BRUSSELS — Financial watchdogs in Europe announced Wednesday they cannot properly monitor how member nations are distributing billions of dollars from a massive economic recovery program launched during the coronavirus pandemic.
The Recovery and Resilience Facility emerged in 2020 when the 27-nation European Union faced border closures, widespread lockdowns and a scramble for vaccines as the deadly virus spread. The trading bloc experienced its worst economic downturn in history during this period.
The fund has distributed approximately 577 billion euros, equivalent to $679 billion, through January of this year.
However, the European Court of Auditors revealed in their latest assessment that tracking fund distribution across countries proves challenging. Numerous funding recipients, including major corporations and large business partnerships, remain unidentified in official records.
“Without this information, we cannot assess whether funds are fairly distributed, whether risks of concentration exist, whether EU money delivers value for citizens,” stated Ivana Maletić, who oversaw the financial review.
“Transparency is not a technical issue. It is a core condition for trust and accountability,” Maletić explained to the press.
The European Commission secured funding through capital market borrowing and allocated resources for initiatives aimed at strengthening economies through sustainability, environmental improvements and digital advancement.
Financial assistance was distributed only after recipients satisfied specific requirements. This marked a departure from previous procedures where funding typically depended on projected project expenses. Current regulations require national governments to publicly disclose their top 100 funding recipients.
Investigators examined 10 EU nations and discovered the largest beneficiaries consisted almost entirely of government ministries, agencies and regional authorities. Private sector recipients remain largely hidden from public view.
Maletić noted that European legislators investigating potential fund misuse frequently seek details “about transfers and money going to different companies, big companies, consortia and so on. This is something that we don’t see.”
Auditors faced particular difficulties obtaining recipient information from France. French officials cited administrative burden as the reason for withholding details about final recipients and payment amounts, according to the assessment.
“You can imagine in France we have thousands and thousands of recipients,” Maletić explained.
Previous misuse incidents have already surfaced. Law enforcement in Italy, Austria, Romania and Slovakia arrested 22 individuals two years ago during an investigation into suspected theft of 600 million euros in pandemic relief funding.
The European Commission disputed the auditors’ conclusions. The EU’s executive leadership argued their authority was limited by regulations established by all 27 member nations.
Commission officials defended their milestone-based payment system and achievement requirements for fund distribution.
The commission maintained that their process of payment requests, progress monitoring and detailed analysis of funding decisions, combined with ongoing member nation collaboration to “address inconsistencies,” functions effectively.
Auditors expressed concern that European support for milestone-based joint funding approaches could expand to the EU’s upcoming long-term budget for agricultural subsidies and infrastructure assistance, representing major portions of the seven-year spending plan.
Maletić described the milestone system as “not clear” and essentially “just a number of people getting different amounts. It’s really a model which cannot be applied to traditional policies.” The 2028-2034 budget could reach approximately 2 trillion euros, or $2.4 trillion.
Commission representatives dismissed these concerns, stating that “the design of future legislative proposals” remains the responsibility of member countries and the European Parliament.
