In an opinion on the Recovery and Resilience Facility, the budgetary instrument at the heart of the Recovery Plan for Europe, published on Wednesday 9 September at the request of the European Parliament, the European Court of Auditors said that the adequacy of the amounts allocated to each Member State to address the socio-economic consequences of the Covid-19 pandemic is difficult to assess properly.
According to the Court, too much emphasis was placed on the pre-pandemic position when calculating national allocations.
The European Council agreement of 21 July envisages 70% of the budgetary allocation of the Recovery and Resilience Facility being allocated using criteria such as population, national GDP and unemployment trends over the period 2015-2019 (see EUROPE 12532/2). At the request of the Central and Eastern European countries in particular, who felt that the allocation of resources did not fully reflect the economic impact of the pandemic, the criterion based on unemployment will be replaced by the fall in national GDP in 2020 and the cumulative decrease in GDP for 2020-2021 when the allocations for the remaining 30% that have to be committed by the end of 2023 are calculated.
The Auditors note that, as a result, four Member States (Poland, Germany, Romania and Portugal) out of the ten EU countries receiving the highest grant allocations from the Facility are expected to suffer from a less substantial decline in GDP in 2020 than the EU average of about 7%.
The Court of Auditors is also of the opinion that the Facility's budget distribution mechanism only partially reflects the objectives of economic, social and territorial cohesion. The Court also concludes that more than two thirds of the Facility’s grants are earmarked for the 14 Member States with a 2019 GDP per capita of at least 90% of the EU’s average. And only about a quarter of the Facility's grants will go to Member States (Poland, Greece, Romania, Bulgaria, Croatia, Hungary, Slovakia and Latvia) with a 2019 GDP per capita below 75% of the EU’s average.
“The Recovery Plan is an opportunity to demonstrate that the EU creates value for money. To do so, we must be very attentive that the money is actually allocated to measures that help achieve the EU’s ambitious objectives”, said Ivana Maletić, the Member of the Court responsible for the opinion, in a press release.
The Auditors believe that, despite the synergies identified between the European Recovery Plan and post-2020 cohesion policy, the parallel development of National Recovery Plans, which will set out the investments and reforms that Member States would like to make, and the Operational Programmes that form part of cohesion policy will be a real administrative challenge for the EU27. Hence the importance of providing guidance and simplifying procedures at EU level to avoid duplication with other sources of European funding.
The Court also stresses the importance of including robust anti-fraud measures in the Facility’s operations. It calls for the roles of both the European Parliament and the EU’s auditors to be explicitly delineated in matters of budgetary control.
The Court’s opinion can be found at: https://bit.ly/2GK6EJR (Original version in French by Mathieu Bion)