A report by the European Court of Auditors (ECA) warns that continued delays are putting the EU’s €724bn post-Covid recovery fund at risk. Three years after the fund was created to stimulate post-pandemic recovery, EU member states have only utilized less than a third of the grants and loans available. Several countries, including Belgium, Finland, Hungary, Ireland, the Netherlands, Poland, and Sweden, have not yet received any post-Covid money. Delays in submitting payment requests have been attributed to various reasons such as political turmoil, uncertainty over rules, and national administrative capacity. Progress has been hindered by issues such as Hungary’s failure to meet corruption and judicial independence milestones.
The delayed absorption of funds is a concern as the deadline for the Recovery and Resilience Plan is approaching with a significant number of planned reforms and investments not completed on time. The ECA found that by the halfway point of the six-year implementation plan, 24% of the planned reforms and investments have yet to be fulfilled. With the RRF set to expire in August 2026 and no expected extension, the EU auditors are recommending that the Commission provide further support to strengthen the design of similar funds in the future. There is a risk that member states may receive substantial amounts of funds for actions that cannot be completed within the given time, leading to inefficient and erroneous spending.
The EU auditors have suggested that the Commission should consider stopping funding for incomplete actions and recovering transfers, but the Commission has rejected these recommendations. The Commission does not view payments based on progress as a risk and does not believe there is a legal basis to recover funds already disbursed for milestones and targets that have been fulfilled. The delays and lack of progress in meeting commitments have raised concerns about the efficient utilization of the post-pandemic recovery fund. The ECA’s report highlights the importance of timely absorption of the RRF to avoid bottlenecks and ensure that measures can be carried out effectively within the fund’s lifespan.
The Netherlands, Hungary, and Sweden are among the countries facing challenges in accessing the post-Covid funds, with issues such as not signing operational agreements, delayed payment requests, and political instability hindering their progress. In the case of Hungary, the government has yet to meet milestones related to fighting corruption and safeguarding judicial independence. Other countries like Belgium, Finland, Ireland, and Poland have also submitted payment requests later than others, leading to delays in assessing their progress by the European Commission. The report emphasizes the importance of political consensus and support for the effective implementation of the Recovery and Resilience Plan.
The delays in utilizing the post-Covid recovery fund raise concerns about the overall effectiveness of the EU’s efforts to stimulate post-pandemic recovery. Member states are being urged to expedite the absorption of funds and fulfill commitments to avoid inefficiencies and errors in spending. The ECA’s recommendations for the Commission to provide additional support in designing future funds and to consider withholding funding for incomplete actions highlight the need for improved monitoring and oversight of the post-pandemic financial support. The challenges faced by EU member states in accessing and utilizing the RRF underscore the importance of efficient governance and coordination to ensure the successful implementation of recovery plans.
