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Last Updated: Thursday, 7 February 2008, 00:16 GMT
Moves to halt EU 'gravy train'
By Paul Kirby
EU reporter, BBC News

Former EU Education Commissioner Edith Cresson
Edith Cresson was warned about her choice of personal adviser
Remember the dentist who brought down Brussels?

In the UK, Conservative MP Derek Conway's career lies in tatters for employing his son and the political parties are still dealing with the repercussions.

But the EU has been grappling with expenses reform ever since Education Commissioner and former French Prime Minister Edith Cresson was accused of hiring her home-town dentist as an adviser.

The result was the fall of Jacques Santer's European Commission in 1999.

Significant revamp

Now, commission officials are carefully vetted and MEPs sign a declaration of interests. The information is clearly available on the European Parliament website, although for many the system is currently voluntary.

There should be no problem employing a relative as long as they do a proper job they're qualified to do
Philip Bushill-Matthews
British Conservative Euro MP

From next year, all travel expenses for the monthly trip to Strasbourg will require a proof of receipt and there is going to be a significant revamp of MEPs' salaries.

Instead of being paid the same as MPs in their home countries, Euro MPs are to receive a gross monthly salary of 7,413 euros (5,520).

Known as the New Members Statute, it will rid the EU of a bizarre pay discrepancy.

For Italian MEPs, the change will mean a 4,000 euro pay cut while Latvian legislators can look forward to a 600% pay rise.

European Parliament building, Strasbourg
The Strasbourg parliament costs more than 200m euros a year

Existing MEPs will be allowed to keep their current salaries, but next year's European elections will create something of a new broom through Brussels.

The 287-euro daily allowance which MEPs can still receive simply for turning up is likely to be linked more closely to the length of time they stay. A half-day in Brussels would mean a half-day allowance.

"2009 is a huge step forward," says UK Liberal Democrat MEP Diana Wallis, one of a group of four MEPs seeking a deal on expenses.

And yet, while the basics on salaries and allowances have been tackled, there is still a long way to go and it is clear that not everyone wants to be open and transparent.

'Pots of money'

Austrian MEP Hans-Peter Martin went independent because he claims "none of the political groups abstains from riding the gravy train".

287 euros daily allowance
4,052 euros per month for constituency office
16,914 euros per month maximum parliament allowance
Travel allowance
Chauffeured taxis to airport
Up to 4,000 euros per year for non-EU trips

He has long campaigned for change and says he is openly detested for it.

He says there are more than 10 "pots of money" still open to abuse, including travel allowances, chauffeur services from the airport, the additional voluntary pension scheme and general office expenses.

MEPs are allowed 4,052 euros (3,025) a month for constituency offices - ranging from office rent to electricity bills and computers - and 16,914 euros (12,630) a month to pay parliamentary assistants.

Ms Wallis says secretarial expenses in Brussels are now controlled "more tightly than Westminster".

"I can't even take an assistant down to Strasbourg without having to complete an addition to their contract each time," she says.

The dangers of nepotism and cronyism are always involved
Hans-Peter Martin
Austrian MEP

But other costs are not audited, although British Labour MEPs have had their accounts independently checked since 2000.

The working group of which Ms Wallis is a part has put forward draft proposals for office expenses which are now under consideration.

One option would be for each MEP to have half their constituency expenses accounted for systematically while another would be for records to be kept with no provision for vetting. The second option is likely to win through.

Another plan is to deal with the additional voluntary pension, denounced by Mr Martin as a "luxury pension scheme" which he complains is 66% funded by the European tax-payer.

One suggestion of closing it down altogether is likely to be rejected in favour of allowing it to be phased out over 10 years.

Husbands and wives

When it comes to employing husbands and wives as assistants, there is no proposal for change, although the practice is alien to Germans and Scandinavians.

Mr Martin says that it is open to abuse and unjustifiable. "The dangers of nepotism and cronyism are always involved," he says.

But that argument is hotly disputed.

British Liberal Democrat MEP Diana Wallis
Compared with Westminster, Ms Wallis says progress is being made
Diana Wallis says British politics has never seen it as untoward and she clearly states on her website that she employs her husband Stewart Arnold.

He has a background in marketing in Northern Europe which she says is important for all her media work: "My husband could earn a great deal more where he formerly worked."

Conservative MEP Philip Bushill-Matthews, whose wife deals with constituency matters, says she is well qualified for the job and the arrangement works well for his commitments.

He believes it is "highly desirable" to have someone available day and night.

"There should be no problem employing a relative as long as they do a proper job they're qualified to do," he says.

'Nothing to declare'

For Ms Wallis the key is to be open and transparent about where the money goes.

Many of the declarations of financial interests signed by MEPs say merely "nothing to declare". Ms Wallis cites a Greek colleague who complained of people wanting to look inside his wallet.

But others are assiduous in their documentation.

British Conservative Syed Kamall lists trips abroad and a free ticket for a 2006 World Cup tie while British Labour MEP Mary Honeyball lists her three voluntary student interns and free rail tickets.

Many of the new rules, although slated to come into effect next year, may not be universally applied in Brussels until 2019.

Ms Wallis says everything takes time to change and there are days when she has felt disillusioned. But, she says, "there is a sense of progression, and when I look at Westminster, I think maybe we haven't done so badly".

Cameron sets out expenses changes
05 Feb 08 |  UK Politics
'I'm no crook,' says suspended MP
03 Feb 08 |  UK Politics
Family jobs ban for MPs suggested
30 Jan 08 |  UK Politics
MEPs adopt pay and perks reform
23 Jun 05 |  Europe
EU Commission resigns
16 Mar 99 |  Europe

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