£740m 'wasted'as EU foreign aid remains unspent

A catalogue of nearly 2,000 redundant, half-finished or dormant European aid projects, for which EU governments paid out nearly 1.2bn euros (£740m), has been uncovered as part of a drive to clean up Brussels.

A catalogue of nearly 2,000 redundant, half-finished or dormant European aid projects, for which EU governments paid out nearly 1.2bn euros (£740m), has been uncovered as part of a drive to clean up Brussels.

The scale of the bureaucratic chaos has been revealed by a report listing so-called "paper" aid projects - those that have been dormant for at least five years but have not been closed.

Officials working for Chris Patten, the European Commissioner for external affairs, who conducted the study, identified a total of 1,925 spending pledges, for which 1.192bn euros was allocated, which have been gathering dust in the files of Brussels.

A thick dossier itemising the projects inherited by the present commission includes one dating back to 1978 for which no payments have been made for seven years but which has not yet been closed.

Since the stock-taking work began Mr Patten's officials have closed 611 cases, subject to a final audit - a 32 per cent reduction to 1,321.

As well as revealing the bureaucratic stagnation that is only now being tackled in Brussels, the figures indicate how much of the aid work started by the EU never gets finished because of legal, political, bureaucratic or financial control problems.

In many of the cases identified payments have been stopped either because of political changes in the countries concerned, problems in the firms or non-governmental organisations carrying out the work, or suspicions of fraud. In one project the European Parliament intervened to freeze payments over irregularities in a company contracted to do the work.

But the extraordinary backlog has revealed the consequences of the steady expansion of the EU's ambitions without a similar increase of staff.

With Europe's politicians making pronouncements, officials were urged to deal with the most recent cases. As one said yesterday: "We were told, 'don't worry, the logistical help will come'. It never did."

For 1995, the report says, 7 per cent of the aid projects failed to get off the ground with no payment being made.

Usually this meant that, once the pledge was made, the European Commission and the beneficiary were unable to agree on the detail.

In a further 17 per cent of cases, just one instalment was paid out before cash was stopped, because of a problem either involving the agency distributing the aid, or new political difficulties. That means that at least 45m to 50m euros was spent on projects that were never completed.