The Commission decided today to extend its actions against irregularities in the EU statistical office Eurostat - after its announced probe into allegations two weeks ago - by deciding to terminate contracts between Eurostat and four other companies.

This measure, described as "precautionary", involves the companies CESD, 2SDA, TES and Planistat.

Termination of the contracts should take about two months.

Commission spokesperson Reijo Kemppinen stressed that this is a "very serious issue."

Measures
The Commission said on Wednesday that most of the problems which have emerged were due to outsourcing - awarding contracts to outside companies - and is therefore taking measures to internalise more of its tasks.

It has also asked the special 20-person team set up to look into the whole Eurostat affair to examine whether the illegal practices occurring there had also occurred in other Commission departments.

A closer eye will be kept on the approximately 400 contracts which Eurostat had with other companies.

New rules on cooperation between Olaf – the EU’s antifraud office – and the Commission are also being worked out. Until now Olaf had not been obliged to inform the Commission of the investigations that it carries out.

But the Commission is being criticised for acting too late on this issue particularly since fraud has been on-going in Eurostat for over 3 years.

After the mass resignation of the Santer Commission in 1999 on charges of nepotism and mismanagement, the current Commission pledged 'zero-tolerance' of fraud and mismanagement.

Who is responsible?
The Brussels executive is also under fire from euro-parliamentarians, who are urging Commissioners to take political responsibility for this case.

Commission President Romano Prodi was invited by the European Parliament Budgetary Control Committee to be questioned on this case after the summer break.