On the choice of performance indicators for audit and budgetary control in the context of financing measures to support the implementation of future European competitiveness

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

on the choice of performance indicators for audit and budgetary control in the context of financing measures to support the implementation of future European competitiveness

(2025/2034(INI))

The European Parliament,

– having regard to the Treaty on European Union,

– having regard to the Treaty on the Functioning of the European Union,

– having regard to Council Regulation (EU, Euratom) 2020/2093 of 17 December 2020 laying down the multiannual financial framework for the years 2021 to 20271,

– having regard to Council Regulation (EU, Euratom) 2024/765 of 29 February 2024 amending Regulation (EU, Euratom) 2020/2093 laying down the multiannual financial framework for the years 2021 to 20272,

– having regard to Council Regulation (EU, Euratom) 2022/2496 of 15 December 2022 amending Regulation (EU, Euratom) 2020/2093 laying down the multiannual financial framework for the years 2021 to 20273,

– having regard to the Interinstitutional Agreement of 16 December 2020 between the European Parliament, the Council of the European Union and the European Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management, as well as on new own resources, including a roadmap towards the introduction of new own resources4,

– having regard to the Commission communication of 8 June 2021 on the performance framework for the EU budget under the 2021-2027 MFF (COM(2021)0366) and the accompanying staff working document (SWD(2021)0133),

– having regard to the Commission proposal of 16 July 2025 for a Council regulation laying down the multiannual financial framework for the years 2028 to 2034 (COM(2025)0571),

– having regard to the Commission proposal of 16 July 2025 for a regulation of the European Parliament and of the Council establishing a budget expenditure tracking and performance framework and other horizontal rules for the Union programmes and activities (COM(2025)0545) and the accompanying impact assessment report (SWD(2025)0590),

– having regard to the Commission proposal of 16 July 2025 for a regulation of the European Parliament and of the Council on establishing the European Competitiveness Fund (‘ECF’), including the specific programme for defence research and innovation activities, repealing Regulations (EU) 2021/522, (EU) 2021/694, (EU) 2021/697, (EU) 2021/783, repealing provisions of Regulations (EU) 2021/696, (EU) 2023/588, and amending Regulation (EU) [EDIP] (COM(2025)0555),

– having regard to Regulation (EU, Euratom) 2024/2509 of the European Parliament and of the Council of 23 September 2024 on the financial rules applicable to the general budget of the Union5 (Financial Regulation) and in particular Article 33 thereof,

– having regard to the publication of 18 July 2024 by Commission President Ursula von der Leyen entitled ‘Europe’s choice: political guidelines for the next European Commission 2024-2029’,

– having regard to the report of 9 September 2024 by Mario Draghi entitled ‘The future of European competitiveness’ (Draghi report),

– having regard to the report of 17 April 2024 by Enrico Letta entitled ‘Much more than a market’ (Letta report),

– having regard to the Commission communication of 29 January 2025 entitled ‘A Competitiveness Compass for the EU’ (COM(2025)0030),

– having regard to the Commission communication of 11 February 2025 entitled ‘The road to the next multiannual financial framework’ (COM(2025)0046),

– having regard to its resolution of 7 May 2025 on a revamped long-term budget for the Union in a changing world6,

– having regard to the publications of the European Court of Auditors (ECA),

– having regard to the study requested by its Committee on Budgets entitled ‘Performance framework for the EU budget – Concepts and practices’, published in March 20247,

– having regard to Rule 55 of its Rules of Procedure,

– having regard to the report of the Committee on Budgetary Control (A10-0000/2025),

A. whereas sound financial management, as defined in the Financial Regulation, requires that EU funds be implemented in accordance with the principles of economy, efficiency and effectiveness; whereas the concept of performance as regards the budget should be linked to the direct application of the principle of sound financial management;

B. whereas in line with the Financial Regulation, a link should be established between the objectives set and performance indicators, results and principles of economy, efficiency and effectiveness; whereas progress in the achievement of objectives should be monitored with performance indicators that are relevant, accepted, credible, easy, robust and based on widely recognised scientific evidence; whereas an effective, transparent and comprehensive methodology should be defined, where relevant;

C. whereas ensuring the EU’s sustainable prosperity and competitiveness forms part of the Commission’s political priorities for the period 2024-2029;

D. whereas the Draghi report has cautioned that the EU’s declining competitiveness, exacerbated by the increasingly unstable geopolitical environment, together with the succession of crises it has faced in recent years, poses an existential threat to the Union; whereas the report estimates that the EU needs to mobilise additional public and private investment equivalent to 4.4-4.7 % of EU GDP – approximately EUR 750-800 billion annually between 2025 and 2030 – to close the investment gap;

E. whereas the Competitiveness Compass, also building on the Draghi report, sets out the Union’s strategic path to restore its competitiveness globally by focusing on three central pillars – innovation, decarbonisation and economic security – complemented by horizontal enablers such as simplification, increased coordination at EU and Member State level and a reinforced single market, in line with the Letta report;

F. whereas the ECA has repeatedly found weaknesses in the design, implementation and accountability of the performance measurement systems used for EU funding programmes, and called for the increased use of performance indicators that measure and monitor the longer-term effects of EU spending;

General remarks on the performance framework for the EU budget and the use of performance indicators

1. Recalls the need to ensure that the EU budget delivers on the Union’s policy priorities, including boosting competitiveness, fostering sustainable prosperity and securing the EU’s sovereignty and independence as a geopolitical actor;

2. Considers it imperative that the EU budget should become more results-focused; reaffirms the need to set and use performance indicators that are specific, measurable, achievable, relevant and time-bound (SMART) in order to monitor and evaluate progress towards achieving EU policy objectives;

3. Notes with concern that the ECA, in its audits, has repeatedly found that most performance indicators used for EU funding programmes are input and output indicators, which do not provide relevant information on progress in achieving the objectives of EU-funded actions; regrets, furthermore, that in many cases baseline data for indicators was found to be missing and the underlying data used for the indicators was neither traceable nor reliable; calls on the Commission to ensure that indicators used for EU-funded projects are measurable, verifiable and based on reliable data sources that ensure the traceability of the underlying data, with clear baselines and definitions to prevent divergent interpretations;

4. Regrets that the performance framework for the EU budget for the period 2021-2027 remains overly complex and fragmented; notes the Commission’s assessment8 that over 5 000 heterogeneous, non-aggregable performance indicators are being used under the 2021-2027 multiannual financial framework (MFF) and that around 7 000 milestones and targets have been defined under the Recovery and Resilience Facility (RRF) that address different needs, such as assessing performance in the context of the draft budget, and monitoring and evaluating programmes, Member State plans and payment disbursements;

5. Notes the Commission’s proposal that the 2028-2034 MFF, including the European Competitiveness Fund (ECF), be monitored through a standardised set of performance indicators applicable to all EU budget programmes, as set out in its proposal for a performance regulation9; notes that a simplified application of the performance framework has been proposed for the budgetary guarantees and financial instruments under the ECF;

6. Considers that the performance framework for the EU budget should be simplified so as to ensure a harmonised approach to measuring the effects of EU spending across the Member States, to reduce the overall administrative burden, rationalise reporting obligations and increase transparency by reducing information overload, while still enabling the effects of EU funding to be captured in full, including the added value of EU interventions that could not be achieved by Member States acting alone;

7. Recalls that approaches to data collection vary across Member States and also within Member States, making the aggregation of performance data at EU level difficult; reiterates its call for the Commission to develop secure and interoperable IT infrastructure, while also capitalising on artificial intelligence, machine learning and data mining capabilities to improve policy delivery and facilitate monitoring, reporting and oversight; insists that indicator data and methodologies be made publicly available in real time through an interoperable monitoring, reporting and audit system, thereby increasing transparency and ensuring traceability down to project and final beneficiary level;

8. Considers it essential to verify and ensure the reliability of data used to establish performance indicators; notes with concern that, owing to the introduction and increasing use of delivery models, such as the RRF, that are based on financing not linked to costs – where disbursements are made against the achievement of previously set milestones and targets – weaknesses in data reliability can adversely affect the financial interests of the Union;

9. Calls on the Commission to include in its performance reporting substantive information concerning the quality assurance used for the performance indicators; demands that any performance data reported by Member States be subject to independent verification, including by national audit bodies and the ECA, with results made available to Parliament;

Performance indicators related to fostering EU competitiveness

10. Recalls that the Draghi report urges the EU to pursue deep reforms to boost competitiveness, focusing on innovation, decarbonisation and defence, and calls for massive investment in strategic sectors such as green energy, digital infrastructure and advanced manufacturing, supported by regulatory simplification and stronger coordination at EU level; considers, in this regard, that a robust performance framework is essential for tracking progress and measuring impact;

11. Underlines that the implementation of Draghi report recommendations should be monitored with relevant performance indicators that capture the EU’s progress in boosting its competitiveness; stresses that indicators must be carefully designed and should capture not only outputs (e.g. number of projects financed), but also outcomes and impacts (e.g. productivity gains, reduced emissions, jobs created, leverage effect of EU programmes, especially in terms of mobilising private investment), in order to measure the efficiency and effectiveness of EU spending;

12. Stresses the need for project-level data to be included in enhanced performance reporting for financial instruments implemented under indirect management, such as InvestEU; recognises that, owing to the market- and demand-driven nature of financial instruments, the performance of such programmes depends on their take-up by the market, which limits the Commission’s ability to establish predefined milestones and targets;

13. Calls on the Commission and the Member States to establish and consistently use a harmonised set of core indicators aimed at fostering competitiveness across Member States so as to allow comparability, benchmarking and aggregation of data at EU level, while also allowing for the use of indicators tailored to national or regional needs, where appropriate; stresses that business associations, research institutions and civil society should be consulted in defining and reviewing indicators in order to ensure that they reflect real competitiveness needs;

14. Considers that, in the case of projects that foster innovation and support strategic technologies, the following output indicators could be used: volume of funding mobilised, return on investment, the number of projects funded per sector (i.e. artificial intelligence, quantum, biotech) and the number of start-ups and scale-ups created or expanded in the EU; considers that results indicators such as the number of patents filed by EU-funded projects and the survival rate of EU-funded companies after three years could also be used;

15. Considers that industrial relocation to the EU should be supported in order to reduce the EU’s strategic dependencies; proposes that progress could be measured with output indicators such as the number of projects and small and medium-sized enterprises that have relocated to the EU, the number of start-ups and scale-ups created or expanded and industrial job creation in targeted regions; considers that results indicators such as the reduction in imports stemming from reduced strategic reliance on imported critical raw materials could also be used;

16. Considers that joint industrial energy purchasing should be supported in order to reduce energy costs and secure supply; proposes that progress could be measured with output indicators such as the number of participating companies and the share of renewable energy in joint contracts; considers that results indicators such as changes to average energy prices in targeted industries and reduction in supply interruption could also be used;

17. Considers that the EU should invest in talent in critical sectors to increase the EU’s long-term competitiveness through a capable workforce; suggests that progress could be measured with output indicators such as the number of young people trained annually (with a specific focus on gender balance), participation rate in adult and lifelong learning programmes and the satisfaction rate of partner companies; considers that results indicators such as changes to the employment rate in targeted sectors could also be used;

18. Considers that in order to accelerate green and digital industrial projects, particular attention should be paid to innovative small and medium-sized enterprises, while also pursuing simplification; suggests that progress could be measured with indicators such as the number of projects approved annually, the rate of appeals or disputes related to procedures and the time required to access EU funding – from application to disbursement;

°

° °

19. Instructs its President to forward this resolution to the Council and the Commission.

EXPLANATORY STATEMENT

In her 2023 State of the Union Address, Commission President Ursula von der Leyen announced that she asked Mario Draghi, former President of European Central Bank (2011-2019) and former prime Minister of Italy (2021-2022), to prepare a report on the future of European competitiveness. Mario Draghi delivered his report on the future of European competitiveness on 9 September 2024.

The Draghi report warns that declining competitiveness, compounded by geopolitical instability and crises such as Russia’s war in Ukraine, poses an existential threat to the EU. The report highlights a widening productivity gap with major economies—especially the USA— due to underinvestment in innovation, digitalisation, and skills. It identifies high energy costs and strategic dependencies, particularly in digital technologies, as key barriers.

To close the investment gap, the EU must mobilise approximately EUR 750–800 billion annually (equivalent to 4.4–4.7 % of EU GDP) from 2025 to 2030, targeting strategic sectors such as green energy, digital infrastructure, R&D, defence, and advanced manufacturing. These efforts must be supported by regulatory simplification and stronger EU coordination.

In response, the Commission launched the Competitiveness Compass in January 2025, focusing on innovation, decarbonisation, and economic security. The Commission’s proposal of 16 July 2025 for the 2028-2034 MFF includes a European Competitiveness Fund and a streamlined performance framework for the EU budget post-2027.

The Rapporteur considers that in the context of the implementation of a future European competitiveness strategy, the effectiveness of EU financing measures must be carefully monitored and assessed. The sound financial management of EU funds should be monitored with only relevant and pertinent performance indicators that capture the EU’s progress in increasing its competitiveness. This is only possible through a robust performance framework built on performance indicators that are specific, measurable, achievable, relevant, and time-bound (SMART). Performance indicators must be carefully designed and should capture not only outputs (e.g. number of projects financed) but also outcomes and impacts (e.g. productivity gains, reduced emissions, jobs created, ratio of private equity mobilised in EU programmes), in order to measure the efficiency and effectiveness of EU spending. With a comprehensive set of performance indicators, it will be possible to evaluate both the direct effects of the financing on the economy as well as the long-term sustainability and growth of European competitiveness.