EU auditors unable to trace billions in post-pandemic recovery funds

European auditors have warned that they are unable to clearly track how billions of euros from a major post-pandemic recovery fund have been spent by European Union member states.

The Recovery and Resilience Facility (RRF) was established in 2020 as the EU’s 27 member countries closed borders, imposed lockdowns and rushed to secure vaccines during the COVID-19 pandemic. At the time, the bloc entered its deepest recession on record.

By January this year, the facility had distributed an estimated €577 billion in grants and loans.

However, the European Court of Auditors said in a report published on May 6 that it remains difficult to determine how parts of the money were ultimately allocated, as reported by AP.

In many cases, thousands of final recipients — including companies and large consortiums — were not identified.

“Without this information, we cannot assess whether funds are fairly distributed, whether risks of concentration exist, whether EU money delivers value for citizens,” said Ivana Maletić, who led the audit.

“Transparency is not a technical issue. It is a core condition for trust and accountability,” she told reporters.

Maletić added that EU lawmakers investigating possible misuse of funds have repeatedly requested information “about transfers and money going to different companies, big companies, consortia and so on. This is something that we don’t see.”

Additional difficulties in several countries

The auditors said they encountered particular difficulties obtaining details about recipients in France.

According to the report, French authorities argued that gathering information on final recipients and payment amounts would be “too administratively burdensome,” even when specific requests were made.

“You can imagine in France we have thousands and thousands of recipients,” Maletić said.

Concerns over transparency come amid previous cases involving alleged misuse of recovery funds. Two years ago, police in Italy, Austria, Romania and Slovakia arrested 22 people during an investigation into the suspected siphoning of €600 million in post-pandemic aid.

The European Commission financed the recovery program by borrowing on capital markets before distributing funds for projects aimed at improving sustainability, digitalisation, and economic resilience.

Unlike previous EU funding models, where money was typically allocated based on project costs, payments under the RRF were tied to whether recipients met specific reform and investment milestones. National governments were also required to publicly disclose their 100 largest beneficiaries.

However, auditors found that among the 10 EU countries examined, those top beneficiaries were overwhelmingly government ministries, agencies and regional authorities, while little public information was available regarding private-sector recipients.

By Nazrin Sadigova