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European Union Seeks Jail Sentences for Serious Budget Fraud

July 11 (Bloomberg) -- The European Union said it will crack down on fraud and misuse of the bloc’s central budget by seeking criminal penalties for the worst offenders.

The European Commission, the 27-nation EU’s executive arm, proposed a draft law that would set minimum penalties throughout the region for fraud against the EU budget. Imprisonment would be mandatory for “serious cases,” the regulator said in an-emailed statement.

“EU money must not be pocketed by criminals” Viviane Reding, the bloc’s justice policy chief, said in the statement. “It is crucial to put in place criminal law rules of the highest standard, in order to protect our taxpayers’ money.”

Jose Barroso, the European Commission president, has called for the bloc’s funds, which total around 1 percent of the region’s economic output, to be more targeted at easing the euro area’s fiscal crisis, which is now in its third year.

In 2010, there were a total of 600 suspected fraud cases involving EU expenditure and revenue, the commission said. National governments estimated that the misused monies amount to 600 million euros.

To contact the reporter on this story: Jim Brunsden in Brussels at

To contact the editor responsible for this story: Peter Chapman at

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