on working for them).

But office expenses and the daily subsistence allowance are still available without receipts - effectively leaving huge amounts of money going straight into MEPs' pockets every year, with no check on how that your money is being spent.

Outrageously, as recently as March this year, MEPs voted to exempt documents which detail how much they are claiming in expenses, and what they are claiming for, from public information requests.

Full credit to Chris Davies - he is one of avery few MEPs who has consistently encouraged and voted in favour of greater transparency in the European Parliament (he voted against exempting documents relating to MEPs' expenses, along with about a quarter of UK MEPs).

Just like at Westminster, the Brussels (and Strasbourg) system needs root-and-branch reform, as we've spelled out before.

What exactly do MEPs propose to do about expenses?

If there's one thing the British public is sick to death of right now, it's politicians and their expense claims.

So you would have thought that the parties would've sought to address this in a big way in their manifestos for the European elections on 4 June.

Because if you think Westminster's rotten, you should look at Brussels. At least at Westminster there are receipts to look at - in the murky world of EU politics, Members of the European Parliament don't even have to keep receipts for any of their expenses. So we will never find out exactly how they've been wasting spending taxpayers' money.

The European Parliament rules are not going to be changed anytime soon, so it's up to the individual parties to force their MEPs to adopt better standards for themselves, and to commit to doing their best to change the system from within.

To give credit where it's due, so far the Conservatives are the only party that have made any detailed effort to persuade people that they intend to shake things up in the EP. Following a pledge last year to publish the details of all Conservative MEPs' expenses online, which they first did in December (with the exception of Christopher Beazley - there's always one), their manifesto, published yesterday, states:

We will also make sure that our MEPs are committed to the highest standards in public life. We were the first party to require all its MEPs to publish a breakdown of their expenses. Our MEPs undertake to continue to publish their expenses online at regular intervals. We will urge other parties to follow suit.

Their "Commitment to the British people" has further details about what this actually means.

Meanwhile, the best the Lib Dems could do in their manifesto, unveiled last week, was:

We will continue to work to reform MEPs expenses, ensure transparency and end the abuses that have undermined public confidence.

Great. Thanks for the detailed commitments.

The Green Party says:

Strong action is also needed to clean up Brussels bureaucracy, and enforce a transparent and fair system for MEP expenses.

UKIP doesn't mention it and makes zero committments to actually do anything as the idea is just to sack the whole thing off and pull out the EU altogether.

Labour, meanwhile, (whose manifesto we come to last, because it was impossible to find on the Party website, and when we called up we found they had closed the offfice for a well-deserved two-hour lunch - oh, and then the office of Labour leader in the EP Glenis Willmott told us they would try to email us a copy of the manifesto, but "couldn't promise anything"), says:

Labour in Europe is working hard to deliver for the people of Britain and we have led the way in ensuring transparency. British Labour MEPs have all their office and staff expenditure reviewed by an independent auditor. British Labour MEPs have all their office and staff expenditure reviewed by an independent auditor.

So absolutely no intention to change anything then. In fact, the inferrence is that we should be happy with the status quo.

Regulations row

In case you missed it, Open Europe Research Director Mats Persson was on the BBC Politics Show on Sunday, discussing our new research, which puts the cost of EU regulations at £106.6 billion over the past ten years.

Also on the programme were Labour MPs Gisela Stuart, and Michael Connarty, Chairman of the European Scrutiny Committee.

Mr Connarty wasn't too impressed by the findings, saying they were meaningless because "If the EU didn't exist, most of the regulations would be in law in this country anyway". He went on to say that "When it [a proposal] eventually becomes a regulation... people ignore the fact that we want it or we had it in the first place."

While it may be the case that, in some instances, EU legislation is not unwelcome, there are two important points to make here. Firstly, although the UK might have wanted a proposal originally, that doesn't necessarily mean that that would still be the case once it has made its way through the lengthy European legislative process.

Secondly, it is fundamentally important to understand where legislation has come from - otherwise how can we possibly think about attempting to de-regulate? As Gisela put it on Sunday: "I think you need to look at where legislation is made, who's responsible for what and whether it's been properly assessed of what the kind of impact and what are sometimes called the unintended consequences of legislation are, so I think to rubbish a report that just looks at the decision making process seems strange to me."

Mr Connarty may well not be interested in looking at the decision making process and understanding where legislation comes from, especially considering he voted against a Bill back in October to require Statutory Instruments to state whether they were the result of a decision made in the European Union or not.

Mr Connarty went on to suggest that if the EU did not exist, "probably 90% or more of those regulations would still exist because we need them." We are not quite sure where he has plucked this figure from.

If he finds time to read our report, he will see that about 50% of the number of regulations introduced in the UK in the last ten years originate in the EU, yet these are responsible for over 70% of the cost of regulations , suggesting that EU regulation imposes a higher burden on the UK economy than domestic legislation does. The Working Time Directive is only one example that springs to mind of an EU regulation that would not exist without the EU. If the rest of the 10% is like that one, it would be a very costly minority indeed...

Going backwards

Finnish MEP and former prime minister Anneli Jäätteenmäki is tackling the EU Commission over a proposal to make the EU's transparency problem even worse.

Current rules state that any “content…concerning a matter relating to the policies, activities and decisions falling within the institution’s sphere of responsibility” is open to the possibility of public scrutiny. But the new rules would mean that only the final, transmitted version of documents will be listed on the public register, which, Jäätteenmäki says, "will encourage policymakers to share information informally so that it will not be subject to public scrutiny."

She said:

“In all European countries the legislative procedure is open, but not here in the EU... European citizens must know what is behind the decisions that are made and what the opinions of the different nations are in the council. I could understand it if we lived maybe 50 years ago, but now that the EU is an internal market and we have common values, why don’t we release the different opinions of the member states on legislation?”

Good question.

How much do MEPs cost?

With the controversy over MEPs' expenses returning to the news, we've received a few queries along the lines of 'how much can MEPs claim in total?'

We've put together the following list of the European Parliament allowances, together with salary/ pension figures. Both salary and first pension are linked to the UK rates, the rest are EU-wide:

Salary = £61,820
First pension (after ten years service) £13,750
EU Parliament contributions to second pension: £18,500
Staff = £148 761
Office costs “general expenses” = £37,881
Daily subsistence (180 days) £50,220
Travel excess = £10,000
Travel allowance = £2,316

TOTAL = £343,248 a year

They also get life and accident insurance, and private healthcare for them and their family.

There are 785 MEPs - salaries and pensions vary quite a bit depending on nationality (eg. Italian MEPs get paid far more than their British counterparts, whilst Hungarian deputies get much less), but to give a fairly rough ball-park estimate based on the UK entitlements, the total bill for the European Parliament would be £270m or €340m.

What's wrong with the EU?

Really interesting book coming out from Simon Hix at the LSE.

Given that he is generally "pro", he has some pretty scathing comments about the limits of the EU's much vaunted new "transparency":

Under the rules agreed at the Seville European Council, debates in the Council are open to the public at two stages of the co-decision procedure: (1) during the initial stage, when the Commission presents its initial proposal and in the ensuing debate between the governments; and (2) during the final stage, when the public can see the final vote in the Council on a bill and hear the explanations of how each government votes.

The Council advertises which sessions are open and at what times on its website. However, Council debates are not open during the first reading of legislation under the co-decision procedure, after the initial debate on the Commission’s proposal, which is when the governments get down to the serious business of agreeing a ‘common position’ on the legislation. Deliberations are not open during the second reading of legislation, when the Council considers the amendments proposed by the European Parliament, nor at third reading, when the Council discusses whether to accept or reject a ‘joint text’ they have agreed with the European Parliament in the conciliation committee (which meets if the European Parliament and Council still disagree after two readings in each institution).

And, debates are not open at any stage of the consultation procedure, which is still used for almost half of all EU legislation. Hence, despite the recent changes, the Council is still probably the most secretive legislative chamber anywhere in the democratic world. One could even go as far as saying that the legislative process in the Chinese National People’s Congress is more transparent than the legislative process in the EU Council!

He takes a number of other things head on too. Looking at the idea that the EU just needs to work harder on its public relations he notes that:

The problem is that as people learn more about the EU, they start to understand that economic integration benefits some social groups more than others, that they pay significant amounts into the EU budget and do not see much in return, and that it is almost impossible for them to change the direction of EU policies.