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EU officials cannot charge hotels and meals to corporate credit cards

August 20th, 2015

The Daily Telegraph said on 17 August that EU officials “spent more than £85 million in a year on specially issued credit cards to pay for meals and hotels…not including train and air travel costs”.

Some clarifications are called for.

First, EU staff cannot charge a penny or a euro cent to a corporate credit card linked to a corporate bank account.

The European Institutions, unlike many organisations, do not allow this.

All work-related travel must be signed off by a senior manager. Staff must meet the costs (except transport tickets, which are purchased directly by the institutions) from their own bank accounts and claim the money back by submitting full supporting documents, which are carefully scrutinised.

So where do the credit cards come in?

The nature of the job – in institutions working with 28 Member States and many more non-EU countries – makes frequent travel necessary for many staff.

The time needed to scrutinise and authorise staff expenses claims, especially for longer trips, can sometimes exceed the interest-free period on many credit cards. Clearly it would not be fair for either staff personally or the European taxpayer to have to pick up the tab for such interest charges.

So the EU institutions have a contract with a credit card provider offering a longer interest free period than many credit cards – currently 60 days – and this provider offers credit cards to officials.

Individual staff members can use the cards for both professional and private expenses but remain responsible for settling the entire bill, which is linked to their private bank accounts and not to any corporate account.

They are reimbursed retrospectively and ¬only for legitimate professional expenses for which they can provide documentary justification.

The Telegraph’s £85 million figure is taken from a tender document where €103m (about £73m at current rates) is given as the estimated annual total spend on a future such credit card contract, including both private and professional spending.

The EU could not publish itemised bills – as some quoted in the media demand – under this arrangement as that would infringe the privacy of employees by showing where they are spending their own money. Redacting that personal information would be a Herculean and expensive task.

But we are quite happy to clarify that in 2014 the entire spend on reimbursing travel expenses by the European Commission, its agencies and some linked services, including all air and train tickets, car mileage, hotels and daily expenses was € 92.7m, or about £65m at current exchange rates.

This in fact amounts to less than £2 000 in total per official who was required to travel at least once during that year (NOT per business trip, for which the figure would be far lower). Not £6 600 on just hotels and meals as the Daily Express claimed (see below).

Some of this money was spent on the above mentioned credit cards. But much was not, as many staff do not have the cards and as travel tickets are billed directly to the institution by the relevant travel agents and operators.

It is still a significant sum, but far less than the media reports suggest. It reflects the fact that Commissioners and many staff need to be frequent travellers to do their jobs properly – if people in the relevant jobs never visited the Member States, they would be criticised for being out of touch with stakeholders and the public.

For example, in promoting the Commission’s Investment Plan to lever €300 bn into key sectors for jobs and growth, Commission Vice-President Jyrki Katainen and his Roadshow team have already this year visited 25 Member States, to a very positive reaction not least in the UK.

Staff are usually required to purchase economy air tickets and encouraged to use budget airlines.

Daily spending on hotels is tightly controlled, for example usually capped at €175 (currently about £120) in London.

Finally, the Daily Express followed up this story on 18 August, making the outright false claim that EU staff were spending £6 600 per head on “hotels, dining and other extravagances” – in passing apparently classifying sleep and food as “extravagances”. The Telegraph was on the contrary careful to say in the body of its article that its £6 600 estimated average spend on the credit cards included the private spending referred to above and not charged to the taxpayer.

The print edition of the Express also claimed that “the maximum [daily] allowance (for meals and other expenses) would come to £20 000 a year on top of basic salary,” as if officials could reclaim this money even when not travelling and as if it were somehow normal to regard expenditure on justified and documented work travel as part of someone’s salary package.

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Please note that all statements in all entries were correct on the date of publication given. However, older archived posts are not systematically updated in the light of later developments, for example changes to EU law.

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