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EU auditors want the 27 to refund anti-crisis funds if they leave measures incomplete

by AI | 03.Sep 2024 | Europe in brief AI

The European Court of Auditors has asked the European Commission for measures to recover funds already disbursed for milestones and objectives met if the projects are not completed, after warning this Monday that the Member States have received a “significant amount” of funds from the recovery and resilience plan to finance projects at risk of being incomplete due to delays in applications.

Detail of the flags of the member countries of the European Union outside the European Parliament, the parliamentary institution that in the European Union represents European citizens and exercises legislative power. Photo: Europa Press / Europa Press

The European Court of Auditors has asked the European Commission to take measures to recover funds already disbursed for milestones and objectives achieved if projects are not completed after warning on Monday that member states have received a “significant amount” of recovery and resilience plan funds to finance projects that are at risk of being incomplete due to delays in applications.

A report by the auditors published on Monday notes that delays in the disbursement of funds and the execution of projects have endangered the achievement of objectives to help EU countries recover from the Covid-19 pandemic, so there is a risk that capitals may not exhaust the funds or complete the planned measures before the mechanism expires in August 2026.

The auditor responsible for the report, Ivana Maletic, explained that it can happen that member states receive a “significant amount” of funds for the design of projects that may not be completed within the expected timeframe, so that “even if they do not succeed, they will be rewarded anyway”.

“We must insist on the completion of the measures we are funding and, if not, we need tools to recover the funds, something that is not reflected in the regulation,” said the auditor, urging the European Commission to outline a plan “to mitigate the risk of delays accumulating and some unfinished measures receiving significant disbursement.”

The auditors stress that milestones and objectives in the second half of the anti-crisis fund implementation period are often more closely linked to the completion of measures and the achievement of objectives, so failing to complete these milestones or objectives may jeopardize their completion.

In the case of Spain, the Court of Auditors cites as an example a measure for the renovation of buildings that in 2023 provided for the award of the project, but is not expected to be completed until 2026, during the last eight months of the implementation period, when Spain plans to complete milestones and objectives related to 30% of its investments, a figure that rises to 62% in the case of Italy and up to 70% in the case of Poland.

In addition, several member states will have to complete more than 50% of their measures in 2026, while most of them will receive less than 20% of their total funding to do so. “The incentive to complete projects at the end of the period is very low, because funding is reduced in the last months to 20% or even less to complete a large part of the plan,” acknowledges Maletic, aware of the risk that some countries may decide they do not need that last tranche.

On the other hand, the report highlights the need to ensure a definition of the “final addressee” after noting that almost half of the funds disbursed to the 15 member states that provided the corresponding information have not yet reached the beneficiaries.