Plenty of strange things go on in Brussels, and there are plenty of funny words for them, too. “Quango” is one of these. It is an acronym for “quasi-autonomous nongovernmental organization.” The European Union runs and funds more than 40 such agencies as separate legal entities, to provide scientific know-how, monitoring or other services.
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Two quangos are headquartered in London and will have to be relocated because of Brexit. Among the 27 EU member states, 19 offers were made to host the European Medicines Agency (EMA) and its staff of 900, while eight offers were made for the European Banking Authority (EBA), which currently employs 160 people. The European Council is supposed to determine the lucky winners this November.
EMA and EBA are useful agencies that prepare and oversee regulation in important and complex issues. There are other useful quangos, like the European Chemicals Agency (ECHA) in Helsinki or the European Border and Coast Guard Agency (EBCG, also known as Frontex), based in Warsaw.
Two of the key problems are that the quangos’ tasks overlap and their locations are spread out
But have you ever heard of the Community Plant Variety Office (CPVO) in Angers, France? Did you know that Thessaloniki hosts the European Centre for the Development of Vocational Training (CEDEFOP)? Developing vocational training is not an EU competence, and one can hardly claim that this center has produced local spillovers in a country with the EU’s highest youth unemployment. But there is also the European Training Foundation (ETF), in Turin, Italy, which may or may not be active in the same field.
This example reveals two of the quangos’ key problems: their tasks overlap and their locations are spread out.
Take regulating financial services. The EBA is not the only agency working in this area. There is also the European Securities and Markets Authority (ESMA) in Paris and the European Insurance and Occupational Pensions Authority (EIOPA) in Frankfurt. Moreover, in that German city you will not only find the European Systemic Risk Board (ESRB) but, of course, the European Central Bank (ECB) with its Single Supervisory Mechanism (SSM).
Naive observers might think a single agency could handle health and medication issues. But that is not how the EU works: In addition to the EMA in London, Lisbon hosts the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA), Stockholm has the European Centre for Disease Prevention and Control (ECDC), Bilbao the European Agency for Safety and Health at Work (EU-OSHA) and Luxembourg the Consumers, Health, Agriculture and Food Executive Agency (CHAFEA).
Back in 1990, there were only three such agencies. One cannot claim that since then the tasks and complexities of EU policy-making have increased more than tenfold. Rather, after EU enlargement, every member state wanted to have at least one of the prestigious, high-paying agencies.
The quangos employ more than 10,000 officials and cost around 2 billion euros a year
Now, the EU’s quangos employ more than 10,000 officials and cost around 2 billion euros a year. According to the European Court of Auditors, many agencies find it hard to spend their budgets usefully. An obvious remedy would be to engage in a rigorous cost-benefit analysis, scrap some agencies and merge others.
However, bureaucracies, once established, are almost impossible to pare down. This is true at the national level and even more so when it comes to international horse-trading.
The same is true for another type of EU madness: With Brussels and Strasbourg, the European Parliament has two seats. The abolition of the Strasbourg seat could save EU taxpayers at least 180 million euros per year and spare parliamentarians weeks of useless travel. Furthermore, the EMA and related agencies could be relocated to Strasbourg, thus solving two problems with one smart move.