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Monday, January 11, 1999 Published at 18:17 GMT

World: Europe

Schröder steps into fraud row

Gerhard Schröder offers President Santer a helping hand

German Chancellor Gerhard Schröder has intervened in the controversy over allegations of fraud and financial mismanagement in the European Commission.

Europe Correspondent Angus Roxburgh: "Entire European Union could be thrown into utter chaos"
The European Parliament is expected to debate whether to remove all 20 commissioners over the allegations, which concern multi-million dollar humanitarian aid projects that never existed and financial favours for friends.

Speaking before the European Parliament debate in Strasbourg, Mr Schröder - the new head of the rolling six-month EU presidency - proposed the creation of a new working group to examine the fraud allegations and tighten up the system of awarding contracts.

The group would include officials from the commission, the parliament and the member-states' own council.

The BBC's David Eades: "Mr Schroeder spoke of misunderstandings between the Parliament and the Commission"
Speaking in Bonn with the commission president, Jacques Santer, by his side, Mr Schröder said he wanted the Brussels-based commission to be free of suspicion so that it could tackle urgently needed reforms in the coming six months before EU enlargement.

'Thorough investigation'

Mr Schröder, Germany's new, left-wing president, said: "The federal government is interested in a stable and capable commission. By looking into these allegations the commission is on the right road."

[ image: President Santer will defend the Commission's credibility at the Parliament]
President Santer will defend the Commission's credibility at the Parliament
Correspondents say a censure vote in the European Parliament on Thursday is unlikely to achieve the two-thirds majority needed to remove all commissioners from office, but point out the debate is a political embarrassment for Brussels and has severely undermined its credibility.

Mr Schröder promised that Germany would strive during its six-month presidency to clear up the issue. "The commission will get a boost with the support of the German presidency," he said.

SDP MEPs free to vote

Mr Schröder said he had not instructed members of his Social Democratic Party in the European Parliament how to vote on censure motion.

Before he left for Strasbourg, where he will address Parliament, Mr Santer said: "The debate this evening in Strasbourg is important because it should help clear up relations between the Commission and the legislature. We have become victims of our own policy of transparency because we uncovered these issues."

In 1996 the Commission opened its own investigation into fraud in tourism projects and its humanitarian aid office.

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