The President of the European Court of Auditors, Tony Murphy, warned about new risks that may arise following reforms to the European Union budget. He stated that the European Commission's new decisions to increase the budget's responsiveness to future crises may lead to the misuse of financial resources.
Regulatory Challenges in Budget Usage
Murphy emphasized that reforms in the EU's long-term budget may cause confusion in overseeing public spending. He said: "We can now track financial flows with greater difficulty. Member states are told: 'Take this amount and make sure everything is correct.' This is a form of self-regulation."
This warning comes as the issue of the 2028-2034 EU budget is being discussed at the European leaders' summit in Brussels. The European Court of Auditors has also reported an increase in irregularities in budget usage.
Budget Distribution and Risk of Misuse
Given the specific conditions created by the pandemic, wars, and climate change, the European Commission intends to design future budgets to be more flexible. To this end, about half of this budget, which will be nearly 1 trillion euros over seven years, will be allocated to a single package. Member states can use this package to achieve their goals in areas such as migration, agriculture, and regional development.
These resources, which are typically allocated to agriculture and local projects, have always been at risk of fraud and misuse. Murphy stated that granting more freedom to national governments to redirect their spending will make oversight of these expenditures more difficult.
He remarked on this issue, saying: "There will be flexibility, but at what cost?" A large part of oversight depends on the measures each country has previously adopted.
Moreover, irregularities in the use of the EU budget are on the rise. According to the European Court of Auditors, financial errors reached 5 billion euros last year.
Murphy has warned that in the future EU budget, it may even be impossible to estimate this figure, as auditors in each country have different roles and working methods. Additionally, Murphy's office head, Wolfgang Stölz, emphasized in an interview that the work of these auditing officials is not fully reliable.
Commission's Response and New Challenges
In response to criticisms, the European Commission defended its proposal and emphasized that the "fundamental principles" of the current oversight system will remain in place. They stated that "national authorities are working well" while reserving the right to request reforms in programs or to create corrective mechanisms.
Among the proposed innovations by the Commission is the integration of the Common Agricultural Policy (CAP) into a larger fund called the National and Regional Partnership Program. Murphy emphasized that he is not seeking to introduce a specific model, but that with the further integration of EU financial resources into national budgets, oversight of expenditures will become more difficult. He also pointed out that controlling the CAP is easier when "these resources are not combined together."
Oversight of payments related to agricultural aid in Greece or financial resources for supporting rural tourism in Slovakia, which have been allocated to building luxury villas for the wealthy, illustrates the difficulties in monitoring these payments in the current system.
The new expenditure model, designed based on the post-COVID recovery fund, is also concerning. Although member states can now easily allocate financial resources to where they are needed, expenditures have also become increasingly opaque. New national programs have been developed based on this model.
In the current system, the European Court of Auditors can physically visit a farm that benefits from the EU budget. However, under the post-COVID recovery fund, the EU only publishes a list of the top 100 recipients each year.
Murphy said about this: "This is not very transparent. Where does the EU money really go? That is what matters." He added that this is a fund that combines various public policies with different goals and deadlines, different execution mechanisms, and less predictability.
