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19th Aug 2022

Opinion

The pandemic EU billions? Follow the money (or don't)

  • The total in loans and funds available to battle the economic outcome of the coronavirus pandemic is €672bn (Photo: Fotolia)
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Monday (21 February) marks 12 months exactly into one of the largest investment plans to mitigate the economic and social impact of the coronavirus pandemic put forward by the European Commission – yet there is little transparency on how the monies will be spent.

Reaching €420bn over the coming years, as highlighted by EU commissioner Elisa Ferreira, this comes once in a generation.

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  • The injection of cash seems to have few official safeguards (Photo: Nathan Forget)

Accountability and transparency on how money is spent - and on who - will be critical to ensure the Recovery and Resilience Facility (RRF) at the core of this investment delivers in making European economies and societies more sustainable, resilient and better prepared for the challenges and opportunities of the green and digital transitions.

Oddly enough, it did not commit member states to rigorous reporting and public oversight requirements on these loans and grants, which will total over €672bn, despite a terrible track record of corruption and misspending in EU funds. It's not too late to avoid the grime of old to introduce cleaner, more transparent processes to public spending.

Without question, the RRF projects must be delivered quickly. But strong safeguards against corruption needn't be sacrificed for efficiency.

During the pandemic, procurement rules that supported public monitoring of government contracts, coupled with an accessible complaints mechanism and specialist oversight, helped some countries to buy fast and openly, and work with journalists and citizens to reinforce public trust.

With digital platforms, they had real-time data on what the government was purchasing, which helped ensure money was well-spent and saved everyone time and money.

The EU and many of its member states already have such tools at their disposal. In the absence of the EU commission's leadership (at least for this round of RRF funding), it is up to others to ensure these tools are used to full effect.

Trigger warnings already in place

Governments should demonstrate their commitment to transparency by using the EU's Early Detection and Exclusion System, Arachne, and the Irregularities Management System, as the European Parliament has noted in multiple resolutions, including one elaborated by the author, MEP Michele Rivasi.

This would allow them to promptly identify problematic businesses and who is in charge of them. A critical mass of countries making such commitments would put pressure on the laggards.

Civil society, journalists, parliamentarians, and others who share values of open government, can support member states to ensure high standards of transparency, tagging public spending related to RRF investments clearly, and foster a much better understanding of how RRF investment will build back better in specific policy areas, such as green and digital transition, education, and health.

A collaboration of civil society watchdogs, Open Spending EU Coalition, has laid the foundations for this work, conducting an extensive analysis of the gaps in transparency commitments in the RRF plans. Its recommendations point to what is expected to be published on RRF spending in the Member States, including timely spending information on loans, grants, contracts and, importantly, ultimate recipients of the EU funds.

The European Commission might say that transparency and control of EU funds is member states' business, but we know countries are rarely interested in transparency of EU money without independent oversight.

We have seen how it has been used as an "electoral fund" to buy more power for those already in power and fuel the corrupt networks in EU countries, especially those that have been on a democratic backslide recently.

For this reason, the parliament has called on the EU to fulfil its role as guardian of the EU budget when the member states fail to do it on their own.

This includes obliging member states to join the EU Prosecutor's Office as a condition to receiving EU funds, and establishing a solid and transparent EU public procurement framework that would allow for full and unlimited scrutiny by the parliament when funds from the EU budget are fully or partially involved, especially concerning major economic, security or health crisis-related spending areas.

The parliament has also called for a full and undisturbed work of the controlling institutions (European Anti-Fraud Office (OLAF), the European Court of Auditors, the European Public Prosecutor's Office, European Parliament) during all sorts of crises that the EU might face in the future.

The political price for omitting such measures in the RRF could be enormous. This is the first time the EU has raised money collectively – some called it Europe's New Marshall Plan – and if the process is seen to fail, it could shatter the frail trust in the European project.

It is not too late to put necessary transparency safeguards in place to help ensure the RRF delivers.Now more than ever, we need to build more trust in the EU by showing the value of every public investment and collaboration in times of crisis.

More effective governments will be able to measurably build back better and show Europeans why a unified Europe is still an idea worth our hearts and minds.

Author bio

Michèle Rivasi is a French Green MEP, and Karolis Granickas is EU senior manager for the Open Contracting Partnership, and co-founder of the Open Spending EU Coalition.

Disclaimer

The views expressed in this opinion piece are the author's, not those of EUobserver.

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