Europäischer Rechnungshof - European Court of Auditors
Auditors reveal lessons from weaknesses in the EU’s €650 billion recovery pot
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Press release
Luxembourg, 6 May 2025
Auditors reveal lessons from weaknesses in the EU’s €650 billion recovery pot
- EU recovery fund brought a new approach to EU spending decoupled from costs
- Auditors warn about its many weaknesses ahead of key EU budget decisions
- The RRF suffers from insufficient focus on performance, and weak control
The EU’s COVID recovery fund – the Recovery and Resilience Facility (RRF) – suffers from several weaknesses in terms of performance, accountability and transparency, the European Court of Auditors (ECA) observes in its review of the €650 billion crisis spending. Although the RRF has played a crucial role in the EU’s post-pandemic recovery, information on results is scarce, and there is no information on actual costs. As a result, it is not clear what citizens actually get for their money. The auditors call on EU policy makers to draw lessons from this when mulling future budgets based on performance rather than costs.
The RRF was established in 2021 at a time of crisis. It finances measures – reforms and investments – in areas such as the green or digital transitions. EU countries must achieve predefined milestones and targets set out in their national plans in order to receive funding. This is the first time that the EU has used financing not linked to costs on such a large scale.
“EU policymakers must draw lessons from the RRF, and not allow any future similar instrument without having information on actual costs, final recipients and a clear answer to the question of what the citizens actually get for their money,” said Ivana Maletić, one of the two ECA Members behind the review “For future performance-based budgets, funding must be better linked to results and clearly defined rules, otherwise such a system should not be used,” said Jorg Kristijan Petrovič, the review’s co-author.
The auditors highlight several issues with the RRF against a backdrop of ongoing political discussions on the EU’s long-term budget after 2027. To begin with, they take the view that the RRF is not really a performance-based funding mechanism. In actual fact, the RRF places greater emphasis on progress in implementation. In addition, its spending efficiency and value for money cannot be measured, as the European Commission does not collect data on actual costs, and information on results is scarce.
The auditors emphasise the importance of designing and running future spending programmes in a way that is not detrimental to accountability. Despite recent improvements, the RRF’s control safeguards are still not robust enough. For example, the Commission mainly relies on member states to detect and correct serious irregularities and to ensure compliance with EU and national rules, but their systems do have weaknesses. Moreover, the EU’s executive cannot impose financial corrections such as recovery of funds for individual breaches of procurement rules, except in cases of serious irregularities such as fraud. This means that the Commission can make payments in full even when public procurement irregularities have occurred, as long as the agreed milestones and targets have been attained. Furthermore, due to the way milestones and targets have been set, some EU countries receive considerable funds before they complete the projects. This poses a risk to the EU’s financial interests, as member states could end up keeping the money without completing the projects.
Although the RRF’s implementation is progressing, it faces delays, thus jeopardising the achievement of its objectives. In fact, the bulk of measures still need to be completed by August 2026. At the same time, disbursement of EU funds to national budgets does not mean that the money has reached the final recipients and the real economy.
The RRF is almost entirely financed by borrowing from the markets. The Commission managed to raise funds for the RRF both rapidly and successfully. In the first few years, this was done when interest rates were historically low. Interest rates have since risen, and financing costs could be more than double the initial estimates by 2026. Together with repayments, this will put significant pressure on future EU budgets. Where any future borrowing is concerned, the auditors believe it is important that the EU should properly mitigate interest risks and set out a loan repayment plan upfront, specifying where the money will come from. This was not the case for the RRF.
Background information
The RRF was established in 2021 as a one-off temporary instrument to help EU countries recover from the Covid pandemic and build resilient economies. It finances their measures in six pre-defined areas between February 2020, when the pandemic started, and August 2026, the year in which the RRF ends. Its initial budget was €724 billion, but EU countries signed up for €650 billion (€359 billion in grants and €291 billion in loans). RRF debt must be repaid by 2058 by both the Commission (for grants) and member states (for loans). In the second half of 2025, the Commission intends to present the next financial framework for the post-2027 period.
Review 02/2025, “Performance-orientation, accountability and transparency – lessons to be learned from the weaknesses of the RRF”, is available on the ECA website, together with a one-page overview of the key facts and lessons. It summarises the ECA’s audits and opinions on the RRF, which are available in this dedicated RRF section. The ECA’s audit plan for 2025 and 2026 includes further reports on the RRF, covering areas such as energy efficiency, traceability and fraud.
Press contact
ECA press office: [email protected]
Damijan Fišer M: (+352) 621 552 224