EU: As Romano Prodi prepares to deliver the initial findings of the Eurostatinquiry, some observers believe he will sacrifice his Commissioner forEconomic Affairs, writes Denis Staunton
The European Commission travels to Strasbourg this week for a European Parliament hearing that could trigger the Commission's biggest crisis since all its members resigned in 1999.
On Thursday, the Commission President, Mr Romano Prodi, will report to MEPs on the initial findings of an inquiry into alleged wrongdoing at Eurostat, the EU statistical agency based in Luxembourg.
Brussels is giddy with speculation that Mr Pedro Solbes, the Commissioner for Economic and Monetary Affairs, who has ultimate responsibility for Eurostat, will be forced from office this week. Mr Prodi's spokesmen have done nothing to quash such speculation and diplomats point out that, unlike most commissioners, Mr Solbes has little political support from his national capital.
Mr Solbes is not a member of Spain's ruling Popular Party and, although he is associated with the opposition Socialists, he is not a party member.
Some observers believe that Mr Prodi, whose cuddly public image conceals a ruthless instinct for political survival, will sacrifice Mr Solbes to deflect attention from his own responsibility for the proper conduct of EU agencies.
Eurostat used a curious system of double accounting, which inflated the value of some outside contracts and claimed EU funds for some contracts that did not exist at all. The agency's auditors raised questions about these practices in 1998 and Eurostat's senior management ordered them to be stopped.
An investigation by OLAF, the EU's anti-fraud agency, found that some irregular bank accounts remained in existence and that companies that had contracts with Eurostat enjoyed special treatment.
Eurostat's director, Mr Yves Franchet, and another senior official, Mr Daniel Byk, have stepped down and up to 20 other Eurostat employees have been moved to other agencies.
All contracts with Planistat, a company that is alleged to have benefited from Eurostat's unorthodox arrangements, have been cancelled and the Commission has set up a taskforce, under the direction of its secretary general, Mr David O'Sullivan, to look into the allegations against Eurostat.
The taskforce has not completed its work and will not be able to give Mr Prodi a full account of what went on in Eurostat before he meets MEPs on Thursday. Officials have told The Irish Times, however, that the taskforce is likely to conclude that all wrongdoing at Eurostat ended before Mr Prodi's Commission took office in 1999.
The report is also expected to conclude that, although funds were used irregularly, there was no personal enrichment involved on the part of Eurostat officials.
The External Affairs Commissioner, Mr Chris Patten, said this weekend that, although there was clear evidence of wrongdoing at Eurostat, the funds were not looted by employees for personal gain.
"Is it the case that these off-budget funds were going to pay for mistresses's furs or villas in the South of France? It doesn't appear to have been. That doesn't, of course, excuse it," he said.
Despite these indications that Mr Prodi will have little to say on Thursday that will implicate his Commission in the scandal, many journalists and MEPs are expecting Mr Solbes to be sacked.
MEPs face an election next year and, after four years of obscurity, some view the Eurostat scandal as an opportunity to attract public attention to their role as watchdogs over the Commission. The Liberals, who combine sanctimony and opportunism in equal measure, are leading the charge against Mr Solbes.
Some in the conservative European People's Party (EPP) are inclined to seek the head of Mr Solbes, whose opposition to the Franco dictatorship in Spain is not universally admired on the right. The Socialists have indicated, however, that any conservative attempt to remove Mr Solbes will be met by a move to unseat Mr Prodi, a liberal with friends on the right.
Most members of the EPP are horrified by such a prospect but some members of Mr Silvio Berlusconi's Forza Italia, who are affiliated to the EPP, are encouraging a showdown that could humiliate Mr Prodi, who remains the best hope of the Italian left to win power in 2005.
Mr Solbes annoyed MEPs earlier this year when he suggested that he should not be held responsible for events of which he had no knowledge. Some of his supporters suspect, however, that the campaign to run Mr Solbes out of office is linked to opposition to the Stability and Growth Pact.
The stability pact demands that governments in the euro zone maintain a budget deficit below 3 per cent of gross domestic product. Most euro zone member-states have obeyed the rules but France and Germany, the EU's biggest economies, are running deficits above the limit.
As Commissioner for Economic and Monetary Affairs, Mr Solbes is responsible for initiating sanctions against errant states - a process that he is expected to initiate against France next month.
Many European Union politicians believe that the pact is too rigid but few have the political will to initiate its reform. Removing Mr Solbes would make a move to reform the pact less problematic and some diplomats in EU capitals are privately relishing the prospect of his demise.
Mr Prodi secured a promise from all his commissioners that they would resign if called upon to do so and there is little doubt but that Mr Solbes would go if asked.
Despite his political complexion, however, Mr Solbes retains the support of the Spanish government and some other member-states would oppose his sacking.
When Mr Prodi meets MEPs on Thursday, he is unlikely to offer Mr Solbes as a sacrifice but his report will be interim and incomplete.
The European Commission is almost certain to survive this week intact but revelations about Eurostat are likely to haunt its remaining months in office.
