The European Court of Auditors (ECA) warns that the response to the Covid-19 pandemic and the war in Ukraine have increased the risks for the budget of the European Union (EU), also speaking of an increase in errors in community spending .
The position is reflected in a report published this Wednesday by the TCE on the EU budget in 2021, in which the European auditor explains that “the total exposure of the EU budget to contingent liabilities increased by 146,000 million euros in 2021 , going from 131,900 million euros to 277,900 million euros”, more than double.
“This increase was mainly due to the issuance of bonds amounting to 91,000 million euros to finance the Recovery Instrument of the European Union in 2021 and the increase of 50,200 million euros in loans granted to Member States under the instrument. of temporary support to mitigate the risks of unemployment in an emergency situation, the SURE programme”, justifies the ECA, referring to the recent programs to ensure the recovery from the Covid-19 crisis and the European scheme to safeguard employment during the pandemic.
According to the organization, “Russia’s war of aggression against Ukraine also contributed to this increase, due to the guarantees granted by the EU to cover loans to third countries”, funds that were mobilized even before the Russian invasion of the country and that were add to the recent macro-financial aid announced last May of nine billion euros.
In the document, the ECA warns precisely of the risks that the war in Ukraine represents for the European budget, since, at the end of 2021, “Ukraine had outstanding loans with a nominal value of 4,700 million euros in the framework of various programs of the Union” and that the European Investment Bank had granted, also until that date, loans to the country “backed by EU guarantees amounting to 2,100 million euros”.
Another finding of the court is that, in 2021, the overall level of errors in EU budget spending increased to 3%, up from 2.7% the previous year, with almost two-thirds of audited spending (63.2 %) considered high risk. a further increase compared to 2020 (59%) and previous years, with significant errors equivalent to 4.7% in 2021, compared to 4% in 2020.
Speaking at a press briefing ahead of the report’s release, ECA President Tony Murphy said there was an “unfavorable view for the third consecutive year” on spending from the EU budget, given widespread problems identified.
“Our findings once again confirm a previous assessment that the way funds are spent […] affects the level of error”, said Tony Murphy, referring to funds such as cohesion, single market, security, neighborhood and natural resources.
The estimated level of error is not a reflection of fraud, inefficiency or waste, but rather an estimate of money that was not used in accordance with EU and national rules.
In the report, the ECA adds that it identified 15 cases of suspected fraud last year, compared to six in 2020, and reported them to the European Anti-Fraud Office (OLAF).
Every year, the Court audits the Union’s income and expenditure, assessing the reliability of the annual accounts and the compliance of operations with the applicable rules.
As far as 2021 is concerned, the ECA’s conclusion is that the EU accounts “give a true and fair view of its financial position”, with receipts “being legal and regular and free from material error”, despite risks related to expenses.
In 2021, the EU budget expenditure was €181.5 billion, equivalent to 2.4% of the total expenditure of the public administrations of the Member States and 1.3% of their Gross National Income.
Source: TSF
