Spain: Corrupt government officials steal £1.5bn EU jobs aid

How the EC is failing to help people get jobs… and squandering our money in the attempt.

On Thursday, buried at the bottom of page 17 of the Daily Telegraph, I came across a truly shocking story which shows how the EC is failing to help people cope with the jobs crisis.

There’s an online version of the story here

Spanish government officials are under investigation by the Spanish anti-corruption police (who must be very busy people), concerning the embezzlement of £1.5bn of EU funds given to Andalusia to help people get back into work.

Back in November 2012 here, I reported (largely negatively) on the announcement by the EC that they were going to use EU funds to stimulate job growth across the Eurozone, particularly in the Southern member states.

I felt that the measures proposed would be ineffectual. Firstly because labour isn't as mobile as economists and politicians would like, and secondly because I felt it would be hugely expensive and inefficient.

But I was wrong. I massively underestimated just how inefficient this policy would be.

The first examples of just how hopeless it has been are now coming to light.

Anti-corruption detectives in Spain’s southern region of Andalusia believe this is the nation’s biggest ever fraud…and in Spain, that's saying something.

£1.5 billion! To write this down in full gives you a sense of the scale. It’s £1,500,000,000. To think about it another way, let’s say you were spending one pound a second, every second of every day. That would equate to £3,600 every hour; £86,400 every day. To spend £1.5 billion would take you 48 years!

Spain: A pretty face hides some nasty secrets

The population of Andalusia is 8.45 million people (2012). That’s roughly the same as the population of New York City. So the total EC grant amounted to an investment of £177 for every man, woman and child in Andalusia. Except they never got it.

So even £1.5 billion shared out amongst a population of 8.45 million isn't a lot. But shared between a few corrupt individuals it's a fortune. By the way, in Spain, the average household net-adjusted disposable income is currently just £15,000 a year.

To sum it all up, we have corrupt officials in Spain helping themselves to money taken from European taxpayers by an unelected suprastate that was intended to help the unemployed in a region hard hit by recession.

And that money has gone. Probably never to be seen again. How much will the police and legal investigation work cost? I don't know but it won't be cheap or quick and will compound the costs of the whole sorry episode.

For more details of this story, please see the Spain Report’s news item here.

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