EU governments are debating whether to set up a “European public prosecutor’s office” (EPPO) as part of efforts to recover the €500 million that go missing from the Union's coffers every year. If agreed, this new body could radically change Europe’s judicial landscape: it will constitute a network of around 100 prosecutors across the continent, each with powers to investigate and prosecute suspects for defrauding EU funding programs.
The very idea is controversial. But it could mean the creation of a powerful new corruption-buster at a time when the Union is struggling to defend the rule of law in, among other places, Bulgaria, Hungary, and Romania.
The European Commission says the EU needs an EPPO to fight fraud against its budget, for example the siphoning off of European funds by the Sicilian mafia via bogus construction projects (as has happened). National administrations are not always hugely motivated to tackle these cases, as they are essentially trying to recover the Union’s money, not their own.
Such cases invariably involve complex financial investigations and, often, require the collection of evidence from other jurisdictions. At best, a successful conviction involves national authorities repaying the misspent money to the EU, even if it is not recovered from the perpetrators. At worst, local government and commercial interests may be too tightly intertwined to guarantee a proper investigation.
Unsurprisingly, then, the Commission estimates in its impact assessment that less than ten percent of the money at risk of fraud each year – anywhere between €500 million and a “dark figure” of €3 billion – is recovered through national efforts.
The Commission has published a proposal to set up the EPPO that cleverly anticipates most automatic objections that justice ministries in the EU will have to an “alien” prosecution service operating on their territories. For starters, the EPPO would be built on a network of national prosecutors, nominated by their own countries to serve as “European delegated prosecutors” (EDPs). These may have other responsibilities locally but will be paid a “top up” fee from Brussels to handle all fraud cases involving EU funds. The prestige and extra money will ensure their loyalty to Brussels, but they should still remain rooted in their national administrations.
Every country would be required to have at least one such Euro-prosecutor but many would have more. France, for example, assumes it would need 7 to 13 such posts to carry out the EPPO’s duties in its jurisdiction.
Each EDP would be picked from a list of three nominees by the head of the new organization, the European Public Prosecutor (whoever this is). EPP candidates would be short-listed by the Commission, vetted by a panel of national public prosecutors, and agreed by a majority of EU countries and MEPs. He or she would serve a nonrenewable term of eight years, be assisted by four deputies, and could only be dismissed by the European Court of Justice.
Only the EPP would be able to decide, independently of anyone else, whether a fraud case should be dropped. Governments might unanimously widen the EPPO's remit to include crimes like VAT fraud or human trafficking. But this would probably only happen if the service first proved itself as highly effective.
Despite all this, the Commission knows it has a Herculean struggle on its hands to get the EPPO established. Certainly, it will not be an EU-28 project. Britain, Denmark, and Ireland will not participate for constitutional as well as political reasons. The sceptical Czechs and Swedes may decide against participating also and perhaps even Finland and the Netherlands.
Under the Lisbon treaty, at least nine EU countries must be interested for the new office to be legally possible, although the others can choose to join later. France and Germany would want to participate but both want the EPPO to be a much weaker “college” of national prosecutors. Germany's constitutional court is likely to take a dim view of the creation of a supranational EU prosecutor.
Moreover, pessimists fear that the EPPO could become an autocratic body that undermines, rather than bolsters, the rule of law. Defence lawyers cite the danger of a “European inquisitor” operating without proper checks and balances, as well as the proposal that evidence gathered by EDPs will be admissible throughout the EU without any harmonization of standards. They cite the example of the European arrest warrant which was agreed and put into operation by EU governments in 2004, using the legal fiction that defence standards across the Union were all equally good. (Governments have been playing catch-up on this issue ever since.)
However, the EPPO is a tempting prospect for those concerned about the EU’s seemingly waning power to influence events in member-states where the rule of law seems open to question. Corruption is often found in the very areas where the European prosecutor would shine a light, such as public procurement. And what better way to address poor judicial standards in countries such as Bulgaria and Romania than by creating an EU body already integrated into national justice systems? (Newer member-states are likely to want to be involved from the get-go for prestige reasons, not least because influential Poland has already hinted it will participate in an EPPO.)
The EPPO is one of the few new “rule of law” tools available under the current EU treaties, which will probably not be re-opened for years. According to Commission president José Manuel Barroso: “We need a better developed set of instruments – not just the alternative between the "soft power" of political persuasion and the "nuclear option" of article 7 of the Treaty (suspension of voting rights).” [http://europa.eu/rapid/press-release_SPEECH-12-596_en.htm]
He is right. And that is also why instinctive sceptics – wary of another EU “grand project” on the scale of Schengen or the euro – should keep an open mind as the debate unfolds over the coming weeks and months.
Hugo Brady is Brussels representative and senior research fellow with the Centre for European Reform. He is currently based at OSEPI, with whom he will publish a policy brief on ‘The case for and against the European Public Prosecutor” in the coming months.