Committee on Budgetary Control Extraordinary meeting
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CONT European Parliament
Follow its sittings
Tony Murphy
At the same time, we recognize that many national audit authorities operate under considerable pressure and face persistent capacity challenges. The new MFF proposals will give member state authorities greater responsibility for the management and assurance of EU funds, even though their current assurance bodies and systems cannot yet be relied upon to the extent which is required. Bringing the Common Agricultural Policy and cohesion policy together within a single European fund is to promote simplification and flexibility, but it will likely shift the administrative burden from the Commission to the member states and beneficiaries and increase the risk of error.
Therefore, greater flexibility should not come at the expense of predictability. Simplification should reduce unnecessary administrative burden, not merely relocate it, and it must not weaken accountability. In relation to the Recovery and Resilience Facility, this model differs from the traditional budget. Payments depend on the fulfillment of milestones and targets, and it follows a financing not linked to costs model, rather than being based on actual costs and compliance with EU and national rules. Consequently, RRF results are not comparable with traditional budget expenditure, and therefore this is why we have a separate audit opinion.
As the new MFF is expected to largely mirror the RRF, our findings here are crucial. They highlight significant weaknesses that should not be repeated. In 2023, RRF expenditure amounted to 45.4 billion euros. In payments to nine Member States, we identified instances of milestones and targets that had not been satisfactorily fulfilled, as well as issues related to double funding and the RRF eligibility period. We also identified weaknesses in the design of milestones and targets, gaps in the Commission's monitoring, and again we note persistent shortcomings in the reliability of Member States' control systems.
On this basis, we've issued a qualified opinion on the RRF expenditure. We found that in certain instances, previously agreed milestones and targets were revised in ways that reduced the promised outputs required of Member States under their recovery plans. Particularly concerning is that some amendments were submitted only after the original payment requests had been submitted and while the Commission was still assessing them. The changes were then adopted before the final payments were approved, bringing the outputs into line with those actually achieved, rather than those originally agreed, and without affecting the related payment. In many cases, no objective or convincing reasons were provided to justify these amendments.
This weakens the link between funding and delivery, creating a risk that Member States may receive funding even where performance falls short. The deadline for Member States to submit their final RRF grant payment request was the 30th of September. In consequence, 21 were still submitted in September to meet this deadline, eight on the 29th of September and eight on the 30th of September. The Commission must now process around 90 billion euros by mid to late November. This creates an immediate risk.
Our experience shows that pressure to spend at the end of a budgetary period can result in an increase in payments that do not comply with the rules and encourages the selection of lower quality or scaled-back projects, ultimately resulting in a less effective use of EU funds. So I think we must learn from the experience of the RRF in the context of the next MFF. If the EU moves towards a performance-based financing not linked to costs model, it must ensure that milestones and targets are credible, they're clearly defined, objectively measurable, and directly linked to the results to be achieved. Performance information must also be reliable, transparent, and capable of independent verification. Our assessment is that the proposed performance framework is still weakly designed.
Its setup does not make it possible to measure what EU spending has achieved or what EU citizens ultimately receive in return for their money. In terms of future budgets and debt, the Commission's proposal for the 2028-34 budget is nearly 2 trillion euros, or roughly 1.26% of the GNI of the EU. Within this 2 trillion, 8% of the budget is earmarked solely for servicing debt related to the Next Generation EU.
In terms of borrowing, this EU borrowing could reach 1 trillion euros by 2027, with the NGEU being a major contributor. And in its proposal for the next MFF, the Commission has proposed a fixed amount of 24 billion current prices to cover both interest and principal repayments annually. The interest costs alone to NGEU grant support over the 2028-34 period could total around 93 billion euros. The Commission's proposals for the next budget potentially allow substantial additional borrowing, including 150 billion for Member State national and regional partnerships, up to 100 billion in additional support for Ukraine, and the potential use of a severe crisis instrument up to 395 billion euros. It's important to note that the total proposed MF budget amounts to 2 trillion euros, but this is contingent on the materialization of new proposed revenue streams, which represent approximately 20% of the proposed budget.
These new revenue streams are around 50 billion per year. So overall, the message is one of caution. Unless these new revenue streams are approved and materialize as expected, the EU budget could face a significant shortfall. This would require either higher contributions from Member States, a reduction in the budget's overall level of ambition, additional borrowing, or a rollover of existing debt. Moreover, the substantial planned borrowing could expose Member States to additional financial obligations at a time when national budgets are already under considerable strain.
So to conclude, addressing the findings and shortcomings identified in our annual report is essential to strengthening the management and implementation of EU funds, particularly in the context of the current MFF, where absorption of shared managed funds currently stands at around 30%. And I think with all the focus on the next MFF, we shouldn't forget that there are still substantial funds to be spent under the current MFF. However, looking ahead, ambitious budgets require equally ambitious safeguards. If the Union moves towards a financing-not-linked-to-costs model based on milestones and targets, it must learn from past experience and strengthen accountability and transparency across the system. Success should not be measured simply by fewer rules or greater flexibility, but by whether citizens see better results, public money achieves greater impact, and trust in the European project is strengthened.
Finally, I would like to close by expressing my gratitude to the European Court of Auditors staff and the College. Their commitment, expertise, and careful work underpin the quality of this annual report and make an essential contribution to strengthening the ECA's role and mission. Thank you for your attention.
Andreas Schwab
Thank you very much, Mr. President, for this very comprehensive and also interesting presentation. Plenty of questions have already been developing. I would like now to give the floor to the Commissioner to give us a very precise and good explanation or comment on what he would like to say. And then our first speaker will be Olivier Chastel, our rapporteur. And I mention already here that today we speak only about the budget of 2025, so that the interventions are all to the point.
Piotr Serafin
Thank you, Mr. Chair, dear rapporteur and shadow rapporteurs, honorable members, and dear colleagues from the European Court of Auditors. Let me start with the important positive result that has been already highlighted by the European Court of Auditors. For the 19th consecutive year, the Court has issued an unqualified opinion on the reliability of the EU accounts, confirming that they are complete, transparent, and reliable. This result is particularly significant because in 2023, it was the first year in which the consolidated annual accounts were prepared using our new financial and accounting system, SUMMA. Moving the Commission, the executive agencies, European External Action Service, as well as 22 other EU entities to a new corporate financial system was a major undertaking.
I therefore welcome the Court's conclusion following the corrections made that the remaining risk of error in the accounts was not material. I also welcome the Court's assessment that, as in previous years, the level of error in revenue was not material. At the same time, we take very seriously the Court's conclusions on expenditure, its adverse opinion on the legality and regularity of the MFF expenditure, and its qualified opinion on the Recovery and Resilience Facility. In this context, I am however pleased to note that the level of error in administrative expenditure was not material. For 2023, the Court estimates the overall level of error in EU expenditure at 5.8%.
This is broadly in line with the estimate presented in the last year's annual report, but it remains above the materiality threshold, and I would stress what was already stressed by President Murphy, that the overall level of error is not a measure of fraud. This is rather a measure of administrative mistakes. The picture differs significantly across spending areas. I welcome the lower estimated level of error for the single market, innovation, and digital, and for neighborhood and the world. At the same time, the higher levels reported for cohesion and natural resources require our particular attention and determined follow-up.
The same holds for the Recovery and Resilience Facility, where the Court's qualified opinion reflects shortcomings in 10 milestones and targets across seven member states or findings on double funding, issues we are following closely. The Commission is acting. We work closely with the EU member states, which manage a large share of EU expenditure, to prevent errors before they occur, detect weaknesses, and correct them when necessary. Where required, we apply financial corrections and recoveries to protect the EU budget. In 2023, the Commission and member states implemented preventive and corrective measures amounting to more than 9 billion euro.
The Commission also carries out its own management assessment of the risks affecting EU spending and reports them transparently in the Annual Management and Performance Report, which will be presented to you later during the day. Together, these different perspectives provide an important basis for accountability and for continuous improvement. We do not claim that there are no weaknesses. There are. Our responsibility is to identify them, correct them, and above all, prevent them from recurring by continuously improving management and control system.
This is precisely where the discharge process adds value. The findings and the recommendations of the Court and Parliament must translate into concrete improvements in the way the EU budget is managed and protected. In fact, in average, more than 90% of the recommendations are accepted by the Commission and are being or have already been implemented. You said, Mr. Chair, that we shouldn't talk about the future, so I will not refer to the comments on the proposal for the next MFF, even though I'm also prepared to react if need be. So I will stop here.
Thank you, Mr. Chair.
Andreas Schwab
Thank you very much, Commissioner Serafin. And like that, we shouldn't wait further for giving the floor to Olivier Chastel, our rapporteur.
Olivier Chastel
Merci, Monsieur le Président. Monsieur Murphy, Monsieur Grégor, chers collègues, permettez-moi avant tout de remercier la Cour des comptes pour son travail. Monsieur Murphy vient de le dire, c'est la moitié des ressources de la Cour des comptes qui, tous les ans, s'occupent des comptes annuels de l'Union européenne. Et c'est un travail colossal, travail colossal que nous endossons dans notre commission pour pouvoir tirer un certain nombre de leçons, un certain nombre de recommandations pour que les intérêts financiers de l'Union soient préservés au mieux. Et donc je veux remercier Monsieur Murphy, Monsieur Grégor et tout le personnel de la Cour pour cela.
Monsieur Murphy en particulier pour sa présentation aujourd'hui particulièrement précise, claire, exhaustive sur les comptes 2025 de l'Union européenne, mais aussi pour les conseils, même si ce n'est pas le sujet du jour, pour ses conseils pour le prochain budget pluriannuel puisque sur la fin de ce CFP, la Cour des comptes sait maintenant tirer un certain nombre d'enseignements sur les tendances qui nous attendent. Merci aussi pour cela. Alors nous prenons bonne note de l'opinion favorable sur les comptes 2025, sur votre opinion défavorable sur le volet dépenses. C'est la septième fois de suite, vous l'avez encore précisé aujourd'hui, ainsi que celle avec réserve sur les dépenses liées à la facilité pour la reprise et la résilience. Enfin, vous l'avez évoqué, ce n'est pas anecdotique même si on n'en tire pas de conclusion particulièrement spéciale, le taux d'erreur est en légère augmentation avec 3,8%.
Alors j'ai quelques questions à adresser évidemment à la Cour. À l'approche de la fin de cette facilité pour la reprise et la résilience, la Cour considère-t-elle que le système de contrôle de la Commission, et donc celui des États membres, donne une assurance suffisante non seulement sur l'atteinte formelle des jalons, des cibles, mais aussi sur la légalité des dépenses et la protection des intérêts financiers de l'Union quand on sait, si j'ai bien compris, quand on sait que dans certains cas on a vécu une adaptation des objectifs a posteriori pour répondre aux exigences. Je trouve que c'est un peu particulier comme méthode que d'adapter ses objectifs a posteriori pour pouvoir avoir les montants pro-mérités. Les systèmes actuels permettent-ils réellement à la Commission de détecter les éventuels bénéficiaires à risque, les conflits d'intérêts et surtout, vous l'avez évoqué Monsieur Murphy, le double financement entre RRF, fonds de cohésion et d'autres instruments européens. Ma deuxième question, nous avons eu une discussion avec la DG Budget qui semblait apprécier et surtout avoir tiré un certain nombre d'enseignements d'un rapprochement avec la Cour des comptes et de discussions pour harmoniser les pratiques et la méthodologie.
Mais quand on analyse vos taux d'erreur respectifs, la Commission après correction est toujours en dessous de 2% et quand on lit votre rapport, on peut constater qu'on en est encore parfois très loin.
Et quand je dis très loin, ça vise aussi certains secteurs en particulier puisque dans certains secteurs, on est au-delà de 5 ou 6 % de taux d'erreur. Et ma dernière question vise votre appréciation particulière sur le nouveau système informatique SUMAC que la Commission a mis en œuvre, qui semble satisfaire pleinement la Commission. Mais je pense qu'il y a eu un certain nombre de dysfonctionnements, un certain nombre d'adaptations manuelles qu'il a fallu mettre en œuvre. Est-ce que ce sont des maladies de jeunesse de ce nouveau système ou est-ce que vous avez des recommandations plus profondes sur les déficiences constatées ? Merci beaucoup.
Andreas Schwab
Merci Olivier Chastel. Et maintenant on passe à nos rapporteurs fictifs et on commence avec notre collègue Tomáš Zdechovský.
Tomáš Zdechovský
Yes Andreas, you don't need to speak with me French. Next times you can try Czechish also. I hope so that you will improve it to the next Budgetary Control Committee. Thank you very much Mr. Murphy for your presentation. Also I would like to thanks dear Commission, Mr. Serafin.
Thank you very much for your insightful report. It's really not easy to go through the pages in one and a half day, but still we did it and we have it some questions. Also I hope so that it will be useful my question and you will respond me what I have it on my hair. My first question concern the RRF. The ECA founds weaknesses in Commission's assessment of milestones and targets, case of double founding.
It's quite interesting. Weaknesses concerning conflict of interest, it's also interesting, and procurement, and also cases where milestone or targets were amend in way that reduce elements of the original measures. At the same time, we are now looking at the post-2027 budget architecture that will make greater use of performance-base instrument and financing not linked to the costs. What concrete lesson is the Commission drawing from the RRF experience before applying this model more broadly ? In particular, how will be ensure that milestone and targets are sufficiently precise, measurable and verifiable while preserving effective monitoring, audit and correct action ?
And second issue is follow-up. The ECA founds that 64 % of the open critical or very important recommendation were already overdue and also identify cases where recommendation had been closed without sufficient evidence. How will the Commission strengthen its follow-up mechanism to ensure that identified weaknesses and effective addressed and that corrective action are completed in the time manner ?
Also, my question is in particular how can the follow-up process be strengthen where agreed deadlines are not met? And finally, the report again highlights the tension between the simplification and control, with the largest errors continuing to arise in complex reimbursement-based expenditure. From the Commission perspective, how can we simplify the rules sufficiently to reduce error and administrative burden while ensuring the simplification does not weaken auditability and prevent of the double founding or protection of the financial interest? Thank you very much for your response.
Speaker 5
Thank you very much, Mr. Zdechovský, and now over to you for the questions. First of all, rapporteur and our first general.
Tony Murphy
Yeah, thank you rapporteur for the questions and maybe if I start with the second one, the methodology. I mean, this is a constant question we face almost every year at this committee. I mean, there has been some harmonization, for instance, the way we quantify procurement errors, we have aligned them with the Commission now. But I have to say, and I've said it here before, I mean, we have a methodology which is a random sample of the EU budget and we can extrapolate our results across the whole population and that's where we have our error rate. The Commission is coming from a different perspective.
It's a risk-based approach they do, they identify programs which are at they consider to be high risk and they're the ones they check. So the error that they're reporting is a minimum error rate. It's not statistically they cannot it's not representative of the whole population. It's just based on the work that they have actually done. So I think there are two different they're never going to be the same basically.
In terms of the assurance or the performance framework etc. for RRF, I mean, as you know, I mean, I know the chair said we should stick to budget, but I mean, this house asked us for an opinion on the new proposals which we delivered in February, March. And there we have outlined some of the risks and concerns that we see from the implementation of the RRF or experience of auditing the RRF. And I think here one of the big issues for me still comes back to the performance framework. I mean, if you don't have a proper performance framework in place, you can't measure the impact or results properly. That's the key to the whole performance-based means that you can measure performance.
So I think we have identified that there are still large gaps, let's say, in the proposed performance framework, which we think would still not satisfy in terms of being able to give a full picture of what's actually been delivered for the money. In terms of the assurance framework, we obviously this has developed, I would say, through the program. I mean, there has been amendments from the very start. I mean, at the start it was more limited than it is now, so there is some, let's say, more assurance work being done than at the start. For instance, you asked about beneficiaries or someone did.
Jan Gregor
I mean, at the start there was no requirement to disclose beneficiaries, then it was the 100 top beneficiaries. There has also been some additional work beyond the systems work that was initially envisaged by the Commission. So they have extended the assurance work they're doing, but we would still consider that it's not commensurate with the assurance work they're doing for the traditional MFF. So maybe if I pass on to Jan about just maybe he has some further comments on RRF and also on the IT, the SUMMA project.
Thank you very much. So I start with the accounting software SUMMA. So from my days at the Ministry of Finance, I recall how difficult it is to launch a new treasury/accounting system. And of course, at the level of the European Commission, it's much more complicated than at national level. And I would basically summarize that this was this is rather heroic task of trying to take the data from the local accounting systems to the central new SUMMA.
Yes, indeed, we found some additional issues and I just want to appreciate the smooth cooperation with the Commission in fixing these issues on the go between the preliminary accounts and final accounts. So I can only appreciate and of course wish the good luck to the Commission to fix the gaps. I think it's for the period three, four next years. And every year in the context of our audit on the accounts, we'll be together with the Commission looking at the gaps and focusing also our additional audit efforts on the novelties in SUMMA. For the RRF, there was the issue of double funding mentioned.
I think we detected two cases in last two years where there was double funding together with ESF. So what was paid initially by ESF was then the deliverables from these projects were then refunded by the RRF. This year, it's a little special case. It was in Latvia and the RRF basically has financed again deliverables that have been previously financed by the EU Technical Support Instrument. So this has been financed by the Commission.
On the RRF, yes, you're right, we feel that this part of our report on the changes of the CIDs is very significant and this actually undermines the performance nature of the instrument itself. And I believe that at the end of the financial year '26, we would be able to see what percentage of the allocation has been spent. If it's 99%, it would be more than clear that the instrument was designed to pay all the funding no matter what. So we will be watching closely. We will also present special report on the matter in September next year.
Also on the management systems, yeah, we noted in the RRF chapter that 64% of the RRF recommendations have been delayed, critical or very important ones. And of course, this is also need to be read in connection with the still existence of control milestones in the RRF and they have been added on the go even for the second payment in some countries. So of course, this is an element we keep an eye. There was also a question on simplification. So in this respect, I think we highlighted previously in our special report that there is there needs to be measures of simplification in public procurement because this is something which is scoring high in terms of causes of error in different chapters, in agriculture, in cohesion, but also in other chapters, including administration.
So this is something which is very difficult for small towns and villages to cope with. This is such a complex area that we would hope for some simplification. Thank you.
Tony Murphy
If I could just add to the RRF, as I think Jan alluded to, I think it's really important the changes to the CID. I mean, we had 32 modifications during 2025. Nine of them basically the request was after the payment request had already been submitted. And there was another 12 where there were amendments, okay, they were requested before, but they were after the payment, the amendments were made after the payment request was made. So I think this is a worrying trend.
As I say, we will see, given the large number of payment requests which have been made at the last minute, if you want to call it that, we will be looking out to see if there is a replication of that issue with the large bulk of payments which are being processed now.
In terms of simplification, just I'd like to say, I mean, I think, you know, Jan has already answered it to some degree, but there's also an element, I mean, simplification is a very easy thing to say. I mean, implementation of it is a different matter. And for instance, you will still see that even some of the simplification measures which have been taken, we still have errors, for instance, with simplified cost options. If you look at our examples in the chapter, we actually have errors in relation to simplified cost options. So by, it doesn't mean that, you know, everything will be perfect just by introducing simplified cost options.
There are still potential for errors to be made. So I think it's about balancing, as we always say, simplification with accountability.
Tomáš Zdechovský
Yes, I understand it, but I feel sorry for that, but I feel that we are talking about simplification, but problem is that member states have it still paperwork also. They ask for the same paper what they ask for 12 years, and especially in agriculture sector, you see it that every times you have to come personally to the, to the ministerium with the same papers.
Maria Grapini
Mulțumesc foarte mult. Vreau și eu să mulțumesc pentru raport domnului președinte Murphy și întregului colectiv și mă bucur pentru mesajele cheie care ni le-ați transmis și anume acelea că, și eu spun de trei mandate aici în Comisia CONT, că trebuie să ajungă la cetățean nu numai percepția, dar și comunicarea noastră și ceea ce facem să ajungă la cetățean, banii să ajungă la cetățean. Altfel nu vor înțelege, degeaba le spunem avem bugetul atâta, două trilioane în următorul mandat. Dar vă mulțumesc că ați revenit cu această treabă. Eu îmi amintesc o dată am și propus că ar trebui să introducem un indicator nu numai contabil să rezulte că banii au fost cheltuiți, ci eficiența, cât s-a scos dintr-un euro investit.
N-am reușit, nici statele membre nu reușesc. Eu vă pun o întrebare directă. De ce de șapte ani la rând nu se corectează și Comisia apare cu aceleași erori? Pentru mine, eu vin din mediul privat, dacă un singur an aveam erori într-un bilanț, evident găseam mijloace să corectez. Adică a persista șapte ani în aceleași lucruri pentru mine este de neînțeles și cred că aici trebuie o explicație dată de la Comisie.
Sigur că ați mai specificat că erorile au fost peste pragul semnificativ în mod deosebit la două bugete, la PAC și la coeziune. Problema este aceste erori le găsiți repetate în acești șapte ani? Pe mine mă îngrijorează comasarea acum pentru că va fi și mai dificil să urmărim traseul banilor în ceea ce, chiar dacă domnul președinte a zis să nu atingem subiectul pe noul buget, dar sigur că mă îngrijorează pentru că pe de o parte, cum ați spus, se transferă povara administrativă, dar va fi mai greu de urmărit traseul banilor. Și ați spus și dumneavoastră și a spus și domnul comisar că sunt state la care ați găsit, mă rog, neconformități, neîntocmirea documentelor conform înainte de plată, dar nu ne-ați spus statele. Eu cer multă transparență.
Am cerut și Comisiei transparență, am mai fost o dată raportor de descărcare pe gestiune când am cerut în scris Comisiei Europene să ne dea răspuns, nu ne-a dat. Păi dacă nu suntem transparenți, care sunt acele nouă state? Să știm și noi, poate ne ducem, poate e țara mea, mă duc și vorbesc cu guvernul din țara mea.
Adică mi se pare că trebuie să avem mai multă transparență. Și ultima, ultima, sigur o să, ca raportor din umbră recent desemnat, o să lucrez cu raportorul pe acest raport, însă de pe acum spun raportorului și raportorilor din umbră că ar trebui să nu facem formal acest raport de descărcare. Adică trebuie să fim cu exigența necesară, nu din dorința de a ne lupta cu o instituție, pentru că citeam aici la dumneavoastră că sumele alocate pentru cheltuielile de la Comisie nu sunt deloc mici și eroarea găsită la Comisie este aproape egală cu vreo alte șapte instituții. Deci mi se pare un dezechilibru în ceea ce privește, dacă vreți, fidelitatea cu care se lucrează în anumite instituții care sunt pentru ce? Pentru supravegherea și buna gestionare a banilor europeni.
O să văd care va fi și punctul de vedere, îl voi discuta în grup, însă ceea ce doresc, doresc mult mai multă transparență din partea Comisiei și da, poate ne răspundeți de ce se repetă de șapte ani, că pentru mine asta este absolut de neînțeles. Mulțumesc.
Tony Murphy
Well, I think our error rate, I think, I mean, it's an indicator based on a sample that we do. And that's why the error rate varies from year to year. Some years, I mean, this is the first time it's gone up for natural resources to 3.9%. You know, last year it was 2.6 and it has been around 2% over the years, near our materiality threshold. Cohesion is a bit more volatile as has gone up to 9.3 in 2024 and it's now back to 5.7 and 6.6.
But basically, it's a byproduct of the sample that we select. So it's a random sample. So it depends on the sample basically. But what I would say is regardless of the sample, the worrying issue is that the same type of errors that are repeated year after year after year. So that's the issue, that we have a structural issue in terms of the capacity or competence of the, you know, the audit, the control bodies, the designated control bodies in the member states who are, you know, controlling these funds which are both under shared management.
So I think that's, that's the background to the, to the error rate. I'd say it depends on, on the samples. In terms of transparency, I think it's important that we do give examples and we, you know, there was a long discussion whether we should name the member state. We can give an example without the member state and it's still indicative because I think it's important as well with that, you know, there could be a member state who's not sampled for a long time. So is it fair, you know, we're auditing the EU budget, the implementation of the EU budget in member states, we're not auditing the member states per se.
So that's the reasoning behind we do give some examples and, you know, to sort of, to make it more concrete, let's say. So that's from a transparency point of view. Yeah, I don't know if you want to add something.
Jan Gregor
Thank you. Maybe on the absence of documents, I consider this is a pass.
Sorry, can we give the floor to Mrs. Grapini to come back with a question?
Maria Grapini
Ok, am o completare. Dumneavoastră ați specificat că Curtea de Conturi are o metodă de evaluare și Comisia altă metodă de evaluare. Evident că ele nu pot să ducă la un rezultat care să se suprapună, să fie exact. Întrebarea mea este de ce lucrați cu metode diferite de evaluare? Pentru că noi ce luăm?
Luăm rezultatul pe metoda dumneavoastră sau luăm rezultatul pe metoda Comisiei? Este greu de decis aici. De ce nu lucrați cu aceeași metodă de evaluare?
Tony Murphy
If you were to ask me, obviously I would say us. That would be the, that would be the answer. I think, as I've already said, I mean, they're coming from two different perspectives. I mean, I have also offered the Commission on several occasions that they can copy our methodology if they would so like. I mean, we're an independent audit institution.
We have adopted our methodology, we stand by it. And basically, if the Commission, as I said, has a different perspective, they're looking to see, it's basically from a point of view of making recoupment money. I mean, that's not our role. We're looking at errors. We identify the errors, we notify the Commission, and then subsequently it's up to the Commission to decide whether they want to follow it up with the Member State to actually make corrective actions and recover the money.
So I think the two will never be the same. I mean, I think we've tried to harmonize in terms of how we calculate, but the approach and the logic is completely different. I mean, it's, we're looking at the whole budget, and they're basically looking at individual programs that they have identified as high risk or they have under reservation or whatever reason. So they're completely two different populations even that we're talking about. We're talking about the whole budget and they're talking about specific elements of the budget.
Andreas Schwab
May I, may I try to define that even more clearly? Don't you extrapolate from the errors that you find on the whole budget, which gives us a feeling but not the proof of the wrongdoing, isn't it?
Tony Murphy
Yes, but I mean, it's a statistical, statistically based. So, you know, it's sound. I think we, it's not just a guess. I mean, it's statistically based. We have a sample size which we have to carry out, and then based on the results of that, we can statistically and reliably extrapolate to the whole population.
Jan Gregor
Thank you very much. I would perhaps add on the important issue of the missing documentation. I think we have already indicated that this goes through different policy areas. So, for example, in the research area, the absence of essential supporting documents was 17% of the errors there. In the cohesion, it was 17% of the errors.
In agriculture, it was a bit higher at 20%. And finally, in the external assistance, external actions, this was 0.2 percentage points, so 8%. But this is the only area where the issues have improved because the United Nations gave us full access to the documents for our audits. So for us auditors, this is an area that we don't particularly like because we always prefer full audit trail and traceability of the funding from the very top to the very bottom. So this is an area on which we will keep looking in future.
On the methods as such, I mean, Tony referred to important differences between our approaches, but it does not mean that we give up. I think in this annual report, we have fully aligned the quantification of the public procurement errors. That helps to avoid the confusion at different layers of management, be it Commission, Member States, or final beneficiaries. So this was important step. And I hope we continue with the Commission to organize series of workshops that are not linked to the, to the audit exercise.
We have definitely two areas, still public procurement, because the assessment might still differ even with the new grid. And also the simplified cost options, which is an issue that is mentioned in the research chapter, but also in cohesion. There is definitely different understanding from different players. And I think we refer to the issues that are related to simplified cost options and this needs to be solved.
Tony Murphy
I fully agree with what Jan is saying, but I wouldn't like to raise false expectations.
It's still what I maintained, that we're not going to align fully. It's purely about harmonization of how we calculate certain error types, but in terms of the, it will never result in the same result.
Julien Sanchez
Bien merci Monsieur le Président, Monsieur le Président Murphy, Monsieur le Commissaire, mes chers collègues. Nous sommes en 2026 après Jésus-Christ, au temps de l'intelligence artificielle, et ce Parlement européen et les citoyens n'ont toujours aucun accès au détail en temps réel des opérations comptables européennes, ni même au nom des bénéficiaires finaux. C'est trop demander encore des fonds européens. Un sketch, un scandale épouvantable. Nous en sommes donc réduits à lire ce que veut bien faire par échantillonnage la Cour des comptes, original.
Merci en tout cas à la Cour des comptes pour son travail sérieux comme chaque année, même s'il n'est qu'un échantillonnage lui aussi. Sans ça, nous n'aurions accès à rien. Nous ne saurions même pas qu'il existe des doubles paiements par exemple, et ça ne dérange personne institutionnellement, circulez, y a rien à voir. Le constat de la Cour est sévère et il doit être dit clairement. Pour 2025, la Cour émet une opinion défavorable sur la légalité et la régularité des dépenses budgétaires de l'Union.
Le niveau d'erreur estimatif atteint 3,8 %, ça a été rappelé par ma collègue Grappini, alors que le seuil de signification est fixé à 2 %. Et pour la rubrique cohésion, résilience et valeurs, nous sommes désormais à 6,6 % de taux d'erreur contre 5,7 en 2024. Madame von der Leyen nous dira que tout va bien. Les infractions aux règles relatives aux marchés publics et aux procédures d'octroi de subventions représentent à elles seules 26 % du niveau d'erreur estimatif contre 16 % en 2024. Alors Monsieur le Commissaire, combien d'années d'opinion défavorable et de taux d'erreur supérieur au seuil de signification faudra-t-il encore avant que la Commission reconnaisse que nous ne sommes plus face à des anomalies marginales mais à un problème sérieux de contrôle de la dépense européenne ?
S'agissant de la FRR, les constats de la Cour sont particulièrement difficiles à justifier. La Cour a examiné les 37 paiements de subventions de 2025 représentant 40,1 milliards d'euros. Elle relève des jalons et des cibles non atteints de manière satisfaisante, des problèmes d'éligibilité et des cas de double financement. Et dans 40 cas examinés, la Commission s'est appuyée sur les seules informations fournies par les États membres sans même procéder elle-même à des vérifications suffisantes. Sommes-nous l'Union européenne ou une république bananière ?
C'est la question qu'on peut se poser. Comment justifiez-vous que des milliards puissent être versés dans un système pour lequel la Cour constate de telles faiblesses de vérification et surtout qui assume la responsabilité lorsque les contrôles interviennent après le paiement plutôt qu'avant ? Car c'est précisément ce modèle que vous envisagez d'étendre dans le prochain cadre financier pluriannuel. L'Union européenne a peut-être trop d'argent à dépenser. La Cour avertit qu'un modèle similaire à celui de la FRR présente des faiblesses en matière de performance, d'obligation de rendre compte et de transparence.
Pendant ce temps, les emprunts de l'Union pourraient atteindre 1000 milliards d'euros d'ici 2027 et la seule charge d'intérêt liée au soutien non remboursable de NextGeneration pourrait avoisiner 93 milliards d'euros entre 2028 et 2034. Alors j'en viens à ma conclusion. Pourquoi reproduire à plus grande échelle un modèle dont la Cour documente elle-même aujourd'hui les faiblesses ? Avant de réclamer de nouvelles ressources propres ou davantage de contributions nationales, la priorité devrait être de rendre des comptes sur l'argent déjà prélevé.
Les contribuables européens ont le droit de savoir non seulement combien l'Union dépense, mais si cet argent est légalement dépensé, correctement contrôlé et réellement efficace. Je n'aurai qu'une seule question à la Cour. Vu tout ce que vous trouvez quand vous faites de l'échantillonnage, n'êtes-vous pas désespéré, affligé par ce que vous pourriez trouver si vous faisiez un contrôle systématique ? N'avez-vous pas tout simplement honte du fonctionnement actuel de l'Union européenne ? Merci.
Tony Murphy
I would say we have a challenging job on our hands, that's for sure. I mean, I think, you know, we have raised our concerns in many performance reports in our annual report on the RRF over a number of years since since the first payment to Spain. So we have raised our concerns. We did a review which I think summarized all the concerns that we had in a very succinct document. So we've been on the record, as you said.
I mean, we have we have said as we see it. We were asked for an opinion on the new NRPP. We gave that as well, which basically, as I said, was based to a large degree on the work that we had done from the RRF. However, we do also know what our role is in the whole EU architecture. I mean, we're the auditors.
The policy makers and the legislators will decide on the next framework, whatever it might be. We have contributed and we hope we have made some difference. But nonetheless, our role is just to to to audit the implementation of whatever the final outcome is. And whether we're frustrated or is a different issue. I mean, it's a different challenge for us as auditors because, I mean, there is not the same audit trail as as Jan referred to in terms of being able to follow the money.
We were always able to follow the money from the Commission to the final beneficiary. That was basically what we were able to do and that will no longer be the case.
Andreas Schwab
Thank you very much, Mr. President. Next one is Mr. Terheş, who's my vice-chair, but Mr. Erixon will speak, very good.
Dick Erixon
Tack så mycket, jag steppar in för Terheş här. Jo, det jag särskilt lägger märke till i den här rapporten är upplåningen, hur den har utvecklats under åren. Jag tycker det är alltid intressant att se trender i den ekonomiska redovisningen och där har ju upplåningen åttadubblats på fem år. Och det har jag aldrig varit med om i andra organisationer att man så dramatiskt ökar sina skulder och upplåningen som har skett nu under de här senaste fem åren. Men i rekommendationerna så nämner revisionsrätten då att man bör utarbeta återbetalningsstrategier som avser Next Generation och räcker det?
Det är räntekostnaderna stiger nu. Det blir dyrare att låna. Det kommer att ta upp en allt större del av budgetutrymmet och ni prognostiserar ju den förväntade utvecklingen på lånen totalt i EU fram till slutet av 2027 är ju då 1000 miljarder euro. Jag tycker det är en känns som en oroande utveckling. Skulle höra hur ni ser på det och också gärna från kommissionen hur man ser på upplåningen och hur man hanterar denna del av det ekonomiska systemet.
Tony Murphy
Thank you, Honorable Member Erixon.
Yeah, as we say, the borrowing is 730 billion this year. We expect it to reach 1 trillion by 2027. And we have been in our chapter two every year, we have just been again, like I said about the RRF, we're informing people about this, just letting people that people are aware that this is a real debt. I mean, it's not virtual money, it's a debt that has to be repaid at some point in the future. I think what we would recommend, and I think we did, we were always saying this with the NGEU loans.
I mean, if you if you go down the road of borrowing, let's say, I think you need to have a dedicated repayment stream identified and a reliable and certain one. For instance, with the NGEU, there was an own resource proposal on the table, which was supposed to repay the NGEU debt and interest. It was some member states didn't like it, so it never saw the light of day. And the result of that is what we see now in the budget now, the budget proposal. I know I'm not supposed to talk about it, but it's 8% of the next budget is allocated or earmarked basically to pay back the interest and loans for the NGEU basically.
So I think if you do borrowing, you have to make sure that you have a way of paying it back. Because otherwise it catches up with you at some point. I mean, we all know that. I mean, it's not it's not a free lunch.
Andreas Schwab
Absolutely, thank you very much for this, Mr. Erixon. No question back, then we give the floor to the next colleague, Shadow Daniel Freund.
Daniel Freund
Danke, Herr Vorsitzender, and thanks Tony for for this work and all your members that have contributed to to this. I have been sitting on this committee and this is now my seventh discharge exercise. I've never heard a positive court opinion on Union expenditure. I hope that we can still get there while while I'm a member of this house. But I have to say, I mean, I don't really see, you know, that we're getting closer at at the moment.
And you said it's the same mistakes over and over. I have to say, when this is now the seventh year in a row, still not pointing to those member states' authorities that are apparently not doing their job properly or could do it significantly better. I mean, at some point we we gotta point this out. And if this is a generalized problem across the all 27 member states, well then that needs to be pointed out as well. I I don't know.
I mean, do we need training programs? Do we need complete overhaul? Do you need a special report on the dysfunctionalities of national audit institutions or payment agencies? I I don't know. Tell us how we can finally get there so because otherwise it seems to me that this materiality threshold is just something and now we raise it to 5% and then we're good each year, right?
To be more specific, it seems that one of the bigger increases is in the in the CAP spending and particularly on ineligible land declared. I don't know if the Union grow surprisingly grew surprisingly in the last year or there's all new land that appeared. I mean, this in particular is something where I don't understand how how this can happen. I thought the agricultural land that we have in the Union is probably about the same for for decades now, or or decreasing where we build on this land. But how is this possible that there's such a sharp increase on on this in particular?
And then the second question that I have is, so ECA says that when you find these these errors and when there is a suspicion you transfer this to to EPPO or to to OLAF depending on who's competent.
In last year's discharge report, we with a broad majority here said why don't you send everything that you find and you let the experts of EPPO and OLAF decide whether there might be criminal intent, whether there might be malicious intent behind this. And I wanted to ask if if this practice has now changed. Do you transfer all cases or you know, I'm I'm just not sure, you know, whether the legal expertise within ECA when it when it comes to criminal or administrative matters is is quite as large as in those two institutions. Aren't they just better placed to make the call?
Tony Murphy
Okay, in terms of of of as I said to to Madam Grapini earlier, I mean we're auditing a sample across the member states, so it's very difficult for us to basically, you know, conclude on an audit authority definitively. The people who are monitoring these are the Commission. They basically designate these bodies. They have country desks who are following what's going on in the different member states. So they have a better picture of how where the weaknesses are and how they should be addressed.
Having said that I have to say that they do have annual workshops with the with the with the audit authorities in the different member states to try and address some of these problems. But I think you're right. I mean there are still problems, the same problems. I think there is an issue of capacity in the audit authorities. I mean we keep giving them all this extra money to process.
I mean we had the RRF thrown on top of the MFF. You know, it's mainly the same bodies who are handling that. Now there now you see the result of the RRF deadline has passed. Now the next target will be the MFF 21-27 because we only have 20% 20% absorption there now with another 9% in pre-financing. So I think there's an aspect of capacity in many member states.
I think they don't get they can't develop the expertise because the level of turnover is very high, maybe they're not paying well enough or whatever it might be. So we there are difficulties. I mean I'm not I'm not blaming everything on the audit authorities because they have their own challenges to face. In terms of the ineligible land, I don't think it's an issue of new land or whatever. It's about the right, the legal right to dispose of the land.
That's that's the issue. And basically the reason we have we just again the error rate, it's an indicative error rate and it's based on the sample. So obviously we had a couple in in our sample this year, we came across a couple of cases where this was a specific problem and that's why the error rate has gone up to 3.9%. In terms of EPPO and OLAF, I have since I've been President, the legal service get the get a you know a fiche from from the auditors, they send it to me say what do I think, I don't even have to read it, I just say send it to OLAF and send it to EPPO automatically. I because I'm not saying I don't have any what would you say, I fully respect and and have confidence in our legal service, but as you say, I think to be cautious and prudent why not let the experts decide.
So let's send it to OLAF and EPPO. And the only difference in the number of cases is the fact that some member states are still not in EPPO. That's why there's a discrepancy between the 17 and the 12. Every case if they're a member of EPPO is sent simultaneously to both bodies and that's my policy and I that's the way it is.
Jan Gregor
Thank you, maybe if I can add on this agriculture policy, we had two instances of ineligible land being declared in direct payments. And this is usually small over-declarations that a kind of road or path I mean path in between the parcels should not be declared for example. But Tony already indicated that we out we found an unquantifiable error, nine quantifiable errors in the eco-schemes and three of them related to declared land being ineligible due to the missing document for land disposal. So these are two major components why why this has gone down gone up, sorry.
Andreas Schwab
Thank you very much. Finally like this, Mr. Sjöstedt is representing Mr. Tridico.
Jonas Sjöstedt
Please, over to you, Jonas.
Thank you, Chair, and many thanks to you, Mr. Murphy, and your team for this very valuable work that you do for us. I think two things really stand out in the report. One, of course, is the rapid growth of debt that's been previously mentioned, but also the cost of debt that is rising. And secondly, of course, that the very structure of the RRF makes your life and your work a lot more difficult to do a proper auditing. I think that's really the two main big elephants in the room that we have here.
Parts of the questions I would like to raise are partly covered by colleagues, but maybe we can go a little more in-depth on them. It looks like the cost of borrowing is now rising quickly, especially for heavily indebted countries that have budget deficits. It looks like a very bumpy road ahead. And that not only goes for some member states, it also goes for the euro itself. We can see that the euro is sliding in value in comparison to other currencies, and it looks like the famous markets don't really trust the abilities of the EU to handle its finances.
And of course, also these problems in member states are reflected on the euro itself. And if we end up in a more acute situation, which some member states are on their way to be, how prepared is the European Union for that, for rapidly increasing costs of borrowing and raising interest rates? I mean, any country would have been considering how to counter this and how to build credibility in the long run when this happens on the market. And secondly, the very structure of the RRF makes it difficult for you to do your job. And we can see that similar problems are occurring for the next multiannual financial framework.
This is not only a problem for you, it's a problem for us doing our job, and it should also be a problem for the Commission. Because of course, it can sometimes be a bit tough to be audited, but it should be tough to be audited because it gives room for improvement, that you actually see problems and you address the problems. And I'm sometimes surprised that the Commission doesn't take this more seriously when you again and again raise the issue that you might not be able to do auditing as much in-depth as you do today with the new structure of the MFF. The Commission should be worried about this because it will heavily affect their ability to keep track of the money. And I guess my question is that how do you foresee your possibility of doing a job with the same quality as today if the next long-term budget has the same structure as the RRF?
Tony Murphy
Okay, maybe if I start with the second question, the structure of the RRF, I mean, it is a difficult task for us, there's no doubt about that. I mean, we will have to see, I mean, I think we will have to change our whole methodology and approach because we also, as you said, it's difficult for us, but at the end of the day, we have to be able to produce something which is meaningful and adds value and is useful for both you and the Commission, let's say. So I mean, we have a lot of thinking to do in that regard. You know, as I said earlier to someone earlier, I mean, we will audit whatever is finally agreed, whether we think it's ideal or not is a different issue, but we're not politicians, as I said, we're auditors.
So we will audit whatever the final outcome is. Euh, I think, euh, we will wait, I mean, the Commission is currently designing its own assurance framework for the next MFF. And that will be a key because that will show us, euh, you know, because as you rightly say, I mean, in the first instance they need assurance, they're responsible for the implementation of the budget, not the Court of Auditors. So they need to have their own assurance that the money is being spent correctly and wisely, etc. And then we're a further assurance on top of that, that we look at what they do and we do a bit more and then we can say whether the system is working or not.
So I think we will see the devil will be in the detail when we see because we don't actually know. We have the, the big high-level proposal, but we don't know what that means in terms of the actual implementation yet, the details. I mean, you know, we already know there's some guidelines being drafted about how they will, you know, euh, do their ex-ante cost estimates, how they will, euh, you know, come up with a value for each milestone and target. So we will have to wait and see, I think, and see what, what, what arises and we will have to adapt our methodology accordingly. But for sure we have a challenging, euh, period ahead.
Euh, in terms of the, the first question was about the, the, the borrowing. Yeah, okay.
Jan Gregor
Thank you very much. Indeed, the interest risk for the, euh, kind of managing the European debt is a very important one. Maybe I could refer to the figure that we have 2.16, that we have the maturity profile of, of the EU borrowing. So, for example, in 27, euh, the outstanding borrowing to be refinanced is about 35 billion. So of course this, these open bonds maturing is subject to interest risk and of course, euh, it's quite likely that the Commission will, euh, pay more, more than expected.
Euh, and I think in the future MFF, Tony already referred to the amount of 168 billion that, that is planned for managing the, the borrowing. Euh, so basically Commission will have to, euh, pay first the interest and what remains can be used to, to deal with principal of, of the borrowing. To contribute also, euh, we talked about the, euh, outstanding borrowing roughly 140 billion euros. On the other hand, euh, Commission has prepared a large cash pillow of 100 billion euros, euh, that is available for repayment or payment of the RRF expenditure and this kind of balances a bit of, euh, the outstanding debt. So far Commission has not been losing on the large cash balance, euh, because the, the conditions were beneficial, so there is even small gain for the cash position.
Yes, and maybe also in chapter two we have also, euh, added a new table that summarizes the, the system of different guarantees for different exposures for loans and guarantees. So you can clearly see what is covered by the temporary increase of the own resources ceiling, what is guaranteed by permanent own resources ceiling, guarantees from member states or common, common provisioning fund. So this is now clearly visible there. And in relation to the bonds, we will be also shortly, euh, publishing the green bonds audit. So also we are, euh, we have looked at this aspect also.
Andreas Schwab
Thank you very much. And now we come to other speakers and I want to ask two questions myself at the beginning before giving the floor to other colleagues.
I mean focusing on the financial year 2025 and also the reference that the court did that you did was on 2025 when you said that member states have been changing milestones to keep the money that they got but they could not keep under existing programs. Now we all know this was a critical moment in time member states should invest the money and we know all that and we respect it. But if you now part of a member country A that has spent the money unfortunately wrongly and you are seeing that member state B has been switching quickly the milestones and has been able to keep the money you will have some questions even though you see that it's a specific case that the money has been spent and we wanted to answer an imminent crisis. So could you give us some examples of countries and how they have been shifting the money and if you as an authority here should would think that the European Commission should not have allowed that having seen it. I want to say that the RRF is not in the hands of Commissioner Serafin so we should address this question then in the next ECON committee to another commissioner but this doesn't matter today it's just to create clarity on Piotr Serafin.
Tony Murphy
Okay but I think what it's it's a very important issue it's been raised a few times and I think it comes back to one key concern we've always had with the RRF and that's about the equal treatment of member states. It's what you're saying basically there that if one member state sees that okay this member state has got the money and has lowered the ambition in its plan let's say it's not equal treatment if you want to call it that. So I mean there are we have one example in box 11.5 it's actually an Irish example of of of a target that was changed after the payment request was actually submitted. So we have nine cases of that and I think that's a little bit I mean the member state basically is making a payment request and then after that after the payment request has been made it's saying okay we want to basically amend the plan in line with the payment request. I mean okay we saw in a couple of cases there's sort of a vague explanation which could make sense but no evidence was produced for any of the nine cases.
And as I say then there was another 12 cases where the amendments were made after the payment request but the request was made beforehand. So I think the whole issue is I mean and I agree with you it's not Commissioner Serafin's responsibility but the way the system is basically set up the commission assesses it. So the commission as a body assesses it and if it approves it basically it sends it to the council for for for approval. So the commission is the key player. I mean if it proposes normally it's rubber stamped by the council.
I mean the council is not going to go into the detail about whether a target was under under reached by 10% or 5% or whatever it might have been. So the commission is still the key player in this. And as I say I think it's about making sure that it's an equal playing field and this is throughout the process we've raised it several times I mean even in the design of the plans you know changes to the plans there's been something nearly 100 changes modifications to the plans through the through the course of the of the period from 2022. So that basically means that member states and these are bilateral agreements and arrangements between the commission and member states. So there's no common harmonization to this and this is one of the problems we see with with these sort of okay they may be tailored and in some ways they can be specific for member states but on the other hand there's an element of this equal treatment which is a very fundamental value being being basically you know lost.
Andreas Schwab
You could also consider this political bargaining because the council is composed of 27 members and the commission needs the council sometimes. But that's an important point I think you spoke about bilateral agreements that means the commission and one member state they make an agreement about how EU money is spent. So would you see from your point of view that there have been also political reflections on shifting money to member states allowing them to change the rules of the milestones after just to to make things convenient let's put it like that.
Tony Murphy
We we can't comment on that I don't think you probably don't expect me to comment on it either. But no I mean I think this is we're auditors so we're looking at the facts.
And we come along and we see that these changes have been made. All we're assessing is, is there a good explanation for it and is there evidence to back it up? The actual political bargaining and decisions are out of our jurisdiction, I would say.
Grazie. Grazie Presidente. Io vorrei innanzitutto ringraziare il Presidente Murphy, il dottor Gregor e tutti i colleghi veramente della Corte dei Conti per il lavoro fatto su questa relazione che per noi è veramente un punto di riferimento fondamentale per il nostro lavoro. Voglio ringraziare il Commissario Serafin che ancora una volta è presente e certamente non si sottrae alle nostre domande. Domande che sono state già tante e alle quali è stato risposto con grande precisione e grande puntualità.
Caterina Chinnici
Una riflessione se mi è consentito preliminare sulla prefazione del Presidente Murphy alla relazione di cui oggi discutiamo. Perché ci dà quella che deve essere io credo proprio la linea guida, la prospettiva: guardare al passato per vedere quali sono stati gli errori, le carenze, le disfunzioni e per esaminare con l'attenzione massima il presente guardando al futuro perché il nostro obiettivo, quello della Corte dei Conti, quello della Commissione, quello di questa Commissione è proprio quello di far sì che la spesa pubblica sia, diciamo, attuata correttamente nell'esclusivo interesse dei cittadini. I colleghi che mi hanno preceduto hanno fatto davvero tante domande e alcune le avrei fatte anch'io, ma a questo punto io voglio tornare un po' sul tema dei controlli. Perché è stato già toccato forse da qualche collega, ma ecco io vorrei tornare su questo tema perché anche quest'anno la Corte ha espresso un giudizio con rilievi sulle spese dell'RRF motivandolo tra l'altro sulla constatazione che i sistemi di controllo degli Stati membri non sono ancora sufficientemente efficaci. E seppure in una tematica diversa, cioè la relazione speciale numero 6 del 2026 sul tema delle frodi, questo aspetto è stato molto attenzionato.
In quella relazione peraltro la Corte aveva individuato alcuni esempi di prassi virtuose fra le quali consentitemi di ricordare quelle sviluppate nel mio Paese, in Italia. Nulla è perfetto, però sicuramente nel mio Paese si è cercato di sviluppare un sistema che sia piuttosto puntuale. Che va dallo sfruttamento pieno delle potenzialità del sistema Arachne, la completezza delle verifiche dei soggetti attuatori nei con copertura di tutti gli ambiti di rischio, l'istituzione di una rete di cooperazione fra il Ministero delle Finanze e la Guardia di Finanza, quella polizia finanziaria specializzata tanto cara alla alla Procuratore europeo che vorrebbe vederla anche in altri Paesi, fino, insomma, allo sviluppo del sistema informatico Regis per il monitoraggio dei fondi fino alle spese sostenute dai destinatari finali. E allora io vorrei chiedere, ecco, al Presidente Murphy, già se n'è parlato, però, ecco, quali potrebbero essere dalla prospettiva della Corte dei Conti europea le misure necessarie, utili a, diciamo, colmare questo difetto di efficacia dei sistemi di controllo degli Stati di controllo degli Stati membri? E al Commissario Serafin io rivolgo la domanda anche a lui, considerato specificamente peraltro che anche la Corte ci invita, diciamo, a tener conto delle debolezze in termini di rendicontabilità della trasparenza, appunto, dell'RRF che vogliamo prendere a modello per i futuri finanziamenti.
Allora, ecco, io chiedo al Commissario Serafin come intende la Commissione rimediare a questa, diciamo, non completa efficacia dei sistemi nazionali di controllo.
Cioè, ecco, immaginare una possibile armonizzazione per esempio attraverso dei sistemi, dei meccanismi di informazione, formazione comune sui metodi di controllo, la circolazione delle buone prassi affinché, ecco, tutti i paesi possano avere, diciamo contezza di quelli che possono essere gli strumenti più efficaci per un controllo efficace. Grazie della spesa pubblica ovviamente. Grazie.
Tony Murphy
Thank you chair. I think most of that is for the Commission but nonetheless, I think it's interesting you mentioned the Guardia di Finanza as a good example. I mean, I think something we didn't mention in our presentation is if you look at the EPPO report for 2025, 20% of the active cases relate to the RRF program. 20%. And that's before the plethora of payments which will be processed this year, so it remains to be seen.
Many of the cases are in Italy and that's often looked on as a bad thing, but I agree with you, this is because there is a system in place where the Guardia di Finanza is actually identifying cases and they're being followed up. So I think that's an important aspect. In terms of the control systems I will leave that to the Commission because as I said they designate the bodies who are to implement the EU funds on their behalf, but as I said I think it's important to, I mentioned it earlier, they do have for instance DG REGIO I know definitely has a couple of workshops, technical workshops every year where they try and do this share best practices and you know red flags of where problems keep arising, but unfortunately it doesn't seem to fully, you know, work out in the end.
Bert-Jan Ruissen
Thank you very much chair and thanks to ECA and to Mr. Murphy for the excellent work and their excellent report. It's very useful for us. I have to say I share the concerns expressed by different colleagues about the very high, again and again very high, too high error rate. And I was listening to the discussion really wondering, but that's more a political question I think, it's a question for us, but I was really wondering how long can we accept this as European Parliament? How long are we continued to accept this?
We are here every year, we hear every year fine promises from the Commission saying yes, we take the recommendations serious and we will take action, but every year instead of a decrease of the error rate we see that the error rates, well, look to the what happens in the what we see in the cohesion fund, instead of a decrease of the error rate we see a substantial increase of the error rate from 5.7 to 6.6%. That's too high in my opinion. Yes, I realize it's not all fraud, we are talking about errors, I know that, but it's too high. We cannot accept that in my opinion. But that's a political question.
A question for for the European Court of Auditors about speaking about the cohesion funds. We see there also a very low absorption percentage. Can you reflect on that? What's your opinion about that very low absorption percentage? What are the reasons in your opinion?
And do you see some risks maybe for the future? I can imagine that it can create risks for the coming years. And how can we mitigate these risks? Thank you.
Okay, thank you Deputy Ruissen.
Tony Murphy
Yeah, I think the cohesion funds as you said, I mean I think at the end of 25 for the ERDF for instance it was only 14% the absorption rate, so it's very, very low. Overall I think for the main funds it was 16.6, we're up to 29 now as I said with 9% pre-financing. But I think there's a causal link with the RRF in fact. We have a deadline of the 30th of September, so the focus has been on submitting projects which will, you know, which will qualify for RRF funding and I presume now the emphasis will shift that the deadline has gone to now, you know, spending the funds available under the 21-27. And we've said this time and time again, the risk is at the back end of a budgetary program that there's pressure again to spend, you know, the kind of use it or lose it or whatever you want to call it.
So there's huge pressure and we already have acknowledged or stated that there are capacity issues in the member states already. So if you put more pressure on, you know, systems which are already under pressure, the risk is that you will have more errors, that you will have, you know, more projects which are basically suboptimal if you want to call it that and also potentially an increased risk of fraud. I mean they're the risks that could materialize. So I think in terms of mitigation, I mean I remember the Commission in one of the program periods, I can't remember Commissioner if it was the last one or the one before, they looked at the member states who were really below absorption and they pulled them together in a group and tried to make sure managed from early on that it wasn't coming to the last minute. So maybe something like that will happen again, I don't know.
But basically as I say I think there is a causal link between the deadline for the RRF and the limited absorption of the 21-27 funds.
Jan Gregor
Perhaps if I can add one element, a good mitigation factor would be to adjust the spending conditions for the new MFF because Commission is proposing tight deadlines and this is destined to a failure because there you would have numerous allocations going to the deadlines at the same time. So I hope Commission finally realizes and adjusts the proposal.
Monika Hohlmeier
Thank you very much Chair. Dear President, dear members of the Court of Auditors, I have a question about my most beloved question about exchanging national project against European projects. And I want to emphasize on one part of your report. There was an example of Denmark for and I would have several other examples where the project already was finalized under national budget before it was accepted for the EU plans and money given for these national projects. So could you give us an impression about the situation how it is in the time when at the end now everybody tries to get this money because we know that the implementation was lagging behind, member states are under time pressure and I have a very severe impression we are at the moment not allowed to travel to Spain because of now the elections, then we said we do it later, but I hear in several in three explicitly member states a lot of exchange of national projects into suddenly European projects just to receive the EU funds.
And I have the impression that this is really even not budget support, this is just trying to get to receive money without any European added value or any value that we could create with our European money. Could you give us an impression from your work?
Tony Murphy
I think we already came across the issue earlier before you came about changing the plans even after the payment request has been submitted. So I mean we always have this issue about EU added value. What's the EU added value of projects? I mean would this have been done under national funds anyhow? And I mean this goes back to the RRF itself.
Many of the initial plans when they were set up were basically extracted from national plans in member states. So it was pure what would have been done anyway was basically substituted into the RRF plans. So I mean the Commission can answer this probably better than us. I mean there has been as we said almost a hundred modifications of plans throughout the period. Presumably some of these are changing priorities and projects which may have been originally earmarked to be nationally funded and are now basically funded by the RRF.
And I think as I said I mean this is what happens when you put pressure on member states. We had eight payment claims submitted on the 29th of September and another eight on the 30th of September. So we had sixteen in the last two eligible days payment requests submitted. And we now have a scenario facing the Commission where they have to process 90 billion euros in the next few weeks because the payments have to be issued by the end of December. So I mean even in terms of the quality of the assessment of the Commission I mean the pressure that would be on the Commission in this regard.
I mean there's over 1600 around 1600 milestones and targets we're talking about to be assessed. So this is a huge work you know to do in a very limited. So you're putting pressure on member states to submit within a very limited period. Now we have pressure on the Commission to properly and effectively assess the payment claims within a very short period. I mean it's a recipe from an auditor's perspective for disaster.
Do you want to add?
Andreas Schwab
And can I ask you as to whether you see a concern that as it's not DG Budget responsible for the payments under the RRF but it's another DG that doesn't have the experience on managing budget?
Tony Murphy
I wouldn't like to question the competence of different Commission DGs.
Jan Gregor
Thank you very much. No I just wanted to comment in general on principle of additionality. In the old days there were tough assessment of whether the EU funding comes on top of national expenditure. In the past unfortunately this principle has evaporated from the future. And in the RRF we have seen cases that RRF was financing recurring expenditure which would otherwise be financed by the member states.
And also over the years we have identified number of breaches of the eligible period because we had different legal understanding what it means. So Commission was together with member states financing activities that have been started even before start of RRF. So yes this is we have the concern but this is all we can do.
Monika Hohlmeier
May I just sorry have further because in this specific cases the money was already spent before they were asking for the change of plan. So there was even not a change of plan already existing. They were spending the whole money afterwards they were asking to change the plan when they already had realized the national project. And then they said please give it to our budget from the European budget or from the budget of RRF.
I cannot imagine that this is covered by the RRF text. With the other I agree with you that it was a national budget but it could be European okay there even is a legal question. But in the other when they have already realized it, it is already existing and then to ask a change for plan for something that already has been paid, that already is implemented and the money is already spent, everything is already there and they say let's change the plan and this is now a European project we would like to see some money. And this existed in a lot of cases.
Tony Murphy
I think Monika's talking about a more general issue about plans being changed not after the payment request but basically to substitute already completed projects for targets or milestones which were in. I think that's what you're alluding to. So it's new is it basically it's yes.
Tony Murphy
But hopefully we will be carrying out an audit on the adjustments to the plans and hopefully that will cover some of the issues that you're raising here Monika.
Eero Heinäluoma
Thank you Mr. Chair and thank you Mr. Murphy for your presentation and for your information and really valuable work what the Court of Auditors is doing. I would like to continue the methodological discussion a little bit because one part of your work is that you are looking also what the Commission has done to your previous observations and recommendations. So I would be interested to hear how satisfied you are towards the corrections and changes in the work of Commission after your recommendations. And then my question also to you is that are you also looking or are you ready to look also the decisions you could say recommendations from the Parliament when we are doing the discharge procedure what the Commission has done to the Parliament observations or let's call them recommendations. And then my third question goes to the Commissioner Serafin and I'm talking about the last discharge procedure of the year 2024.
There was lot of observation and very useful process but one of them was the need to look what has really happened in the delivering of the money when we had the information that the eastern border regions of Union are real in economical problems. And then there was the little bit surprising phenomenon that the national some of national governments they had moved the money from the eastern border regions to the other parts of the member state which meant that the problems which the money which was originally meant to spend on the eastern border regions was not spent there and then we know that at the same time the problems are more and more severe on these regions. So I would like to hear that if the Commission has already looked at the 24 discharge process resolution from the Parliament and have you done something to the problems and especially the problems on the eastern border regions.
Tony Murphy
Okay so the last question is for the Commission and we'll just answer the one on the recommendations. I mean generally speaking we have a high level of acceptance of our recommendations and they're implemented but the proof of the pudding is in the eating.
I mean, and basically we see the same problems arising in the member states. So from the financial audit at least, the same problems are still there. Even if we make recommendations and they're accepted, I mean, and the Commission has a role in trying to harmonize this across the 27 member states, there are still obviously gaps in the, you know, full and effective implementation of the recommendations. In terms of the recommendations of the of the Parliament, I mean, obviously we follow the discharge procedure very closely and all sorts of sources of information feed into our work. So I mean, obviously we would be keeping an eye on on recommendations or whatever you want to call them from the European Parliament in the discharge procedure.
Jan Gregor
Thank you. Maybe on the because in the current exercise we have followed up 222 recommendations that we have given to the Commission and other auditees in our special reports. So 58% were followed, fully implemented. 16 were implemented in most respects and 19% implemented in some respects and 6% non-implemented. So this is rather good in total.
Quite a large proportion is implemented either fully or in some respects. We also did special follow-up of RRF recommendations of the annual report that you might find in the annex 11.3. One recommendation was recommended in full, three in the most respects and five remain open or had not been accepted. So could always be better. When we make recommendations, the level of acceptance is relatively high, but it used to be better.
I think that we observe over a few years a shift from fully accepted recommendations towards partially accepted and a slight decrease of the recommendations that were not accepted by the Commission. But yeah. Thank you.
Andreas Schwab
Good. Satisfied? Well, that brings us to an end because there is no other colleague anymore asking for the floor. That's the reason why I would now like to invite Piotr Serafin to give us the view on all the comments and questions from the side of the Commission.
Piotr Serafin
Thank you, Mr. Chair. If you allow me, I will ask in a minute also my Director General, Sance Redragu, to complement me. But there is indeed there are a few points on which indeed I would like to comment. The first one is a recurring topic of our discussion. This is about the methodology.
I don't want to go very much into details because, you know, we know that it is, as you've said, Mr. President, it is only natural that we might have different approaches. But I want to stress two points that you have not referred to. The first one is that our assessment is done once all the controls have been carried out already. So and when it comes to the ECA, ECA is looking into the projects that are still in the process of implementation. That's sorry.
So that's I would say one element that we should be aware of. The second one, and here I also appreciate what was said by Dean Gregor, indeed there is an exchange between the Commission and and the Court, in particular on the question of the interpretation of law. How to interpret the same provisions, for example, with respect to the public procurement. They are applied in that or the another way in member states. Court believes this is a cause to declare error.
Member state and the Commission in some of the instances believes it is not the reason to declare the error.
Then Honorable Member Freund was referring to the question of land. Here again, we believe that we might be, the difference of approaches might be also the result of different methodology applied. The Court takes a sample, in a sample there is a plot. In the Commission, that's what we believe, we're looking into all the plots of a farmer, so it might be the case that at this level we reach differences. But what I want to say in this occasion, on the cases of double funding, where Dean Gregor was referring to three cases, I think on two we fully agree and the process of recovery is going to take place.
On the case of Lazio, there are differences of opinions of the Court and the Commission, so here... I don't remember the countries. I know that maybe Mr. Gregor will say, but you have emphasized two cases, you referred to two cases of double funding and on top of that you mentioned Latvian case and here indeed there are differences of approaches between the Commission and the Court. In any case, I think the key message is where there is a double funding, there is a recovery. There should be the recovery and we really appreciate work of the Court in that respect.
Then there was, I think it was, ah, and what I wanted to say also, yes, it was a very interesting and I think we should look into it. How is it possible that every year there is an error rate somewhere? I think what we should be aware of, we should be aware of that we are talking, and I think the Court will confirm, about all Member States, all programs, millions of beneficiaries. So I think it would be indeed a reason of concern if there was a same problem in the same Member States, in the same program, at the level of the same beneficiary or the same authority. Yes, that would be a reason of serious concerns, but it is not necessarily what the sample taken by the Court is showing us.
It shows us that there are administrative errors, not the same beneficiary, not the same program, not the same Member State. But indeed, in some cases, and then I refer again, it leads to the situation when we see that we have, for example, paying agencies that they don't know what they are doing, then we put into question the functioning of such organization. I can give two examples that I know were also discussed in this house: OPEKEPE in Greece. And there was indeed a case of fraud related to the declaration of land. So this organization, paying agency in Greece, the Commission has basically taken away the certification and now the Greek authorities have decided to nominate a new paying agency because came to the conclusion OPEKEPE is maybe too difficult to be improved.
And the same story is with Hacienda case in Slovakia, when again because of the recurring problems, DG AGRI in this case put into question the certification of the paying agency in Slovakia and right now we are in the process of a discussion with the authorities of Slovakia, they have tabled a plan how to improve the situation on the ground.
So if we see such things, if there is a good evidence, we go to the point when we say: you don't know how to spend EU money, you are not going to be paying agency anymore. Then there was a question of the fact that the milestones and targets are being changed. We might like it, we might not like it, but at least we should not be surprised, because this is what is foreseen in the legal base. That's what is foreseen in the regulation on the RRF. There is a clause which was put there to allow for the revision of milestones and targets in case milestones and targets agreed at the beginning are not achievable partially or totally anymore.
That was a counterpart to the deadline. And I can see the dilemma also for the co-legislators, whether to put a deadline or not to put a deadline. If you put a deadline, you risk indeed that you will have a rush with payments in the last minute. If you don't put a deadline, then also here in this house we'll have a debate about reste à liquider, RAL, that there are commitments but the payments are not taking place. So that has to be assessed.
But as I said, we should not be surprised that there were changes of milestones and targets. How this process looks like? Normally it is always the request of a Member State. Treated equally. All of them can come with a request to change milestones and targets.
Then, as was in the case of the original agreement, there are negotiations between the Commission and the Member State. But at the end of the process, there is a Council, because any change of the milestones, targets, conditionality has to be approved in the form of the Council implementing decision. I took note of what President Murphy said, there is no capacity in the Council to assess, but there is a possibility of all Member States to take part and they vote whether they are okay or not okay with the changes of the milestones and targets. Then there was a number of comments on the question of borrowings. I want to, again, I think there is no reason to surprise, because the borrowing is taking place on the basis of the mandates that the Commission was given.
The biggest mandate was indeed linked with the NGEU. Since I became a Commissioner, the Commission got two additional mandates, 250 billion euro on SURE program and on Ukraine loan. So of course, I mean, if there are mandates, I mean, the Commission borrows money on the financial market only once we got the mandate from the Member States. One thing which I think, which I really stress, we should not build this link, that there is a junctim between own resources and the repayment of the debt.
We will service the debt no matter what. And we have tools and also to we are subject to the very serious review also of the rating agencies. EU bonds are rated at triple A. There are not that many bonds issued in Europe that have a triple A rate. There are Bunds, there are Dutch bonds, there are Danish and Swedish bonds, but we are among the top quality, we issuing top quality bonds.
And that is the assessment of the rating agencies and that is also the assessment of the markets. And now I would like also to refer to the current developments on the markets. Actually, indeed, there is a worldwide trend of increasing yields. Why is that? Because of the war in Ukraine.
Because of the increase of energy prices and because of the expectation that the energy prices will be reflected in inflation. That's why investors expect higher yields. But in that environment, EU bonds is not a issue of any concern. EU bonds are attractive, seen as attractive offer. We are seen actually also as a way to diversify, including from US Treasuries.
Because if you look at the market developments, where are the real problems, the real problems are related to US Treasuries, not to the EU bonds. And we have the capacity, as I said, we are not happy about the increase of yields. It is a counterpart of the increasing inflation, but we have the capacity to service our debt now and in the future and that should not be put into should not be put into any any question. There was also a comment made by Dina Gregor about liquidity costs. It's true that until 2024 we were making money on borrowing money on the financial markets.
It's not the case anymore when it comes to 25 and 26. But we are our job is to be predictable for the markets, for the investments. We are presenting therefore a predictable funding plans and we implement those plans. Rate of absorption of cohesion. Again, the same dilemma about the last minute rush and reste à liquider.
And again, the same arbitrage would need to be offered by the co-legislators also when we discuss about the future NRPP. So that is for sure the case. Additionality is there, however, I have to admit in the legislative framework that we have right now for RRF, it is mentioned. So in principle, recurring budgetary spendings should not take place, in principle, because indeed in the legislative framework there is exception. We want to be a bit more strict in that respect in in the future regulation when it comes to the additionality.
But it's true, the most strict approach to additionality was in the cohesion funding. This was that's what Jan and me we remember from the period when we used in respective national administrations of our Member States. Thank you. And if you want to...
Yeah, thank you very much.
Rosa Aldea Busquets
I will just provide maybe three comments just to give a little bit more information on on what we are we are doing sometimes together. First of all, that on the difference of the error rate, I mean there was already a study done by this house on on the different methodologies and is very well explained. But I would like to to just support the Court of Auditors and also our methodology. The Court of Auditors, they come, they do a sample and they take a photo. Is what I call they take a photo and is good or is bad.
And there again, they are auditors and they have to audit in the sense that if there is no documentation, they cannot say things are okay. But it doesn't mean they are not okay. And they don't have the time to dig or to to wait for six months to see what happens if we find the documentation. And and there were some problems there. We had, for example, an issue in the past years with some indirect management, namely, I think you named it Tony, United Nations.
Rosa Aldea Busquets
And we had a common common activity and common approach that we together, separate but together, we talked to the controller of UN to explain that if we give funds and we don't get any documentation, it was a problem for us because then we couldn't prove that the spending was correct. And I think things are much, much better now. And we also agreed with the controller of United Nations to have an escalation method whenever at the fieldwork the the teams are finding it difficult, be on the ECA or be our own DGs. The other thing is that if there is a program where you have to pay for 50 and you have 49, for the ECA it will be not achieved. And that is normal in ECA and in audit standards.
For a managing authority, be local, a local authority, they might apply a proportionality and they say, okay, well, I'm not going to recover everything, I will recover part of it. So I think those are differences. It's not that one is right, is wrong. It's a different approach. One is the management of the funds and the other one is the real audit.
Rosa Aldea Busquets
And I think we have to put these things on on perspective. On on what we are doing for for cohesion, because I always say where we have really aligned is on what are the areas where we really Commission and and ECA find that we need to to to get better. If we look at cohesion, a lot has been done at what the Commissioner has said is is true. We have 27 supreme audit institutions on top of the Court of Auditors that they also meet to talk about methodology from time to time. And but if we look at cohesion, we have more than 160 authority because we have local and regional capacities to to audit.
And what we see is that the problems that we find in one program, they are corrected and we build capacity there. But then appear in another member state in a different program or with a different or in the main the the same program but a different, for example, region. So we are very active and we are focusing and what we are trying is to we have done webinars, we have help desk to clarify legislation. We have national contact points. We have outreach events which can be at local level or with the Commission.
We are also helping to to build lump sums, financing not linked to cost. There we have had workshops with the Commission with the with the Court of Auditors because we wanted to exchange with them how they audit lump sums, how we build lump sums, where are where we we see differences.
And I must say that even if this year the ECA found issues with financing not linked to costs and with lump sums, we have learned a lot from them and we are going to continue to do these workshops. I would like also to mention OLAF here, and not OLAF as investigative, which you normally refer to, but as a Commission service, because as you know, all the member states also report all the irregularities that they identify in IMS, that then we have the PIF report. And OLAF as Commission service look at them, identify good practices, if needed they open investigations, but I will not go there, and they also have a lot of outreach to member states, to different authorities, to different managing bodies with best practices, with red flags. They put together a community to discuss how to tackle specific errors that are always coming. So we are trying to do everything.
What we are also very much supporting member states and trying to get there is with digitalization, because as Jan said, we have an issue with documentation and we think that if we start digitalization much more, we will be able to trace all the information easier and misplaced documents or burned documents is much more difficult. So I think that's important. And for double funding, the other issue is interoperability. What we see is that you can have double funding because you have one expense in one region and then at national level you have the same expense. It can happen.
If it's identified, we recover the money. But we cannot say to the local authority, you didn't find it, because it has today very little means to identify it. We have controls, every time we identify something it's being recovered, but new technologies like the interoperability of systems is really key to be much faster. Thank you.
Andreas Schwab
Thank you very much, Commissioner Serafin, and to you, DG. Is there anything else that you quickly would like to add?
Tony Murphy
Just quickly, very quickly, I'd like to clarify just a couple of the comments the Commissioner made. I mean, for instance, in cohesion, we basically come at the end where it's more or less finished. I mean, the assurance package is, we wait for the corrective actions to be taken, so it's not exactly true what you said. For other policy areas, what you said is right. In terms of the Council capacity, I meant they basically rubber stamp.
I'm not saying they don't have the capacity to assess the claims. And then just a couple of very small issues. I think you mentioned that the regulation allows for the milestones and targets to be changed, and I'm not disputing that. But the problem for us is in terms of, you have a plan which is valued at a certain amount of money. Then you come along and you change milestones and targets.
So how do you make sure that the equivalent value is being gained if you change a milestone and target? I think that's a big problem. I mean, in terms of how do you value a replacement milestone and target? And then the last thing, just again a clarification, we didn't insinuate that the 8% of the new budget which is to repay the debt is dependent on own resources. What we were saying was that in the past, when the NGEU was set up, there was an intention for an own resource to be created which would repay the NGEU debt, and that never materialized.
Andreas Schwab
Thank you very much, President Murphy. Thank you so much also to all the colleagues that have taken the time this morning to ask the right questions and go into the right detail of this European Court of Auditors report on 2025. And that brings us to our next item on the agenda, which is the discharge 2025. Our rapporteur is Olivier Chastel, and I would like to give you the floor to make an exchange on all the points that have been touched now and that you will touch or have touched in your report. Olivier, s'il te plaît.
Olivier Chastel
Merci Monsieur le Président. Alors c'est vrai hein, on entame un processus aujourd'hui, un processus qui va durer plusieurs mois dans lequel on va travailler ensemble avec les shadows, avec tous les membres de cette commission qui sont intéressés par le la décharge pour 2025. Je vais pas être très long maintenant. Monsieur le Président, si j'ai bien compris le pour le point qui s'annonce dans l'ordre du jour, on attend une commission une un exposé du commissaire hein. Donc je vais pas être très long.
Moi ce que je souhaite dans ce qui se passe ici, c'est que le commissaire puisse nous exposer l'état de la situation financière pour l'exercice 2025, qu'on puisse tous avoir bien en tête les chiffres de 2025 et qu'on lui pose dans la foulée aujourd'hui dans le laps de temps qui nous restera avant le les votes de la séance plénière, qu'on puisse lui poser les premières questions générales. Puisque dans la foulée on aura tous les commissaires, toutes les DG qui sont à notre disposition pour des questions spécifiques. C'est une question d'ordre et de méthode. Et donc je je vais me limiter à ces propos liminaires par rapport à l'ordre du jour et par rapport à la manière avec laquelle on attend aujourd'hui du commissaire une vue d'ensemble sur les finances de 2025.
Piotr Serafin
Thank you Mr. Chair for the invitation to this place. Dear rapporteur and shadow rapporteurs, honorable members of the CONT committee, ladies and gentlemen. So today my role is to present the integrated financial and accountability reporting package. It's a very extensive package. This package is central to our commitment to transparency and a key building block of the annual discharge procedure.
It provides a comprehensive picture of how the EU budget is implemented, what it delivers and how we safeguard the financial interest of the Union and its citizens. Let me start with the delivery on our key political priorities in 2025. The EU budget continued to deliver on competitiveness, green, digital transitions and economic and social cohesion while strengthening also cooperation on security and defense and maintaining our support for Ukraine. On competitiveness, EU InvestEU guarantees of almost 27 billion euro mobilized more than 395 billion euro in investment between 2022 and 2025. The Digital Europe program with over 6 billion committed by the end of 2025 financed 26 of the world's fastest and most energy efficient supercomputers throughout the European continent.
Since its creation by the end of 2025, the Strategic Technologies for Europe Platform had mobilized around 24 billion euro in funding to support critical technologies essential for Europe's competitiveness and strategic autonomy. Common Agriculture Policy provided in 2025 over 53 billion euro in payments to 5.5 million farmers. By the end of 25, European Social Fund Plus supported 16 million participants through measures promoting quality employment, education, social inclusion. So these were just examples how the EU budget contributed, spent, how the EU money was spent last year within the EU. At the same time, the EU budget enabled us also to respond to pressing international challenges, in particular Ukraine.
We have no doubts that the European Union last year played a critical role in the support of the defense effort of Ukraine. Also frankly speaking, we have been, as you know, last year, since last year, it is mostly the European Union, not other international partners, that are supporting Ukraine. The budget also continued to integrate our horizontal priorities across programs. In 25, including NGU, an estimated 64 billion supported climate objectives, over 15 billion targeted biodiversity, over 19 billion supported digital priorities, and almost 38 billion contributed to gender equality. These figures demonstrate how different programs contribute to shared Union objectives.
Ultimately, what matters is of course whether these investments translate into tangible results. Let me give you just a few examples of what had been achieved by the end of 2025. Investment financed by the Recovery and Resilience Facility, InvestEU and cohesion policy had brought very high capacity broadband access to 20 million additional homes. Cohesion policy had supported projects covering some 65 million hectares of land to protect against wildfires, and the LIFE program reported that biodiversity loss had been halted or reversed across more than 2 million hectares of habitats. These results show that the EU budget can deliver, but delivering results must go hand in hand with ensuring taxpayers' money are properly managed and protected.
On that specific point, what I would like to say is that we have already discussed about different methodological approaches of the Court and the Commission. I mention, but I would like to stress that as a result of controls and audit carried out by the Commission and Member States last year, preventive and corrective measures accounting to more than 9 billion euro were implemented. For instruments where expenditure is performance-based, we carry out qualitative assessment, so we identify weaknesses, reserve our assurance where necessary and take action. On the basis of those measures, we assess that the Commission considers that overall the EU budget was well protected in 2025. This is also confirmed by the internal auditor's overall conclusion.
But of course we want to improve things for the better in the future. That is why we are right now in the process of the review of the anti-fraud architecture, and our objectives are clear in that respect: improve cooperation and information sharing, avoid overlaps, make better use of resources, and ensure that each actor can contribute fully within its mandate to protecting the Union budget. If you allow me, Mr. Chair, I will stop here and I'm looking forward to the debate.
Andreas Schwab
Exactly.
Thank you very much, Commissioner. We will ask you maybe points also that have now not been presented, but that's up to my colleagues. And now I would like to start with our rapporteur, Olivier Chastel.
Olivier Chastel
Merci, Monsieur le Président. Monsieur le Commissaire, merci pour cette présentation. Au-delà du rapport, c'est toujours intéressant de commencer par un bilan chiffré parce qu'il faut savoir ce à quoi a été utile le budget européen dans l'année qui nous concerne, comment il a été dépensé, quels ont été les contrôles, les audits, et la manière avec laquelle la Commission a le sentiment que le budget européen et ce qu'il représente a été dépensé le plus efficacement possible au profit de nos concitoyens. L'année 2025, elle a été évidemment marquée par la poursuite de NextGenerationEU, du soutien financier important à l'Ukraine, mais c'est aussi comptablement l'encours des prêts accordés par l'Union qui a augmenté, qui est passé de 284 milliards en 24 à plus de 333 milliards en 25. Et dans le même temps, les passifs financiers ont fortement progressé, de 602 à 740 milliards d'euros, principalement sous l'effet de nouveaux emprunts.
C'est important dans cette tendance, et c'est vrai, on se limite à 2025, la Cour des comptes tire des projections pour les années à venir qu'il sera, dans un autre contexte, intéressant à analyser. Quelques éléments de question en ce qui me concerne. Tout d'abord, vous l'avez un tout petit peu évoqué tout à l'heure, le reste à liquider. Le reste à liquider diminue un peu même s'il reste très élevé, plus de 500 milliards d'euros fin 2025. C'est une problématique que j'évoque souvent.
Je suis pas totalement convaincu que la Commission a une véritable stratégie pour diminuer ce montant. Comment est-ce qu'on collabore avec les administrations nationales, parfois régionales ou locales ? Qu'est-ce que la Commission met à disposition de ces autorités comme outil pour améliorer ce reste à liquider ? Parce que c'est un élément important qui se reporte d'année en année. Qu'est-ce qui peut être simplifié pour permettre une meilleure absorption des fonds ?
C'est ma première problématique que je voulais soulever ici avec vous. La deuxième, c'est la récupération des sommes suite à la détection d'irrégularités. Est-ce que vous avez des éléments chiffrés, statistiques sur le délai moyen entre la détection d'une irrégularité et le recouvrement effectif des fonds ? Quel est le pourcentage réellement récupéré ? Ce sont des éléments qui peuvent être intéressants en ce qui nous concerne.
Et enfin, on a beaucoup parlé de la FRR. La Cour des comptes a été assez critique par rapport à cette méthode de travail. Les paiements à mes yeux ne sont pas suffisamment liés aux jalons. La manière dont les plans ont été conçus, adaptés, modifiés, mais aussi on l'a vu, adaptés parfois a posteriori en fonction des objectifs pour pouvoir obtenir les fonds, c'est quand même une méthode qui manifestement engendre un certain nombre de problèmes, un certain nombre de dysfonctionnements, voire parfois des fraudes. J'ai quand même aussi le sentiment qu'il pourrait y avoir un meilleur suivi de ces plans.
J'insiste sur le fait que c'est vrai, les États membres, les régions ont souvent été tentés d'utiliser ces fonds par l'opportunité. C'est-à-dire des politiques sont décidées dans certains États membres, elles vont être mises en œuvre et puis finalement on leur dit : il y a des fonds européens.
Ah ben alors je vais bénéficier de ces fonds européens pour mettre en œuvre ce que j'avais quand même décidé de faire. Et finalement c'est une aide au budget, c'est une aide à son propre budget. Mais dans un certain nombre de cas, il y a de véritables réformes mises en œuvre dans le cadre de ces plans. Et c'est là que je pense que la Commission a un rôle à jouer, c'est comment mesure-t-on à long terme l'impact et l'effet durable de ces réformes que l'on trouve dans ces plans. Parce que oui, elles ont mis en œuvre la réforme, mais quelle va être l'efficacité de ces réformes et qu'est-ce que ça va engendrer dans le cadre de la relance et de la résilience.
C'était les trois thèmes que je voulais aborder avec vous ce matin. Merci.
Speaker 45
Merci beaucoup monsieur le rapporteur. You want to directly answer to this please?
Piotr Serafin
First on the question of reste à liquider. You will see quite a dramatic decrease of reste à liquider next year. 25% of reste à liquider is related to the RRF. And because of the deadline that we have in the regulation, this is indeed the last moment when the member states can send us the bills and this is indeed the last moment also for the Commission to pay the bills. So next year the reste à liquider when it comes to the RRF is going to be much lower.
Also on top of the RRF, also because of the cohesion. We didn't talk about it at the beginning but President Murphy said that the delays in the implementation of cohesion that might be the result of the fact that in parallel we had the RRF, it might be true. But there is one more reason why we have delays in the implementation of not only cohesion but also rural development programs: late adoption of the MFF. That's why we are calling the member states and also encourage the Parliament to work on the MFF including the legislative package because last time we were late, last time first almost two years of the programming period were lost. And now we see that there is a process of catching up on also on the cohesion policy to which you have referred Mr. Mr. Rapporteur.
And what is the result or what are the challenges related to it? We need to increase the level of payments. So now we also this is the moment when we see we are calling member states either to increase the national contributions to pay the the bills that is going to lead to the reduction of RAL or as is the case for example when we have new revenue revenues and already this year we had one change of the budget annual budget, we are going to propose another one, there was there was some additional revenues. Our intention is to pay the bills to reduce the RAL. But what I want to stress, RAL is also the natural consequence of the fact in which the EU budget is constructed.
I think it was constructed like that based on the French model that we have appropriations for commitments and we have appropriations for payments.
And there is always a time lag. Now there is a question to the co-legislators, how big is this time lag? And I think it was Dean Gregor who referred to an RPP where the Commission proposed N+1, and then indeed this is right now being debated among the co-legislators. On the question of the recovery of money, I will ask, if you allow me, Mr. Chair, my Director General to present some statistics, but I want to use this question also to refer to more structural issues. The recovery is a responsibility in the Commission of authorizing officers by delegation.
So in most of the cases we talk about Director Generals of specific DGs. OLAF is there to identify amounts that should be recovered, to issue recommendations. There is no obligation to follow the recommendations of OLAF. I believe that we can do, in the context of the AFAR review, we can increase also the way in which the system works in the EU. We might improve the cooperation between OLAF and EPPO.
I have to say we put in place a system last year when we are looking into the, we have notifications from EPPO. But I see a lot of unnecessary, in my view, tensions about sharing information and about facilitating the process of recovery of funds by the Commission. So in other words, we also, we are in constant dialogue with the EPPO, but we also believe that the AFAR review could be the moment where we can clarify, and that will be in the benefit of the smoothing of the recovery process, not only the time frame, but also primarily the scale of the recovery. Because if there is no administrative investigation by OLAF, then and only criminal investigation is ongoing, then the money evaporate. And there is nothing to be recovered with the time lag.
That's why we also follow the advice of, we want to follow the advice of the ECA Court and we want to propose a common, we are working on a common repository, primarily having on mind the need to improve the recovery of the EU budget. I might be biased because, you know, I'm not only in charge of anti-fraud but also of the budget. So maybe I'm biased, but I do believe that the recovery, the level of recovery, the speed of recovery is a critical measure when it comes to the efficiency of our action in the context of anti-fraud architecture. And I would really call and appeal to all honorable members to look seriously into that perspective when you are working on your own initiative report. On the measurement of the long-term impact, the challenge with the measurement of long impact is that it requires long term.
If we want to measure long-term impact, we need to have long term. I know that such studies are being carried out. I know, for example, that already European Central Bank has carried out a study on the long-term impact of the RRF and they are referring to the growth, GDP growth of 1% in the long term. But I also aware, I think that also our services, DG ECFIN, is planning to carry out such study next year on the long-term impact of the RRF. There were some questions on statistics, so if you allow me, I would quickly give the floor to...
Rosa Aldea Busquets
Yeah, no, and I will, I will take it from where the Commissioner left it, which is that we need to try to recover faster. And that's the, for, for us, that's the most important thing. So that's why, and, and also the Commissioner mentioned it, basically we recover as soon as we identify that there is an issue. And then I will link it also to the Court of Auditors, the differences in the error rate. They have an error rate and we have two kind of percentages, the, the risk at payment, which is the risk on that we find when we process payments beyond national authorities or Commission, and then the risk at closure.
So there, in the moment that Member States authorities, Commission, identify issues, they carry out recovery. So we have preventive and corrective measures. We have 1.1 billion of errors prevented, so 1,137 million of errors prevented, and 7.9 million of corrections implemented by the Commission after the payment took place, which shows that even once we have paid, we continue to, to carry out controls. Basically because sometimes you pay by tranches or you wait till the programme is finalized to see what is the income and what is the outcome of the, of the, of that initiative. If we look at the, by heading, what we see is that in cohesion is the one that has the most corrective control, so after the payment took place, because we have a lot of capacity and a lot of efforts and resources put into really checking everything that is being done, with 6.6 billion out of the 7.9 on corrective measures.
And then after we have the, the corrective measures and the, the recoveries that OLAF will recommend to the Commission and to the Member States once they do their own administrative investigations. And there what we see is that it takes quite a lot of time to recover the money, be by Member States or by the Commission. First because years have passed since the, the error took place, because first it has to be notified to OLAF, then they have in average 20 months to carry out their investigation, then the recipient of the recommendation has around one year to analyze, assess and do something, and then you initiate the recoveries, which in many, in many cases companies are bankruptcy, if they are really fraudulent they have organized their own bankruptcy, or the, the payers they don't, they don't exist anymore. And that's why in the FR review we are really trying to say, yes, the criminal investigation is very important, but the administrative side and the capacity to recover or, or put, even if you cannot yet recover, you can start doing administrative protective measures not to spend more money on those funds or on that economic operator. I leave it there.
Thank you.
Andreas Schwab
Thank you very much. That gives us the chance now to start our exchange with the shadows, but I would kindly ask you to be precise because we are running already out of time. Over to you, Mr. Zdechovský.
Tomáš Zdechovský
Thank you, Chair. I am every time precise, also I will be very short. You know that my second name is one-minute speech. Also, dear Commissioner, I would like only concern about the issue what are link in 2025. You know there was the famous control in Slovakia.
You mentioned already the current situation, but we have it more and more whistleblowers. This week we have it two new whistleblowers from Slovakia, former, former people who work in paying agencies and who describe us new and new cases of the frauds. Also how will be reaction of the Commission?
You mentioned that this is the agri issue, but we have to solve and really we have to defend interest of EU payers. And you spoke about OPEK. There was very famous mission where I was with my colleague Monika and OPEK was really systematically corruption and frauds and in Slovakia is the same. Also we have to solve it. It's not against the people in Slovakia, but it's against the corruption scheme what was included.
Second things is about the CAP model and agriculture, how to improve it, but there was a lot of discussion. Also I will be not long and Chair I see you and I would like thank you for your openness and I hope so that we will continue with anti-fraud infrastructure architecture to improve it in the best quality for the future.
Maria Grapini
One minute. Mulțumesc foarte mult, domnule comisar, pentru explicațiile aduse acum în plus față de ce ați vorbit la primul punct. Pentru mine este important să înțeleg de ce rămân sume necheltuite, pentru că interesul nostru, totuși vorbim la toate dezbaterile despre nevoia de creștere a competitivității, creșterea investițiilor, ajutoare pentru mediul rural și așa mai departe. Și totuși au rămas acești 500 de miliarde, în plus ați mai recuperat 9 miliarde pentru măsuri corective. Totuși sunt aproape 600 de miliarde.
Ce să facem sau dacă puteți să ne spuneți care au fost cele mai dificile probleme pentru a putea să cheltuiți bugetul? Un buget alocat trebuie cheltuit și asta nu credeți că e și datorat se datorează și complexității documentelor pe care trebuie să le facă? Mă gândesc acum la un IMM care are 12 angajați, 15 angajați și are atât de multe documente de făcut, de întocmit, neclarificate. Spuneați că puteți să închideți o agenție dacă nu-și face treaba. Cum o puteți închide?
Nu înțeleg, pentru că aia e de competența statului membru. În sfârșit, ce credeți că a fost cel mai complicat de n-ați reușit să scădeți, am spus și la primul punct, să scădeți acele neconformități, ci au crescut și ați rămas și cu banii necheltuiți? Mulțumesc.
Andreas Schwab
Thank you very much. Next one is Cristian Terheș, but he is not there, so Mr. Eriksson.
Dick Erixon
Jo, jag ser att revisionsrätten konstaterar att medlemsländerna är långsamma i att rapportera underlag, statistisk data för att räkna ut medlemsländernas medlemsavgift, EU-avgiften. Och en rekommendation då från revisionsrätten är att man skulle kunna införa dröjsmålsränta för senare rapporteringar av BNI. Är det någonting som kommissionen skulle överväga?
Dick Erixon
I rapporten så nämns att medlemsländerna är ibland sena med BNI-rapporteringen om tillväxtdata i medlemsländerna som ju ligger till underlag för EU-avgiften som de ska betala till kommissionen. Står det i den här långa rapporten på 500 sidor. Och då rekommenderar revisionsrätten att man skulle kunna införa en dröjsmålsränta, alltså straffavgift till medlemsländerna om de inte rapporterar sina statistiska data i tid. Och jag tycker det är angeläget att medlemsländerna rapporterar in det underlag som de ska ge till kommissionen i tid.
Piotr Serafin
Thank you for clarification, Commissioner. Yes. Sorry, I understood in translation that it is about DNA fee, but now thank you. Yes, honorable member Złotowski, I think that one thing we should say here loud and clear, and you referred to whistleblowers. Last year at that time, we were very much concerned about the fate of the whistleblower protection authority in Slovakia.
And I think that also the attention that this issue attracted in the European Parliament, also the actions that were taken by the Commission, but also people of goodwill in Slovakia, ultimately we have no, we did manage to make sure that this whistleblower protection authority functions and can play its role and the safeguards were kept. So that is I think something we should remind ourselves because that's a positive ultimately story with the happy ending, and a lot of time was invested by many of you here as well to make sure that the whistleblower protection authority functions well. On the situation there when it comes to the paying agency for the rural development funds, I have to also frankly and transparently inform you that the Slovak government has presented a plan of corrective actions and that is, there is no decision still on the side of the Commission, but the discussions are ongoing on this issue. On the question about RAL, there is nothing secretive about RAL. How could I explain you?
If you were, if you had the intention to build a bridge and you'd come to the EU budget and you'd say, I want to build a bridge, I need for that two years, will you pay, reimburse the invoices if I come to you in two years' time? And that's the whole story, that's the difference between commitments, commitment appropriations and payment appropriations. We commit to pay the bills from the member states, from other beneficiaries, but we pay the bills only once we get invoices. And then that we have this N+2, N+3, what have you, that's the deadline when you need to come back with the invoices and then you are paid. That's why I said the outstanding RAL will decrease dramatically next year, 25%, because the deadline is over, we have reached the deadline for the RRF.
The most complicated issue, I don't know. I think that for sure when it comes to the issue which I thought was genuine an issue of concern because it concerned the question of OPEKEKE. I think this was quite a massive change which took place and a very risky one also from the perspective of the Greek authorities. At a certain point there was really a question whether farmers will get direct payments at all in Greece. And that was really that was really a massive process.
But it was inevitable because when there are frauds related to direct payments, it means that people who are not farmers, they get money. So it's not even yes, it's European taxpayers' money, so European taxpayer is a victim, but the first victim are the direct farmers in Greece that are not getting money because somebody else declares I'm a farmer, I have a land and then the OPEKEKE was sending money at the expense of the genuine farmers in Greece. On the question of the GNI take if you if I may ask shortly, yes?
Thanks a lot. And here yes, I would like to clarify. So this is an ECA recommendation in in chapter four on revenue. And what they are proposing is to have clear rules to apply late payment interest. But already the Commission applies late payment interest every time that a member state is late in providing this information.
Rosa Aldea Busquets
Now we are working in in the Commission to a revised or a revamp of the make available regulation. So we are now within the Commission still discussing and one of the things that we want to do is to precisely clarify and simplify but still charging interest if we don't get the information in in the right moment. Now this is one example and I I want to be very very rapid here and and quick but I think it's a it's a very interesting example because we have partially accepted the recommendation. I'm telling you that we are doing it but because it has to go through the legislative process we cannot just say we accept because we don't know what is the outcome. So we are fully aligned here but we only partially accept because we cannot say what's going to happen after in the Council etc.
Speaker 50
Thank you very much for that clarification. And last one is Daniel Freund.
Daniel Freund
Perfect. Thanks Commissioner. Having been the rapporteur on the previous exercise, I particularly want to ask about recommendations that were made in that report that we adopted in in April and and where the Commission is on implementing these recommendations. I'm sure you have fantastic statistics for me that pretty much all of them are implemented but I want to ask about the two main ones at least from my point of view. The first one is and this Parliament has been very vocal about seeing the final beneficiaries of RRF funding.
We gave the Commission a deadline of of the end of this year to provide us with these final beneficiaries. And I wanted to ask given that we're nearing that, can we expect to be able to see that by by the end of the year? The second question and colleagues and and also you have already mentioned Slovakia. In the report the Parliament has said that at least the first step of the conditionality procedure should be triggered. And this Parliament has made this statement again in a separate resolution and we're also not alone.
The European Public Prosecutor has also asked you given the severe risk for the financial interests in Slovakia to launch the conditionality procedure. You seem to be seeing something very different. So from your I mean there is an ongoing exchange, I understand all that. But I mean the special prosecutor has gone, the National Crime Agency has gone, the legal changes in the in the criminal code they persist to this day. Why are you not acting on the financial risk in Slovakia?
And then finally the last question that I have. I was just in Hungary last week.
There is good progress on the ground. One of the main progress that the Hungarian government, also you, have, have announced is, is the joining EPPO. It seems to me a bit, and I also hear that from EPPO itself, that that joining, and as happy as I am about it, and particularly the five years retroactive inquiries that we're going to see, but I would also like this to be operational as, as soon as possible and well-staffed and well-funded. And on those points, I'm, I'm not quite as reassured yet. I haven't seen a date.
It seems that the Hungarians are rather aiming for mid-27. EPPO tells me this could go quicker. If I could hear you on, on this aspect, which, which has an aspect on the, on the financial security of the budget 25 and whether EPPO will very soon be able to examine it, that would be great. Thanks.
Piotr Serafin
On the list of the final beneficiaries, I think that I wouldn't like to give a definite answer to your question, but I also wouldn't like to build high expectations because it is not, the situation is not that the Commission does not want to share with you information about the final beneficiaries that we have. We can share with you only what we get from the member states. We, and this is the interpretation also of the Commission legal services, we know that this is, there was a question what lessons from the RRF. One of the lessons is that we have to be more precise about the final beneficiaries. We should not be talking, we should be talking also about contractors, subcontractors, because indeed the interpretation that you don't like, we don't like, this is a legal dispute with the legal, between the legal services.
What I can tell, I can tell you what I did. I did already two times when I was present in the context of ECOFIN, then with the finance ministers of all member states, including those who are criticizing the Commission about the way in which the EU budget is executed. I was asking them collectively and one by one, this is a critical issue from the perspective of the European Parliament, maybe you are not obliged, but why don't you want to be transparent when it comes the way who the money, who gets the ultimately the money. So I know, we know, we have been discussing about this, this issue for some time and what I'm afraid of is that we have no legal tools to make sure that those data are made available by the, by the member states. On the question of Slovakia, you also referred to the appeal from the EPPO in the context of the conditionality regulation.
I remember that appeal quite well, that happened in December last year and that was specifically in the context of the draft law that was at the time discussed in the Slovak National Parliament, the draft law on the authority for the whistleblower protection. This was absolutely critical point, the point that indeed might, could have had much broader, far-reaching consequences.
That's why ultimately I'm happy, I think it was a right decision taken also in Slovakia not to go ahead with this law or to scrap it simply and to preserve intact whistleblower authority. On question of Hungary, we are, I'm not sure whether maybe it's today that we present amendments to the, or tomorrow, 9th of October is tomorrow. The amendments to the budget for 27 that is also partly to reflect the expected accession of Hungary to EPPO. You know, it's again not for me to say when exactly is it going to happen. What I hear is that it will be before summer, that it could be in late spring, let's put it like that.
But this is the question in between the EPPO and the Hungarian authorities. The Commission encourages as early as possible operationalization of EPPO membership of Hungary. But as you have noticed, whether it is, you know, in April or is it in June, since there will be a retroactive cognition by the EPPO of the cases, then okay, might take a bit longer, but the time scope, the time frame would cover also the period from 2021. Anything that you, Patshott?
Rosa Aldea Busquets
Super short, that in the meantime OLAF can investigate any Hungarian fraudulent or non-fraudulent irregularity and issue recommendations to the national authorities, judicial authorities.
Andreas Schwab
Thank you very much, and we have also the internal auditor of the Commission here, Ms. Agnieszka Kaźmierczak, I hope that I have done well. Also you should get the floor here, even though we are a bit running out of time, but over to you.
Agnieszka Kaźmierczak
Dear Chair Mr. Schwab, honorable members of the committee. Thank you for the opportunity to present the annual report on internal audits, which shows in a transparent manner the strengths and weaknesses of the systems that were identified by the Commission's internal audit service. 2025 was the first year of the implementation of our audit strategy 25-29, which is aligned with the Commission's mandate and with the political priorities. As internal auditor, we look at the performance of Commission departments in a system and risk-based manner, that is through the lens of how they manage the risks associated with implementing policies, programs, and actions. And let me reassure you that the views of the European Court of Auditors and of this committee are key for me as internal auditor of the Commission in identifying and assessing the risks.
Speaker 53
...in three pillars. We look at financial management. We look at operational and policy related processes and we look at the support processes such as HR, but increasingly IT, cyber security and so on. In 2025, we completed 36 engagements for the Commission and issued 123 recommendations. Looking at the implementation of our recommendations, I consider it satisfactory.
Agnieszka Kaźmierczak
It is comparable to previous years, which is testimony to the commitment of the Commission services, by our own follow-up policy, but also by the monitoring of the implementation of the recommendations by the Audit Progress Committee of the Commission chaired by Commissioner Serafin. So, our report demonstrates that the Commission does take action to remedy the weaknesses identified. And as one particular point, I would like to bring to your attention the overall conclusion on the financial management, which is based on the audit work, our audit work of the last three years, but also takes into account other relevant sources. And I was able to conclude that overall the governance, risk management and internal control procedures for financial management within the European Commission, taken as a whole, are adequate in respect to the achievement of its financial objectives. The overall conclusion is therefore positive, but of course, we cannot reassure on the areas where the assurance was qualified by the reservations by the authorizing officer by delegation.
And it also does not mean that there are no weaknesses, but they are not at a level of magnitude to jeopardize the appropriate functioning of the management control systems and that the Commission is taking steps to continuously improve. In that context, we took into account the combined effect of the amounts at risk or the results of the qualitative assessment of risk categories and the corrective capacity of the multi-annual systems, which shows that the EU budget is adequately protected as a whole and over time. While not qualifying that conclusion, there is a point that I raised to the attention of the Commission, that there is a need to ensure the continuous robustness, proportionateness and effectiveness of the control and assurance systems, especially in the context of the concurrent priorities, continuous pressure on resources. Also, this should also include the increased use of technology. And this is particularly pertinent because in the years to come, we will have to finalize and close the current programs while preparing the new wave of programs under the new MFF, which will be based on the new delivery models.
Andreas Schwab
Thank you very much, Agnieszka. I think there will be maybe questions in the process that our rapporteur is leading this committee through. I don't know if you want to have a question or comment. Over to you, Olivier.
Olivier Chastel
Alors d'abord, Monsieur le Président, au nom des collègues, je veux évidemment remercier Madame Kamierczak sur sa présentation des audits réalisés en 2025. Ces rapports sont d'ailleurs plutôt rassurants, même si des problèmes se concentrent, notamment sur les marchés publics, les subventions, la gestion des systèmes informatiques, parfois la cybersécurité, le recrutement et la mesure de la performance des programmes européens. J'ai deux petites questions. D'abord, il y a ce problème de l'audit de l'accélérateur du Conseil européen de l'innovation qui a abouti à une opinion négative, une recommandation critique concernant le processus de décision d'attribution, notamment par rapport aux critères d'éligibilité non respectés, des décisions d'octroi prévoyant des montants d'investissement maximaux supérieurs à 1,31 milliard d'euros au budget disponible ont été adoptées.
Comment est-ce que vous estimez que cette situation peut se produire et dans quelle mesure on prend un certain nombre de garanties pour qu'elle ne se reproduise plus ? La deuxième, c'est sur ces fameuses recommandations. Si je lis bien, 248 recommandations sur 773, soit 32 % fin 2025, restent ouvertes. Est-ce que vous estimez que c'est une proportion raisonnable ? Deux d'entre elles, qui sont critiques, sont toujours ouvertes fin décembre 2025.
Est-ce qu'on peut avoir quelques détails supplémentaires sur ces deux sujets et quel calendrier est prévu pour leur clôture ? Merci beaucoup.
Agnieszka Kaźmierczak
I react to Kaźmierczak and Kaczmarczyk because both. It's not simple. About, about our audit on the European Innovation Council program, which is a very innovative program and indeed this was the program when we issued critical recommendations and we, and we also gave an adverse opinion. On the, on the root causes. This is a very complex program.
The accelerator part is, is about blended finance. This is something where the Commission and the executive agencies do not have a lot of previous experience. This is where there is a need to collaborate between many departments. The timeframes are different between the equity part and the grants part. The, what we found was that the Horizon Europe requirements were not really translated into the procedures.
So the, the procedures were still based on the previous program on Horizon 2020. The, the economic security policy, which is key for any equity program, was very difficult to, to integrate. Because of the time pressure, the, there was the grant element and the equity element were being verified in parallel, which means there was, there were certain elements which were escaping the, the verifications. And some, the tools were not really supporting the process. For example, the budget monitoring was separate for the, for the part on grants and separate for the, for the equity, equity investment.
We have the, we had the discussion about, about this program at the Commission's Audit Progress Committee, so it was taken up at the advisory body to the, to the College. The recommendations have been accepted and we are currently monitoring them. There are two recommendations that are due now. We already received one of them and are expecting the second as ready for, for review. And we will, so we will be able to, to see how the progress is being done the moment we are able to look at the, at the, at the...
Speaker 56
And the second, the second question was about the, the recommendations.
Agnieszka Kaźmierczak
As I said, there are I mean what is what is something that certainly is is worrying are the recommendations that are long overdue. But as internal auditor we monitor them but we have to admit that they are not implementations that are easy to close. We are currently closing and downgrading one of the recommendations which was related to the not closing downgrading, sorry to be to correct, which is which was corrected which was about the transfer of the of the personal data to third parties under by DG EAC. We are still waiting on the second long overdue recommendation on the physical security strategy which is under discussion so it's also in progress. I can at this moment assure you that there is a common effort by the IIS and by the Audit Progress Committee to look at at those at those area and they are certainly under close supervision.
Andreas Schwab
Thank you very much for this clarification. It brings us to an end of this special session of our committee in Strasbourg. Thank you very much to you colleagues for your attention and your hard work. Thanks to you Commissioner Serafin and the European Court of Auditors and we will adjourn next time in Brussels again and the meeting is closed. Thank you very much.