The EU’s spending watchdog, the European Court of Auditors (ECA), released a report on Thursday stating that at least 9.03 billion euros ($9.87 billion) of the union’s budget in 2023 was spent erroneously. This represents an “error rate” of 5.6 percent, which is an increase from the previous year’s rate of 4.2 percent and two years before at 3 percent.
The allowable threshold for the “error rate” is set at 2 percent, making this increase a concerning trend according to the ECA. The rise in errors was primarily due to mistakes made in the spending of cohesion funds, which are EU funds provided to support poorer regions.
Errors in investment intended for development in the bloc’s poorest regions rose significantly to reach 9.3 percent of spending, up from 3.6 percent in 2021, particularly as funding streams were expiring.
Tony Murphy, who leads the ECA, expressed concerns about rapidly rising EU debt and criticized the notion proposed by the EU Commission to shape the bloc’s next seven-year budget based on its post-COVID-19 recovery fund model. Under this scheme, Brussels only releases money when countries meet predetermined targets.
Murphy argued that this model makes it extremely difficult to assess whether money is being well spent since payments are not linked to specific projects.
The ECA emphasized that robust oversight and accountability structures are necessary at both member state and EU levels to maintain public trust and safeguard future budgets.
Last year, cohesion spending overlapped with a separate pandemic-era program called the Recovery and Resilience Facility (RRF), leading auditors to suggest that time constraints related to RRF may have contributed to ineligible projects receiving funding.
The report also revealed that EU debt had risen significantly from €348 billion ($380 billion) in 2022 to €458.5 billion ($501.6 billion) in 2023 due mainly to borrowing under Next Generation EU (NGEU).
In response, a statement from the European Commission acknowledged improvements were needed but stated that changing their approach halfway through implementation would not be feasible or consistent with their mandate.
This marks another instance where issues with EU spending have been highlighted by ECA within recent months; last month it was reported that despite significant expenditure aimed at preventing illegal crossings from Africa into Europe, such crossings were still occurring.