22nd Oct 2020

Auditors criticise EU spending for 16th year in a row

  • EU money spent on regional projects is often misused (Photo: Marfis75)

The EU's cohesion policy, accounting for one third of the total budget, continues to be the most prone to errors and fraud, although the situation is improving in comparison to previous years, the European Court of Auditors has said.

Over a third of the €35.5 billion allocated by the EU in 2009 for regional infrastructure projects were affected by errors, either unintentional, as EU funding rules are often too complex for regional authorities and small contractors to cope with, or as a sign of fraud, the annual report of the Court of Auditors says.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

The blame goes mostly to governments and local administrations, who are in charge of the projects and fail to double-check that all invoices and claims submitted to the European Commission are genuine.

"The Court estimates that almost a third of the errors found on the interim and final payments tested could have been detected and corrected by member states before certifying expenditure to the commission, as the audit shows they had the information to do so," EU chief auditor Vitor Caldeira told MEPs on Tuesday (9 November).

In a rush to "absorb EU funds" by all means, member states often allow other fake or erroneous bills to replace those detected as "ineligible," he added.

This is the 16th year in a row when the Court of Auditors, based on sample checks in all EU expenditure and revenue areas, is not able to give a clean bill of health to the overall budget.

However, the rate of errors has decreased in the regional policy field, falling from 54 percent in 2007 to 36 percent last year. According to the Court's rules, errors need to be below three percent to get a clean bill of health.

"We have to ask ourselves if we can continue to allocate more and more money to the EU commission, if year after year it is uncapable of managing the funds efficiently," said German Liberal MEP Jorgo Chatzimarkakis, responsible with drafting the Parliament position on this report.

The report is likely to fuel discussions about a planned increase in next year's EU budget, as well as the future of regional policy from 2013 on.

Poland is the main beneficiary of cohesion funding – a policy aimed at helping more backward regions catch up with the economic leaders of the bloc, mostly capital regions – and is pressing for it to be maintained at least at current levels.

But net payers to the EU budget, such as Germany, the Netherlands and Britain, which are also under pressure at home to cut national budgets – are now increasingly wary of the efficiency of this policy. Even recession-hit Spain, a long-time beneficiary of cohesion policy, is in favour of less national money flowing to the EU coffers in 2011.

Spain, Greece, Italy and the UK were also the four countries who had to pay the most money back in 2009, for erroneusly allocated funds.

But Poland has come under criticism as well, apparently for having misused EU regional funds to the tune of €10 million to have British tea producer Twinings shift its production site to Poland.

Twinings denied the accusations, claiming that its business decision was "not based on receiving any external funding." "We applied to the Polish ministry for a grant. The Polish authorities are satisfied we meet the eligibility criteria and have approved the grant," a spokesperson for the tea company was quoted as saying by Warsaw Business Journal.

In EU new member state Romania, journalists have uncovered that two cross-border centres funded with over €840,000 are actually being used by regional authorities for private parties and weddings.


A deep dive into the EU regional funds

While the regional funds account for a full third of the EU budget, they are somewhat under-reported. EUobserver's latest edition of the Regions & Cities magazine looks at the EU's cohesion policy.


A tourist's guide to EU-funded Amsterdam

When it comes to projects paid for by EU regional funds, most people think of roads in Romania or bridges in Bulgaria. But richer regions also receive money. EUobserver takes you on a tour of selected projects in Amsterdam.


Tug of war between 'top-down' and 'bottom-up' cohesion money

The European Commission has promised greater flexibility for local authorities when it comes to delivering on-the-ground results - but it has also tied cohesion policy to the European Semester, a tool used to coordinate macroeconomic policies.


Commissioner Cretu: the EU budget is 'very emotional'

Despite Brexit and new priorities, it is important to keep EU funds for all regions - rich and poor - argues the regions commissioner. But more controls, including a link to rule of law issues, are part of the discussion.

News in Brief

  1. Belarus opposition awarded 2020 Sakharov Prize
  2. Belgium's foreign minister in intensive care for Covid-19
  3. MEPs restrict CAP funding for bullfighting
  4. Coronavirus: Liège is 'the Lombardy of the second wave'
  5. UK to keep out EU nationals with criminal past
  6. Report: EU to restrict travel from Canada, Tunisia, Georgia
  7. Pope Francis supports same-sex civil unions
  8. EU Commission to increase use of open-source software


A deep dive into the EU regional funds

While the regional funds account for a full third of the EU budget, they are somewhat under-reported. EUobserver's latest edition of the Regions & Cities magazine looks at the EU's cohesion policy.


The EU Agencies Race

In this edition of EUobserver's Regions & Cities magazine, we take a closer look at some of the EU agencies, exploring how their location matters and the benefits for cities and regions to host them.

Stakeholders' Highlights

  1. UNESDAMaking healthier diets the easy choice
  2. Nordic Council of MinistersUN Secretary General to meet with Nordic Council on COVID-19
  3. UNESDAWell-designed Deposit Return Schemes can help reach Single-Use Plastics Directive targets
  4. Nordic Council of MinistersNordic Council meets Belarusian opposition leader Svetlana Tichanovskaja
  5. Nordic Council of MinistersNordic Region to invest DKK 250 million in green digitalised business sector
  6. UNESDAReducing packaging waste – a huge opportunity for circularity

Latest News

  1. Nato and EU silent on Turkey, despite Armenia's appeal
  2. EU tells UK to decide on Brexit as deal 'within reach'
  3. EU farming deal attacked by Green groups
  4. France vows tough retaliation for teacher's murder
  5. All eyes on EU court for decision on religious slaughter
  6. 'Big majority' of citizens want EU funds linked to rule of law
  7. EU declares war on Malta and Cyprus passport sales
  8. EU Commission's Libya stance undercut by internal report

Join EUobserver

Support quality EU news

Join us