The European Court of Auditors has warned this Wednesday that the European Commission’s proposal for the EU budget framework from 2028 to 2034 suffers from significant shortcomings in the control of EU funds. According to the auditors, the current approach does not guarantee that the money can be traced to its final beneficiaries, nor does it precisely define the consequences for Member States that fail to comply with the rules.
In its new analysis on the future multiannual financial framework, the audit body concludes that Brussels has applied fully only one of the 28 recommendations previously made to strengthen budget management and transparency. Nineteen other improvements have been incorporated only partially and eight remain pending.
The criticism focuses on the new funding model, which provides for aid to be granted based on the achievement of certain milestones and objectives, without payments necessarily being linked to the expenditures effectively incurred.
This approach, inspired by the scheme used for recovery funds after the pandemic, would be extended to a substantial part of the European programmes for the next seven years. However, the Court reproaches that the proposals continue to prioritize checking formal milestones instead of measuring the concrete results obtained with the investments.
In particular, the auditors warn that disbursements could be approved on the basis of the declarations of the Member States themselves without a mandatory prior verification, while the evaluation criteria and oversight responsibilities remain insufficiently defined.
The document also questions whether the final financial corrections for irregularities could be delayed until February 2036, something that, in the Court’s view, would weaken the “deterrent effect” of sanctions and complicate compliance with European and national rules.
Added to this is the fact that the proposal does not guarantee the “full traceability” of European funds up to the final implementers of the projects. For this reason, the auditors call for strengthening control systems and clarifying in which situations the amounts used improperly must be recovered.
Risks for the regions and doubts about the reordering of funds
Another relevant warning concerns the reconfiguration of agricultural and cohesion funds, which the Commission proposes to merge into a single European fund endowed with 865.000 billion euros, managed through national and regional plans designed by each country.
The Court fears that concentrating the planning of these aid measures in a single document per State could undermine the decision-making capacity of regional authorities regarding the allocation of resources. In addition, it stresses that it has not yet been clearly defined how the reforms will be evaluated or what criteria will be applied to allocate the funding.
The auditors acknowledge, nonetheless, certain progress in simplifying the budget architecture, which would move from seven major headings to four and reduce the number of programmes from 52 to 16. However, they insist that this reorganization does not automatically imply a lower administrative burden for recipients of the aid.
They also criticize that Brussels has not established a precise definition of the concept of "European added value" in legislation, which, according to the report, could lead to divergent interpretations regarding the benefits of EU investments and make it harder to compare results.
Alerts on financing and the protection of the rule of law
In the revenue chapter, the Court warns that the addition of five new sources of funding, up to a total of nine, will increase the complexity of the system and may raise administrative costs for both national governments and the Commission itself.
Against this approach, the auditors argue that strengthening the collection from sources that already exist, in particular by reducing tax losses linked to VAT and customs duties, would make it possible to limit the need to introduce new contributions.
The report also finds that the proposal includes stricter mechanisms to safeguard the rule of law and fundamental rights, although it warns that some provisions could weaken the sanctions foreseen in cases of infringements.
Overall, the Court concludes that the most significant advances are recorded in the rules that make it easier to adapt the budget to new priorities, while the main weaknesses persist in the instruments intended to verify spending results and ensure effective control of the funds.
"We need a budget that clearly shows what the EU can contribute, that guarantees proper management of the funds, and that strengthens accountability and transparency," the member of the Court responsible for the analysis, Jan Gregor, has said, who has argued that his conclusions can help improve the rules before the negotiation of the next European budget is concluded.