Committee on Civil Liberties, Justice and Home Affairs Joint meeting Committee on Budgetary Control
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LIBE European Parliament
Follow its sittings
Andreas Schwab
Because the new proposed structure of the MFF is clearly inspired by the RRF, the lesson learned from EPPO investigations in this specific regard is of the utmost interest to all of us. Moreover, colleagues, the initiatives that EPPO and its partners are taking and proposing in the field of digitization and AI are important. The criminal landscape is changing rapidly, and we must be sure that investigation and prosecution are progressing at least as fast, if not faster. Fraud and financial crime now sits at the intersection of trade, corporate complexity, digital exploration, IT, and AI development. It is our common responsibility to make sure that those who counter fraud and crimes are well equipped from the point of view of the resources, and from the point of view of the prerogatives and their powers.
There is, of course, the point that is repeatedly made in
Kant.
Andreas Schwab
The point of the cooperation and coordination amongst the relevant actors on the anti-fraud landscape. My colleague, Javier, Mister Sarta Lejos, the chair of Liebe, has mentioned Europoort and Eurojust. I would also add Olaf, whose role is to be clarified, and the new arrivals, the anti-money laundering authority and the new customs authority of the European Union. Moreover, colleagues, we cannot refer to cooperation by limiting ourselves to the union's level. Cooperation must be endorsed also between the union on the one side, and the member states on the other side.
Hence, I draw the attention to the role of the national authorities, not only judiciary and prosecuting, but also on the law enforcement and investigative national authorities who are supposed to provide qualified and adequate support to the EPPO. So as we can see, the number of topics and intertwined aspects is relevant, and the points for further debate would be many. But I do not want to take away any more time from the European chief prosecutor, Miss Kvezi. I just would like to thank her in advance for her dedication and devotion to the mission that she has received at the time of her appointment. Looking at her and at the many obstacles that she had to tackle in her, at the time, new role of a newly born office.
I cannot think of anything else than a mission accomplished. I'm sure that she will enlighten us now with her presentation. Therefore, Miss Kevese, the floor is yours.
Speaker 5
Dear chairs, honorable members of parliament, ladies and gentlemen, thank you for your invitation to exchange with you today. This is the fifth and last annual report of the EPPO that I have the honor to present to you. I would like to take this opportunity to take stock of what we have achieved, and share a few broader reflections with you. It might take a little bit more of your time than usual, and I hope you can accept it. I remember very well my first days as the European chief prosecutor.
I was shocked to hear that my job was to set up a new European agency with 32 and a quarter, the European delegated prosecutors, who, after five years of activity, when we were supposed to reach cruising speed, would end up working on less than 1,000 cases. A European agency. I thought it was a prosecution office, an institution of the European judiciary. No operational support staff, part-time prosecutors, maximum 1,000 cases at cruising speed. I questioned each of these assumptions.
Very quickly, I was given a piece of advice. Miss Keveshi, this is Europe. You have to accept suboptimal compromises. Be happy with what you get. It is already great that we have a European public prosecutor's office at all.
As you can imagine, I have not accepted this advice. For me, just as for most European citizens, I am sure the proverbial too little, too late is not acceptable, especially when it comes to justice and security. You simply cannot afford to disappoint here. A prosecution office cannot be just for show, and European cannot mean weak. This is why, as I took up my duties, I asked this parliament, do we want to have an EPPO just to say that we have it, or do we want the EPPO to be an efficient institution?
With your support, we set up a new European institution which demonstrated that European can mean strong. We did what we were supposed to do, not gradually in the distant future, but from day one at full speed with resources that have never been proportionate to the magnitude of the task. As a matter of fact, the original estimates proved inaccurate very quickly. There is no way to sugarcoat it. The level of fraud affecting the EU budget was underestimated.
To my great surprise, our annual reports were put into doubt. Our methodology to estimate damages was questioned, and I was advised to tone down our public communication. Honestly, I never believed that fever would disappear if you broke the thermometer. I do not think many people do. And, anyway, I was not appointed to sweep dirt under the carpet.
These are the facts. We reached almost 1,200 uptake cases at the end of first full year of our activity. Today, we have more than 3,600, and this is not the end of it. And let me explain why. First, because with the support of this parliament, the EPPO was able to start with a reasonable number of European delegated prosecutors.
As a result, the detection and reporting by most responsible national authorities increased. But there is still room for improvement in some member states, and even more in institutions, bodies, offices, and agencies of the European Union. Second, because thanks to the support of this parliament, the EPPO was able to start with a reasonable number of central office staff supporting operations, including financial investigators and case analysts. In combination with Europol as well as dedicated unspecialized police, tax, and custom investigators in so far only 7 member states, we started to map a new continent of crime in the EU. As a result, we began to uncover very dangerous criminal organizations that are literally plundering our budget.
This is the main added value of the APPO. We see what no one else can see because of the way we are organized and our unique ability to access and analyze relevant information. Third, because it is mathematical. More cases are being opened than we can close. The longer this goes on, the higher our workload is.
Honorable members, we have set up the first transnational prosecution office in record time, and demonstrated that it can be extremely efficient. But the EPPO has reached the limits of its current capacity. It's not only about more European delegated prosecutors, analysts, and dedicated police, tax, and customs investigators. It is also about the applicable legal framework, in particular, the EPPO regulation, the PIF directive, but also the Europol, OLAF, and Eurojust regulations, as well as the data protection framework and many others. It is also going to be about new ways to spend EU funds conditionalities.
For instance, by the end of last year, 21% of our active expenditure fraud cases concerned the Recovery and Resilience Facility. It is a significant proportion. I expect it to increase this year. This is why your involvement in the ongoing debate on the EU anti-fraud architecture is essential. Any European ambition is believable only to the extent we can effectively protect our budget.
And I insist there still is a lot to improve. Starting with the revenue. Currently, VAT and customs fraud cases represent roughly one third of our active cases, but two thirds of the reported damage. We are investigating and prosecuting more than 45 billion euros of revenue fraud. Let us look beyond the numbers.
What is really at stake here? When it comes to VAT fraud combined with customs fraud, we are essentially confronted with criminal networks organizing massive imports of goods from China. The EU is literally flooded by fraudulent imports. These criminal networks do not only defraud our budgets. Obviously, they represent a big threat to our security.
But in my view, the level of fraud we bring to light also indicates, sorry. Also indicates a systematic undermining of the EU trade policy. These networks are hurting our economies. We must give a convincing answer to this question: how to dismantle the criminal industry. Ladies and gentlemen, to conclude, the last seven years confirmed to me that to be strong, any public authority must be credible.
You will not earn respect by merely displaying symbols or polishing your public image. It is not a matter of communication. It is about keeping the dis citizen's trust. As the first European chief prosecutor, I tried to make sure that justice serves European citizens, that it is tangible, and that the law is equal for everyone. I gave it my best.
Thank you for your attention.
Marina Kaljurand
Madam Kervisi, thank you very much for your remarks. And now we will continue with the speakers on behalf of the political groups. Each political group will have the opportunity for two speakers, one from Libya, one from Conte, both for two minutes. And after that, madam Covici will have the chance to reply and comment on the remarks by the members of the parliament. So I will start the first round with speakers on behalf of the EPP Group.
And I understand that from Conte, it's Mister Ziehovsky who will take the floor. Please, you have the floor.
Tomáš Zdechovský
Thank you, madam chair. Thank you, Madam Kovese. I hope that you feel much better, and you will use my time to refresh you and to respond to my question. I would like to ask about the disciplinary procedure concerning the Bulgarian European prosecutor, Theodora Georgieva. EPO has established a press release saying that notification about the start of disciplinary proceedings was sent to the European Parliament, European Commission, and Council.
I would like to ask you when was it sent, who received it in each institution? And what did EPO ask this institution to do? And I also have a question about the information shared. Does it include enough detail for proper democratic oversight? For example, does it mention the alleged unauthorized involvement of Miss Georgieva in Epo investigation in Bulgaria?
Or if not, will Epo provide more details? And I would like to raise another point. Yesterday, market, four years since miss Georgieva tried to involve APO in matters linked with arrested of GERP leader, Boyko Borisov. This happened under the government of former prime minister Kerel Petkov. And that time, Epoch clarified that it's not involved.
How do you address the impact of this case on Apple reputation, and has it affected public trust? And what steps are you taking to protect the integrity of Apple? Thank you very much. Thank you very much for your very good work and for your cooperation, and we are very happy that you established Apple.
Marina Kaljurand
Thank you. And on behalf of Libba, I would like to give the floor to mister Radev.
Emil Radev
Thank you very much, chairman. Dear Miss Kervashy, I am. Dear Ms. Kyivishi, I would like to congratulate you on your successful mandate. You have succeeded to build the PPPoE from scratch.
Today, we're witnessing an effective institution, an institution which deals in an excellent way with current challenges. According to the annual PPPO report for 2025, the number of active investigations is over 3,600, with a total estimated damage of over €67,000,000,000. There is also a substantial increase in the number of transborder VAT fraud cases. They're about two thirds of the overall number, and they're a major source of damage for the EU budget. In this context, I would like to ask you the following questions. What concrete measures is the EPPO taking to improve the early detection of such complex schemes?
Are the current resources and powers at your disposal sufficient to deal effectively with this type of crime? Also, how does the DPPO guarantee that with such a sharp increase in the volume and complexity of cases, it keeps equally high the standards of integrity and internal control, especially bearing in mind the institution is also already being confronted with a disciplinary proceeding with the Bulgarian prosecutor. Thank you for your attention.
Marina Kaljurand
Thank you, Mr. Roderick. And madam Kevasi, please, you have the floor to answer.
Speaker 5
Thank you. Indeed, we started a disciplinary procedure in the EPPO against the Bulgarian European prosecutor. It was an internal procedure. After that, we set up a panel who made supplementary checks on the facts that we have identified. And in the end, the conclusion was that there were three misconducts.
We sent the college decided to ask the European Parliament, the Council, and the Commission for the procedure to dismiss the European prosecutor from her position, because this is what is written in the EPPO regulation. We have sent this letter in February to the chief of these institutions for the par European Parliament. We addressed this letter to the president, Metzola, because this is how we are doing today. I cannot explain more because two of these misconducts are related to the operational information. That's they are related to some investigations ongoing.
And we will wait for this procedure to be finalized. I would like to say that for the case with the former prime minister of Bulgaria, the EPPO has not been involved. We didn't have an investigation ongoing at that moment, so it was not our case. For the other questions, how we can improve the early detection, I would like to underline that it's not the job of the EPPO to detect. Our job is to make an investigation and prosecution.
Detection is in general for managing authorities, for the police, for tax administration, for custom offices, but we are very concerned about the level of reporting and about the fact that in some member states, the level of detection is very low for the crimes that we are investigating. And in order to increase the level of detection, we also share our typologies with all these institutions from national authorities. And this is why we have asked to have dedicated police officers and financial investigators from customs and tax administration to work in EPPO cases, because in this way, they will be specialized. They will know exactly what EPPO is investigating and how, and also sharing information will be very easy. I would like with this occasion to stress that in our activity, we gather a lot of information that sometimes is not in our competence, and we share all the time this information with the member states. And in this context, I can say that we have information about trafficking of weapons, money laundering, trafficking of drugs, trafficking of human beings, and all the time we share this information.
We are trying to raise the awareness during all the national authorities, but also at European level with all the institutions, bodies, and agencies that according to EPPO provisions, everyone and anyone who has information regarding the crimes that fall under the EPPO competence can address directly to the EPPO. Speaking about the resources, I already said that they were not enough. I think in this moment, with this huge workload that we have to deal with, our resources are very limited. Comparing with the damages that this criminal organization are creating each year, if we take as an example only the VAT, it's more than €50,000,000,000 that they are creating as damages. I would say that what we have is suboptimal.
It's good that we have a lot of resources to pay different consultancies, different studies to tell us that the EPPO regulation has to be revised. It is something that we have said in the last four years many times, and we have pushed a lot for an area revision of regulation. But when it's about to have more resources and the EPPO, it's more difficult. Here, I will give you one example, Calypso investigation. It's a case that concerns VAT fraud and custom fraud that created damages of €800,000,000. This case has been possible due to one colleague who is working in operation, a Greek colleague who was national expert seconded from the Greek customs, and he was the one who connected the dots and who helped us to develop this investigation.
In this investigation, we have seized more than 2,000 of 500 containers worth around €250,000,000. And these are money that when the investigation will be over, and when we will finalize with the assessment of the content of these containers, the damages will probably be recovered. And I would like to say that this is only one colleague in one case. We have asked for 15 more colleagues. And for the second and national experts, we don't have to pay the salary because the member states are paying the salaries.
We just have to pay a small allowance, and we didn't get it. And regarding the standards that we have in EPPO, I would say that we have very high standards from the ethical perspective, and this is why in the cases when we have information that the European delegated prosecutors or a European prosecutor is committing a crime or some misconduct, We all the time open investigations. And, unfortunately, we had won this precedent with the Bulgarian European Prosecutor.
Marina Kaljurand
Thank you, Miss Kovacian. I don't want to stop you, but could you please keep your answers within four minutes so that no. That's okay. That's okay. So that all colleagues will have the chance to intervene in the discussion.
So I will continue with the S and T group, and I would like to give the floor to Ms. Laurent Muriel. Please, you have the floor.
Thank.
Murielle Laurent
Thank you very much, madam. Missus Govese, here I am. On behalf of the S and D group, I'd like to thank you and your team for all of the work that you have done at the PPO. Chloe Riedel, who works on corruption issues, couldn't be here today, but she asked me to ask a few questions. What kind of change in the mandate concerning resources would allow the APPO to attack large-scale corruption rather than just intermediate-level fraud?
A significant number of your cases involve consultancies, shell companies, and political figures who misappropriate money. How do you think in the future you'll be carrying out work at the EPPO? Are there sectors or countries where the risk is more significant? Do your teams work on anticipating risk upstream? And how do you think that the relationship between the EPPO and the member states might develop through the use of delegated prosecutors?
Thank you. Please.
Speaker 5
When it's about the changes in the mandate of the EPPO to investigate corruption, we have this new proposal to have the new directive for combative corruption that it's in dialogue and that would clarify. But still, I have to underline that we have competence when it's about a corruption case in relation with the PIF office. Unfortunately, not in all the member states, they have the same reading as us when it's about this. When it's about the financial resources that EPPO would need, I think at this moment, we would need around €270,000,000. This means three times more than we have at this moment.
And when it's about the relations with the member states, we are trying to expand a model that works very well in almost half of the member states. As I said many times, to have dedicated police officers and financial investigators dedicated to work in EPPO cases. This doesn't require any changes in the legislation. It's zero cost. It's just an organizational way in which those police officers and those financial investigators would help our colleagues to work in the cases.
As you can see in our annual report, the number of European delegated prosecutors also has to be increased in some member states because the workload is triple what it was a few years ago.
Marina Kaljurand
Thank you. On behalf of PFE, I do not see anybody wishing to take the floor. So we continue with the ECR Group, and I would like to invite Mr. Sturza to take the floor, please.
Şerban Dimitrie Sturdza
Thank you, sir. I'll speak in Romania, my mother-in-law Tong. So, please.
Dear missus, from the very beginning, I would like to express the joy I feel to have you here with us in the European Parliament. I would like to congratulate you on the completion of your seven year mandate and term rather, and for all the impressive results you have achieved so far. One question for you. When at the end of your term, what do you think is the main duty of the EPO? And I do not mean the mission of this institution, but the specific practices that your successor from Germany should focus on so that the EU can become stronger.
In other words, what exactly in your activity as a chief European prosecutor in the last 7 years is still to be continued and finalized by your successor? Thank you.
Speaker 5
Can I reply in Romanian? Because I'm sorry. I will switch to Romanian. For.
The next chief prosecutor of EPO, the main challenges will focus on the review of the EPO regulation that will need to clarify the remit of the EPO. Then the involvement of EPO in the anti-fraud architecture and the role that this institution is to play in that. And the main challenge is not the relation with other institutions or European agencies. The biggest challenge is fighting organized crime groups, especially organized crime groups from third countries. From my point of view, the biggest challenge for a chief prosecutor is maintaining the independence of this institution, and it can only be guaranteed when we prove to everyone that the law is equal for all.
Andreas Schwab
Thank you very much. Now we come to the Renew Group, and the first speaker is Raquel. Over to you.
Raquel García Hermida-Van Der Walle
Thank you, cheers, and thank you, Mrs. Coventry. If you didn't know this already, I will say it again. I am really a big fan of your work, and I was very happy to hear of the reads in the reports. We have achieved these accomplishments with extremely hard work, outstanding dedication, and fierce determination.
I think your presentation today is a testimony to that. So thank you on behalf of all Europeans. Now on to my questions. I was wondering on the issue of, well, overextended resources and the number of referrals that you get. We have seen reports, complaints from private parties, 4,629 last year, of which 208 were opened based on reports, on these reports officially by EPPO.
So I have a question about, do you see there a difference in reliability in cases that are referred from national authorities or from the European institutions, when compared with cases referred by private parties? That would be my first question. My second question is more general, referring to your transition. I was happy to vote for mister Ritter, but I think that he's going to have a huge task to take it forward and to continue your commitment to independence. So, what do you need from this parliament as an institution, do you think, in your outgoing position, to ensure that the independence of the EPPO is going to be held up high for the next period?
That would be very important for us to know as a parliament. And then on the mandates, it is no secret that for the Renew Group, it's a very important step to take to review the EPPO regulation. We have asked the Commission about this on a number of occasions. So this is a question also to the Commission: when is that revision coming up? I hope that the Commission, maybe at the end of this hearing, can answer if it is possible for the Chairs.
And also important because we tried, as a rapporteur in the Anti Corruption Directive, we tried to get the Member States to move on giving more mandates to EPPO, but they really wanted to wait until the new regulation is proposed. So I think that we can all sense the urgency of doing that. So this is a call to the commission, but also a question for the commission. Thank you so much.
Andreas Schwab
Thank you very much, colleague Hermida Garcia. Over to you, Miss Quevesi.
Speaker 5
Thank you. I think the high number of reports that we have received from the private party shows that citizens trust the EPPO. Otherwise, they wouldn't address us. But I have to say that not all the complaints that we receive from private parties are connected to our competence, and this is why there is a discrepancy between this high number of complaints that we receive and the number of the cases that we can open based on this. Comparing with this, indeed, the reports from the national authorities, but especially from the European institutions, bodies and agencies are very, very low.
I would say that in the member states, we try to raise the awareness of all the institutions about what is the role of the APPO and what we can do. But I think at central European level, there is still this instinct when they see something to not send the complaint to EPPO and to not send the information to EPPO. And maybe we still have to work on this. When it's about the next European chief prosecutor, thank you for voting for mister Ritter. I think he's an excellent prosecutor, and I'm sure that he will keep the independence of the APPO at the highest level.
But you will discuss probably, I think, the main challenge in keeping the independence of the APPO, it's also the revision of regulation and what the regulation will see. And I see here three main points that are crucial for keeping the independence. First, it's clarifying the competence, and here, keeping the principle of legality because this will make us be and act independent. After that is the appointment of the European prosecutor and the way the European delegated prosecutors are appointed. This is also something very important.
And the crucial part in our independence is EPPO to be considered as an institution. We have been, and we are still considered by the commission also in the way how the budget is constructed as an agency. We haven't been created to implement the policy of an executive institution. We are part of the judiciary. We have to be also in the regulation very clear, decided that the EPPO is an institution.
We are part of the judiciary. And if you really want an independent EPPO, only an institution that is a part of the judiciary can be independent. And here, probably, the problems with the budget will disappear once EPVO is an institution. And, of course, for the last topic with the revision of regulation, I waited 4 years for the commission to start. Probably, it will start when my mandate is over, so I cannot make other comments.
Thank you.
Gilles Boyer
Boyer, you have the floor. Thank you, chair. Thank you, Miss Covesi. As the in on the EPPO, I align myself with those who have encouraged and supported your work in the annual report for 2024. It's a reality which concerns us.
We are seeing the number of cases increase. The estimated damage is also increasing in a dramatic way. We can see the figures in a good light or in a bad light. We are seeing the increase in the number of cases identified, but we are also seeing an increase in the number of cases that are resolved. That's what I would like to focus on.
I'm a natural optimist. I would like to ask two questions. The increase in reporting this year comes mainly from the national authorities. Could you explain what contributes to why the contribution of European institutions has been more limited? What are the reasons for that?
Number two, VTA fraud. You recalled that this is the majority of the estimated damage. I would like to know, is the current legal framework sufficient to deal with these cases, which are often complex and often transborder? Thank you. Thank you.
Speaker 5
Indeed, we have an increase in the reporting from the national authorities because we work very much on this in order to increase the level of detection and reporting in the member states. As I said, unfortunately, we don't have the same level of the European institutions, bodies, and agencies. Still, sometimes when, for example, different DGs of the Commission have information about a potential fraud, they do not refer these cases to EPPO. They refer these cases to Olaf. Olaf has to assess.
And in the end, Olaf probably will send the cases to us. So it's just a little bit of a waste of time. We tried to raise awareness to everyone to send to us. After that, we have the managing authorities. We have the same issue.
There is no exercise among the civil servants when they see something to report. They said that they are not the prosecutors. They are not police, and they don't know if there is fraud or not. But sometimes, if you have fake documents, what else can it be? If you see fake documents during the procedure, you have to report this to the EPPO.
Let's hope that in the future, the level of reporting also from institutions, bodies, and the agency of the European Union will increase. Now when it's about the custom fraud, the main problem is that we cannot give an estimation about the damages because no one calculated how much is the gap for customs. We have a gap for VAT, but no one is looking at how much the gap for custom is. But, also, our duty on the European Union has to defend its revenue. It's not only about making investigation in expenditure frauds, but also in revenues and customs revenues.
And everything that we are investigating in our cases and we have a custom fraud and we succeed to cease all those money goes, in the end of the procedure, directly in the European Union budget.
Andreas Schwab
Thank you so much, Miss Kurvisi. Next speaker is for the Greens, Daniel Freund.
Daniel Freund
Thanks to the chairs, and thanks so much, madam Kurvisi. I really think, I mean, your track record of you and the entire team at EPO over these past five years is truly impressive. What you have done under, I think, not always easy circumstances. Let's be honest. So thank you for that.
And, I have to say also looking now at the annual report, it's quite impressive to see what is being done. The first question I would like to ask is, I mean, you have indicated it, but maybe you can be more specific. What does EPO need in terms of financial and human resources to fully deliver on its mission? You have said you're at the capacity, but, what are we talking about more concretely? We have been very supportive as Green Zephyr of your institution.
We also welcome the election of mister Gretta and look forward to the cooperation. And, well, we are discussing now how Apple will evolve in the future. And maybe you can tell us a bit, you know, I know you have answered some questions of colleagues on this. But if there's anything to add from you on how you see that the institution should evolve, how the mandate should evolve, what would you like us to do here from the parliament? And then the final question I have, mister Boyer already put it a little bit, but when I look specifically at the numbers of investigations for RF fraud, it's 1% of the cases that are notified by the EU institutions.
I mean, this to me seems not just that they're not doing the job properly. It almost looks like, they're looking the other way. What do we, I mean, this is such a low number. What do we need to do about this?
Speaker 5
When I said that we probably have to triple the budget, I was thinking that we have to increase the number of European delegated prosecutors. We still have member states in which we have only two European delegated prosecutors, for example. We have to increase this number because also the workload is very high. Just to give you an example, Luxembourg. It's not the biggest member state as size, but you have a lot of headquarters of the European institution.
If you have a fraud in Ukraine, if you have a fraud committed in any other third country, our colleagues from Luxembourg have to investigate, and we have only two European delegated prosecutors. We appointed only one last year. So we have to increase the number of European delegated prosecutors in almost all the member states. After that, we have to increase the number of analysts and financial investigators due to the high number of cases that we see, but also because we can see things that the others cannot see because we have this helicopter view, as I like to say it, and we can connect the dots better. In each member state, even if you have the best police officers, the best prosecutors, they cannot see what is happening outside of their territory.
The only one who can see and do something, it's us. And especially when it's about VAT and customs fraud, when I said that we are invaded by the third country's criminal organized group, especially Chinese. And only if you look at our figures, you see that we have to do more for this. How will EPPO evolve? I already said when it's about the revision of regulation, but probably I have to say about the competence.
I don't know if the member states of the legislator would like to give the EPPO more competence for terrorists, for other things. We didn't ask for it, and it's the legislator who has to decide. But we have been asked about the circumvention of US sanctions, and the College of the EPPO decided that it's a competence that we can have. And we are in the best position at the European level to make these investigations. Why?
Because we are specialized. We have European delegated prosecutors in 24 member states. And mainly, the typologies of this kind of criminality fall under the EPPO competence. And for the last question regarding error and fraud, indeed, the number of cases increased in the last period. Most of the reports came from the national authorities.
What we can do at European level, I think we did everything that was in our power to raise awareness. Maybe we have to work more on this, but maybe each European institution, body, and agencies have to reply to this what they are doing because we see some developments in some cases that could have been identified. We have a lot of agencies and institutions that are responsible for prevention. We have the managing authority. We have auditors.
It's impossible not to see a fraud. We can make more trainings with them in order to raise awareness, but I think if everyone, including at European level, will do their job, the figures will increase.
Andreas Schwab
Thank you very much, Miss Kubese. I think the question is fully covered. We come then to the left, and the first speaker here is Constantinos Arvanites.
Thank.
Konstantinos Arvanitis
Thank you very much. Madame Kvesi, the annual EPPO report on 2025 shows the blow that our finances in the EU get on an annual basis. We're talking about €90,000,000,000. And this is exorbitant, and it's really disheartening given that this unlawful behavior is linked both to cross-border and organized crime as with corruption. And as you said, and I'm going to agree, corruption kills or can kill. Generally speaking, I think that the EPPO with you, Missus Kovessi, at the helm not only worked tirelessly, but it did a sterling job.
And the left would like to thank you very much for what you've done. More and more investigations and national authorities are already getting into their stride now. Others are saying unacceptable things, including against you. But it seems that citizens are embracing the institution more and more. So I have a question because in Greece, you know, we have the Debon Convention 757 as well as the agricultural scandal, agricultural fund scandal, and others.
So, are these investigations ongoing? Or are these cases closed? Now, it's really unfortunate that there will be more work in the future. So there are three points here. This means that these crimes are rampant.
It also means that the EPPO needs to be bolstered. That's how we see it. You need more staff, more infrastructure, so that you can deal with this constant challenge. Now you did reply to this question slightly, but I want more information. On the basis of your experience and your successful career here, what three initiatives would you put forward to the EU institutions in order to strengthen the EPPO, in order to fight against the kind of crime that falls under the remit of the EPPO?
Thank you.
Speaker 5
The cases with agricultural subsidies in Greece are ongoing. It's not only one case. There are several cases. And once we finalize them or we can give you more information, we will give it to you. Indeed, the workload of the EPPO will increase because the level of reporting and the level of detection increased, but also due to our activity.
And this will not stop because the criminals will never stop. Initiatives to strengthen the APPO. I already said the revision of the regulation. Probably, I already said about the anti fraud architecture. I would say one thing that it's also connected to justify the need for resources, and this is IT tools.
We see in our activity a lot of information that cannot be assessed, cannot be analyzed. Just to give you an example, in four of our investigations, we had more than 2,000 terabytes of information. No police, no national police in Europe can assess that information for EPPO because they will be blocked probably for a few months. But still, in those information, there are very relevant information based on which the national authorities can open an investigation as it happened. So I think we need to strengthen a little bit Europol.
They are one of our strategic partners. The revision of the Europol regulation will come soon. And here, maybe, if we can increase the analytical capacity of Europol and look with a little bit more openness to the possibilities of what Europol can do together with TPPO, I think this will strengthen very much the fight against financial criminality.
Pasquale Tridico
Thank you, Madam Covesi. I will not go further in detail concerning the question because I was very closely looking at the activity of Ippo and at your work recently as discharger. So I really appreciate the work has been done. However, we know that the more you work and the more people work, the more we discover that things do not work in the concerning, do not work in the sense that we are subject to multiple frauds. Now, I will go straightforward to a very political question, probably, and knowing that there are differences here in our function.
Do you think that probably what we miss is a jump in the quality of the integration of the VAT scheme in order to avoid fraud, or is it enough, the regulation that we do have in the single market? Because I think that with this number which is so big of fraud, we are really threatening our single market, which is one of the most precious things that we have in Europe. Thank you.
Speaker 5
You know, like, we are the tailors. We work with the material that the clients offer us. Whatever you in parliament decide that we can do, of course, we will do it. But, when we speak about the VAT on custom fraud, I think now there are these discussions with the future EU custom authorities, and there is this discussion about the customs reform. So I think here, there are a few things that can be taken into consideration as a suggestion that EPPO needs direct access to the customs data hub in order to identify very quickly when the fraudsters change the import partners.
So here, I would see something that the parliament can help us when it's about the fight against the VAT fraud and the custom fraud. And I think what is the most important, it's to have a little bit of shift of mentality at the European level because I have the impression that there is no strong wish to fight against the fraud with VAT on custom. There is a strong wish when it's about the expenditure fraud, but when it's about the revenue part of the budget, the wish is not so high to fight. All the time, the fraud with VAT was considered a niche criminality, something that, okay, any other business, but is the core of criminality, and Europe is losing a lot of money.
Andreas Schwab
Thank you very much, miss Kvese. We are coming now to the ESN group, and I see speaker Alexander Jungbrut.
Thank.
Alexander Jungbluth
You, chair. I'll speak in German. I also thank you for your work. A question. You said that there were several problems when it comes to cooperation.
For example, you spoke about cases which go to Olaf before they come to you. You said that leads to delays to additional work. You also talked about cooperation with the national authorities. You described a situation in which it is often not very easy to work together with them. And the question often seems to be who has competency, and there is a risk here of the creation of double structures.
So my question to you is what could we do about this to improve effective cooperation and to avoid double structures. You focused on some very good aspects. Something I find very interesting is on page 70 of your report relating to the next generation EU program. And what we see here is something which we were worried about, and you've really focused on it, euros 2,050,000,000.00, you have discovered. That's a minimum figure for abuse.
And looking at this programme, there is a specific problem in the green transformation, particularly with solar panels. So in the development of green infrastructure, we are seeing abuse taking place. And as a German, I was particularly alarmed by what I've seen here. You'll know about Mr. Harbeck and the issues which have been there have come up there with the green transformation in Germany, the way in which the program was implemented, and that those advocating for this green transition, the green institutions were just earning money through this.
They were getting really rich. So I'd like to hear what you have to say about that. That's something which you've uncovered here, these problems. So what specific cases have you uncovered in Next Generation EU, specifically with the green transformation in Germany?
Speaker 5
K. When it's about EPPO and Olaf, I don't have we have this danger to have a double structure to do the same things because our competencies are very clear. And I think what we can do in order to avoid the duplication of our work can also be clarified in the next revision of EPPO regulation and OLAF regulation. And I think with the new general director of Olaf, we have had very constructive meetings, and we have a plan of what we can do. Now when it's about the investigations in Germany, I'm not an expert in German law, but I learned that when it's about Germany, it is very complicated because you are unique.
You have the federal level, and it's a little bit different than the other member states. And all the time, it's a little more complicated. But here, I would like to say that we have an excellent cooperation with the financial administrations, with the customs in general, and with the national police. And I cannot say anything more than it's in our annual report about the cases that we are investigating in Germany, because I cannot comment in public on any ongoing cases. But I would say that sometimes the number of the investigation and the apologies for the investigation depends very much on the specialization of the national authorities.
If you look also at the figures, you will see that in Italy, we have a high number of investigations because we also have Guarda di Financa. They are specialized in detecting. They're reporting all the time these cases to EDPPO, and this is why we have such a high number of cases that are there. I can just reassure you that we are looking at all the possible frauds that are committed with EU money. Doesn't matter in which member states this is happening, and we are trying to cooperate better and better with all the member states.
But, also, the number of cases depends very much on how much the national authorities are working on detection and reporting.
Marina Kaljurand
Thank you. And now for the second round of speakers, we have three speakers, and I would like to limit your interventions to one minute. We'll take all three interventions at a time, and then madam Covesi will have the chance to reflect and answer. So I will start with Madam Wosenberg. Please, you have the floor.
Elissavet Vozemberg-Vrionidi
Thank you, madam chair and chair. I will speak in Greek, please. Kira Kovessi.
Missus Kovesi, welcome. I'm Greek. I'm a Greek MEP, and I would like to congratulate you on all your efforts. I worked as a lawyer for 30 years before I became an MEP. I know how difficult it is to be a prosecutor.
And we have seen that you have a very organized team that really gets stuck in and is working extremely hard in order to deal with unhealthy situations in the member states. And of course, the EU wants that, and you have our unwavering support. I understand that you cannot be efficient and effective since we have so many member states here with just a bit of staff. So I understand you need more staff, and you need more funds as well. Greece was mentioned before.
You have been involved when it comes to the agricultural subsidies, and there's also the issue of Tempe and the Tempe railway disaster. When it comes to Tempe, it caused a lot of pain. 57 people lost their lives. But in ten years' time, we will have the main trial begin. So we have the independent judiciary in Greece that will be looking at this.
And justice will be served, and the perpetrators will be found. Now, Mrs. Covey, you talked about responsibility. We have, when it comes to subsidies, 14 people in jail, 14 people who have been found guilty. Then you set down certain actions with the European Commission. We're pleased to see that there is some order that has been put in this.
The Agriculture Minister who appeared before Conte was there together with Commissioner Hansson, of course. What I would like to say, because this will be important for what you're doing and for the day after, in October 2025, you said in Athens that you had excellent cooperation with the Greek authorities, especially with the Greek government, Greek law enforcement, the police, and so on. And so at this point, let me say that, of course, you are going to have our support. And even after you leave, your successor will continue this. I would like to know whether there are member states, whether there have been obstacles when you've tried to cooperate with the national governments. Because in Greece, they are proud.
We have done our duty. We will continue doing our duty. And any recommendations coming from the EPPO as well as other recommendations are taken, we take note of them, and they lead to specific results. Thank you.
Marina Kaljurand
I would like to invite Mr. Lopez Aguilar. Please, you have the floor and one minute.
Juan Fernando López Aguilar
So much. This is your latest and final annual report, Laura Kovese. And, of course, I add my voice on behalf of the SNE Group on the recognition of the work that you have carried out, setting a new institution anew altogether, and paving the way for making a difference. I've got three questions for you. First, your report shows that, yes, there is an increase of investigations on fraud, but there is also an increase of the meaning and the content of that fraud revenue across the European Union.
So I would like you to know I would like you to assess that growth, which is in parallel the investigations, but also the level of fraud across the EU. Second, it takes cross-border nature for you to get on the move. So short assessment of the difficulties that so far you have encountered when it comes to political cooperation cross border in the European Union, that, of course, shows that not all member states have incorporated the European private prosecutor, but those who have, which are the ones which are best behaving and the ones which are leaning back. And the third point goes as to the difference between private denounces, private parties activating EPO and public authorities. Your report shows that most of the denounces, most of the investigations have been activated by private parties rather than by public authorities.
So I would like you also to assess what is the meaning of it. Thank you.
Marina Kaljurand
Thank you. And the last person in this group, I would like to invite on behalf of Renu, Mr. Minshev to take the floor.
Nikola Minchev
Thank you very much, chair. Dear madam chief prosecutor, dear colleagues, in 2025, Bulgaria recorded 267 active EPPO cases, but only three final court decisions and three convictions. That means just 1.1 percent of active cases reached the final court decision, compared with an EPPO-wide average of around five percent. Seen in that light, the challenge in Bulgaria lies not only in opening cases, but in bringing them to a judicial conclusion. The concern becomes even more serious in the case of the Bulgarian European prosecutor, who became the subject of disciplinary proceedings following the release of video material, alongside allegations concerning the integrity of her appointment procedure.
Let me be clear. Integrity is non-negotiable. And where misconduct is identified and proven, it must be sanctioned. But the timing and context also matter in this case. The attacks against her intensified after she publicly alleged in the media that public officials were obstructing the Chiron investigation.
That sequence raises a serious institutional concern in a system where sensitive cases rarely reach judgment, and misconduct allegations may also serve to sideline the prosecutor handling them. In this sense, I have three questions. Firstly, what in your view lies behind Bulgaria's combination of a high number of cases and strikingly low judicial outcomes, and the de facto impunity that can result from it? Secondly, where national systems do not provide effective judicial outcomes, what safeguards could be built into the EPPO framework to prevent sensitive investigations from being stalled or neutralized? And finally, when prosecutors handling sensitive cases face public attacks or disciplinary sanctions, what safeguards can ensure that their investigations are not undermined in practice?
Thank you very much.
Marina Kaljurand
Thank you. And Miss Kobeski, I know there are many questions. But if you can be precise, please.
Speaker 5
Thank you. I would like to repeat what I said in October 2022 that our cooperation with the Greek authorities is very good. And, yeah, the relation with the member states, it's very complicated. And it's very difficult to give good examples of bad examples, but I will try. The main obstacle in the cooperation with the member states is sometimes to shift a little bit the mentality.
They have the impression if they work for Europe if they send the police officers, for example, to work for the EPPO, in our cases, they have the impression that, you know, we send them somewhere in Luxembourg, and we will not have any benefits. So we have to change this mentality because everything that we are doing in the end, and everything that we are seizing in our cases, will remain in the national budget. When it's about the cross-border investigations, difficulties to political cooperation, well, I used to say when it's with politicians involved, everything gets complicated, and I'm sure the politicians think the same. When it's about prosecutors and judges, everything gets complicated. And it is difficult to say, and I will go directly to Bulgaria after each meeting with the Minister of Justice.
After two months, that minister of justice was replaced because they had elections all the time, almost each year. So it's very difficult to keep the same level of discussion and cooperation in all the member states. I will not insist on the private reports because I think I reply already to this and some member states in this would receive more information from the private persons than from the public authorities. Coming back to Bulgaria, I would like to say that, yes, I think from the investigation side, we are doing our job even if since EPPO started in Bulgaria, we didn't fulfill all the positions of European delegated prosecutors because, as I said, we had to work with different ministers in five years, and we didn't have continuity on this topic, for example. But I have to say that we have 18 cases ongoing in the trial phase, so probably more judgments will come.
And when it's about the public cases, I think the best protection is not to discuss in public the cases. You cannot make an investigation. You cannot catch the mice if you send the cat out. So when we have this kind of investigation, we shouldn't communicate, and we shouldn't speak publicly about it. And indeed, to conclude, we have a high number of the cases.
The workload will increase not because only EPPO is doing the job, but also because the criminals will not stop. And this is a fight that will never stop. So the fight against crime, especially the fight against financial criminality, will not stop.
Marina Kaljurand
Thank you. And the last speaker on the list is Mr. Aftias. Please, you have the floor. And one minute.
Georgios Aftias
Dear colleagues, I will talk to the Greek.
You're a very brave prosecutor, missus. Maybe I'm going to repeat what I said so you can hear it. You're a brave prosecutor, Missus Kovese. As a member of the command committee, I will say that anything you ask for to bolster your role as a prosecutor, whether it's staff or funds, I'm going to suggest that we do it immediately. So with your hand on your heart, I would like you to answer the following. Greece has been mentioned a few times.
You asked for 54 actions to be taken as the EPPO, and we did all of them. You wanted the audit plan to be updated by the U. N. It was done. A lot has been done.
You had a list of 54. But let me say that I almost became a prosecutor, but then I became a journalist, and then an MEP. So hand on heart, are you pleased with how Greece is doing when it comes to the fight against corruption? Harris wasn't happy, Harris Alvanites, but you hand on heart, please.
Marina Kaljurand
And still, is one more person asking for the floor. I would give it to mister Anaidiotis, but please, please be brief.
Nikolaos Anadiotis
Thank you. I would prefer to speak in my native language, Greek.
Honorable Mrs. Kovese, let me congratulate you for the excellent work done by the EPPO and the tangible results in your annual report. The annual report for 2025 shows a very worrying picture, and that is more than 3,600 cases, more than €67,000,000 in damages. And in Greece, my country, especially when it comes to agricultural subsidies, there are serious indications of abuse of EU subsidies, even though there have been a lot of reports saying that European programs were not used properly. That means that the funds aren't going to the farmers and the proper beneficiary, but are leading to fraud.
And this dealt a huge blow to the agricultural sector, and therefore a huge blow to the Greek economy as a whole. Can you tell us very clearly whether the EPPO has had problems dealing with member states or whether member states have even meddled if we're talking about huge economic interests and political figures? What political difficulties have you had that could affect the speed and efficiency of your investigations? And last but not least, which funding areas in Greece show the highest risk of fraud and corruption? And how can we deal with this?
Thank you.
Marina Kaljurand
Thank you. And now I see that, Billet, would you like to take the floor? Thank you. There was a question addressed to the commission concerning the regulation. So, commission, if you want to answer, one minute please.
I do not see anybody speaking on behalf of the commission, which means they're still. Please, you have the floor.
Speaker 43
Yes. Good afternoon to you all, and thank you very much for the question. At this stage, on behalf of the commission, I can only say that we are indeed in the process of, first, finalizing the evaluation of the EPO regulation, and the report will be published in June as provided for by Article 119 of the EPO regulation. On its basis, the commission will indeed work on a proposal for the revision of the EPO regulation, which we intend to adopt shortly after the evaluation, in the context of the already mentioned review of the EU anti-fraud architecture. Thank you.
Marina Kaljurand
Thank you. I'm not a good person. You have the floor for the final replies and for your concluding remarks.
Speaker 5
Thank you. With my hand on my heart, I will give you the answer in April because, indeed, we have a long list. Some of the requests have already been implemented. We still have a few things ongoing that the minister of justice promised that they will do. So probably in April, when I visit him, I can tell you if the list was solved or not.
And for the Greek, yes, for the Greek situation, yes, as I said, we have a few investigations ongoing, but I don't see a specific field in which there are more frauds or less frauds. This depends very much on the specificity of each member state. And the high problem that we have and created a lot of problems was related to the conflict of competencies because around 10 member states, when it's about solving this issue of conflict of competence, this is made by the general prosecutor, and we do not have the possibility to go in front of the court. And this is where we sometimes had difficulties.
Marina Kaljurand
Thank you, madam Curci, and I would like to thank also all colleagues who participated in today's discussion. I would like to thank co-chair for going through today's session. And, I would also like to remind that Liba members will have the chance to have further exchange of information and discussions with Ms. Coversi during next week's Libya member's mission to EPPO. Needless to say, today's discussion highlighted once again the crucial role of the EPPO, and our committees will continue to follow closely the development of the EPPO's activities.
And finally, I would like to express deep appreciation to Miss Coversi for her exceptional leadership and tireless dedication during her mandate, for her invaluable contributions to the development and consolidation of the EPPO. Thank you so much.
Andreas Schwab
Thank you so much, colleagues. To conclude, I would like to reiterate what has been said by my colleague from the Lieb Chair. Thank you, Ms. Quevesi, for your dedication and for all the people that work together with you. And like that, I think we can close the meeting.
Thank you very much.
Javier Zarzalejos
Well, dear colleagues, I think it's time to get started with this public hearing. And I'm really pleased to welcome you and our guests to this public hearing dedicated to democracy, elections in the AI era. This hearing is organized jointly with the Committee on Constitutional Affairs, AFCO, and the Special Committee on the European Democracy Shield, UDS, and with the participation of the Committee on Foreign Affairs and the Committee on the Internal Market and Consumer Protection, IMCO. I'll be co-chairing today's meeting together with my colleagues, Mister Charles Gerens, the vice chair of the AFCO committee, and Missus Natalie Loisso.
Sorry.
Javier Zarzalejos
Natalie. Welcome. The chair of the UDS special committee. The chairs of INCO and AFET committees have also been invited. The public hearing will include interventions by three guest speakers, and aims to address topical aspects within the areas of competence of our respective committees.
As regards the Lieber Committee, the speakers will focus on fundamental rights and AI-driven elections. AI driven tools are increasingly shaping the way in which citizens access information from political opinions and participate in public debate, while these technologies can offer new opportunities for engagement and access to information. They also raise significant challenges with regard to the protection of fundamental rights, including privacy, data protection, and the freedom of expression. Among the key concerns are the risks of manipulating through AI generation, disinformation and deepfakes, profiling and the micro-targeting of voters, the use of algorithms to influence the visibility and the dissemination of political content. The potentially undermining of electoral integrity and citizens' trust in democratic institutions.
European Union has already taken important steps to address these challenges through legislative initiatives and efforts to increase transparency in political advertising, ensuring that effective implementation and continuing to assess the impact of emerging technologies on democratic processes will remain crucial. Today's hearing offers an important opportunity to exchange with our guests on how elections are evolving in the age of AI, and reflect on the safeguards needed to strengthen our democratic resilience. We have a very tight agenda. Therefore, I kindly ask all the participants to respect the timing allocated to them. And now I'll pass the floor to Missus Natalie Loiso, chair of the special committee on the European democracy seal for her opening remarks.
Madame Loiseau.
Nathalie Loiseau
Colleagues, guests, our discussion today addresses, as you have just said, a profoundly transforming challenge across democracies worldwide: how to safeguard the resilience of our electoral processes in the face of artificial intelligence. Of particular concern is the scale, speed, and sophistication that artificial intelligence enables at a fraction of the cost of what was possible before. The examples of this are numerous. Looking at the potential for artificial amplification, we remember the presidential elections in Romania, where the French agency Vigi Noum documented how coordinated networks exploited TikTok's recommendation system. More than 25,000 coordinated accounts generated more than 73,000,000 views for a single political hashtag in just one week.
On deepfakes, in the last elections in Moldova, in just 48 hours, a fake video was viewed over 350,350 times on TikTok and Telegram, which is a significant number for a country with a voting population of roughly 2,500,000. Talking about deepfakes in from my country, France, we have local elections at the moment. One party, one candidate was the target of a deepfake generated by artificial intelligence, and a fake campaign website. It's another example. Before the Dutch parliamentary elections, the data protection authority tested widely used AI chatbots, including ChatGPT, Gemini, and Grok.
The results showed that these systems provided distorted and polarizing voter voting advice to a significant number of voters, influencing their voting decisions. With over 56% of recommendations directing users towards just two political parties, while many other parties were rarely mentioned at all. We know that AI also offers opportunities for strengthening electoral integrity and for bolstering cybersecurity by detecting in real time manipulation and interference. So AI can help us master the very challenges it creates. So my hope today is that we, in our discussion, will look at ways how we can ensure the right balance in our approach.
Javier Zarzalejos
Madam Blassault. And now I give to Mister Charles Gerrins, vice chair of the committee and constitutional affairs, for his introductory remarks.
Charles Goerens
Thank you. Dear colleagues, dear guests, I think we can all agree that artificial intelligence is increasingly affecting not only political communication, but also the broader electoral environment and the functioning of democratic institutions. As new technologies reduce the cost and speed at which interference can occur, they raise questions about the resilience of electoral procedures, the preparedness of electoral authorities, and the safeguards needed to preserve trust in democratic processes. In this context, AFCO committee has selected the expert, Missus Ines Narciso, head of information integrity and resilience, Cyberspace Cyber Peace Institution in Lisbon, who will address how AI is beginning to affect the organization and administration of elections, whether existing legal and institutional frameworks in the EU and its member states are equipped to respond to these developments, and what institutional safeguards may be required to ensure that AI strengthens rather than undermines democratic electoral systems. As we know, the EU has already established an important legal framework to address these challenges.
This includes the Artificial Intelligence Act, which introduces the world's first comprehensive regulatory framework for AI based on a risk-based approach, aiming to ensure trustworthy and human-centric AI while protecting fundamental rights and democratic values. These issues are going to be further elaborated by our experts. But to avoid stepping over Libase and Imco's competence, from the perspective of the Committee on Constitutional Affairs, the key question is complementary but distinct. How these technological developments affect democratic institutions themselves, including the organizations of elections, the functioning of electoral systems, and the preservation of democratic legitimacy and trust in electoral processes. Today's hearing, therefore, aims to bring together these perspectives in order to examine how the EU and its member states can ensure that artificial intelligence supports, rather than undermines, democratic elections.
Before giving the floor to our experts on the panel, I would first like to give the floor briefly to Mister Emmanuel Kefal Logiannis, reporter of the own initiative report, Institutional Aspects of Artificial Intelligence in the context of European integration, and the author of the idea of this hearing. Mister Keefalo Yannis has been leading the European Parliament's work in AFCO on the institutional implications of artificial intelligence for the European Union, including questions relating to democratic governance, institutional resilience, and the functioning of our democratic systems in the AI area. Mister Kevalougiannis, you have the floor for a short introductory intervention.
Emmanouil Kefalogiannis
Thanks, chair. Dear colleagues, I would like to thank the chairs for the organization and remarks of today's debate. AI is increasingly affecting democratic processes, public debate, and the integrity of elections in the European Union. AI is shaping the way information circulates, the way public opinion is formed, and is affecting the way democracy itself operates. For this reason, AI is an institutional and constitutional issue of the European Union.
For the Committee of Constitutional Affairs, the key question is one: how do we ensure that AI strengthens rather than weakens democratic auto accountability, transparency, and electoral integrity. The artificial intelligence act is an important step for the European Union, but the rapid development of AI systems raises broader questions. AI already affects access to information, shaping public opinion, and the credibility of democratic debate. With AI, new risks emerge, deep fakes, bot networks, digital influence operations. Protected elections in a digital era are a matter of resilience.
Our response must be guided by three principles. First, the governance of AI must remain in full alliance with the values of the European Union in accordance to Article two of the treaties of the European Union. AI must remain human-centered, transparent, and accountable. Second, we must strengthen parliamentary scrutiny. The European Parliament has a specific responsibility to ensure democratic accountability and institutional balance in accordance with article ten, thirteen, and fourteen of the Treaties of the European Union.
Therefore, an observatory would help the European Union and the European Parliament to understand the institutional and democratic implications of AI on fundamental rights. Finally, the governance of AI must be addressed at a global level. AI requires stronger international cooperation. It is a systemic technology with geopolitical implications. Dear colleagues, democracy cannot function when citizens no longer know whether what they see is real, what they hear is authentic, and whether political messages are produced by humans or by algorithms.
AI can strengthen democracy, but it can also be used to manipulate it. Our task is therefore clear. In Europe, technology serves democracy. Thank you for your attention.
Javier Zarzalejos
Thank you, Mr. Gefalo Giannis. And now we will move to the presentations by our guest speakers. I do thank you for joining us today in this public hearing and for having the benefit of your input to these three committees convened here. So, I would start by giving the floor to Missus Ines Nartizo, who's the head of information integrity and resilience at the Cyberpeace Institute and PhD researcher at the IS University Institute of Lisbon. Your presentation, for a maximum of 5 minutes.
Miss Nartizo, the floor is yours.
Speaker 53
Thank you. I will very much try to keep a note of the time, although I do feel that it is a topic that it's hard to talk so briefly. So I will start by saying something I always tell my students, which is we should look at AI as a child with superpowers. And if we feel that we wouldn't let our children, even if they had superpowers, super strength, super intelligence, super fast, do something on their own, when we probably shouldn't let AI do it on their own as well, and there should be a human in the loop. So the first lesson I would like to bring here is the idea that we should think that AI's interference or effects on election and electoral procedures go way beyond the political campaign.
So we need to remind ourselves that it's not just about, you know, deep fakes and about what one candidate said that was misleading about the other one. We're talking about, for example, a cyber attack enabled by AI on a critical infrastructure in the week before the elections, so that nobody has public transport and everyone gets really angry at the government. So we need to think about it as way more than the political discourse, and we need to think that it will be used by threat actors to interfere with elections in several ways and in several procedures. From voting registration, from making it harder, for example, on immigrants through AI bias to get nationality, the examples can go on. The second thing that I feel is most important to say is that, and it has been said here by Natalie, is that AI changes the opportunity structure.
It industrializes opportunity, and it makes it accessible for previously very smaller threat actors to actually interfere in elections because it's become just very cheap, very fast, and possible to anyone. So that means that a candidate that is in tenth place in the polls, if he's really motivated and he wants to devote himself to interfere with elections using AI, that is now possible. So, of course, we always look at the usual actors, big threat countries that have a lot of money and resources. But right now, we're going to start seeing threats from very small actors, maybe lobbies, maybe economic sectors, maybe just disgruntled people. As us, looking at the procedural and what exists in terms of AI and in terms of elections and in terms of legislation, also including the DSA and the code of practice, the code of conduct right now.
I don't feel there is a lack of rules, and there is a lack of regulation per se. The main problem that we are seeing as researchers is that there is no operation or there is limited operational capacity. And that means, very specifically, that there is lack of data. So civil society and governments and law enforcement are not working effectively enough to really be able to gather the data that actions, that enables to act against situations where incidents occur. So we need more interoperability.
We need guidance from the EU saying this is the framework that we're going to use. It doesn't mean it's perfect. It doesn't mean that everyone will agree on it. But unless we start collecting data in an interoperable manner to use AI on our side to understand the patterns, to understand the trends, to prevent things before they start happening. I'm not sure if it's possible to go to the slide before, because I think I jumped one inadvertently.
I'm sorry. Yes. And we also need to regulate all manipulation vectors. So one thing we've been seeing is there is a lot of investment in everything that has to do with content manipulation. You know, deep fakes, a lot of the discussion on AI in elections is about deep fakes and false information, manipulated images.
But actually, the threat comes way more from amplification and suppression. And I was happy to hear also some of you mentioned that here this afternoon. Because indeed, what AI will allow is it will allow, for example, an amplification of one candidate's voice over the others. And more importantly, it will suppress voices. This means that, for example, certain targeted communities, more vulnerable communities may be suppressed using AI with hate speech, harassment, doxing, spamming, DDoS attacks against their websites, etcetera.
I think we also need to look at how AI is going to start integrating with wearables and neurotechnology. So thinking about, you know, things like the idea that AI glasses will know that someone has an issue with immigrants because they cross the road when they see an immigrant. And therefore, they can target it ads or targeted political content that is disinformation about immigrants to them, and how that is gonna become more and more an issue. And then I think I'm managing to get through in time. As a positive note, there is a lot that we can do, and there is a lot that AI also allows us to do.
One of them is really trying to create a regulation system that fosters and tries to make authenticity more regulated. There are some initiatives, the C2PA initiative, for example, for media authenticity that some platforms are using, some are not, for example. And the relevance of knowing the provenance of content is becoming more important. The second one is red teaming and this idea of stress testing, that we really need to stress systems, procedures, and really try to anticipate what can be the next thing. So getting teams on board before elections happen, and say, if you wanted to use AI to tamper with these elections, what would you do?
What are the vulnerabilities that you spot? We are here today talking about AI, when AI is already an issue, and it would be interesting to start thinking about things like quantum computing, for example. So anticipating technology and the problem it's going to bring before it is here. And lastly, but not less important, we need coordination. We need observatories or institutions that start collecting benchmarking data on, for example, AI.
How does AI respond to a question like, who should I vote for? To see if these systems are being manipulated and to see how modules progress and to try to regulate at least based on data and evidence of real testing with different modules. Thank you so much for your attention.
Javier Zarzalejos
Thank you. Thank you very much, Missus Narciso. We are all aware that sometimes it's difficult to pack all your ideas and what you would like to say into the time allocated, but, otherwise, it would be impossible to manage these sessions. And now I give the floor to the next speaker at this point, Miss Julian Mueller, who is an associate program officer of digitalization and democracy program at the International Institute for Democracy and Electoral Assistance. Again, you have four minutes for your presentation.
Speaker 55
Yeah. Thank you very much for inviting me today and for giving me the opportunity to speak here. And I hope I can also stick within the time, but of course, there's so much more to say. At International Idea, we work really closely with the electoral authorities from all over the world. And so today, I want to precisely share that perspective with you.
And my message that I want to bring across here is simple. I think that AI's impact is much more long-term than we think. It's not necessarily the one single electoral deepfake that we need to worry about, but instead, it's much bigger. It's the slow erosion of information integrity. And also with that, our democracy, that we should worry about.
And I want to get into this based on four challenges that we identified. So the first challenge is the collapse of our information system, because the key difference is not simply that there is now more disinformation. What changes is the operational problems also that AI creates for electoral authorities because on the response side, electoral authorities, but, of course, also civil society, political parties, and journalists have to spend much more time to trace and verify information while attackers spend way less time producing because they need less resources and time to do so. And so it also becomes much easier, in turn, to exploit vulnerabilities in our democracies. So, very bluntly speaking, AI turns safeguarding election integrity into a firefighting exercise.
And what happens when institutions are constantly firefighting, then they have way less capacity to govern the process well. So this is not simply a fact-checking problem like we sometimes frame it. It's much bigger. It's actually a resilience problem because the question that we should ask and find an answer to is how do we protect the information space from being flooded with cheap, repetitive, and often misleading synthetic content that gradually erodes public trust and clarity. And then the next challenge is algorithmic amplification and monetization.
We often focus on AI-generated disinformation itself, but what we often overlook is how AI-based algorithms shape its impact and its reach of this disinformation. And a lot of business models of platforms reward the most engaging content, as we all know, so which is content that is most polemic, emotionally provocative and sensational. And, of course, it is also something that malicious domestic and foreign actors exploit to push their narratives. And another thing that is often overlooked is the monetization. Not all actors necessarily want to attack democracy, but a lot of them just do it for the money, because it pays.
So even though the intention might be different, though, the consequences are the same, and it's still this kind of disinformation that still pollutes our democratic discourse. And then the third challenge is that AI can exclude because the threats of AI do not affect all political actors equally and in the same scope and severity. And yet, a lot of AI policy frameworks around the world, but also in the EU, do not adequately address how weaponized generative AI disproportionately targets female political candidates and individuals from LGBTQ AI plus communities, and how this also discourages their political participation. And then the fourth challenge is how AI is changing election administration itself. From our research that we conducted on an idea, we learned from a lot of electoral authorities around the world that they are using a lot of AI systems already for voter registration and candidate registration, but also for external and internal institutional chatbots.
And this can bring benefits, but of course, also new risks. And here, I want to highlight one gap of the EU AI Act because this kind of AI systems or Annex III classifies those AI systems as high risk that are intended to influence an election, the outcome of an election, or voter behavior. But, of course, a lot of these AI tools are not inherently designed to do so, but by consequence, because any AI system can have inherent bias or hallucination or error, it can have the same consequence. So this is something I think we need clarification on, and to make sure that also such scenarios are covered by regulatory safeguards. And so I want to sum up by saying that in 2024, at IDEA, we suggested it's not really necessary to panic over AI.
But perhaps now it might be time to panic because we are really running the risk of a collapse of our digital public square, because in a society that is unable to have a shared reality and to discuss its problem, then is that still a democratic society? So what we should do is that we should build on what we already have in the EU. We should close gaps in our EU digital rulebook to better oversee AI's impact on electoral processes, specifically. And another thing that we'd suggest is that, for example, the digital service coordinators or also the AI office should include more external election or should include more electoral expertise to also better translate DSA and AI Act obligations into the realities of electoral periods. And then third, also, the European Centre for Democratic Resilience should be more operational to adequately respond to electoral risks.
And that should also include structured consultative measures to, for example, include electoral authorities and support or better support their work and realities. And then also, we can leverage the existing networks like the European Cooperation Network on Elections, which already serves as a very strong vehicle for improving election authorities' ability to understand, assess and respond to AI related risks. But of course, this work should be supported through structured cooperations with organizations and experts already engaged in research and technical assistance, and to make sure that we have the necessary resources and capacity to do so. Thank you very much.
Javier Zarzalejos
Thank you very much for your presentation, Mr. Miller. And now I will give the floor to our third and last speaker, Miss Sofia Calabresse, who's a digital policy manager at the European Partnership for Democracy, again, for five minutes.
Speaker 56
Thank you very much. Good afternoon, everyone. Thank you for giving me the opportunity to take the floor today. This discussion is very important. As mentioned, I work for the European Partnership for Democracy.
We are an umbrella organization. We have over 20 members in different European countries who work on several aspects of democracy support, from more traditional issues linked to democracy, such as rule of law, to new issues such as the impact of new technologies on democracy and elections. That's also my main field of expertise. I will try to integrate what was said by my colleagues. I work in particular at the EU level and on the EU regulatory framework, so that's what I'm going to focus on in my short intervention today.
I think the main threats were, like, already covered very well by my colleagues. I only want to make three points regarding the EU regulatory framework. The first point would be that we actually have a very advanced regulatory framework in terms of digital policy, in terms of AI regulation, online platforms regulation, data protection. Our digital framework was not only thought to regulate companies and the business sector, but it was also already drafted having in mind our fundamental rights and EU values and the protection of democracy. Right now, it is tied up even better with the European democracy shield.
But if we look at the rules that we have, I think the issue that we have right now is not really about adding some additional rules or regulations, but it's really about implementing and enforcing boldly what we have. We shouldn't be ashamed of our digital framework. We should actually be proud of it, and we should implement it strongly. That said, obviously, as a second point that I would like to make, there are always some adjustments that can be made, and we are still learning how to implement this new regulation because in most cases, it's very recent pieces of legislation. Even the ones that have been applicable for a while, such as the Digital Services Act, it's still, in most cases, a learning process, in understanding how to best utilize the potential of the regulation.
So for example, when it comes to the Digital Services Act, I think there are aspects that can be improved, especially when it comes to the assessment of risks by very large online platforms. A lot of the issues that were mentioned linked to elections and civic discourse online should be part of this risk assessment and can be considered by platforms in a more detailed way, in particular when it comes to AI-generated content, but also political ads campaigns and disinformation campaigns, but also about the structure itself of these platforms. So the recommender systems and their monetization business models that were mentioned before by some colleagues as well. When it comes to some of the other rules, there are similar observations that can be made. I think some gaps in the AI act were already mentioned when it comes to the risk assessments for AI systems intended to be used to influence elections.
That intentionality is actually very restrictive. So this would benefit from some clarifications or a broader interpretation. And another tool that we have at our disposal is obviously the political ads regulation. The political ads regulation also presents a few technical issues here and there, but I think one of the most important aspects that needs to be noted is that, because a lot of online platforms have announced bans on political ads on their platforms. Rules are considered less effective, but the thing is whether or not the platforms have internal policies that consider bans, doesn't mean that certain content cannot be on the platform, such as in the case of TikTok, which on paper doesn't allow political ads.
So we should actually enforce these rules, even when on paper, the platform says that they don't allow certain content because the laws apply when there is, like, the specific case that is in the scope of the law. And that also applies to political influences, that is more difficult to catch within the scope of the law, but they should also comply with the transparency obligations that are foreseen. And I think a last point that I wanted to make is broader. It's linked to these values that we have been talking about, and about the fact that we should integrate these values into the technologies we use. I think we should look at that also in a more constructive way.
We're discussing a lot in the EU about fostering an EU tech sector. This is obviously a very ambitious objective, but when we do, we should actually create a tech sector that is different from what we have right now. And this can be done under different aspects. There is obviously a regulatory aspect. Obviously, there should be compliance with the rules that we have.
And as I pointed out, the rules are quite strong, so we should use them. There is a more technical perspective. I think a few elements were mentioned about interoperability and about open source software to be used in alternative models to be put forward. And then there is one last point, that is the organizational model. Obviously, we cannot really expect from companies that are very top down, very often not based in Europe, and have an exclusively for-profit goal to actually make the interest of EU citizens.
So I think we should look also into alternative models in terms of ownership, purpose, and control when building a new tech sector. And alternative models, I'm talking about, for example, having more hybrid models between private and public. So public-private partnerships, cooperative models, foundation-led. I think I will stop here. The three main points were let's use our regulation because it's good with some adjustments, and let's look at the broader picture, and let's be constructive as well.
Thank you very much.
Javier Zarzalejos
Thank you. I thank you for your three very substantial presentations. You really make the most of your time. I'm sure that will be the basis for a very productive debate. And also, you will have the opportunity to touch upon other aspects of this matter in the course of the Q and A session that will be organized in two rounds.
Mister Gerems, the floor is yours now.
Charles Goerens
Thank you, dear colleague. During the first round, we will first take questions of Liebe, Afco or EUDS members for two minutes each, starting with the group EPP, followed by S and D, PFE and ECR. Our guest speakers will then have eight minutes altogether to reply to the questions. As instructed in advance, the groups can decide to allocate the speaking time to one member for two minutes or divide it between two members for one minute each. I will start by giving the floor to Mister Cunha from the EPP for two minutes.
Paulo Cunha
Thank you, sir. I will speak in Portuguese if you allow me. Thank.
you. Artificial intelligence in the way that we communicate and the way that we receive our information in public life is going to go through some unprecedented changes. And today, I think we're seeing misinformation or disinformation campaigns, which are personalized, automatized, and very often amplify impressions without the average citizen being aware of it. The European Union has tried to respond to this with different pieces of legislation. But there is still a key idea here that technology should serve democracy rather than the other way around.
And there, I think we have clear political responsibilities. We need more transparency, and we need to make sure that democratic principles meet the demands of a world in which technology is progressing very quickly. I have a very specific question for Missus Narciso.
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