On discharge in respect of the implementation of the general budget of the European Union for the financial year 2024, Section III – Commission and executive agencies and the ninth, tenth and eleventh European Development Funds

OPINION

The Committee on Employment and Social Affairs calls on the Committee on Budgetary Control, as the committee responsible, to incorporate the following into its motion for a resolution:

– having regard to the Court of Auditors’ annual report on the implementation of the budget for the financial year 2024, together with the institutions’ replies, and to the Court of Auditors’ special reports;

1. Welcomes the European Court of Auditors’ clean opinion concluding that the EU’s 2024 consolidated accounts present fairly, in all material respects, the Union’s financial position at year-end;

2. Notes that total outstanding commitments amounted to EUR 507.4 billion at the end of 2024, including NextGenerationEU (NGEU), a decline from the record high of EUR 543 billion in 2023, and notes that this level stands at EUR 33.5 billion above the Commission’s June 2024 estimate;

3. Observes that the Court of Auditors’ estimated error rate for MFF heading 2 ‘Cohesion, resilience and values’ fell to 5.7% in 2024, down from 9.3% in 2023, yet still exceeds the 2% materiality threshold resulting in the Court issuing an adverse opinion on the legality and regularity of budget expenditure; notes that spending under this heading remains high-risk due to its reimbursement-based nature and complex rules, and that the main types of error quantified were ineligible costs and projects, irregularities in public procurement procedures and absence of essential supporting documents; calls for strengthened efforts to reduce the error rate especially for the new funding period, and notes the Court’s observation that the complexity of the way funds are disbursed has an impact on the risk of error;

4. Strongly regrets that the Commission forecasts EUR 2.7 billion in decommitments for cohesion policy funds over 2025–2027, nearly seven times higher than in forecasted 2022; notes with concern that the overall absorption rate of these funds was only 5 % by the end of 2024 compared to 14 % at the equivalent point of the previous MFF; reiterates that this reflects persistently low absorption and calls, therefore, for Member States to ensure faster implementation of these funds; stresses the Commission should identify ways to help Member States accelerate the use of EU funds, in particular shared management funds under the Common Provisions Regulation to improve absorption, while respecting sound financial management; notes, in this regard, the recently adopted legislative proposals in respect of the cohesion policy funds regulations for the 2021- 2027 programming period which could help to reduce the risk of these funds being decommitted;

5. Recalls that spending under the subheading 2a “Economic, social and territorial cohesion” focuses on reducing disparities between Member States and regions of the EU; stresses the importance of EU cohesion policy in supporting the implementation of the European Pillar of Social Rights and its Action Plan and headline targets; underlines that EU cohesion policy provides an important contribution to the EU’s employment, social, education and skills policies, including structural reforms in these areas;

6. Recalls the importance of the ESF+ which aims to achieve high employment, fair social protection, a skilled and resilient workforce, and inclusive societies as key to eradicating poverty; notes that despite easing, inflation continued to affect the 2024 Union budget, raising costs and eroding the real value of appropriations and the effectiveness of ESF+; underlines that the current budget for the ESF+ is in any case not sufficient to meet the 2030 targets of the European Pillar of Social Rights Action Plan; stresses the need to provide the ESF+ with the continued financial and political support of the EU, national and regional institutions in the delivery of its objectives and targets in the years to come; stresses the importance of involving civil society organisations and social partners working on the ground in the implementation of ESF+ funded activities; calls on the Commission to bring crèche staff in-house, ensuring good working conditions and contractual stability;

7. Welcomes the fact that in line with its binding commitments, and following Parliament’s repeated calls, the Commission has developed a pilot methodology to track and measure expenditure related to gender equality at programme level in the 2021-2027 MFF, with a view to improving gender mainstreaming in the Commission’s budget process and enhancing how policy design and resource allocation advance gender equality objectives;

8. Asks the Commission to implement as soon as possible all outstanding Court of Auditors' recommendations.

9. Recalls the importance of monitoring the use of EU funds to ensure the protection of the EU’s financial interests; calls on the Commission to make full use of the tools available to address the clear risk of a serious breach of the EU’s values and the rule of law; recalls in this context the Commission statement attached to the mid-term review revision of the cohesion policy on the matter;

ANNEX: DECLARATION OF INPUT

The rapporteur for opinion declares under her exclusive responsibility that she did not include in her opinion input from interest representatives falling within the scope of the Interinstitutional Agreement on a mandatory transparency register, or from representatives of public authorities of third countries, including their diplomatic missions and embassies, to be listed in this Annex pursuant to Article 8 of Annex I to the Rules of Procedure.

INFORMATION ON ADOPTION BY THE COMMITTEE ASKED FOR OPINION