Plans to radically reshape the EU’s long-term budget risk weakening financial oversight, The European Court of Auditors (ECA) has warned as negotiations on a proposed €2 trillion budget get underway.
Tasked with auditing EU spending, the Luxembourg-based watchdog scrutinised the European Commission’s proposal for the 2028-2034 spending period in 12 opinions since January. On behalf of the European Parliament and Council of the EU, the ECA looked at legislation ranging from governance and competitiveness to research, agriculture and cohesion.
“The legislative proposals for the EU’s next multi-year budget show that this is not business as usual, but a major overhaul,” said ECA President Tony Murphy, referring to the Commission’s planned massive restructuring under the 2028-2034 spending plan. “Many of the changes proposed are no guarantee of better spending in the future.”
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A major overhaul
Under the Commission’s plan, the number of programmes would be reduced from 52 to 16 in a bid to streamline spending and allow greater d flexibility. Additionally, the budget foresees a large increase in national contributions compared to the current budget and would also include new revenue streams, of new taxes, to help cover costs and repay Covid-era debt.
A central feature of the reform is the creation of a €865 billion “European Fund”, merging cohesion and agricultural spending into a single pot, centred around national and regional plans (NRPPs) modelled after the bloc’s EU covid recovery loans, which have drawn staunch criticism from MEPs, farmers and regions alike.
The Commission’s proposals also introduce greater use of performance-based financing, as well as a new facility offering up to €150 billion in EU loans to capitals to help implement the national plans.
“The large amount of planned new borrowing could require member states to make additional payments in a strained budgetary situation,” the summary reads.
The risks
When it comes to new revenue streams, the ECA points to the risk of a “significant budget shortfall” if they are not agreed, as capitals would either have to increase their payments or the budget would be smaller.
In terms of spending effectiveness, the watchdog says that merging policy areas may blur objectives and “require trade-offs between priorities”. Different national plans, for example, might lead to weakened alignment with EU-wide goals.
The ECA also criticises the proposed performance framework’s design as too “weak” to properly measure results, warning that greater flexibility must not come at the expense of accountability.
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Source:
www.euractiv.com