The head of the EU’s audit body said on Tuesday (April 9th) that there was a risk of a repeat of the recent case of the alleged embezzlement of hundreds of millions of euros from the bloc’s pandemic recovery fund.
In an interview with Euractiv, its president European Court of Auditors (ECA) Tony Murphy He stressed that following last week’s announcement that 22 people had been arrested in Italy for fraud amounting to 600 million euros out of 723.8 billion euros Recovery and Resilience Fund (RRF) of the EU were followed by persistent warnings that the lack of central oversight increases the potential for funds to be misused.
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“Due to the limited control, or smaller control framework, compared to standard EU funding based on the Multiannual Budget (MMF), the risk of such incidents occurring is high”Murphy said.
He also pointed out that the planned expiration of the facility at the end of 2026 “intensifies the risk” of misappropriation of funds by increasing the “pressure on member states to quickly spend this money”.
“That in itself increases the risk of people being opportunistic and taking advantage of shortcuts or whatever else there might be.” he said.
Last week’s news, reported by the European Public Prosecutor’s Office (EPPO) in Venice, led to arrests in Italy, Austria, Romania and Slovakia and followed Murphy’s own explicit warning just two weeks earlier that the strategy of the European Commission to rely on Member States to ensure that RRF funds are properly spent increases the “risk of irregularity or even corruption”.
Murphy’s comments also came just months after an ECA report found multiple “weaknesses” in the monitoring framework of the RRF.
What is RRF – Recovery and Resilience Fund
The RRF, which was agreed at the height of the COVID-19 pandemic in December 2020, includes €385.8 billion worth of loans, financed through debt jointly assumed by EU Member States, and €338 billion in grants.
The funds, which are the flagship of the initiative NextGenerationEU (NextGenEU) of the bloc, are meant to boost Europe’s post-pandemic recovery by funding green, digital and other critical investments in return for specific reforms.
Despite the fact that the facility has received willing applications from several Member States – including Italy and her Spain, the bloc’s third and fourth largest economies—less than a third of the total RRF facility has been disbursed so far. The majority of payments have taken the form of grants (€144.88 billion) rather than loans (€80.51 billion).
The Recovery fund was presented by European Commission President Ursula von der Leyen speaks during a press conference after the signing of the EU Recovery and Resilience Facility document at the European Parliament building in Brussels on February 12, 2021.
Source: Euractiv
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