EU slammed for cutting Iceland grant

Ingibjörg E. Guðmundsdóttir, Head of ETSC.

Ingibjörg E. Guðmundsdóttir, Head of ETSC. Photo:

The European Union (EU) Ombudsman has harshly criticised the European Commission for terminating ahead of time a contract with the Icelandic Education and Training Service Centre (ETSC), after Iceland froze talks to join the Union in 2013.

According to EU Ombudsman, Emily Reilly, the Commission move “constituted serious maladministration”. She concludes that the institution “acted wrongly and in bad faith in this case”.

EU to pay 75%

In June 2012, the ETSC signed a contract with the Commission worth €2.5 million (approx. ISK 365 million) to implement a project aimed at “increasing the employability of low-qualified workers”. The EU was to pay 75% of this amount.

Following Iceland’s decision to freeze talks on joining the 28-country Union, the Commission terminated the contract with two months’ notice.

The ETSC referred the case to O’Reilly on the grounds that the contract entered into was not in any way subject to political decisions by the Icelandic government on the continuation of EU accession negotiations.

“Unfair to burden ETSC”

The Ombudsman agreed, opining that the commitment made by the Commission was not only legal but also moral and social, and that it was unfair to burden and financially damage the ETSC on the basis of the political uncertainty.

EU funding for the Icelandic project was cut as result of the Commission move, meaning that all funding had to come from the ETSC itself. Since then, progress on the project has slowed.

Commission must be “an exemplar of good administration”

O’Reilly has asked the Commission to reconsider its position on the contract. The ETSC is prepared to take the case to the European courts, if need be.

In her decision (see full text here), the Ombudsman reminds the Commission that it “can reasonably be expected to be an exemplar of good administration” and that “the fact that an accession state had, as in this case, put its accession negotiations on hold, does not release the Commission from its obligation to act in an exemplary fashion.”

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