Changes from plenary report to adopted text

206. Welcomes that the Ukraine Facility lays out provisions to ensure effective controls; recalls that on 7 April 2022, the Parliament called for the confiscation of Russian assets owned by Russian individuals and entities, frozen as a result of Union restrictive measures, in order to finance Ukraine’s reconstruction;

207. Welcomes the Global Gateway strategy as a concerted Union response to global challenges bringing together public and private investment; notes that 2022 was the first full year of the implementation of the Global Gateway strategy; stresses the need for more transparency, accountability and regular assessments of the Global Gateway implementation as well as for enhanced Parliament’s involvement in respect of its democratic scrutiny role;

208. Welcomes that OLAF signed administrative cooperation arrangements with both the Prosecutor General’s Office of Ukraine on 11 February 2021 and the State Audit Service of Ukraine in March 2023; notes that Ukraine is soon expected to be associated with the Union Anti-Fraud Programme (UAFP) and welcomes that OLAF is providing support to the Ukrainian authorities in their national anti-fraud efforts and strategies; welcomes that the EPPO signed working arrangements with the National Anti-Corruption Bureau of Ukraine, in July 2023, aiming to facilitate the cooperation in investigating corruption cases, and with the Ukrainian Prosecutor General’s Office, in March 2022, to protect the financial interest of the Union and Ukraine through effective investigation and prosecution;

Recommendations

209. Calls on the Commission to:

(i) as regards the OPSYS application system, enhance the quality of the new software, stabilise the application and improve interfaces between the different OPSYS modules, and allocate resources needed to enhance its maturity/robustness;

(ii) continue ensuring that all contracts involving Union funding fully respect applicable Union values, Union legislation, including accountability, transparency and protection of Union funds; ensure that strict monitoring and ex ante and ex post control mechanisms make sure that all individuals involved in Union funded actions exclusively pursue the Union objectives and activities approved for Union funding, request, where necessary, the restitution, or compensation for Union-funded assets that have been demolished, dismantled or confiscated;

(iii) to intensify its communication with international organizations in order to provide the ECA with complete, unlimited and timely access to documents necessary to carry out its task in accordance with the TFEU, and not just in read-only format;

(iv) put in place adequate ex ante and ex post control measures in unstable or conflict zones to ensure the proper control of spending of Union funds and ways to recover the Union funds;

(v) ensures the proper, timely and thorough audit, including with the inclusion of the EPPO and European Court of Auditors, of all funds provided under the Ukraine Facility and the upcoming Western Balkans facility;

European public administration

Human Resources

210. Notes that the budget for the programmes under MFF Heading 7 ‘European Public Administration’ was EUR 11,6 billion (5,9 % of the Union budget), which comprises the expenditure of the Union institutions and bodies on human resources and pensions (about 70 % of the total), buildings, equipment, energy, communications and information technology; notes that of the total amount, 58,6 % is spent by the Commission (EUR 6,7 billion); notes that, as of 31 December 2022, the final adopted budget commitment appropriations for the European Commission were EUR 6 298,13 million (99,84 % of them were implemented, i.e. EUR 6 288,14 million), as well as that the final adopted budget payment appropriations amounted to EUR 6 298,22 million (94,66 % of them were implemented, i.e. EUR 5 961,72 million);

212. Notes that the Commission adopted its new Human Resources strategy (‘HR Strategy’) in April 2022, which aims to address emerging needs after the COVID-19 crisis and focuses on achieving an attractive workplace, faster and more agile selection and recruitment, and a flexible and rewarding career for all staff; notes that the document is a set of intentions for change and improvement that should gradually be implemented, and that part of its content shall be first negotiated in social dialogue with staff representatives;

213. Notes that the Commission has increasingly recruited contractual or temporary agents on permanent posts to carry out new tasks stemming from rapidly evolving priorities, in response to special or urgent situations and even to compensate geographically unbalanced recruitments; recalls its concerns about the loss of knowledge for the institutions, as well as the negative impact on perspective and job security of the members of staff concerned; highlights that recruiting contractual or temporary agents is not a sustainable solution to the decreasing and geographically unbalanced applications of those applying for Union competitions and, most importantly, to the long-identified and complex issue of the Union’s decrease of attractiveness as an employer;

214. Notes with satisfaction that the percentage of women in management functions has risen considerably since the beginning of the mandate: in July 2023, the share of women in management functions was 45,2 % at senior management level (up nearly 9 percentage points since the beginning of the mandate) and 47,5 % at middle management level (up 6 percentage points);

215. Acknowledges that, in order to ensure recruitment on the broadest possible geographical basis it is necessary to address the causes of the under-representation from the point of initial recruitment; welcomes that, to strengthen geographical balance across different categories of Commission staff, the Directorate-General for Human Resources and Security (DG HR) met all Member States to discuss their representation and finalised all joint action plans taking into account the specificities of each Member State to address the possible causes of under-representation jointly;

Buildings and administration

220. Notes that the new central corporate financial system of the Commission, SUMMA, was planned to go into production by the end of 2023 and had progressed in line with the objective of going live at the beginning of 2024; regrets that the deadline for implementing the new accounting system was extended by one year because implementing the connections of operational programmes (shared management, e-grants, e-procurement, staff payments) with SUMMA simultaneously has proven to be a more complex exercise than expected; stresses with concern that the cost of the SUMMA programme since its inception at the beginning of 2018 until the end of 2022 was around EUR 95 million and that its timeline extension will require additional resources in 2024, estimated at around EUR 7 million euro;

221. Notes the adoption on 5 April 2022 of the ‘Communication on greening the Commission’, which aims to achieve climate neutrality by 2030, including an action plan to reduce its greenhouse gas emissions; notes the Commission intends to achieve these objectives by acquiring more energy efficient and greener buildings, shifting to dynamic collaborative workspaces and reducing the number of offices, and reiterates its warning that staff wellbeing and satisfaction should be taken into account in all future decisions in this regard;

222. Notes the media reports on negotiations between the Belgian Government and the Commission on a real estate transaction worth nearly EUR 1 billion and, likewise, the Commission’s plans to rent office spaces in the Brussels North area, including reluctance on the part of the staff concerned; stresses that any development in the Commission’s real estate policies shouldn't degrade the working conditions of its personnel;

223. Is concerned that the Commission has refused to provide records of the discussions with a pharmaceutical company and regrets the lack of transparency related to the text messages between the Commission’s President and the pharmaceutical companies regarding the purchase of COVID-19 vaccines; notes the European Ombudsman decision on the related case 1316/2021/MIG considering that not recording text messages in its document register constitutes “maladministration” and is concerned that the Commission has not followed up on the recommendation to conduct another search for relevant text messages; notes that, to date, the Commission has not made available to the Members of the European Parliament the non-redacted versions of the contracts signed; recalls the Parliament resolution of 13 July 2023 on public access to documents – annual report for the years 2019-2021;

European Schools

225. Notes with concern that both the Court and the external auditor found immaterial errors, which mainly related to the calculation of provisions for post-employment benefits and that the audit opinions of the external auditor were not in line with the framework contract concluded with the Office of the Secretary-General (the ‘Central Office’);

226. Notes that the Court, while praising improvements in recruitment and procurement procedures in the Central Office, found, for two out of the seven schools it reviewed (Frankfurt and Luxembourg I), shortcomings in these procedures; notes with concern that the Court, once again, noted weaknesses in terms of payment procedures for both the Central Office and the two schools that were reviewed;

227. Recalls that the Parliament, in its resolution of 12 September 2023 on the system of European Schools: state of play, challenges and perspectives, stressed that the current system of teacher recruitment in the European Schools System (EES) has serious shortcomings, resulting in a mismatch between the needs on the ground and the actual staff seconded by the Member States, issues with yearly recruitment plans, difficulties in finding qualified teachers and staff, precarious working conditions for locally recruited teachers and other educational staff and problems with continuous professional development;

Recommendations

228. Calls on the Commission to:

(i) take into account on an equal footing the efficient use of office spaces and the health and well-being of staff while implementing the new HR strategy, in particular regarding people with disabilities, as well as duly involve staff representatives when changing work conditions;

(ii) remain vigilant regarding the prevention, identification and adequate management of burnout cases in the larger context of staffing, workload and staff well-being;

(iii) reinforce the measures to support women pursuing a management career in order to increase the number of applications from highly qualified women to middle and senior management functions within both the Commission and the Union agencies;

(iv) continue its work to strengthen the geographical balance of its staff at all levels while at the same time fulfilling the requirements in the Staff Regulations regarding competences and merits of candidates;

(v) address without further delay and in an efficient way the challenges faced by members of staff who are assigned to and reside in Luxembourg;

(vi) making appropriate investments in building IT capabilities and resources for EPSO to be more efficient and effective and, in particular, to ensure optimal testing conditions in future selection processes; and

(vii) ensure a better and stricter risk management approach towards the readiness of the SUMMA deployment and avoid material risks of temporary disruption until the new accounting system is fully operational;

(viii) follow up on the Ombudsman’s recommendation in case 1316/2021/MIG, as well as ensure that its internal guidelines on document registration are in line with Regulation (EC) No 1049/2001;

229. Furthermore, calls on the Commission to continue to support the European Schools to:

(i) implement without delay the Court’s recommendations in its Report on the accounts of the European Schools for the 2022 financial year, and to keep the discharge authority informed on the progress;

(ii) urgently resolve ongoing teacher shortages and ensure a stable and fair employment situation for all by retaining staff and reducing turnover, thereby also avoiding a brain drain; and

(iii) perform an in-depth review under an independent chairperson of the governance and management structures across the System of European Schools and involve the Directorate General for Education, Youth, Sports and Culture of the Commission;

CHAPTER II - Recovery and Resilience Facility (RRF)

General remarks

230. Recalls that the outbreak of the COVID-19 pandemic in 2020 abruptly changed the economic and social outlook of the Union and led to a unified effort to launch the recovery package for Europe, consisting of the 2021-2027 MFF and NGEU, of which the cornerstone is the RRF; recalls that the objective of the RRF is to provide Member States with financial support to mitigate the serious economic and social impact of the COVID-19 pandemic and make European economies and societies more sustainable, resilient, inclusive and better prepared for the challenges and opportunities of the green and digital transitions; recalls that the RRF is an innovative, temporary instrument based on performance, which means that payments are linked to the satisfactory fulfilment of milestones and targets (M&Ts) reflecting progress on reforms and investments included in the national recovery and resilience plans (RRPs), which are set in a Council Implementation Decision;

231. Notes that all 27 RRPs were adopted by the end of 2022, allocating EUR 335,1 billion in grants and EUR 165,3 billion in loans, that will be paid out upon the fulfilment of 2 557 measures (consisting of approximately one third for reforms and two thirds for investments), and their related 6 237 milestones and targets, by 2026; notes that, in 2022, the Commission disbursed a total, including pre-financing, of EUR 74,4 billion (EUR 47,2 billion in grants and EUR 27,2 billion in loans);

232. Notes that the REPowerEU Plan was launched in May 2022 to help the Union to reduce its dependency on Russian fossil fuels by saving energy, producing clean energy and diversifying its energy supplies, which is aligned with the green transition; notes that the amendments introduced to Regulation (EU) 2021/241 (‘the RRF Regulation’) by Regulation (EU) 2023/435 on REPower EU added additional financing and priorities to the RRF; notes that all 27 Member States have submitted modified RRPs to include REPowerEU chapters, but also to request additional loan support, to make adjustments following the update of the maximum financial contribution or to make amendments due to objective circumstances, as enabled by the RRF Regulation; notes that the revision of the RRPs are subject to the same assessment criteria as the original plans, together with specific requirements applicable to the REPowerEU chapters;

233. Recalls that, under NGEU, the Commission can raise up to EUR 806,9 billion between mid-2021 and 2026 through the issuance of Union-bonds; notes that in June 2022, the Commission announced a funding plan for the period June to end-December 2022 and raised an additional EUR 50 billion in long-term funding for NGEU, complemented by short-term EU-bills issuances, bringing the total outstanding amount of NGEU bonds to EUR 171 billion, of which EUR 36,5 billion were raised by issuing green bonds; notes that this debt consists of borrowed amounts with different maturities, ranging from 1 year to more than 25 years; notes that repayment of NGEU debt will only start after 2028;

234. Notes the efforts of the Commission to raise funds on the financial markets to provide the financial means for the RRF; notes that, in 2020, an amount of EUR 14,9 billion was planned in the MFF 2021-2027 to cover the interest payments for NGEU non-repayable support; is concerned about the impact of the higher interest rates on the purchasing power of the Union budget, with the interest rates on 10-year EU-Bonds increasing from 0,09 % in 2021 to 3,2 % in 2023; notes that Commission’s AAA borrowing costs are higher than some Member States with a lower rating; notes that borrowed amounts need to be repaid and borrowing activities remain needed not only to raise new funds, but also to replace existing debt; is concerned about the rising interest rates, particularly in 2022, and the resulting debts and uncertain capacity to repay the loans, taking into account the large amount of money that the Commission is borrowing in order to finance the RRF; notes however that the debt is currently EUR 90 billion less than initially forecasted; notes the Commission’s long-term plan for repayment of the debt and calls on the Commission to regularly update it and inform the discharge authority of any new risks that might influence its implementation; notes the Commission’s statement that the Union will meet its obligations towards bondholders in all circumstances and its proposal for a technical modification to the MFF to optimise the budgetary treatment of NGEU borrowing costs; notes that information on the EU debt and planned repayments are part of the regular reporting within the NGEU dialogue; requests that the Commission continues to provide more information to the European Parliament on how repayment will be made and from which institutions funds are being borrowed; emphasises that this debt burdens the EU budget;

235. Welcomes the Commission’s estimate that the full implementation of quantifiable milestones and targets up until the end of 2026 funded by NGEU Green Bonds, corresponding to 57 % of the NGEU Green Bond eligible expenditure, can reduce Greenhouse gas (GHG) emissions by 44 million tonnes of CO2 per annum– equivalent to 1,2 % of the aggregate for the Union’s GHG emissions in 2022, and insists on proper implementation; stresses furthermore the importance that reforms and investments under the Recovery and Resilience Plans meet the climate targets of the regulation and fully respect the “do no significant harm” principle;