Do EU revenues and expenditure comply with the law? The EU Court of Auditors checks this every year. The answer is clear this year: there was a lot of sloppiness and cheating.
In 2023, the level of sloppiness and trickery in dealing with EU funds rose to its highest level in years. As the new control report from the EU Court of Auditors shows, the error rate in spending rose significantly from 191.2 billion euros in the last financial year to 5.6 percent. In 2022 the rate was 4.2 percent. Even then it had already increased (2021: 3 percent).
The high level of irregular spending highlights the need for robust oversight and accountability mechanisms at both Member State and EU level to ensure public trust is not lost, said European Court of Auditors President Tony Murphy.
Errors especially with structural funding
However, according to the Court of Auditors, the estimated error rate is “not a measure of fraud, inefficiency or waste.” It is an estimate of the amounts that were not used in accordance with EU rules and national rules, the auditors wrote in their annual report published in Luxembourg.
The significant increase in the error rate is largely due to the errors found in cohesion spending. The funds are intended to help economically underdeveloped regions grow in order to compensate for economic and social differences. They are one of the largest items in the EU’s common budget. The Court of Auditors suspects that the reason for this is, among other things, great time pressure on the authorities “when it comes to spending money from competing funds.”
Further risks for the EU budget
EU auditors also warn of increasing financial risks to the EU budget due to record levels of debt, Russia’s war of aggression against Ukraine and high inflation. Based on the Commission’s inflation forecast, they estimate that the EU budget could lose almost 13 percent of its purchasing power by the end of 2025.
The EU’s financial aid to Ukraine more than doubled in 2023 (from 16 to 33.7 billion euros). The auditors also point out risks in connection with financial aid for Ukraine decided this year. In addition to 17 billion euros in grants, it was decided at the beginning of the year to provide an additional 33 billion euros in the form of loans from 2024 to 2027, for which no provisions are required.
Source: Stern
