The EU Commission's attempt to make the Union's billions more flexible for the uncertain crises of tomorrow could also make these funds more vulnerable to misuse. The EU's chief auditor warns against this.
Key pillars of the Commission's plan to reorganize the multiannual financial framework would make it difficult for those tasked with ensuring public money is spent well to see, said Tony Murphy, president of the European Court of Auditors.
“It is becoming more difficult for us to follow the money trail,” Murphy told Politico, which, like WELT, is part of the Axel Springer Global Reporters Network. "You say to the member states: You have a lot of money here and you make sure that everything is correct. This is a kind of self-control."
The warning comes in a week in which heads of state and government in Brussels continue to wrestle over the volume of the EU budget for the period after 2027 - and in which auditors document an increase in the misuse of taxpayer money. Aside from the total amount of the budget, it's also about how the money is distributed.
At the end of a financial cycle marked by pandemics, wars and climate-related upheavals, the Commission wants to make the next seven-year budget more agile. To achieve this, around half of the budget – almost a trillion euros over seven years – should flow into a single pot.
The states can use this to finance projects ranging from migration to agriculture to regional development. Funds for agriculture and regional development in particular - often paid out in the form of subsidies for farms and local projects - have always been vulnerable to fraud and abuse.
Murphy said giving capitals more leeway to reallocate funding would make tracking spending even more difficult. “There will be some flexibility – but at what cost?” he told Politico. In the future, monitoring will depend even more heavily on which controls the respective country has already established.
Incorrect spending in the EU budget is already increasing: according to the latest report from the Court of Auditors, transactions worth an estimated five billion euros were affected by errors last year. Murphy warned that such a figure may no longer even be possible in the next EU budget.
The testing authorities in the individual countries simply have different tasks and working methods. His head of cabinet, Wolfgang Stolz, added: “Year after year we find that the work of these testing authorities is not completely reliable.”
In a statement, the Commission defended its proposal and stressed that the “key principles” of the existing control system were retained. The national authorities are “functioning well,” it said. At the same time, the Commission reserves the right to ask the capitals to “adjust the plan or introduce corrective mechanisms if necessary”.
One of the proposed innovations is to transfer the Common Agricultural Policy (CAP) - previously an independent budget item - into a gigantic umbrella fund, the so-called National and Regional Partnership Plans.
Murphy emphasized that he was not advocating one model or the other. But the more EU money merges with national budgets, the harder it will be for Brussels to monitor where the money actually ends up going. The CAP is easier to audit when “it’s not mixed up in this catchall,” Murphy said.
Headlines about agricultural subsidies paid for fake grazing land in Greece, or about funds to promote rural tourism in Slovakia that instead went to luxury villas for the rich, show how difficult it is to control these funds under the current system.
And the model for the new spending system – the EU recovery fund after the corona pandemic – does not bode well, said Murphy. It is true that it has become easier for the states to direct funds to where they are needed; but the use of funds has also become more opaque. The new national plans were drawn up according to the same template.
Under the existing budget system, the Court of Auditors can visit any farm receiving EU funding. When it comes to the Corona recovery fund, however, the EU only publishes the 100 largest recipients every year.
"It's not particularly transparent. Where does the EU money actually end up? That's what matters," said Murphy. “You have a fund in which different policy areas come together with completely different goals and time frames, with different payout mechanisms – and less predictability.”
This text first appeared in the WELT partner publication “Politico”. Translated by Lara Jäkel.
