EU Budget Under Scrutiny: Irregularities and Debt Concerns Highlighted in New Report
The European Court of Auditors (ECA) annual report on the 2024 EU budget execution reveals ongoing challenges wiht financial management, marked by complexity, increasing debt, and insufficient oversight. While an improvement from 2023, the report estimates that 3.6% of the total EU budget – approximately €6.9 billion out of a €191 billion budget – was affected by irregularities. The ECA notes the difficulty in accurately quantifying this figure due to convoluted funding pathways and fragmented supervision.
A key driver of these irregularities is the proliferation of financial programs and instruments launched in response to successive crises. The layering of initiatives,including cohesion funds and the post-COVID recovery plan,has obscured clear budgetary tracking. The recovery plan, in particular, faces criticism for “systemic weaknesses” and inconsistent payment controls.
The report points to inconsistencies in eligibility rules across different programs as a source of errors and ineligible spending. Furthermore, the effectiveness of national control systems – the first line of defense against misuse of funds – varies considerably between Member States. The European Commission’s ability to provide complete oversight is also hampered by the sheer volume and technical complexity of operations. Importantly, the ECA stresses that control failures frequently enough stem from poor submission of rules rather than deliberate fraud. This translates to billions of euros where the use of funds cannot be fully validated, a proportion the ECA deems “worrying” for the credibility of EU budgetary management.
Adding to these concerns is the growing burden of EU debt. Since the launch of the European recovery plan, the Union has financed expenses through common debt, which now totals nearly €200 billion. Repayments are scheduled to begin in 2028, escalating to €25-30 billion annually. These repayments will coincide with funding commitments under the new multiannual financial framework (2028-2034), perhaps creating tension between debt servicing and maintaining investment levels. The ECA warns that the sustainability of this common debt could be jeopardized, especially given rising interest rates.
The report also identifies a structural issue: instances where the European Commission has relaxed control requirements, increasing the risk of funds being misspent, especially in co-financed national projects.
The ECA recommends simplifying financing rules, improving expenditure traceability, and focusing verification efforts on high-risk areas. However, these recommendations, previously made in prior reports, have been slow to be implemented.
