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OPINION (2023/2129(DEC))

On discharge in respect of the implementation of the general budget of the European Union for the financial year 2022, Section III – Commission and executive agencies

REGI-AD-755040

Committee on Regional Development · Rapporteur: Younous Omarjee

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The Committee on Regional Development calls on the Committee on Budgetary Control to include its suggestions in the discharge resolution on the 2022 EU budget. It asks for simpler cohesion rules, better fraud detection and faster spending, and raises concerns about suspended RRF funds for Hungary. It notes that cohesion spending is reimbursement-based and error-prone, that the 2014-2020 closure, CRII(+), CARE, REACT-EU and the RRF have increased pressure, and that the Just Transition Fund is progressing too slowly. It highlights the error-rate gap between the Commission and the European Court of Auditors, the risk of decommitments, and delays in the 2021-2027 funds caused by prioritising the RRF. It calls on Member States to join the European Public Prosecutors' Office and to accelerate cohesion investment, and welcomes national anti-fraud strategies and the Commission's climate and gender tracking work.

Committee position. The Committee on Regional Development calls on the Committee on Budgetary Control to incorporate its suggestions into the discharge resolution, asking for simpler cohesion rules, better fraud detection, faster spending and no release of suspended RRF funds to Hungary until remedial measures prove effective.

Key points

  1. Cohesion spending is reimbursement-based and more prone to error; the 2014-2020 closure, CRII(+), CARE, REACT-EU and the RRF have increased pressure on managing authorities and beneficiaries.
  2. The Commission should give national authorities additional advisory support, simplify administrative procedures, use more simplified cost options and improve ex ante and ex-post checks.
  3. Progress on the Just Transition Fund is insufficient, given the need to spend NextGenerationEU resources by the end of 2026.
  4. Cohesion funds' flexibility helped address the Covid crisis, war-related emergencies and the energy crisis, but post-2027 cohesion policy must keep flexibility while ensuring long-term planning.
  5. The most pressing issues are overly complex rules and procedures, disproportionate administrative burden and effective targeting of funds; diverting cohesion funds to other policy areas, as with the STEP proposal, is a recurrent problem.
  6. Audits should be simplified and rationalised to focus on fighting fraud; under the 2021-2027 Common Provisions Regulation, Member State authorities must report all suspected or established fraud, even before declaring expenditure.
  7. All Member States should join the European Public Prosecutors' Office, which needs more means; a strengthened office would allow further simplification of the cohesion regulatory framework.
  8. The adoption of national anti-fraud strategies by 24 Member States is welcome, but more effort is needed at EU and national level to tackle fraud.
  9. Suspended RRF funds should not be released to Hungary until its remedial measures have proven effective in practice.
  10. The European Court of Auditors estimated a 6.4% error level for 'Cohesion, resilience and values' in 2022, against the Commission's 1.8% to 2.6%; the growing discrepancy raises concerns.
  11. Ineligible expenditure, public procurement, audit trail and State aid are the main sources of irregularities; recurring errors should be addressed without complicating fund management for regional and local authorities and beneficiaries.
  12. The Commission should strengthen cooperation with Member States and regions to close the 2014-2020 period correctly, address weak RRF milestones and targets, and help Member States accelerate cohesion investment, including through a one-stop-shop for all available funds.

Who is affected

  • Managing and audit authorities in Member States: face pressure from simultaneous funds and must report all suspected or established fraud.
  • Regional and local authorities and final beneficiaries: should benefit from simpler rules and less administrative burden.
  • Hungary: suspended RRF funds should not be released until remedial measures prove effective.
  • Member States: called to join the European Public Prosecutors' Office and accelerate cohesion investment.
  • The Commission: urged to simplify procedures, support national authorities and strengthen cooperation on closures.

Figures and deadlines

  • 6.3 billion EUR: suspended RRF funds for Hungary that the Commission reportedly plans to disburse.
  • 6.4%: estimated error level in 'Cohesion, resilience and values' spending for 2022 according to the European Court of Auditors.
  • 1.8% to 2.6%: the Commission's error estimates, above the materiality threshold.
  • 24 Member States: have adopted national anti-fraud strategies.
  • End of 2026: timeframe to spend NextGenerationEU resources.
  • 25 May 2023: date the European Public Prosecutor appeared before the Committee on Regional Development.