EU misspent €5.5bn, needs to regain trust

The EU misspent 5.5 billion euros ($6 billion) in 2015, the bloc's financial watchdog said Thursday, warning that Brussels needed to regain the trust of European citizens shaken by Brexit and other crises. 

Badly spent funds went on paying overcharged personnel costs for developing cloud computing services, it said.

Another example included aid earmarked for small- and medium-sized enterprises in the Czech Republic, Italy and Poland also benefiting people deemed ineligible, it added.

In issuing the report for 2015, Klaus-Heiner Lehne, the president of the European Court of Auditors, said Europeans have lost trust in EU institutions amid economic troubles, the migration crisis and the British vote to leave the EU.

"In the months and years to come, a major challenge for the EU will be to regain that trust," Lehne said in a presentation of the report, stressing that a good start would be to ensure funds are better spent.

"People cannot even begin to trust us if they do not believe we are looking after their money properly," Lehne said.

The report said the so-called error rate for spending fell slightly to 3.8 percent of the EU's 145.2-billion-euro budget in 2015, but was still far above the acceptable level of 2.2 percent.

That was better than the 6.3 billion euros that were estimated misspent in 2014.

The report said the figures were not a measure of fraud, inefficiency or waste, but an estimate of the money that should not have been paid out because it did not fully comply with EU rules.

Spending managed jointly by Brussels and member states had the same level of error as that managed directly by the European Commission, the EU's powerful executive branch, the report said.

The total EU budget amounts to around one percent of EU gross national income and around two percent of total public spending in member states, it said.

EU spending amounts to around 285 euros for every citizen in the bloc of around 500 million people.