In 2017, the combination of a high level of commitment and a low level of payments further increased the under-execution of the budget of the European Union, with outstanding commitments having risen from €238 to €267.3 billion compared to 2016, the European Court of Auditors warned on Thursday 4 October, in its annual activity report.
“The EU should not make promises if it cannot deliver”, the President of the Court, Klaus-Heiner Lehne, said the day before, observing that the level of outstanding commitments is almost double the annual EU budget.
He said that there is no question of the European auditors telling the member states that the multiannual financial framework (MFF) needs to be increased or reduced, as this decision is political in nature. The EU budget should “more or less show the truth”; “at the end, if absorption capacity is not there, there is a problem”, Lehne said.
The Court notes that the executed expenditure of the European budget is increasingly out of step with the timetable for setting political priorities.
It is mainly the use of available resources for the European structural and investment funds (ESI funds) that is a challenge to the member states, particularly due to insufficient absorption capacity.
In volume terms, commitments under the ESI funds that had not yet been disbursed in 2017 were highest in Poland (€33.1 billion), Italy (€20.3 billion) and Spain (€17.5 billion). These un-consumed amounts represent nearly 20% of public spending in Bulgaria, Croatia, Latvia, Lithuania and Romania.
The level of the outstanding commitments is not a problem in itself, the problem is that the money is spent too late, Lehne stressed. If funds are not used three years after they were committed ('n+3' rule), they are de-committed. This may affect 2% of the EU budget.
Acknowledging that the interim revision of the 2014-2020 MFF increased the flexibility of the EU budget, the Court advises the European leaders to make managing the risk of payment delay a priority in the ongoing negotiations on the 2021-2027 MFF.
Sources close to Lehne nonetheless wonder: by keeping the Common Agriculture Policy and the Cohesion Policy at the current level, how will it be possible to pay for new political priorities such as defence or migration?
Fewer mistakes. For 2017, the EU auditors have issued a clean opinion on the reliability of the accounts. They note that the level of error concerning payments continues to fall, from 3.1% in 2016 to 2.4% last year. The errors identified stem mainly from payments made on the basis of applications for reimbursement of expenditure incurred by project-owners supported by European funds.
For the second year in a row, the Court has returned a qualified opinion on the legality and regularity of the payments. This year, discussions were easier on this point, Lehne said.
The Court also note that 13 cases of suspected fraud were detected last year and reported to OLAF for investigation. (Original version in French by Mathieu Bion)