The notion of transparency has
moved to the front-line of public debate
and is now high on the European political
agenda. This is first and foremost because
public institutions with good
transparency practices perform better
and are more highly valued. Transparency
is an essential prerequisite for
the integrity and credibility of our political
institutions - local, national or international.
Transparency is not an end in itself.
Its aim is to promote the long-term success
of effective, time-tested policies by
generating public support. This may
sound easy, but it is increasingly difficult
because the public is tending to become
more demanding and less patient. Citizens
want to have value for their money.
They pay taxes and demand good government
in return.
Whenever high expectations are
shattered, citizens express their outrage
at the ballot box. So, every political institution
should be aware that genuine
transparency must be an integral part of
its policy.
The political institutions of the European
Union are under permanent
scrutiny. The physical and mental distances
between the European public and
the EU institutions tend to create gaps in
both policy and perception. Brussels is
regarded as a far away, inaccessible place,
where all sorts of obscure measures are
agreed.
The real Brussels, on the other hand,
wants to do good for people, but often
feels misunderstood. Brussels does not
get any credit for the fact that the EU
single market is creating millions of
extra jobs or that citizens can travel
freely across Europe at low cost. But
whenever things go wrong, national governments
or the media point their fingers
at Brussels as the playground of
restless paper pushers.
If Brussels tried to hoodwink the
general public, the European Union
would risk collapse. Secrecy in government
would erode the legitimacy of the
European Union, and lack of accountability
could make public opinion feel so
deceived that it finally rejected the European
project altogether. Closed government
would only serve the cause of
populist movements that seek the European
Union’s demise.We cannot let that
happen.
That is why I plan to launch a European
Transparency Initiative, which aims
to promote greater openness throughout
the European Union. I shall submit a
White Paper to the Commission in the
spring and organize a Round Table Conference
at which the principal interested
parties will exchange views and put forward
concrete proposals. The European
Transparency Initiative will be closely
coordinated with the UK government,
which will hold the EU Presidency in the
second half of 2005.
Proposals for specific, possibly legislative,
action at EU level, together with
recommendations to member states and
other stakeholders, could be presented
this autumn and discussed with the European
Parliament.
The European Transparency Initiative
starts from three assumptions:
1. While transparency is needed to
ensure the proper functioning of the decision
making process, a fully open system
would turn the EU institutions into
unproductive talking shops. Policy makers
need space for private reflection. In
the preparatory stages of legislation, for
example, decision-makers must be able
to discuss freely and evaluate information
before submitting a proposal.
Other interested parties may provide
data, suggestions and position papers,
but in the end those politically responsible
have to make a proposal and defend
it in Parliament. If there were no space
for reflection, Parliament would engage
in the preparatory stages of legislation
and government would break down because
the separation of powers would be
infringed. One has to keep deliberations
as open as possible, but also to strike a
balance.
2. Transparency is needed to gain the
public’s trust. Political institutions cannot
perform without public confidence.
Throughout history ambitious empires
have tried to set up political institutions
and conduct policies without taking account
of public opinion. In many cases,
people were promised happiness, even
against their will. Model states were designed
to implement “policies of good
intentions.”
Intellectuals, in particular those far
away from the scene, admired the model
states and their leaders. But on closer inspection
they were no more than houses
of cards.Why? People did not believe in
the system any more, in spite of the
promising statistics and daily “good
news” purveyed by the state-controlled
media. Legitimacy is only ensured when
political institutions are exposed to
transparency, when people know that
what they see is what they get.
3. Transparency protects policy makers
against themselves. The fight against
fraud and the abuse of public funds
should be a permanent activity of every
public administration. Policy makers are
normal people. They may not be inclined
to listen to the inner voice of evil,
but it is always better to install a set of
tangible guarantees.
Sometimes political institutions are
on the slippery slope before they are
even aware of it. Transparency helps
keep public administrations on the right
track and prevents human weaknesses
from prevailing.
In the light of these assumptions, the
European Transparency Initiative would
focus on two themes: to increase financial
accountability and to strengthen
personal integrity and institutional independence.
Firstly, financial accountability is the
linchpin of transparency in public administration.
The EU budget totals about €100 billion, of which 80 percent
goes to two policy areas, agriculture and
structural development funds. In both
areas the European Union and member
states are jointly responsible for the allocation
and spending of the financial resources.
Many member states, however,
regard European subsidies as other people’s
money and sometimes turn a blind
eye to possible misuses. That is wrong.
“European money” is taxpayers’ money
and should be spent just as well as national
tax revenues.
We should, for example, request
governments to allow open access to information
on the final beneficiaries of
European funds, which is not now publicly
available in most member countries.
I was amazed to learn about this
information gap at European level, because
in my country, Estonia, data on recipients
of agricultural and rural
development funds have been fully available
on government websites since 2000.
Denmark introduced a similar system
in June 2004, and the UK recently
announced that such data would be accessible
under the Freedom of Information
Act. This information should be
made available in all EU member states.
There is a similar lack of information
on the distribution of EU structural
development funds. Information to the
general public is often provided simply
by erecting billboards at the sites of projects.
Nobody monitors the quality of the
information. The Commission should
improve the transparency of the structural
funds as it prepares for the next
programming period, from 2007 to
2013.
Proper information and public
awareness are needed to prevent the evil
phenomenon of fraud, or at least limit
its scope. The fight against fraud lies at
the heart of my activities because the European
Union is spending taxpayers’
money. The Commission could try to
raise public awareness of fraud through
public debate and urge whistleblowers to
tip off anti-fraud authorities. There is a
free telephone line for this purpose in all
EU languages, but it has only been used
32 times over the past year.
Secondly, personal integrity and institutional
independence are cornerstones
of good governance and require
permanent control. Members of the
Commission try to ensure personal integrity
by respecting a code of conduct
and providing a declaration of financial
interests, both of which set high standards.
The Commission could perhaps
urge other institutions of the European
Union, and even in the member states, to
set the same standards. Members of the
European Parliament are currently
obliged to provide a declaration of financial
interests, but the information is
very sketchy and some members do not
supply any at all. There is definitely
room for improvement.
The integrity issue should not be
limited to public institutions. Organizations,
groups or persons in the ambit of
the European institutions that offer advice,
represent clients, provide data or
defend public causes should also be accountable.
There is nothing wrong with
lobbies, because each decision making
process needs proper information from
different angles. There are now about
15,000 lobbyists in Brussels, and around
2,600 interest groups have permanent
offices there. Lobbying activities are estimated
to generate €60 million to €90
million in annual revenue. But transparency
is lacking.
There is no mandatory regulation on
reporting or registering lobbying activities,
even though they can have considerable
influence on legislation, particularly
when it is technical. Registers provided
by lobbyists’ organizations are voluntary
and far from comprehensive. They do
not provide much information on the
specific interests represented or how lobbying
is financed. Self-imposed codes of
conduct have not been widely adopted
and lack serious sanctions for
misconduct.
The same goes for Non-Governmental
Organizations, many of which rely on
public funding, some of it from the
Commission. Every year the Commis-
23 Winter/Spring - Volume 6, Numbers 1 & 2 - EUROPEAN AFFAIRS
sion channels over €2 billion to developing
countries through NGOs. The websites
of some NGOs that receive funds
from the Commission describe one of
their main tasks as “lobbying the Commission.”
Or to put it another way, “the
Commission is paying lobbies in order
to be lobbied.”
The European Transparency Initiative
seeks to improve the current registry
of NGOs and ensure it contains financial
information. People have a right to know
how their money is being spent, including
by NGOs. A lot of money is currently
channeled to “good causes” through
organizations about which we know
very little.
These are all questions and suggestions
that are open to discussion as we
prepare the European Transparency Initiative.
All interested parties are allowed
to ask questions and to raise issues.
There are no taboos. The White Paper
will be only a starting point. There will
be enough time and plenty of occasions
for consultations. Transparency is not a
once-only achievement. It is a permanent
process.
Siim Kallas is Vice President of the European
Commission and Commissioner for Administrative
Affairs, Audit and Anti-Fraud.
This article is based on a speech delivered to the European
Foundation for Management at Nottingham Business
School in England on March 3 2005.
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