Billions Unused Three Years On
Three years after the launch of the EU’s €724 billion post-Covid recovery fund, less than a third of the money has been utilized by member states, according to a recent report by the European Court of Auditors (ECA). The report highlights that by the end of 2023, seven member states—Belgium, Finland, Hungary, Ireland, the Netherlands, Poland, and Sweden—had not yet received any funds due to unmet milestones and targets.
Reasons Behind the Delays
The delays in receiving funding are attributed to various factors, including political instability, confusion over funding rules, and national administrative hurdles. For example, the Netherlands and Hungary did not sign the required operational agreements, while Sweden failed to submit a payment application. In the Netherlands, protracted coalition negotiations delayed progress, while Hungary’s government has yet to meet 27 milestones related to anti-corruption measures and judicial independence.
Struggling to Meet Recovery Goals
Unlike traditional EU cohesion funds, the post-pandemic recovery funds are tied to the completion of specific reforms and investments. The ECA report found that halfway through the six-year implementation plan, 24% of these commitments have not been fulfilled on time. This delay could create bottlenecks toward the end of the fund’s lifespan in August 2026, raising concerns about inefficient or erroneous spending.
Recommendations for the Future
To address these issues, EU auditors have urged the European Commission to strengthen the design of future funds and provide additional support to ensure timely absorption of resources. The auditors warned that some member states might receive substantial funds without completing required actions, as Brussels lacks the authority to reclaim money if milestones are not met within the designated period.
EU Commission Rejects Calls to Halt Funding
The European Commission, however, disagrees with the auditors’ recommendations to withhold funding for incomplete projects or recover disbursed funds. In its response, the Commission stated it does not view payments based on progress as a risk and maintains there is no legal basis to recover funds once they are allocated to fulfilled milestones and targets. The situation underscores ongoing tensions over the management and oversight of the EU’s critical recovery resources.
SOURCE: Ref Image from The Irish Times
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