MEPs expressed concern about the rules for controlling spending of the EU’s economic recovery fund (Next Generation EU), during a debate on the EU Court of Auditors 2021 annual report on Wednesday 19 October in Strasbourg.
The President of the Court of Auditors, Tony Murphy, said of the Recovery and Resilience Facility (RRF) that it was “a particular challenge and one which is highly topical at the moment and will continue to be a challenge for us all going forward” (see EUROPE 13042/21).
“I would like to just re-emphasise that what we say in our opinion is that the assessment of the Commission, namely that the reforms in Spain have been met and the payment can be made legally and regularly on that basis, is the limit of the opinion”, Mr Murphy noted.
He added that “we are not saying that EU national financial rules are respected. In this case, however, because there’s no investment – it’s reforms in any case – so it’s very difficult for us to audit anything in that regard, because there are no associated costs”. According to Mr Murphy, the responsibility and roles of the different players should be clarified. It is also necessary to determine, on this basis, “if there are any accountability gaps”.
The EU Commissioner for Budget, Johannes Hahn, said that by 2021, the Commission has already made €54 billion in pre-financing payments to 20 Member States under the recovery fund.
The Commission made a first payment of €10 billion to Spain before the end of last year. As far as the RRF is concerned, the Commission “carries out checks and audits throughout the spending cycle”, Mr Hahn said. The Commission verifies that Member States have sound internal control systems in place, assesses whether milestones and targets are met before payment and carries out risk-based ex-post controls after disbursements, the Commissioner said.
“The first examination by the Court of Auditors of the RRF of one of our Member States, the first to receive resources, raises doubts about the ex-ante controls and the objectives to be achieved”, said Olivier Chastel (Renew Europe, Belgium). “This fear is obviously all the more important when you think of countries like Hungary” which show “systemic failures in the fight against corruption, conflicts of interest”, added Mr Chastel.
Viola von Cramon-Taubadel (Greens/EFA, German) said that the Multiannual Financial Framework (MFF) and the recovery plan “follow completely different rules”. “If we work with two budgets and apply very different rules, the funds will not be subject to standardised and strict controls”, she feared.
Error level. “We are concerned that the error level estimated by the Court of Auditors is 3%, while the Commission estimates it at 1.9%”, said Isabel García Muñoz (S&D, Spanish).
Mr Chastel deplored “a still significant error rate in the areas of cohesion, single market, European development funds, but especially in the area of high risk expenditure, where the error rate peaks this year at 4.7%”.
The increase in the error rate to 3% is “probably in line with the trends normally towards the end of a programming period”, said Mr Murphy. “Also, the fact that we have a higher proportion of high-risk expenditure – as someone mentioned that the error rate for high risk expenses is 4.7% – obviously has an impact on the overall error rate going up from 2.7 to 3%”, concluded the President of the Court of Auditors.
“We need absolute transparency in the use of EU funds, including the list of beneficiaries of cohesion and agricultural funds”, said Ms von Cramon-Taubadel. She referred to the millions of euros of agricultural funds embezzled by Andrej Babiš, the former Czech Prime Minister, with his company Agrofert. (Original version in French by Lionel Changeur)