EUROPEAN INSTITUIONS

 EU PLUNGES INTO CRISIS
March 16, 1999
  Jacques Santer (right) will make a full statement in Brussels on Tuesday
  The European Union has been plunged into deep crisis following the resignation of all 20 Commissioners after the publication of a devastating report into fraud and incompetence.
  The mass resignation was announced by commission President Jacques Santer, who is among those to go, shortly before 0100 GMT in Brussels.
  "We have decided this evening unanimously to resign collectively," he said.
  Several hours later it was still unclear how the EU would continue to operate.
  The Commission's Vice President and one of the UK's two commissioners, Sir Leon Brittan, said events leading up to the resignations were a "disaster".
  He told the BBC that commissioners would remain as caretakers and they would wait on Tuesday to hear what member governments wanted them to do.
  Unprecedented
  Until now not a single commissioner has resigned in the organisation's 42 year history.
  BBC Correspondent David Shukman says the atmosphere in Brussels is one of ''hysteria and chaos''.
  The resignations came after an emergency meeting of the EU executive in Brussels. That session was called after the commission was slammed in an independent report on allegations of fraud, corruption and mismanagement.
  It accused the EU executive body of losing political control.
  The European Parliament's largest political group, the Socialists, had earlier called on the entire commission to step down.
  The crisis comes just days before EU leaders meet to overhaul the bloc's finances ahead of an ambitious expansion into eastern Europe.
  Mr Santer is expected to deliver a detailed statement after discussions on Tuesday.
  Our correspondent says that leading figures in the European Parliament hope that popular commissioners not implicated directly in the scandal will be allowed back onto the new commission.
  'No sense of responsibility'
  The 140-page report by independent experts looked at charges of widespread fraud, nepotism and corruption in the commission.
  It discovered no evidence of fraud on the part of commissioners themselves.
  But it found cases where "commissioners or the commission as a whole bear responsibility for instances of fraud, irregularities or mismanagement".
  And it said it was becoming difficult to find anyone who had ''even the slightest sense of responsibility''.
  The panel, which included two former auditors, stated that commissioners had lost control over fraud and corruption in their ranks.
  But commissioners implicated in the report claimed to be unaware of abuses taking place in their departments.
  The report concluded that such affirmations, if true, would "represent a serious admission of failure".
  Avoided censure
  The commission, responsible for proposing and implementing EU legislation, has been shaken to the core by the fraud allegations.
  It only avoided being toppled in a European Parliament censure vote in January by agreeing to order the independent investigation.
  One of the commissioners at the centre of the storm, former French Prime Minister Edith Cresson, has been accused of cronyism and fraud because she ran vocational training programmes where money went missing.
  Also heavily criticised is Spaniard Manuel Marin who was in charge of the EU's humanitarian aid programme at the time of an alleged fraud involving bogus payments made for projects in Bosnia and Rwanda.
  Both Ms Cresson and Mr Marin deny any wrongdoing.
  The man who first blew the whistle on the commission, Dutch auditor Paul Van Buitenen, asked for his job back on Monday night. Mr Van Buitenen was suspended at half pay for going public.
 
  BACKGROUND: THE EU SHOWDOWN
March 15, 1999
Sacking the Commission requires a two-thirds majority in the Parliament
  By Europe analyst Veronique Kaboha
  The issue at the heart of the conflict between the two most prominent EU bodies - the European Commission and the European Parliament - is the extent of fraud and mismanagement in the Commission and its perceived unwillingness to address it.
  In the wake of a series of corruption scandals involving fraud and irregularities in EU finances, a Commission official sent information to the European Parliament detailing cases of fraud.
  The official highlighted what he called "incompetence and unwillingness of the administration to deal efficiently with fraud and irregularities".
  European Commission President Jacques Santer provoked the parliament into tabling a motion of censure after they refused to discharge the 1996 Commission budget. Mr Santer insisted the MEPs should "back us or sack us".
  The name of the whistle-blower, Paul van Buitenen, was released accidentally by MEPs of the Green Party when they made the information public - they had removed his name and any information about his position, but forgot to remove his signature from the material for use by the press.
  Mr van Buitenen - a member of the Green party himself - was suspended on half pay for four months for breaking staff rules. He faces disciplinary action and could lose his job and his pension.
  Accountancy and accountability
  The parliament cannot force individual commissioners to resign, it can only sack all 21 commissioners en masse. This is a provision in the Maastricht treaty, intended to ensure that MEPs only use this power in extreme circumstances.
  The issue developed from one of accountancy to one of accountability because of the response of European Commission President that even if over half of the Members of the European Parliament supported the censure motion, he would not ask any of his Commissioners to resign.
  It became a showdown between the European Parliament and the European Commission.
  If the Censure motion had been carried it would have threatened EU business at a key time. EU countries are supposed to agree Agenda 2000, the budget for the next seven years which has been under negotiation for several years now.
  The row has also threatened to disrupt the timeframe for enlargement of the European Union to Central and Eastern Europe.
 EURO CHIEF DEFIANT
March 16, 1999
  Jacques Santer at a packed news conference in Brussels
  The President of the European Commission, Jacques Santer, has criticised the damning report which provoked the dramatic resignation of all 20 members of his commission.
  Mr Santer, who was among those who resigned, told a news conference in Brussels he was shocked by the conclusions and tone of the report which he said was "unbalanced".
  Speaking the morning after the resignations, which have plunged the European Union into the worst crisis in its 42-year history, he said: "I have no guilt whatsoever."
  He added that he had "full credibility" to carry on with his job.
  The commission has been told by the German government, which holds the EU presidency, to continue in a caretaker capacity.
  German Chancellor Gerhard Schröder has said he doubts whether replacement commissioners can be found in time for the Euro summit on 24-25 March, called to overhaul the bloc's finances.
  Correspondents say European member governments will want to appoint a new body swiftly but divisions are emerging. The President of the European Parliament, Jose Maria Gil-Robles, says all 20 commissioners must leave their posts immediately rather than continuing on a caretaker basis.
  Some other leading figures in the European Parliament have expressed the hope that popular commissioners not implicated directly in the scandal will be allowed back onto the new commission.
  France has called on European leaders to decide how to tackle the situation at their summit in Berlin on 24-25 March.
  The Spanish government want the commission to serve out its term until the end of 1999 so as not to disrupt the negotiations on how to pay for an ambitious expansion into eastern Europe.
  UK Prime Minister Tony Blair has said he wants a "real heavyweight" to replace Jacques Santer to push through reforms. He says the mass resignation should to be seen as an opportunity for root and branch reform.
  A spokesman for Mr Blair said he would press for the immediate reappointment of the two British representatives, Sir Leon Brittan and Neil Kinnock, as there was no evidence they had done anything wrong.
  The UK prime minister meets German Chancellor Gerhard Schröder at 1600 GMT with the chaos in Brussels certain to top the agenda.
  There have also been calls by European MPs for an emergency Euro summit this weekend. There are also concerns about the effects on the fledgling single currency, the Euro, which fell sharply in value on Tuesday morning before stabilising.
  First resignations in commission history
  The commissioners stood down - the first resignations in the organisation's history - following the publication on Monday of a scathing report into fraud and mismanagement.
  The 140-page report by independent experts looked at charges of widespread fraud, nepotism and corruption in the commission.
  It accused the EU executive body of losing political control, and picked out commissioners Edith Cresson and Manuel Marin for particular blame.
  It discovered no evidence of fraud on the part of commissioners themselves.
  But it found cases where "commissioners or the commission as a whole bear responsibility for instances of fraud, irregularities or mismanagement".
  The panel, which included two former auditors, stated that commissioners had lost control over fraud and corruption in their ranks.
  The commission, responsible for proposing and implementing EU legislation, only avoided being toppled in a European Parliament censure vote in January by agreeing to order the independent investigation.