A recent report by the European Court of Auditors (ECA) has raised concerns about the delays in the implementation of the EU’s €724bn post-Covid recovery fund. Three years after the fund was created, EU member states have only utilized less than a third of the grants and loans available. Countries such as Belgium, Finland, Hungary, Ireland, the Netherlands, Poland, and Sweden have not yet received any post-Covid money due to delays in fulfilling milestones and targets. The delays have been attributed to political turmoil, uncertainty over rules, and national administrative capacity issues. The Netherlands and Hungary were unable to access EU funds due to not signing operational agreements, while Sweden did not submit a payment application.
The delay in accessing the post-Covid recovery funds has been exacerbated by political challenges in some member states. For example, the Netherlands experienced delays due to protracted coalition negotiations, which hindered the implementation of the Recovery and Resilience Plan. Hungary, on the other hand, has not met the required milestones to fight corruption and safeguard judicial independence. This has resulted in hurdles in accessing the funds allocated for post-pandemic recovery. Other countries like Belgium, Finland, Ireland, and Poland submitted payment requests later than others and were still under assessment by the European Commission at the end of 2023.
Unlike cohesion funds, which are the usual vehicle for EU regional spending, the post-pandemic financial support is linked to meeting commitments and targets. However, member states have fallen behind schedule in meeting these targets and absorbing funds. The European Court of Auditors found that 24% of the planned reforms and investments have not been completed on time halfway through the implementation plan for the post-pandemic funds. The ECA emphasized the importance of timely absorption of the funds to avoid bottlenecks in carrying out measures and reduce the risk of inefficient and erroneous spending. The RRF is set to expire in August 2026, with no extension expected, prompting auditors to recommend further support to strengthen the design of future funds.
Concerns have been raised regarding the possibility of member states receiving substantial amounts of funds without finalizing actions within the given time frame. The EU auditors suggested that the Commission should provide further support to improve the design of similar funds in the future to avoid inefficiencies and errors in spending. However, the EU executive rejected the auditors’ recommendations to stop funding incomplete actions and recover transfers. The Commission stated that payments based on progress do not pose a risk and do not have a legal basis to recover funds that have already been disbursed in relation to milestones and targets that have been fulfilled. The challenges faced in accessing and utilizing the post-Covid recovery funds highlight the need for better coordination and support to ensure effective implementation and utilization of such financial support in the future.
