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Last Updated: Tuesday, 26 July 2005, 16:39 GMT 17:39 UK
Fraud in Europe
Marta Andreasen
Marta Andreasen publicly criticised the EU's financial systems
This week File On 4 examines the anti-fraud regime in Europe.

The European Commission says funds totalling almost 1 billion Euros (about 650m) were lost last year in 10,000 cases of fraud and irregularities.

The programme speaks to Jules Muis, who wrote a stinging memo when he retired last year from his job as head of the European Commission's Internal Audit Service.

He called the accounting systems "chronically sordid" and said officials were in "a persistent state of denial of the problems."

It also hears from Marta Andreasen, the Commission's former chief accountant who went public in 2002 with claims that the EU's 100bn euro (69bn) budget was open to fraud and abuse.

She was sacked for disloyalty and breach of trust.

Now a private consultant in her native Spain, she tells File On 4 that even this year's reforms of the Commission's financial systems have not fixed a systemic problem in its computer system.

"The fact that it does not operate properly puts a question mark on the fairness and legality of all the payments being made out of the budget.

"You cannot be certain if the amounts, beneficiaries or purpose of the payments are correct.

"The scope for fraud is immense."

Sim Kallas, who became European Commissioner responsible for fighting fraud in November last year, denies these claims.

He says there is a polictial will to root out fraud from the EU institutions.

"We cannot leave these issues to the Eurosceptics. We are thinking seriously about all the critical issues that have been raised."

File On 4: BBC Radio 4, Tuesday 26 July, 2005 at 2000 BST and repeated on Sunday 31 July, 2005 at 1700 BST.

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