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REPORT (2025/2032(INI))

On control, transparency and traceability of performance-based instruments

A-10-2026-0022

Committee on Budgetary Control · Rapporteur: Monika Hohlmeier

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The report addresses control, transparency and traceability of performance-based instruments, focusing on the Recovery and Resilience Facility model. It calls for safeguards, better data systems, and stronger parliamentary oversight. It recommends that financing not linked to costs should not be generalised, except for smaller beneficiaries, and that large projects remain cost-based. It demands interoperable monitoring systems and clear thresholds for corrective measures. It urges the Commission to enhance transparency, including public dashboards and access to cost estimates, and to strengthen audit trails and safeguards for financial instruments.

Committee position. The Committee on Budgetary Control proposes a resolution calling for stronger control, transparency and accountability of performance-based instruments, recommending that financing not linked to costs not be generalised and that Parliament's role be safeguarded.

Key points

  1. Stresses that performance-based instruments must respect legality, regularity, economy, efficiency and effectiveness, and that simplification should not undermine sound financial management.
  2. Notes that the RRF is the first major performance-based instrument using financing not linked to costs, and that the model has been replicated in the Ukraine Facility and Western Balkans Facility.
  3. Calls for drawing lessons from RRF weaknesses, including reduced accountability and limited EU-level oversight, and for a uniform interoperable reporting system accessible to the Commission, ECA, EPPO and Parliament.
  4. Regrets that RRF implementation often prioritises outputs over results and calls for more specific key performance indicators in future instruments.
  5. Calls for risk- and materiality-based verification mechanisms and for systematic integration of data mining and cross-checking tools to detect irregularities.
  6. Expresses concern about the generalised use of financing not linked to costs in the next MFF and calls for a comprehensive evaluation of the RRF.
  7. Notes that outstanding EU borrowing could exceed EUR 900 billion by 2027, nearly ten times the 2020 level, and warns of risks to future budgets.
  8. Asserts that generalised FNLC increases risks of irregularities, double funding and fraud, and calls for robust governance to ensure Parliament can exercise its discharge authority.
  9. Calls for a unified framework under the Rule of Law Conditionality Regulation and for FNLC to be compatible with it.
  10. Notes that the EPPO was handling 311 active NGEU-related cases at end of 2024, with estimated damage of EUR 2.8 billion, and calls for stronger EU oversight.
  11. Calls for decisive corrective measures to prevent systemic failures in national control systems, citing examples like OPEKEPE in Greece and rural development funds in Slovakia.
  12. Demands that the Commission establish clear thresholds for corrective measures and ensure transparent methodologies for assessing milestones and targets.

Who is affected

  • Member States and national authorities: must comply with new reporting and audit requirements, and ensure independence of audit authorities.
  • Beneficiaries of EU funds, including smaller beneficiaries: may benefit from simplified cost options and lump sums.
  • The European Commission: must implement interoperable systems, publish thresholds, and provide access to data.
  • The European Court of Auditors and national audit authorities: must adapt to new audit approaches and receive training.

Figures and deadlines

  • EUR 900 billion: estimated outstanding EU borrowing by 2027.
  • 311 active NGEU-related cases handled by EPPO at end of 2024.
  • EUR 2.8 billion: estimated damage to EU financial interests from NGEU-related fraud.
  • 17 %: share of NGEU cases in all active expenditure fraud investigations.
  • 51 %: increase in NGEU-related cases compared to 2023.
  • 30 %: share of NGEU damage in total estimated damage from EU expenditure fraud.

Legal basis: Articles 311, 312, 319, 323 and 324 of the Treaty on the Functioning of the European Union