EU agencies should tighten their rules to reduce potential conflicts of interest if their senior staff go on to take up private-sector jobs, the European Court of Auditors (ECA) said in its annual report on the bloc’s agencies.
In the report published on Thursday (27 October), the Court pointed to longstanding governance problems in the EU agencies responsible for regulating financial services.
“We are once again able to give the EU’s agencies positive, clean audit opinions on their accounts and revenue, while their spending is generally up to the mark,” said Rimantas Šadžius, the ECA member leading the audit.
“But legislators and agencies must heed our red-flag warning and handle the potential revolving doors more stringently in order to prevent conflicts of interest and avoid reputational damage to themselves and to the EU as a whole.”
Transparency campaigners have longstanding concerns about the so-called ‘revolving door’ of officials in the EU institutions moving to join private sector firms that they had been regulating. The path from officialdom to the private sector is particularly popular in the case of financial services since the establishment of a string of financial sector agencies following the 2008 financial crash.
In 2019, the European Banking Authority allowed its former Executive Director, Adam Farkas, to become chief executive of the Association for Financial Markets in Europe, one of the most powerful finance lobby groups. A year later, the European Ombudsman Emily O’Reilly concluded that Farkas should not have been permitted to take up the job.
In May, O’Reilly urged the European Commission to temporarily block its staff from taking private sector jobs if they pose conflict of interest risks that cannot be offset by restrictions. O’Reilly also warned that failure to handle the ‘revolving doors’ issue properly “could lead to reputational damage and legal challenges.”
Under the existing regulations, EU officials are required to inform the Commission if they plan to take up a job within two years of leaving the EU civil service, and the EU executive can forbid the person from taking the job if it believes that there is a conflict of interests. Meanwhile, senior officials are banned from lobbying the EU institutions for 12 months after leaving the service.
However, out of 366 applications for officials from the European Commission to the private sector and 597 applications for employment in the private sector during a leave of absence in 2019, the Commission blocked only six.
Meanwhile, campaigners have pointed to the switch by Pascal Saint-Amans, the outgoing head of the Organisation for Economic Cooperation and Development (OECD) Centre for Tax Policy and Administration, to the lobbying firm Brunswick next week, without any cooling-off period, as another example of the potential conflicts of interest caused by revolving doors.
The EU’s financial watchdog signed off the agencies’ 2021 accounts, despite persistent public procurement problems across most agencies. In 2021, EU agencies were responsible for spending €13.1 billion from the EU’s budget to run programmes such as those supporting the European Green Deal and research. They also employed 14,430 people, equivalent to 17% of all EU staff.
The EU border control agency, Frontex, was the biggest spender with a budget of €4.1 billion.
[Edited by Nathalie Weatherald]
Source: euractiv.com
