Europäischer Rechnungshof - European Court of Auditors
Errors in EU spending persist while debt burden increases
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Errors in EU spending persist while debt burden increases
- The level of error in EU budget spending in 2024 is estimated at 3.6 %
- The EU’s COVID recovery mechanism is also affected by irregular payments and systemic weaknesses
- A growing debt burden poses risks to future EU budgets
The estimated level of error in spending from the EU budget has decreased, but it remains a concern, according to the European Court of Auditors. In their annual report, published today, the auditors also highlight risks posed by the growing burden from borrowing obligations and the implications of these for future EU budgets and action. Against the backdrop of the current discussions on the shape of the next EU budgetary period from 2028, the auditors are calling for a stronger focus on performance measurement, transparency and accountability.
The auditors conclude that the EU’s accounts for 2024 give a true and fair view, and that revenue transactions were error-free. However, they note issues in connection with customs duties, which are at risk of either not being declared or being declared incorrectly by importers. Compared with the previous year, the level of error affecting EU spending fell to 3.6 % (down from 5.6 % in 2023). The auditors also found that irregularities affected part of the €59.9 billion spent under the Recovery and Resilience Facility (RRF), the main pillar of the EU’s NextGenerationEU (NGEU) pandemic recovery package. They noted an increasing trend in the financial impact of these irregularities.
“While the reduction in the level of error is a step forward, there are still too many irregularities across EU spending,” said ECA President Tony Murphy. “These are down to persistent weaknesses in oversight and accountability structures. As the post-2027 EU long-term budget takes shape, policymakers should draw lessons from our findings to ensure the sustainability and transparency of future EU budgets.”
“Adverse” opinion on EU budget expenditure
The auditors conclude that the estimated level of error was both material and pervasive. They have thus issued an adverse opinion on the EU’s spending for the sixth consecutive year. Once again, the estimated overall error rate was largely driven by irregular payments associated with spending under the EU’s Cohesion policy, which reached 5.7 % in 2024 (2023: 9.3 %). The most common errors in the EU budget continue to be those related to ineligible projects and costs and failures to comply with public procurement rules. For the first time since 2016, the auditors estimated the level of error for funds allocated to support for regions and countries outside the EU.
“Qualified” opinion on RRF expenditure
2024 was the fourth year of implementation of the RRF, under which EU countries receive funds in exchange for achieving predefined milestones or targets. Unlike traditional budget expenditure, payments to member states under the RRF are not contingent upon compliance with EU and national rules. Of the 28 grant payments paid out to member states under the RRF in 2024, which had a total value of €59.9 billion, 6 payments did not comply with the applicable rules and conditions. Furthermore, owing to a pending ruling by the Court of Justice of the EU, the auditors at this stage refrained from concluding that two milestones related to judicial reforms in one member state had been satisfactorily achieved. The satisfactory achievement of these milestones had been a precondition for any RRF payments being made to that member state.
The auditors also identified cases of design weaknesses in milestones and targets, and persistent problems with the reliability of information that member states included in their management declarations. The auditors therefore issued a qualified opinion on RRF expenditure. They also emphasise that such spending models should only be used in the future when it can be ensured that responsibilities are clear, that funding is directly linked to measurable results, and that payments are traceable to actual costs.
Concerns about increasing budget pressure
The annual report also draws attention to how borrowing may increase risks for future EU budgets. By 2027, outstanding EU borrowing could surpass €900 billion, the auditors warn, nearly ten times the level before the NGEU pandemic recovery package was launched in 2020. Additionally, the total interest payments on NGEU in the current budgetary period could exceed €30 billion, more than doubling the European Commission’s initial forecast of €14.9 billion. For the period from 2028 to 2034, interest payments could reach nearly €74 billion. To safeguard the sustainability of future EU budgets, the growing burden of borrowing-related obligations needs to be seriously considered, the auditors stress, reminding the importance of solid guarantees and the need to ensure sufficient resources for the implementation of EU programmes.
Background information
Each year the auditors examine EU revenue and expenditure to see whether the annual accounts are reliable and whether income and expenditure transactions comply with the rules. They measure the estimated level of error against a threshold of 2 %, this being the rate above which irregular spending is deemed to be material. The estimated level of error does not refer to fraud, inefficiency, or waste: it is an estimate of the amount of money that was not used in compliance with EU and national rules. However, in the course of their work the auditors also identified 19 cases of suspected fraud which they reported to the relevant EU authorities. An “adverse” opinion means that the auditors have identified widespread problems. A “qualified” opinion means that problems have been identified but are not pervasive.
Contact:
ECA press office: press@eca.europa.eu