Changes from report parliamentary committee draft to plenary report

Change 9 under “9. PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION”

Changed1. Approves the closure of the accounts of the general budget of the European Union for the financial year 2023 / Postpones the closure of the accounts of the general budget of the European Union for the financial year 2023;

Change 10 under “10. PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION”

Changed1. Approves the closure of the accounts of the, ninth, tenth and eleventh European Development Funds for the financial year 2023 / Postpones the closure of the accounts of the ninth, tenth and eleventh European Development Funds for the financial year 2023;

Change 11 under “11. MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION”

Removed2. Notes that the Court of Auditors (the Court) for the financial year 2023 has issued a clean opinion concerning the reliability of the accounts and the legality and regularity of revenue; at the same time, regrets that again the Court has had to issue an adverse opinion on the legality and regularity of Union budget expenditure and a qualified opinion on the legality and regularity of expenditure under the Recovery and Resilience Facility (RRF);

Added2. Underlines the importance of the principle of separation of powers in the Union and recalls that according to the Treaty, the institutions shall practice mutual sincere cooperation; believes that under no circumstances the actions of one Union institution should affect the independence of another institution; urges all other institutions to respect the role of the Parliament as the sole Union institution directly elected by the citizens and to refrain from any undue, direct or indirect interference in its legislative processes, thereby ensuring that Parliament’s decision making-process remains free and independent from other Union institutions or any other entities;

Removed3. Deeply regrets that the overall error rate estimated by the Court has been on a rising trend since the financial year 2020 and has reached 5,6 % for the financial year 2023; notes that there are significant differences in the error rates between headings which range from spending areas with error rates below the materiality threshold of 2 % up to an error rate of 9,3 % in the case of cohesion policy; further notes that discharge is a political process where all issues related to a specific financial year may be taken into consideration and that the decision on whether to grant or refuse discharge is taken for the budget as a whole; at the same time, notes that if discharge was granted or refused heading by heading, it is unclear whether discharge could be granted for the implementation of the budget in heading 2 ‘Cohesion, Resilience and Values’, in light of the very high error rate; strongly encourages the Commission to take into account the Court’s recommendations and to reduce the overall error rate over the coming years;

Added3. Highlights the importance of the Union budget for achieving the Union’s political priorities, as well as its role in assisting Member States in unforeseen situations such as international conflicts or crises and their consequences; points out in this regard the continuing relevance of investments and support from the Union budget for reducing disparities between Member States and regions, for promoting economic growth and employment, for combating poverty and social exclusion, and thus for improving the daily life of European citizens;

Removed4. Is concerned that the Commission and the Court have different interpretations of what the “error rate” represents, thus generating confusion; expresses its support for the audit approach and methodology of the Court and strongly calls on both institutions to find a solution to the divergent approaches; is concerned that the Commission may be systematically underestimating the existing error level and that this could lead to an ineffective protection of the financial interests of the Union;

Added4. Notes that the Court of Auditors (the Court) for the financial year 2023 has issued a clean opinion concerning the reliability of the accounts and the legality and regularity of revenue; at the same time, regrets that the Court has had to issue for the 5th consecutive year an adverse opinion on the legality and regularity of Union budget expenditure and a qualified opinion on the legality and regularity of expenditure under the Recovery and Resilience Facility (RRF);

Change 12 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed20.27. RegretsStrongly regrets the adverse opinion on the legality and regularity of the Union budget expenditure issued by the Court for the fifth year in a row; considers this increasingly problematic, as the Commission seems unable, or unwilling, to identify the cause and address the underlying issues; regrets the Commission is not accepting some recommendations of the Court of Auditors; notes in particular the importance of reinforcement of financial management of the Commission and Member States, that is considered as not reliable by the Court and therefore compromises the reliability of the Annual Management and Performance Report; calls on the Commission to present a clear action plan on reducing the error rate within the following four months; stresses that Parliament shall duly scrutinise such an action plan;

Change 13 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed21.28. Is particularlyseriously concerned by the Court’s estimation of the error level of 5,6 % in 2023 expenditure; notes that this is an accelerated deterioration compared to the previous two years (4,2 % in 2022 and 3.0 % in 2021); notes with concern that the Court continues to detect substantial issues in reimbursement-based expenditure where the estimated level of error is 7,9 %; notes that the effect of the errors found by the Court is estimated to be both material and pervasive; calls for the Commission’s financial management to be tightened up, in accordance with the recommendations made by the Court in its Annual Reports and Special Reports, in order to resolutely tackle the high error rate over the next few years; underlines the Court’s warning that the increasing European debt is placing growing pressure on the Union budget;

Change 14 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Removed22. Notes that the increase is primarily caused by the estimated level of error under MFF heading 2, cohesion, resilience and values, where the Court found 9,3 % of expenditure to be in breach of Union rules and regulations; recalls the underlying issues that are reported by the Court and that have been known for several years;

Added29. Notes that the Commission in its Annual Management and Performance Report categorises the expenditure into higher, medium and lower risk categories, in order to focus action on high-risk areas; while the Court uses only two risk categories in order to produce an opinion on the legality and regularity of the expenditures; is worried that the Court’s work revealed limitations in the Commission’s ex-post work, which, taken together, affect the robustness of the Commission’s risk assessment; notes with concern that one of the areas most impacted was ‘Cohesion, resilience and values’, where the Court assessed the majority of the spending to be high risk, while the Commission classified only a minority in this way;

Removed23. Underlines that the estimated level of error in the Union’s expenditure, as presented in the Court’s statement of assurance, is an estimate of the money that should not have been paid out because it was not used in accordance with the applicable rules and regulations; considers that, though not an indicator of fraud or corruption, the estimated level of error represents expenditure where corrective actions are necessary, and thus shows a wasteful use of resources; regrets that this will give a negative impression to citizens;

Added30. Reiterates the concerns about the Court observation that the Commission’s risk assessment is likely to underestimate the level of risk in several areas; is also worried by recurrent weaknesses identified by the Court in Member States’ management and control systems, which are still not still preventing or detecting irregularities in heading 2, thus limiting the reliance that can be placed on their work, while the Commission’s error rates do still rely on these national systems, which do not work effectively;

Removed24. Notes that the Commission´s own estimate of the risk at payment is 1,9 % for 2023 and has been at that level since 2020; notes that the Commission estimates its capacity to correct and recover irregular expenditure during implementation of the associated programmes at 1,0 %, resulting in a risk at closure of 0,9 %;

Added31. Notes that the increase is primarily caused by the estimated level of error under MFF heading 2 - cohesion, resilience and values, where the Court found 9,3 % of expenditure to be in breach of Union rules and regulations; recalls the underlying issues that are reported by the Court and that have been known for several years;

Change 15 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed26.35. Recalls the positions expressed in the 2022 discharge resolution and the exchanges of views in the discharge hearings for the financial year 2023 on the diverging methodologies and estimates between the Court and the Commission of errors made in Union expenditureexpenditure; notes in particular that the Court’s error rate is based on a statistical sample, whereas the Commission’s risk at payment is to a large extent compiled from the error rates reported by national auditing authorities in Member States and expressescalculated itsonly supportafter forcorrections and repayments; reminds that the auditCourt’s approacherror rate includes the errors that remained undetected by the Member States and methodologythe ofCommission, which demonstrates that the Court;Commission’s error rates are an underestimation; notes with concern an even wider gap between the Court’s and Commission’s estimates; further notes that the Commission and the Court are organising a joint workshopworkshops on this issue; notes that the Court recently aligned its methodology on procurement in the decentralised agencies with the methodology of the Commission; reiterates its support for the independent audit approach and methodology of the Court and invites the Commission to cooperate with the Court with a view to increasing harmonisation and providing for more comparable estimates of the level of error;

Change 16 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed28.37. NotesRecalls that the primary responsibility for preventing and detecting fraud rests with the Commission, as theCommission institutionis responsible for the managementpreventing and governance of the Uniondetecting budget;fraud; notes that the Court, in the exercise of its mandate, is obliged to report any cases of irregularity; notes that the Court forwards to the EPPO suspicions of criminal offences falling under its competences and to OLAF suspicions of fraud, corruption or other illegal activity affecting the Union’s financial interests identified while performing its audits;interests; notes that, in 2023, the Court reported 20 cases of suspected fraud to OLAF, and in parallel reported 12 of these cases to the EPPO, resulting so far in four OLAF investigations and nine EPPO investigations; commends the Court for its reporting of cases of irregularity to OLAF and the EPPO, as information resulting from audit engagements usually has a high degree of reliability; reminds in this framework of the key role played by the whole Union’s anti-fraud architecture and expresses some concerns about the refusal of some Member States to cooperate with one of its elements, the EPPO;

Change 17 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed30.39. Notes with concern that the total outstanding commitments, which represent future debts if not decommitted, reached an all-time high of EUR 543 billion (2022: EUR 450 billion),billion); notes that the Commission foresees a decrease from 2025 to 2029 when committed amounts for both NGEU and the 2021-2027 programming period should be paid out; notes however that the actual amounts for 2023 (EUR 543 billion) are much higher than the forecasted amount (EUR 490 billion), calling the Commission’s estimates into question;

Change 18 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed31.40. Recalls that the time available for implementing shared management funds under the 2021-2027 MFF is shorter than under previous MFFs because of the n+2 for the last year, which, coupled with the high RAL, will raise the risk of decommitments; notes the Court’s observation that the Commission has increased its forecasted amount of decommitments from EUR 7.67,6 billion for 2023-2027, to EUR 8.18,1 billion for 2024-2027 to EUR 8.88,8 billion for 2025-2027, a 15 % increase in 2 years; notesunderlines with concern that the Commission has underestimated its projections for the RAL in the last two years, and that the Commission therefore likely underestimates the amount of decommitments that will be made until 2027; notes the introduction of the “cascade mechanism” following the mid-term review of the MFF 2021-2027 and the incentive to use decommitted amounts to cover increased interest costs for amounts borrowed by the Commission for NGEU;

Change 19 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Added41. Notes that the latest long-term payment forecast produced by the Commission foresees substantial decommitments as of 2027 unless Member States undertake additional efforts and implement at a much faster pace than in the period 2014-2020; notes that for the CF, ERDF, and ESF+ cohesion policy funds, the Commission forecast total decommitments for 2024-2027 at EUR 2,2 billion, more than five times its 2022 forecast of EUR 0,4 billion; warns that for the Just Transition Fund (JTF), the low implementation in 2023 puts important amounts at risk from 2025 onwards; calls on the Commission and on the Member States to use all of the available possibilities to avoid decommitments;

Change 20 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed33.43. Notes with concern that the total exposure of the Union budget because of guarantees and contingent liabilities for loans rose to EUR 298,0 billion; notes that assumptions on capital-market interest should be made conservatively, both for existing debt and new debt and that for both categories a viable plan for its repayment is necessary; notes that the Court received information from the Commission that indicates that the exposure will steadily increase in the coming years, putting additional pressure on the headroom of the budget and further reducing the flexibility of the Union Budget;budget; supports the Court recommendations to the Commission to act more proactively to ensure that its mitigating tools (such as the Common Provisioning Fund) have sufficient capacity as well as to provide more transparent reporting on total annual budget exposure, making its estimate public;

Change 21 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Added44. Notes with concern that the Court in its Special Report 07/2024 observed that a significant share of recovery orders issued between 2014 and 2022 were still outstanding at the time of their audit; further notes that the Commission, in its replies to the Parliament’s Committee on Budgetary Control’s (CONT Committee) written questions for the 2023 discharge, mentioned that there are 1 357 overdue recovery orders for a total outstanding amount of approximately EUR 335 million for the period 2014-2023; calls on the Commission to prioritise collecting monies under overdue recovery orders and to keep the Committee on Budgetary Control informed about progress made;

Added45. Highlights that equality is a founding value of the Union and is enshrined in the Charter of Fundamental Rights of the European Union; recalls the commitment of the Union to gender mainstreaming in its policy-making and implementation of Union funds, including gender budgeting; encourages the Commission to continue the efforts made in gender budgeting and in tracking the impact of the Union budget to foster gender equality; recalls the obligation of the Commission to accompany all legislative proposals with an impact assessment when they are projected to have a significant economic, social, and environmental impact in order to guarantee, among other things, fair distribution of funds;

Added46. Notes that the review of the Interinstitutional Agreement on the Transparency Register is due by July 2025; calls on the Commission to ensure that the process is as open as possible, to align financial reporting requirements across all categories of registrants (including funding sources and lobbying budgets), addressing also the risk identified in the Court’s Special Report on the EU Transparency Register (SR 05/2024) regarding self-declarations on the category of interest representation; believes that, in order to address the recommendations of the Court, the resources of the secretariat of the Transparency Register should be increased;

Change 22 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Removed35. Notes with concern that the Court in its Special Report 07/2024 observed that a significant share of recovery orders issued between 2014 and 2022 were still outstanding at the time of their audit; further notes that the Commission, in its replies to the Parliament’s Committee on Budgetary Control’s (CONT Committee) written questions for the 2023 discharge, mentions that there are 1 357 overdue recovery orders for a total outstanding amount of approximately EUR 335 million for the period 2014-2023;

Added48. Calls on the Court to look for ways, together with the Commission, to align their methodologies for the general budget, as in the case of procurement for the decentralised agencies, while respecting the different roles;

Removed36. Calls on the Court of Auditors to:

Removed(i) look for ways, together with the Commission, to align their methodologies for the general budget, as in the case of procurement for the decentralised agencies, while respecting the different roles;

Change 23 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Added(ii) qualify the impact of corrective measures on the overall level of error;

Change 24 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed(iii)(iv) present the discharge authority with a strategy to strengthen the use of funds for their intended purpose, increase absorption and prevent decommitments in order to maximise the EU-added value of the Union Budget;

Change 25 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed(iv)(v) increase the reliability of the forecast of the outstanding commitments with a more realistic estimate of the absorption of Union funds to give the discharge authority a better forecast of the development of the RAL over the years;years and better protect the Union budget;

Change 26 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Removed(v) present, in the Annual Management and Performance Report, a multi-annual outlook on the exposure of the Union Budget to budgetary guarantees;

Added(vi) report on, and provide sufficient measures to, protecting the Union budget from the different risks identified beyond the RAL, such as decommitments in cohesion policy, the increasing debt, increased budget exposure and the impact of increasing inflation;

Removed(vi) substantially simplify rules and procedures and improve the assistance and guidelines for SMEs, spin-offs, start-ups, administration and payment agencies, and all other relevant stakeholders, without compromising the quality of the controls;

Added(vii) provide more transparent reporting on total annual budget exposure by presenting, in the Annual Management and Performance Report, a multi-annual outlook on the exposure of the Union Budget to budgetary guarantees;

Removed(vii) boost efforts to improve transparency in the use of funds, including as regards information on final beneficiaries;

Added(viii) substantially simplify rules and procedures and improve the assistance to, and ensure consistent and user-friendly guidelines for SMEs, new applicants, spin-offs, start-ups, administration and payment agencies, CSOs and all other relevant stakeholders, without compromising the quality of the controls;

Change 27 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed(ix) guarantee(x) adequateboost resourcesefforts forto theimprove secretariattransparency ofin the Transparency Register inuse orderof tofunds, ensureincluding thatas theregards entriesinformation on the lobbying activities offinal interestbeneficiaries, groups,including lobbieson andthe NGOsfunds canthat beare checkedallocated for accuracythe andpreparation thatof lobbyingpolicy becomesand morelegislative transparent;proposals;

Change 28 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Removed(x) require NGOs to list their financial supporters by self-declaring that they are only representing their interests or the collective interests of their members and to require all NGOs to list their financial supporters in the EU Transparency Register, even if they state in that register that they are only representing the interests of their own members (as observed by the Court in Special Report 2024 on the EU Transparency Register that 34 % of NGOs (1207 NGOs) made entries in the Transparency Register avoid this);

Added(xi) put in place all necessary means for ensuring that all interest representatives that approach Union institutions are registered in the Transparency Register; further asks the Commission to set up an effective mechanism to ensure that entities funded by the Union in the Transparency Register are aligned with Union values and demand full transparency on their financing, providing a deeper insight into the financing of all entities registered and which should be the condition to approach all Union institutions, bodies and agencies;

Removed(xi) continue to support Member States in improving both the quality and the quantity of checks and to share best practices in the fight against fraud;

Added(xii) together with Parliament and Council, guarantee adequate resources for the secretariat of the Transparency Register in order to ensure that the entries on the lobbying activities of all interest representatives can be checked for accuracy and that lobbying become more transparent as requested in the Court in Special Report 05/2024 on the EU Transparency Register; calls on the Commission to allocate adequate resources to identify irregularities to guarantee a wide range of search capabilities;

Removed(xii) improve the situation concerning recovery orders and work on the implementation of corporate escalation mechanisms;

Added(xiii) require interest representatives in the Transparency Register to list their financial supporters by self-declaring that they are only representing their interests or the collective interests of their members and to propose an amendment to Annex II to the Interinstitutional Agreement of 20 May 2021 to require them to list their financial supporters in the EU Transparency Register, even if they state in that register that they are only representing the interests of their own members; urges entities already registered that have not listed their financial resources by self-declaration to declare them voluntarily before the interinstitutional agreement is amended;

Change 29 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed39.51. Notes with serious concern that the Court has examined the implementation of the Commission’s Customs Action Plan, which has the potential to lead to a significant reduction of the customs gap, and has again identified insufficient progress in the implementation of some actions from this plan; notes that the Commission, as part of this plan, proposed a customs reform in May 20232023, including the establishment of the EU Customs Authority and EU Customs Data Hub;

Change 30 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Added52. Recalls that the Court has highlighted the risks to the EU's financial interests from inadequate or ineffective customs controls of imported goods; commends the efforts made by OLAF on the fight against Fraud linked to customs duties and VAT; underlines the rise of the ecommerce and the online platforms risks due to potential security and safety threats and risk of non-compliance with EU taxation and customs rules, product standards, intellectual property rights, prohibitions and restrictions;

Change 31 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed42.55. Stresses that the Commission’s proposals concerning new own resources from 2021 comprising three elements, the first based on revenues from emissions trading (ETS), the second drawing on the resources generated by the EUUnion’s carbon border adjustment mechanism, and the third based on the share of residual profits from multinationals that will be re-allocated to EU Member States under the OECD/G20 agreement on a re-allocation of taxing rights (“Pillar One”) are obvious candidates for such new resources; at the same time, points out that other sources might also be considered if they should prove to be easier for Member States to approve; welcomes other initiatives that may lead to new own resources for the Union budget;

Change 32 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed(i) increase focus and pressure on the implementation of the Customs Action Plan and not least the proposal for a significant customs reform from May 2023, including the establishment of the EU Customs Authority and EU Customs Data Hub; ensure that Member States implement effective, proportionate and dissuasive penalties for non-compliance with reporting obligations; initiate infringement proceedings in those cases where there is sufficient evidence that Member States are implementing a manifestly inadequate penalty system for breaches of the Directive on Administrative Cooperation 6 (DAC 6);

Change 33 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Added(ii) insist on the importance of intensifying and diversifying the International customs cooperation with trade partners and stresses the need to strengthen the fight against cross-border tax and customs fraud in the context of the expansion of e-commerce;

Change 34 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed46.59. Notes that the Court estimates that the level of error in spending on ‘Single Market, Innovation and Digital’ in 2023 was material at 3,3 %; notes the Court’s observation that research and innovation expenditure is most affected by error, particularly in the area of personnel costs; further notes that the Commission estimates the risk at payment as 1,4 % for this heading, which is in the lower half of the range of the Court’s estimate; is concerned by the Court’s conclusion that the Commission’s risk at payment for this heading isremains an underestimate;underestimate, because of weaknesses identified by the Court in the Commission’s ex post audits in this area since the financial year 2019;

Change 35 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed48.61. Highlights the importance of EUUnion research and innovation (R&I) funding programmes for the scientific, societal, economic and technological development of the Union, reducing inequalities, achieving the green and digital transitions and decreasing the Union’s energy dependency on Russia; recalls that Horizon Europe is the most significant research and innovation programme in Europe, with a total budget of EUR 95,5 billion for 2021-2027, including EUR 5,4 billion from the NGEU instrument; notes that the RRF has allocated around EUR 48 billion in investments to R&I; underlines that in order to enhance the Union’s competitiveness and close the innovation gap, additional funding for R&I is needed, taking into account the Draghi report’s pertinent recommendations; highlights, in particular, the need to increase defence-related R&I spending due to the current geopolitical conditions, which could serve as an important component of the innovation policy strategy;

Change 36 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed49.62. Notes that its predecessor, Horizon 2020, with a budget of EUR 75,6 billion funded more than 35 000 projects between 2014 and 2020 and its calls attracted over a million individual applications from 177 countries; further notes that in her hearing for the 2023 discharge, Commissioner Ivanova underlined the EU added value of EU R&I funding programmes, explaining that the final evaluation of Horizon 2020 estimated that, for each euro of costs linked to the programme five euros worth of benefits would be generated for society by 2040; deeply regrets that 74 % of proposals assessed as high quality by independent experts could not be funded due to budget constraints; notes that an additional EUR 159 billion would have been needed to fund all high-quality proposals; stresses the importance of ensuring sufficient funding for EUUnion research and innovation, not the least to increase the Union’s competitiveness and prosperity, in line with the EUUnion’s strategic agenda for 2024-2029;

Change 37 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed52.65. Underlines the importance of simplifying the rules and procedures governing EUUnion R&I funding; notes that in 2023 the Commission has continued the roll out of simplified cost options such as lump sums and unit costs in Horizon Europe; further notes the remarks made by the Director-General for Research and Innovation in the exchange of views with the CONT Committee that the Commission intends to increase the disbursement of Horizon Europe funds through lump sums to 50 % by 2027; welcomes that the Commission, taking the Court’s recommendations issued in its annual reports for 2022 into account, will further specify the requirements defining the proper implementation of lump sum grants, including the elements of each work package triggering payment, and will also provide detailed guidance to those involved in assessing the implementation of projects; further notes that, as described in the Commission’s assessment of Lump Sum Funding in Horizon 2020 and Horizon Europe 2018-2024, beneficiaries would welcome more clarity on how lump sum grants would be audited; is concerned that the ex post audit strategy for Horizon Europe is not yet developed;

Change 38 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed53.66. Stresses the crucial role of the private sector in addressing the innovation gap in the Union and improving the Union’s competitiveness and prosperity; believes, in particular, that it is imperative to continue to promote and facilitate as much as possible the participation of small and medium-sized enterprises (SMEs)SMEs in Union R&I funding programmes; notes the Court’s conclusion that SMEs and newcomers are more prone to making errors than other beneficiaries since they lack the experience and resources to administer the funds; welcomes the efforts made by the Commission to specifically support SMEs,SMEs specifically, for example through information campaigns, contacts with the system of National Contact Points and the dedicated helpdesk of the Research Enquiry Service; considers that the simplification of rules and procedures can beis anthe importantmajor driver for increased participation of SMEs;

Change 39 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed54.67. Highlights the importance of EUUnion investments in the development of high performing, sustainable and efficiently interconnected trans-European networks in the fields of transport, energy and digital services and notes that the Connecting Europe Facility (CEF), with EUR 4,1 billion of expenditure in 2023, is a key EUUnion instrument in delivering these objectives;

Change 40 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Removed55. Notes with concern that the Court found two errors in CEF projects in its 2023 sample, and that one of these relates to a serious breach of EU public procurement rules, and has led to the contract being awarded to a consortium that did not fulfil the selection criteria and that this error contributed 28 % to the estimated error rate for heading 1;

Added68. Draws attention to the need to simplify the application procedures under the Connecting Europe Facility for Transport (CEF-T) in order to enable greater participation of smaller entities and local initiatives in the development of European transport infrastructure; regrets that the CEF-T budget does not cover all the needs for sustainable transport investments and that most of the CEF-T budget has already been allocated, leaving a funding gap until 2027;

Added69. Recalls that the Russian war of aggression against Ukraine and the resulting sanctions imposed on Russia continued to adversely impact the Union’s transport sector in 2023, leading to traffic shortages, supply chain bottlenecks, and the necessity to bypass traditional routes, thereby extending journey times and increasing costs; points out that the Eastern border regions, especially in the Baltic states, Finland, Poland, and Romania, have been particularly affected by economic losses and a halt of cross-border mobility as a consequence of the Russian aggression; calls on the Commission to introduce targeted measures, including in the next MFF, to facilitate recovery of the affected regions;

Added70. Calls on the Commission to conduct a comprehensive review of the funding allocated to the cross-border and multi-country infrastructure projects, facing significant implementation challenges, financial difficulties, or delays, such as Rail Baltica; points out that this review should address inefficiencies in planning and management as well as escalating construction costs that threaten project timelines and objectives; reiterates that greater transparency in the management of public funds increases citizens’ trust in the Union institutions;

Added71. Notes with concern that the Court found two errors in CEF projects in its 2023 sample, and that one of these relates to a serious breach of the Union’s public procurement rules, and has led to the contract being awarded to a consortium that did not fulfil the selection criteria and that this error contributed 28 % to the estimated error rate for heading 1;

Change 41 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed(ii) continue to simplify rules and procedures in line with the new financial regulation, to support training sessions and user-friendly, consistent and practical information for applicants in Member States, in particular for SMEs, new applicants, spin-offs, start-ups, regional NGOsCSOs or local action groups;groups and to encourage applications from beneficiaries in Member States with more limited participation, as well as from smaller entities;

Change 42 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed62.78. Notes the Court’s Review 0303/2024 “An overview of the assurance framework and the key factors contributing to errors in 2024-20202014-2020 cohesion spending” whichthat provides a multi-annual overview covering six years of audit results, including an assessment of management and control issues, aiming to strengthen the assurance model; is concerned by the Court’s conclusion thatthat, although the assurance framework for cohesion policy has helped to reduce the level of error, it has not been effective in bringing the overall level of error below the materiality threshold of 2 %; is worried that the Commission can rely only to a limited degree on the work of the national audit authorities, because of the systematic weaknesses; supports the Court’s recommendation to the Commission to strengthen the implementation of the assurance framework for the 2021-2027 cohesion spending; reminds the Commission of the discharge authority’s call to work closely with the Member States to improve the management and control system for Union expenditure to reduce the high error rate to below the 2 % materiality threshold;

Change 43 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed64.80. Notes the Court’s categorisation of errors found in cohesion expenditure, with ineligible expenditureprojects accounting for 29 %, ineligible costs for 26 % and serious non-compliance in public procurement procedures accounting for 21 % of errors and ERDF and CF related expenditure accounting for the largest share of errors (80 %); notes that expenditure under the ESF+, YEI and FEAD are proportionally less affected by error, as they together account for 16 % of errors, while they together account for around 20 % of the budget under this heading;

Change 44 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Removed66. Notes the public discussions on the post-2027 multiannual financial framework that may indicate a shift towards a performance-based model, coupling investments and reforms, and a desire to simplify rules and procedures; warns that any decision on the future design of spending programmes must not be to the detriment of oversight and control of Union expenditure in terms of transparency and information at Union level about non-compliance with rules and regulations; considers that the errors identified by the Court and the way the Commission handles those errors are also an indication of a properly functioning management and control system and notes that both institutions stated their commitment to improve the system and bring down the error rate;

Added82. Stresses that, in its most recent discharge opinions, the Committee on Regional Development called for additional advisory support from the Commission to national, local and regional authorities to avoid a situation of administrative overload; recognises the Commission’s efforts but, observes that, regrettably, these have not been sufficient to mitigate the risk of error; warns that a similar administrative overload might occur at the end of the RRF eligibility period and the final years of the MFF; underlines the need to address the insufficient administrative capacity of national, local and regional authorities as a matter of urgency; calls on the Commission, in this regard, to provide them with clear guidance, and to increase its support for administrative capacity building, including through staff training, best practice sharing, peer-to-peer reviews and technical assistance to ensure effective fund management;

Added83. Notes the public discussions on the post-2027 multiannual financial framework that may indicate a shift towards a performance-based model, coupling investments and reforms, and a desire to simplify rules and procedures; calls on the Commission to prioritise the financial responses to the current threats resulting from the geopolitical situation; warns that any decision on the future design of spending programmes must not be to the detriment of oversight and control of Union expenditure in terms of transparency and information at Union level about non-compliance with rules and regulations; considers that the errors identified by the Court and the way the Commission handles those errors are also an indication of a properly functioning management and control system and notes that both institutions stated their commitment to improve the system and bring down the error rate;

Change 45 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Added86. Reminds that in shared management, it is the Commission’s responsibility to make sure that Member States set up management and control systems that function effectively during the implementation of programmes; is worried that both the Commission and the Court have identified that not all Member States’ management and control systems function effectively, thus negatively effecting the reliability of the Commission error rates, as they rely on these national systems, which do not work effectively; calls into question the possibility for the Commission to continue to rely on national systems;

Change 46 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed70.88. Recalls that following Article 15 of Regulation (EU) 2021/1060 of the European Parliament and of the Council (CPR) for the programming period 2021-2027, Member States need to comply with horizontal and thematic enabling conditions, which need to remain fulfilled and respected throughout the implementation period of the funds; recalls that when enabling conditions are not fulfilled at the time of submission of a payment application to the Commission for the specific objective concerned, the related expenditure will not be reimbursed from the Union budget until the Commission is satisfied that the enabling condition has been fulfilled; recalls the strong regrets of the discharge authority within relation to the Commission decision of 13 December 2023 considering that Hungary fulfilled the horizontal enabling condition related to judicial independence that enabled the Hungarian authorities to submit reimbursement claims of up to EUR 10.2 billion; notes with concern that since the release of these funds, the Hungarian government has not taken steps to reinstate the independence of the judiciary but on the contrary; reiterates its worries about the lack of adequate control mechanisms or unreliable public procurement procedures to guarantee sound financial management and the protection of the Union budget; believes that this decision politically contradicts the prolongation of the measures adopted under Regulation (EU, Euratom) 2020/2092 (the ‘Conditionality Regulation’);

Change 47 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Removed71. Recalls that Regulation (EU, Euratom) 2020/2092 of the European Parliament and of the Council (the ‘Conditionality Regulation’) establishes a mechanism and measures to protect the Union Budget from breaches of the rule of law when other procedures set out in Union legislation would not protect the budget more efficiently; recalls that this mechanism was activated on 15 December 2022 in the case of Hungary over concerns related to its system of public procurement, resulting in a temporary suspension of 55 % of budgetary commitments for three cohesion policy programmes; recalls that the same regulation, in line with Article 6 of Council Regulation (EU, Euratom) 2020/2093 (the ‘MFF Regulation’), stipulates that suspended commitments of 2022 (year n), may not be re-entered into the budget beyond 2024 (year n+2) and that therefore 55 % of commitments from 2022, around EUR 1 billion, was decommitted in December 2024; notes that no other procedures under the Conditionality Regulation are ongoing;

Added89. Expresses deep concern over the findings in the 2023 Rule of Law Report regarding the rule of law situation in Hungary, particularly the persistent and systemic challenges in the judiciary and the media sectors; notes with alarm the increasing pressure on judicial independence, including concerns over the selection and promotion of judges, and recent reports of intimidation and interference in judicial decisions, as exemplified by the resignations of judges in protest against political influence; notes with concern in the same vein that the head of the Hungarian Integrity Authority, a key institution established as a condition set by the Commission for the release of Union funds under the Rule of Law Conditionality Regulation, is facing increasing pressure from the Hungarian government; calls on the Commission to ensure a coordinated and holistic approach across all relevant Union funds and legislative tools, emphasizing that Union funds must not be allocated to activities undermining democracy or reinforcing authoritarianism;

Added90. Recalls that the Conditionality Regulation establishes a mechanism and measures to protect the Union Budget from breaches of the rule of law when other procedures set out in Union legislation would not protect the budget more efficiently; recalls that this mechanism was activated on 15 December 2022 in the case of Hungary over concerns related to its system of public procurement, resulting in a temporary suspension of 55 % of budgetary commitments for three cohesion policy programmes; recalls that the same regulation, in line with Article 6 of Council Regulation (EU, Euratom) 2020/2093 (the ‘MFF Regulation’), stipulates that suspended commitments of 2022 (year n), may not be re-entered into the budget beyond 2024 (year n+2) and that therefore 55 % of commitments from 2022, around EUR 1 billion, were decommitted in December 2024; notes that no other procedures under the Conditionality Regulation are ongoing;

Added91. Notes that the Commission allocated an equivalent of five full-time staff members to the implementation of the Conditionality Regulation and reiterates the European Court of Auditor’s concerns raised in its Special Report 03/2024 that current staff numbers appear to be insufficient to ensure a strict and coherent application of the Regulation;

Change 48 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed73. Is further concerned about93. theNotes re-packagingthat ofsome investments which would have been eligible for financing under cohesion toare included in the National Recovery and Resilience Plans,Plans; thusrecalls castingthat doubtsthe aboutgeneral objective of the realRRF addedenshrined valuein Article 4 of the RRF;RRF furtherRegulation drawsis to promote the attentionUnion’s economic, social and territorial cohesion, and that one of its six pillars is specifically dedicated to this purpose; acknowledges that the increasingwide scope of the RRF results in limited overlap with other Union funding programmes, as intended by the co-legislators when establishing the Article 9 of the RRF Regulation, which establishes additionality and complementarity funding as key principles; draws attention, however, to the risks of double funding emerging from such situations;

Change 49 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Added95. Recognises the disproportionate impact of the Russian war of aggression against Ukraine on eastern regions of the Union bordering Russia and Belarus; draws attention to the costs borne by these regions and Member States as a result of their shared border with hostile neighbouring countries, notably their need to increasingly direct public funding into security, defence and preparedness, while facing dramatically reduced resources due to a disruption in economic activities, cross-border trade and other exchanges, and in cohesion programmes, particularly Interreg programmes; notes the measures taken by the European Commission to support these regions, notably through flexibilities provided under cohesion policy; welcomes that providing support to eastern border regions most affected by Russia’s aggression is included in the mission letter of the Executive Vice President for Cohesion and Reforms; calls on the Commission to ensure the provision of adequate support for eastern regions of the Union bordering Russia and Belarus to cope with the disproportionate consequences of the Russian war of aggression, both in the short-term through the 2026 draft budget and in the medium-term through the Commission’s proposal for the next MFF;

Added96. Stresses the importance of ESF+ which aims to achieve high employment, fair social protection, a skilled and resilient workforce, and inclusive/cohesive societies as key in eradicating poverty; expresses the need to provide it with the continued financial and political support of the Union, national and regional institutions in the delivery of its objectives and targets in the years to come; underlines the importance of closely involving regional actors, in particular civil society organisations and social partners working on the ground in the implementation of ESF+ funded activities;

Added97. Welcomes the frontloading of EUR 100 million from the 2027 budget of Erasmus+ to the 2023 budget of Erasmus+, which enabled continued support to pupils, students, teachers and qualified staff fleeing from Ukraine, and the extra EUR 20 million awarded to Erasmus+ in 2023 as a result of Parliament’s insistence; stresses that frontloading must remain an exception to rapid response to unforeseen acute crisis situations; underlines that any frontloading of Erasmus+ cannot result in cuts for the programme at the end of current MFF; emphasises that every effort must be made to respond to such situations preferentially with additional funding;

Added98. Emphasises the need for strict oversight of the allocation of funds to prevent misuse within the Erasmus programme; asks the Commission to gather evidence to investigate any case of fraudulent or suspicious recipients, in accordance with its duties outlined in the Financial Regulation and Erasmus+ grant agreements; calls for adequate safeguarding of the programme from abuse by organizations whose activities are not aligned with the fundamental values of the Union (human dignity, freedom, democracy, equality, rule of law, human rights); recalls that the Commission is legally bound to ensure that programme beneficiaries commit to and ensure the respect of these values and do not commit professional misconduct;

Added99. Notes that in 2023, the budget of the EU4Health programme, the main financial instrument to support Union health initiatives, was EUR 735 million, mainly managed by Directorate-General for Health and Food Safety and the Health Emergency Preparedness and Response Authority (HERA) and implemented through the European Health and Digital Executive Agency; acknowledges the progress of initiatives funded under this programme, notably in the areas of health emergency preparedness, the Beating Cancer Plan, the Pharmaceutical Strategy for Europe and in the implementation of Union health legislation;

Change 50 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed(i) re-consider the practice of 100 % EUUnion funding in EUUnion crisis response instruments, where increasing pre-financing might provide faster availability of funds, while maintaining a shared financial budgetary control responsibility in implementation of the funds by maintaining financial involvement from both national and Union level;

Change 51 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed(ii) ensure selection of qualitatively good projects with cohesion policy funds by favouring long-term investments, and duly justifying 100 % EUUnion funding while limiting its application;

Change 52 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed(vi) consider expandingexpand the scope of its desk review of assurance packages to review more quality criteria in addition to consistency to make a reliable estimate of the residual error rate for the assurance package under review, as well as of the risk at payment as a whole;

Change 53 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed(vii) step-upstep up its monitoring of the horizontal and thematic enabling conditions in all Member States to identify potential threats for the protection of the Union Budget;Budget and ensure enhanced transparency and stakeholder participation in the application of this tool;

Change 54 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Removed(ix) provide Member States with increased technical assistance in order to address delays in the implementation of national programmes;

Added(ix) continuously monitor the implementation by the Hungarian Government of measures foreseen in Council Implementing Decision (EU) 2022/2506 of 15 December 2022; assess to what extent the situation has improved or worsened, including in relation to the challenges faced by the Hungarian Integrity Authority, and take all necessary actions in accordance with the Conditionality Regulation;

Removed(x) closely monitor and mitigate the risk of double funding between cohesion programmes and RRF funding and address any such occurrences without delay;

Added(x) provide Member States with increased technical assistance in order to address delays in the implementation of national programmes in order to increase the absorption rate;

Added(xi) closely monitor and mitigate the increasing risk of double funding between Cohesion programmes and RRF funding and address any such occurrences without delay;

Change 55 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Added(xiv) ensure the provision of adequate support for eastern regions of the Union bordering Russia and Belarus to cope with the disproportionate consequences of the Russian war of aggression against Ukraine, both in the short-term and in the medium-term;

Change 56 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Added103. Points out, however, that this is partly due to the complexity of environmental schemes in rural development programmes and the recognized negative issue of “gold plating” at national level;

Added104. Notes, in this context, the lower-than-expected implementation rate of EAFRD funding for the period 2023-2027, with an absorption rate of only 1 % at the end of 2023, with payments amounting to EUR 0.7 billion, and expects the absorption rate to increase significantly in the course of the next reporting period;

Change 57 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed81.108. Recalls the farmers’ protests across Europe towards the end of 2023 and early 2024 and the Commission’s response aimed at simplification, in particular for small farmers, and increasing discretionary powers for Member States; commendsstresses that simplification should go hand in hand with sound financial management and take into account the CommissionUnion’s forclimate itscommitments; welcomes the Commission’s targeted approach, especially concerning the distinction between farm size in terms of agricultural land and number of farms; cautions that discretion given to Member States should also be accompanied by thorough oversight by the Commission;

Change 58 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed84.111. Notes the Court’s Special Report 20/2024 on Common Agriculture Policy Plans and the Commission’s reply; notes the Court’s conclusion that the Plans for 2023-2027 are greener than instresses the previous CAP period; isimportance howeverof concernedensuring that all key elements for assessing green performance are missing;provided; considers that plans need to account for specific situations in specific Member States and that therefore a certain level of divergence is even desirable, is however worried that divergence in ambitions may mean that there is no level playing field for farmers across Member States; is further disappointed by the Court’s finding that although the new monitoring framework has been simplified, the CAP objectives lack clarity and indicators focus on outputs rather than results, and that important result indicators are missing; considers thisnotes athat commonthe problemCourt withrecommends the ongoing effortsCommission to introducepromote performance-basedexchange instrumentsof bybest practices in the Commission;plans and strengthening the future CAP monitoring framework;

Change 59 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed85.112. Notes the Court’s Special Report 19/2024 on Organic farming in the EU, and the Commission’s reply; is once more worried by the Court’s finding that a weak strategic framework and data constraints prevent the measurement of the impact of the policy; considers that the increased focus on performance and definition of targets and indicators, and the related monitoring of results across EUUnion policies needs to be supported by an equal increase of the Commission’s capacity to define performance frameworks and monitor performance;

Change 60 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Removed86. Expresses its deep concern on several grant agreements concerning operating grants between the Commission’s Climate, Infrastructure and Environment Executive Agency (CINEA) and civil society organisations, including NGOs, and networks of non-profit making entities under the LIFE programme; notes that some of these agreements include in their description of proposed activities advocacy actions or lobbying (such as providing voting recommendations), towards Commission services and/or (Members of) the European Parliament and other EU Institutions or their representatives; considers that this practice gives the impression that the Commission explicitly pays these entities and organisations to influence decision making and may contradict the principle of separation of powers between EU Institutions;

Added113. Welcomes the increased competitiveness achieved through market measures in the wine sector and encourages the Commission and Member States to persevere in their efforts to replicate this success in other sectors;

Removed87. Notes the actions taken by the Commission to address the concerns raised by the discharge authority, that include the issuance of guidance for Commission services and a requirement to screen their contract portfolios to determine which agreements are not in line with the guidance; is deeply concerned about the time delay between the moment the CONT Committee made the Commission aware of the issue in February 2024 and the moment when action was finally taken; considers that the measures adopted so far by the Commission are not sufficient to mitigate the risks outlined by the discharge authority since the guidance issued by the Commission does not prevent beneficiaries to use EU funds to lobby or influence the Union legislative process; notes that the guidance mentions a non-exhaustive list of activities that can be performed by supported entities; notes that the Commission considers that these activities should not be included in grant agreements to indicate that beneficiaries are required to undertake specifically more detailed activities directed at EU Institutions and some of their representatives as that may entail a reputational risk; believes that the explicit exclusion of certain activities from grant agreements does not necessarily mean that such activities will not be performed with the support of EU funds;

Added114. Recalls that democracy and pluralism are fundamental values of the Union enshrined in Article 2 TEU; further recalls that, in line with Article 11 TEU, Union institutions shall give citizens and representative associations the opportunity to make known and publicly exchange their views in all areas of Union action in order to maintain an open, transparent and regular dialogue; underlines that separation of powers between the institutions as laid down in Article 13 TEU must always be respected and that Union institutions shall practice mutual sincere cooperation;

Removed88. Notes that the Commission has performed a legal analysis of the problematic grant agreements identified by the CONT Committee, which concluded that there was no evidence that the entities concerned had breached their contractual or code of conduct obligations; considers that the actions undertaken by the Commission are indeed focused on mitigation of the reputational risk, but do not address the overall issues outlined by the Parliament; notes reports in the media that several entities have been approached by the Commission to make amendments to the grant agreements that contain the specific provisions that create a reputational risk, but believes that the mere amendments of such agreements do not mitigate the risks of continued use of EU funds for lobbying activities directed at the European Parliament;

Added115. Recognises the importance of the LIFE programme; recalls the provisions of the LIFE+ Regulation, including those related to operating grants, the eligibility conditions, the award criteria, the overall allocation for 2021-2027 and the distribution of funds within the programme;

Change 61 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed(iii) apply the lessons learned as regards the reduction of the administrative burden from its response to the farmers’ protests in future policy initiatives, while taking due account of the risk of abuse of funds where control measures are concerned,reduced, or risk of too much divergence between Member States when discretionary powers are used without proper oversight;

Change 62 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Removed(vii) make the results of the screening of grant agreements and other contracts available to the discharge authority in order to allow an assessment of the extent to which the Commission is exposed to a reputational risk of entering into agreements that call for explicit actions to lobby members of the discharge authority; with the necessary independent assurance on its reliability by the IAS;

Added(vii) update the Commission’s anti-fraud strategy to devote attention to advocating for and upholding a clear separation of executive and legislative power in the Union;

Change 63 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed(viii) immediatelyhave suspenda orclear canceland grantcomprehensive agreementsstrategy withat NGOsCommission whichlevel areas into violationhow ofto better protect the financial rulesinterests of the Union and toensure supplementthat theUnion Commissionfunds guidanceare withspent concretefor proposalstheir forintended avoidingpurposes thatand EUdiligently fundingapply isthe usedFinancial toRegulation activelyprovisions, lobbyincluding EUby Institutions,ensuring suchthat asgrant self-declarations;agreements welcomescan thebe announcementssuspended madeor byterminated thewhen newbeneficiaries Commissionviolate inthe thisUnion's regard;legislation;

Change 64 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Removed(ix) further develop its internal guidance related to grant agreements containing specific lobbying activities;

Added(ix) ensure a fair distribution of Union funds to CSOs to contribute to a pluralistic and vibrant society;

Removed(x) revise the Memorandum of Understanding between CINEA and DG ENV “Inter-institutional single framework contracts, in two lots, for the provision of support for the monitoring of LIFE projects (action grants and operating grants), communication about the LIFE programme and other related activities” to include a clearer division of responsibilities when awarding contracts;

Added(x) ensure that the Commission’s guidance adopted in 2024 is applied by all authorising officers and, if necessary, further develop guidance to fully align grant agreements with Treaty provisions and existing legislation;

Removed(xi) let the audit structure, including DG ENV unit A4, systematically review contracts with NGOs and DG ENV/CINEA and to flag problematic contracts immediately;

Added(xi) make the results of the screening of grant agreements available to the discharge authority in order to allow an assessment of the extent to which the Commission may be exposed to a reputational risk;

Change 65 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Added(xx) improve the quality of dialogue with farmers from all Member States;

Added(xxi) react more quickly when serious concerns of the discharge authority are flagged to the Commission;

Added(xxii) perform adequate checks of entities listed in the Transparency Register, in order to ensure that they comprehensively list their activities in the Register;

Added(xxiii) draw clearer lines of responsibility when implementing collaborative platforms;

Added(xxiv) instruct the Corporate Management Board to submit consolidated information on the list of critical risks to the internal audit service and ensure executive agencies address potential risks and ensure a transparent selection of independent evaluators to prevent conflict of interest and guarantee their independence;

Added(xxv) instruct all DGs and executive agencies to review the distribution of funds dedicated to auditing in order to ensure sufficient resources;

Change 66 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed98.129. Welcomes the progress identified by the Court in its review of the preparatory work done by five member state audit authorities in managing the transition of the AMIF, BMVI and ISF funds to the CPR of the 2021-2027 MFF; observes that these audit authorities reported to the Court that the support and guidance DG HOME provided to them was satisfactory; notes with concern that at the time of the Court’s audit four out of five -MemberMember State audit authorities had not finalised their audit strategies;

Change 67 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed99. Welcomes the new Pact on130. MigrationTakes andnote Asylum,of forthe whichadoption politicalof agreementthe wasNew reachedPact inon 2023,Migration and furtherAsylum; welcomes that the mid-term revision of the Multiannual Financial FrameworkMFF 2021-2027 allocated an additional EUR 2 billion to migration and border management for 2024-2027 to address the growing challenges in migration and border management resulting from the current geopolitical context; notes, however, that additional funds might be needed with a view to ensuring the full implementation of the Pact; calls for the quick implementation of the Pact in the Member States;

Change 68 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed100.131. RecallsStresses that securing the Union’s external borders is a pillar of the New Pact on Migration and Asylum; notes with concern that the Commission reported that the number of irregular border crossings in the Union increased in 2023 to 380 000, compared to 330 000 in 2022; underlinesobserves that the needBMVI tocan bettersupport protectfrontline vulnerableMember peopleStates fromto smugglingensure andthey traffickinghave networksthe resources for infrastructure, facilities and installations necessary to addresssecure the negativeexternal effectsborders of the instrumentalisationUnion, ofincluding migrantselectronic border security enhancements and other tools for border surveillance as partprovided for in annex III of hybridthe attacks,BMVI notablyregulation; bynotes pro-Russianthe forces;European observesCouncil conclusions of 9 February 2023 that the AMIFUnion will step up its action to prevent irregular departures and loss of life, to reduce pressure on the BMVIborders canof supportthe MemberUnion Statesand inon reinforcingreception theircapacities, borderto protectionfight capabilities,against includingsmugglers physicaland infrastructure,to buildings,increase equipment,returns; systemsunderlines the need to better protect vulnerable people from smuggling and servicestrafficking requirednetworks atand borderaddress crossingthe points;negative effects of the instrumentalisation of migrants as part of hybrid attacks, notably by pro-Russian forces, as well as by the Belarusian regime;

Change 69 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Removed101. Notes the Court’s conclusion that the AMIF 2014-2020 was performing below expectations in terms of facilitating returns of migrants: also takes note of the fact that the Court and the Commission agree that progress in this area was particularly affected by COVID-19-related travel restrictions; further notes that in 2023 return measures were supported with EUR 29,8 million from the AMIF; looks forward to receiving consolidated information in 2025 on progress in this regard through the ex-post evaluation AMIF 2014-2020;

Added132. Recalls that, according to Regulation (EU) 2021/1060, Member States and the Commission must ensure respect for fundamental rights and compliance with the Charter of Fundamental Rights of the European Union in the implementation of Union funds;

Added133. Notes the Court’s conclusion that the AMIF 2014-2020 was performing below expectations in terms of facilitating returns of migrants: also takes note of the fact that the Court and the Commission agree that progress in this area was particularly affected by COVID-19-related travel restrictions; further notes that in 2023 return measures were supported with EUR 29,8 million from the AMIF; considers that the Commission must provide stronger efforts to assist Member States in addressing irregular border crossing and in successfully implementing returns of third-country nationals, as well as the integration of legal migrants; looks forward to receiving consolidated information in 2025 on progress in this regard through the ex-post evaluation AMIF 2014-2020; highlights that the Commission should continue to take action on migration and asylum within the framework of external action, including the ‘Team Europe’ approach while also increasing the transparency of the programming and implementation of the Union home affairs funds in third countries and safeguarding the role of the Parliament;

Change 70 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed(iii) take action to improve the performance of EU-funded actions funded by the Union in terms of effective returns and combatting irregular migration, while ensuring the full respect of Union legislation and the fundamental values of the Union in the process;Union;

Change 71 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Added(iv) take action to increase the efficiency of Union spending on the protection and management of the European Union’s external borders;

Added(v) monitor, assist in and scrutinise the timely progress of the administrative, operational and legal steps required by Member States and Union agencies for the full implementation of the New Pact on Migration and Asylum by 2026;

Added(vi) increase the transparency of the programming and implementation of the Union home affairs funds in third countries, while safeguarding the role of Parliament in ensuring the democratic scrutiny of Union spending;

Added(vii) continuously assess, in the implementation of the Union Budget, compliance with the Charter of Fundamental Rights and the Union values enshrined in Article 2 TEU, in accordance with Article 6 of the Financial Regulation;

Change 72 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed107.139. Recalls the highly unstable geopolitical situation in the Union’s neighbourhood giving rise to greater security and defence challengeschallenges, including hybrid threats, and thereby to greater investment needs in security, defence and preparedness, since the beginning of Russia’s war of aggression against Ukraine; draws attention to the fact that MFF heading 5, dedicated to security and defence, is the smallest of all MFF headings and regrets that the Union's current budget for ensuring the security and defence of its citizens is not equal to the challenges to be met either in the short or the long term; notes that in 2023 EUUnion funding in support of the defence industry came exclusively from the EDF; recalls the role played by the EDF in supporting European technological expertise in emerging and disruptive technologies; welcomes that submissions to the 2023 EDF calls increased by 72 % compared to the previous year;year, demonstrating the strong and constantly growing interest of European defence industry actors and research organisations in the EDF and the high demand for funding in this sector; notes that under the 2023 calls, the Union committed EUR 1,15 billion for 61 defence R&D projects, benefiting 581 legal entities from 26 Member States and Norway; notes that on average 17 entities from eight different Member States and Norway participate in each project; underlines the importance of a level playing field in supporting cross-border defence R&D cooperation;

Change 73 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed108.140. Welcomes the Commission’s actions to enhance support for small and medium-sized enterprises (SMEs)SMEs in the defence sector, in particular appreciates that the EU Defence Innovation Scheme (EUDIS), which provides a diverse range of instruments tailored to support SMEs within the defence ecosystem, became fully operational in 2023, with EUR 224 million allocated to it from the EDF budget; appreciates, further, the role of the SME bonus under the EDF in facilitating the access of smaller actors and innovators in defence supply chains; notes that in the 2023 EDF calls, 42 % of the entities selected for funding were SMEs, an increased share compared to 2022 (38,2 %), and that 18 % of the total funding available through the EDF calls is allocated to SMEs;

Change 74 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed109.141. Recalls that the Preparatory Action on Defence Research (PADR) was a precursor programme of the EDF with a budget of EUR 90 million that funded 18 research projects selected following calls for proposals in the years 2017 to 2019; further recalls that the Court, in its Special Report 10/2023 ‘The Preparatory action on defence research’, has observed that the Union still lacked a long-term strategy for the projects under the EDF, particularly in terms of impact, additional research, development, manufacturing and procurement; welcomes that the Commission has accepted all of the Court’s recommendations and has confirmed that their implementation is ongoing; welcomes, in this regard, the Commission’s adoption of a European Defence Industrial Strategy (EDIS) and legislative proposal establishing the European Defence Industry Programme (EDIP) as well as its commitment to build up the EDF; nevertheless, in view of the geopolitical realities the Union faces, is concerned that the full implementation of the Court’s recommendations is expected only in 2026;

Change 75 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed111.143. WelcomesNotes that the implementation of ‘Action Plan on Military Mobility 2.0’ is ongoing, with EUR 1,74 billion allocated for dual-use transport infrastructure projects under the Connecting Europe Facility (CEF) between 2021-2027; notes that so far the Union has co-funded 95 military mobility projects in 21 Member States and that 94 of these projects are still ongoing and most of them are expected to be finalised between 2026 and 2027; furthernotes with concern that following three calls for proposals organised in 2021, 2022 and 2023, the entirety of the military mobility envelope under the CEF for the current programming period has thereby already been exhausted; considers that although making the budget quickly available by frontloading amounts into the 2022 and 2023 calls responded to the need to take into account the evolution of the security situation in Europe following Russia’s war of aggression against Ukraine, it simultaneously led to Union funding being unstable and unpredictable by leaving a gap of more than four years with no more Union funds available for military mobility calls to finance dual-use infrastructure projects until the post-2027 MFF; recalls the Court’s conclusions in its Special Report 04/2025 that the Action Plan was not built on sufficiently solid foundations and that progress towards its objective, namely ensuring swift and seamless movement of personnel, materiel and assets at short notice and on a large scale, has been variable due to design weaknesses and remaining obstacles to implementation; notes that the Commission considers that more action is needed to strengthen dual-use transport infrastructure corridors, including on regulatory issues such as cross-border movement permission procedures; notes the Court’s observation that the Commission had not carried out a robust assessment of the overall funding required to make its objectives and targets achievable; regrets that only EUR 300 million was spent on military mobility in 2023 and is concerned that calls for proposals under the military mobility envelope faced a four-time oversubscription rate;rate, demonstrating the increased interest among Member States and project beneficiaries;

Change 76 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed(ii) secure the provision of adequate resources to enhance EUUnion defence cooperation, in the short-term through the 2026 draft budget and the timely recruitment of expert staff, and in the medium-term through the Commission’s proposal for the next MFF;

Change 77 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed(iii) further strengthen military mobility in the Union by substantially increasing the funding available to improve dual-use transport infrastructure corridors and by taking action to eliminate administrative, procedural and regulatory barriers to cross-border military movements;movements, while prioritising Union funding to projects that best respond to the current European threat landscape; taking into account the Court’s findings and recommendations in special report 04/2025;

Change 78 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Added(iv) take action to ensure due diligence in relation to project criteria for dual-use military mobility infrastructure projects, in line with the Court’s recommendation;

Change 79 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed113.145. Notes that the budget for the programmes under MFF heading 6 ‘Neighbourhood and the world’ was EUR 15,2 billion (7,4 % of the Union budget) distributed as follows: 63,4 % for the Neighbourhood, Development and International Cooperation Instrument - Global Europe (NDICI-Global Europe), 16,4 % for Humanitarian Aid (HUMA), 16 % for Pre-Accession Assistance (IPA III) and 4.2 % for other actions and programmes; notes that in total, payments for ‘Neighbourhood and the world’ reached 15.2 billion in 2023, representing approximatively 8 % of the overall EUUnion expenditure excluding RRF;

Change 80 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed116.148. Is concerned that the Court found a significant non-compliance with visibility rules in an EU-funded project under indirect management by DG NEAR, which concerned a contribution agreement worth EUR 21.2 million signed with an international organisation in a project where the aim was to support Eastern partnership countries in tackling COVID-19; notes that the Court found that most donation certificates it checked did not contain any acknowledgment that the medical equipment donated was funded by the Union; recalls that beneficiaries of EUUnion funds are required to clearly publicise the fact that the Union has financed or co-financed the action they are implementing; notes the Commission’s replies that it is discussing new communication and visibility guidelines with the United Nations to reduce the risks of errors on compliance with visibility rules;

Change 81 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed118.150. Notes that the Commission intensified communication with international organisations in order to raise awareness of the need to ensure that the Court’s auditors obtain full access to documents when auditing EU-fundedprojects projects,funded by the Union, and that the Commission has supported initiatives to find permanent solutions to the issues of access to and retention of documents; notes, however, the Commission’s acknowledgment that despite efforts, some constraints regarding access to documents persist due to the existing legal frameworks of the implementing partners, which are not expected to change in the near future;

Change 82 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Removed119. Stresses that Union aid should under no circumstances - directly or indirectly - be financing terrorism, hence it should not support any entity connected to Hamas or any other terrorist organisation;

Added151. Urges the Commission to enhance the rule of law conditionality-based approach of the Instrument for Pre-Accession Assistance (IPA) III funding in order for the instrument to serve its purpose of effectively preparing accession countries to fulfil the conditions of becoming Member States of the Union; reiterates its calls on the Commission to implement the recommendations of the Court’s Special Report 01/2022 in order to ensure an effective impact of Union financial assistance in support for the rule of law in the Western Balkans, in particular by developing guidelines on the application of the provisions on modulation and conditionality under IPA III;

Removed120. Urges the Commission, in the context of delivering support and humanitarian aid to the Palestinian population, to diversify trusted partners, such as the WHO, UNICEF or different Red Crescent organisations; recalls the importance for the Commission to guarantee independent controls of UNRWA by external experts, the European Court of Auditors and experienced international partners;

Added152. Stresses that Union aid should under no circumstances - directly or indirectly - be financing terrorism, hence it should not support any entity connected to Hamas or any other terrorist or extremist organisation; notes to this end, it is legitimate and necessary to be able to clearly know and identify all the final beneficiaries of European aid in third countries; emphasises the need for strict control over the distribution and use of aid to ensure no misuse of funds;

Removed121. Notes that the Commission has been working in the last months with UNRWA, to enhance the neutrality processes and control systems in the Agency, in line with findings of the investigations by the UN Office of Internal Oversight Services (OIOS) on the allegations of involvement of 19 of its staff in the 7th October 2023 attack, and to monitor the application of the action plan presented by UNRWA on the implementation of the recommendations of the Independent Review Group led by former French Minister of Foreign Affairs Colonna to strengthen control and oversight; notes that the Commission has reassessed the EU 2024 funding decision for UNRWA and that, through an exchange of letters between Commissioner Várhelyi and UNRWA Commissioner General Lazzarini in April 2024, the Union reached an agreement about the EU’s conditional assistance for UNRWA, linked to a number of milestones in relation to three work streams, including the screening of UNRWA staff, an EU audit, as well as the reinforcement of the Department of Internal Investigations and Ethics office;

Added153. Notes with regret that the European Commission financed the Gaziantep Islamic Science and Technology University, which has proven ties to terrorist organisation of Hamas; calls on the Commission to cancel all ties to this university and other universities with ties to terrorist organisations;

Change 83 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed124.158. Welcomes that OLAF provides targeted anti-fraud assistance to authorities and supports the accession of Ukraine to the Union Anti-Fraud Programme; notes that the Framework Agreement for the Ukraine Facility, which entered into force in June 2024, provides for legally binding arrangements for the management, control, supervision, monitoring, evaluation, reporting and audit of funds under the Facility, as well as measures to prevent, investigate and correct irregularities, fraud, corruption and conflicts of interest, and provisions on the roles of OLAF and EPPO; welcomes, in addition, that, pursuant to article 36 of the Ukraine Facility Regulation, the Commission established in June 2024 an Audit Board, with the mission of assisting the Commission in assessing the effectiveness of Ukraine’s management and control systems regarding the funds provided under the Facility and in fighting mismanagement of Union funding under the Ukraine Facility; calls on the Commission to keep the European Parliament regularly informed about the activities and findings of the Audit Board in order to ensure proper parliamentary oversight;

Change 84 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Added159. Notes with concern the recent reports on the findings of a draft audit report paid for by the Commission on the Organisation of African, Caribbean and Pacific States (OACPS) Secretariat which allege to suspected fraud, unpaid salaries and further liabilities; notes that as reported the Commission has contributed EUR 3.7 million to the Secretariat in 2023 and is trying to recover EUR 3.6 million as of March 2024; asks the Commission to ensure full transparency and accountability, grant access to the audit report and inform the members of Parliament on the concrete steps taken;

Added160. Calls on the Commission in line with ECA’s recommendations in its opinion 03/2024 to integrate into the new MFF legislative proposal the recommendations of the External Action Guarantee complementing the Commission's evaluation, including increased use of blending (grants) in LDCs, fragile or conflict-affected countries and engaged coordination with stakeholders such as civil society;

Added161. Is concerned about the allocation of EFSD+ under the new flexible 'Support to Investments' envelope in favour of benefiting countries where the Global Gateway investments are easier to implement at the expense of prioritising LDCs, and fragile and conflict-affected countries; calls for reporting on the volume of EFSD+ amounts allocated and contractualised in these countries and for transparency on how the quota of allocations to LDCs within country MIPs is respected within allocations of the regional MIPs;

Added162. While recognising the Global Gateway strategy as a concerted Union response to global challenges, reiterates that actions bringing together public and private investment must always be guided by the legal framework as provided by the NDICI Regulation, the Agenda 2030, and the needs of partner countries, as communicated by way of an honest dialogue at eye level; is concerned about inconsistencies surrounding Global Gateway programmes; calls, therefore, for improved transparency, democratic accountability, robust monitoring and evaluation mechanisms in Global Gateway and Team Europe initiatives; calls for a centralised, publicly accessible platform, regularly updated, to detail Global Gateway projects, including their objectives, funding sources, implementing partners, and expected outcomes;

Change 85 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Added170. Recalls that two EUTFs were created under the EDFs; recalls that EUTF for Africa has mobilised over EUR 5 billion, with 88% of contributions (EUR 4.4 billion) coming from the EDF and the Union budget; deplores that, despite several requests from Parliament, the process of managing and allocating these funds still lacks transparency; is concerned by the ECA findings in its Special report 17/2024 “The EU trust fund for Africa Despite new approaches, support remained unfocused; notes that, despite an innovative approach to identifying human rights risks in a difficult environment, these risks were not comprehensively addressed and that the Court found that the assessment of potential risks to human rights was not comprehensive; recalls that the Commission is unable to identify and report on the most efficient and effective approaches to reducing irregular migration and forced displacements in Africa according to the Court; regrets that the new monitoring system aggregates information from all EUTF projects, but suffers from issues of data accuracy; notes that the Union’s Africa trust fund is set to be phased out in 2025;

Change 86 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed(i) ensurestrictly strictmonitor monitoringthrough andall ex-anteavailable mechanisms and ex-postwork mechanismswith ofUNRWA to ensure the implementation of all agreed actions to guarantee that the UNRWA works in full compliance with humanitarian principles and neutrality, including in the forthcoming EU-UNRWA joint declaration and the upcoming financing decisions for conditional EUUnion assistance;

Change 87 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed(ii) ensure that all contracts involving EUUnion funds fully respect applicable EUUnion legislation, including accountability, transparency, and sound financial management, and that this includes verifying that there are no subcontractors, natural persons, participants in workshops and/or trainings or recipients of financial support made to third parties subject to EUUnion restrictive measures or involved in the financing of terrorism or acts of terrorism as well as other acts of hatred and incitement to hatred;

Change 88 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Added(iii) increase evidence-based targeting of geographical areas and beneficiaries, and improve the accuracy of reported achievements of future development action, including through the Neighbourhood, Development and International Cooperation Instrument – Global Europe;

Change 89 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed134.173. Notes that the Commission is directly responsible for the implementation of 59,1 % of the overall administrative EUbudget budget,of the Union, equivalent to EUR 7,2 billion; further notes that 70 % of the administrative expenditure relates to human resources including pensions while the remaining primarily covers expenditure related to buildings, equipment, energy, communications and IT; notes with satisfaction that also for 2023 the Court concludes that the spending area is low risk;

Change 90 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed136.175. Encourages the Commission together with EPSO to ensure that necessary technical systems are put in place as quickly as possible and that processes are accelerated in order for the Commission and other EUUnion institutions to be able to rely on EPSO for the selection of highly qualified and motivated candidates for all types of jobs in the institutions;

Change 91 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed137.176. Appreciates that female representation in management positions increased from 46,1 % in December 2022 to 47,8 % in December 2023, which represents good progress towards ensuring gender balance;2023; encourages the Commission to continue to focus on ensuring and maintaining gender balance on all levels of management;

Change 92 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed138.177. Notes with satisfaction that the Commission has implemented policies to enhance work-life balance and staff well-being, including the right to disconnect; at the same time commends that a new decision on the prevention and fight against harassment was adopted which establishes the position of a Chief Confidential Counsellor as importantkey elementsfigure in ensuringthe thatfight against harassment; stresses the Commissionneed isto anprovide attractivethis workplaceposition forwith all;the appropriate resources to effectively carry out multiple challenging tasks;

Change 93 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Added178. Acknowledges the progress of the Commission with regard to the internalisation of crèche staff;

Change 94 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed140.180. Stresses the need to ensure that all the EUUnion Institutions in Luxembourg can attract staff to all types of jobs and careers; notes that especially for servants in lower pay grades Luxembourg can be a less attractive option due to the costs of living; notes that with the agreement on the budget for 2025 the first step has been taken by establishing a special housing allowance for staff in lower grades working in EUUnion Institutionsinstitutions in Luxembourg;

Change 95 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed142.182. Is concerned about the severe delays, including delays of up to 6 months, faced by civil servants across the institutions when receiving the reimbursements of healthcare costs under the institutions’ sickness insurance scheme; is also concerned about the inadequate treatment of civil servants and MEPs with autoimmune diseases, neurological disorders, COPD (obstructive pulmonary disease), long COVID, undiagnosed and rare diseases by the sickness insurance scheme of the institutions; notes that patients with these symptoms are often not reimbursed for their diagnostic tests;

Change 96 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed143.183. Notes thatthat, thein Ombudsman2023, inthe 2023Ombudsman launched 398 inquiries concerning the Commission; further notes that during 2023 the Commission received 187 closing decisions without remarks and 17 decisions of maladministration; notes with concern that the Ombudsman receives many citizens’ complaints about extreme delays in gaining access to requested documents from the Commission and encourages the Commission to strive to speed up the processing of such requests and further reduce the number of decisions of maladministration and establish clear rules concerning access to all types of written texts whether on paper, email, text messages or any other form of communication, which is part of an administrative process related to Commission policies or decisions; notes that out of the nine investigations related to the Commission concluded by OLAF in 2023, seven were closed with recommendations; calls on the Commission to ensure transparency and accountability in the follow-up to these cases;

Change 97 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Added184. Expresses deep concern that there has been allegations of corruption linked to the Commission; at the same time deplores that there has been allegations about officials from the Commission that allegedly accepted gifts from a country that the Union was negotiating an agreement with; stresses the need for a clear and systematic approach to ensure that all OLAF cases involving relevant potential criminal offences are promptly referred to the EPPO and the competent national authorities; calls on the Commission to reinforce relevant rules and procedures in order to ensure that all cases are handled in a strict, correct and efficient way;

Added185. Notes that only very few cases of psychological and sexual harassment have been recognised as such in the past years and expresses concern that this may point to institutional blind spots in the Commission, given the significant number of employees of the institution;

Added186. Calls on the Commission to prioritise permanent staff over external consultants and contractual staff, in order to guarantee high quality working conditions and to prevent knowledge and experience from being lost; calls for flexibility for DGs with a high proportion of seconded national experts (SNE) in the establishment plan to convert SNE posts into temporary agent posts with the aim of ensuring better expertise retention, operational functionality and business continuity; further insists on avoiding the externalisation of tasks to consultancies when available know-how can be found in-house;

Added187. Notes that, in recent years, the Commission has increasingly outsourced impact assessments to external companies, raising concerns about potential conflicts of interest; calls on the Commission to strengthen provisions to prevent possible conflicts of interest and to provide better guidance to staff handling public procurement procedures for policy-related service contracts;

Added188. Regrets the alleged espionage organised by the Hungarian Government against OLAF staff during an investigative mission; calls for the swift establishment of robust protection measures to safeguard Union institutional staff on mission in Member States and to prevent any violations;

Added189. Welcomes the entry into force of Regulation (EU) 2023/2841; takes note of cybersecurity investments, including EUR 30 million allocated to enhancing digital security in the Commission; calls on the Commission to spare no effort in further developing a cybersecurity culture, promoting training and awareness within the Union institution; stresses the importance of continued adequate investments in cybersecurity towards the longer term indicative target in the order of at least 10 % of total IT spending;

Change 98 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed144.191. Notes that the European Schools’ overall budget for 2023 was EUR 417,5 million primarily funded by the Commission, other EUUnion institutions, Member States and fees from parents; further notes that almost 80 % of the budget was spent on staff costs;

Change 99 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed(i) ensure that EUUnion Institutions can rely on EPSO to efficiently organise and complete selection procedures and other staff related procedures in order to provide EUUnion Institutions with sufficient highly qualified and motivated candidates for open positions;

Change 100 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Changed(iii) continue work on measures that will ensure that EUUnion Institutions based in Luxembourg can continue to attract highly qualified staff for all types of job profiles;

Change 101 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Added(vi) act as a role model, particularly for diseases that do not fall into classical fields and rare diseases; urges the Commission to expand their technical knowledge and handling of these cases; urges the Commission to expand the catalogue of tests eligible for reimbursement to include a wider bandwidth for laboratory tests and other diagnostic procedures and exams as well as treatments; urges the Commission to do this promptly;

Added(vii) ensure the rapid introduction of strong protective mechanisms for Union institutional staff on mission in Member States and third countries, safeguarding their rights;

Change 102 under “CHAPTER 1 - Multi-annual Financial Framework (MFF)”

Added(ix) prepare a report analysing the reasons why the vast majority of harassment complaints (requests for assistance) in the Commission are dismissed, most of them without even opening an administrative inquiry, and recommending how such dysfunctionality of the formal procedure can be addressed;

Added(x) ensure that as of 2025, requests for assistance in harassment cases are followed up with a proper administrative inquiry by the Investigation and Disciplinary Office (IDOC) or OLAF so as to ensure that harassers are held accountable and sanctioned proportionately to their wrongdoing;

Change 103 under “CHAPTER II - Recovery and Resilience Facility (RRF)”

Changed148.195. Notes that in 2023, 27 recovery and resilience plans (RRPs) were revised, and that these revisions had an impact on the pace of implementation of the existing plans, causing delays; notes at the same time that the political priorities in Member States can change; notes that increased energy prices, high inflation and supply chain disruptions caused by Russia’s unprovoked war of aggression against Ukraine, and, in some cases, natural disasters, contributed to the revision of the RRPs; underlines that the delays caused by the revisions of the RRPs came in addition to existing ones, as shown by the significant differences between the foreseen calendar of payments requests and the actual transmission of these requests by the Member States to the Commission; remains concerned by the risk of under-implementation and of failure to reach the milestones and targets (M&Ts) as agreed in the RRPs; emphasises the need for enhanced monitoring mechanisms to ensure that delays do not disproportionately impact key projects;

Change 104 under “CHAPTER II - Recovery and Resilience Facility (RRF)”

Added196. Notes that there should be a clear thematic link between reforms and investments and that there may be, in certain cases, a long delay between the creation of the national recovery plans and the completion of milestones and targets; regrets that the RRF design does not allow for sufficient flexibility to respond to emerging crises in a prompt manner;

Change 105 under “CHAPTER II - Recovery and Resilience Facility (RRF)”

Changed150.198. Recalls that the RRF is a temporary recovery instrument based on performance, i.e. that payments are linked to the satisfactory fulfilment of M&Ts related to reforms and investments included in the national RRPs; stresses that the effectiveness of the RRF must be assessed, not only in terms of disbursement, but also in terms of its ability to generate tangible, long-term improvements of the consequences of the pandemic; recalls that there is no definition in the RRF Regulation of the "satisfactory fulfilment of M&Ts"; recalls that each national plan should effectively address all or a significant subset of challenges identified in the European Semester, particularly the country- specific recommendations (CSRs) adopted by the Council; notes the fact that, thanks to the RRF, the percentage of CSRs with progress has increased by 17 % between 2021 and 2023;

Change 106 under “CHAPTER II - Recovery and Resilience Facility (RRF)”

Changed151.199. Notes that in 2023, the Commission disbursed a total of EUR 75 billion, and additional pre-financing payments of EUR 7.1 billion, which brought the total disbursements by the end of 2023 to EUR 220.8 billion, divided into EUR 141.6 billion in grants (40 % of the total EUR 357 billion for grants under the Recovery and Resilience Facility (RRF) envelope) and EUR 79.2 billion in loans (27 % of the total EUR 291 billion for loans under the RRF envelope); mandates detailed reporting requirements on how Member States allocate funds, preventing substitution of recurring budgetary expenditures, and ensuring funds reach intended beneficiaries;

Change 107 under “CHAPTER II - Recovery and Resilience Facility (RRF)”

Changed152.200. Notes that the Court issued a qualified opinion on the legality and regularity of the RRF expenditure in 2023; is concerned that the Court concluded that seven out of 23 RRF payments made in 2023 were affected by quantitative findings and that six of these payments were affected by material error; notes that in the Court’s opinion, except for those matters, the RRF expenditure accepted in the accounts for the year 2023 is legal and regular in all material respects; notes that the nature of the RRF spending model relies on the assessments of milestones and targets (M&Ts) to be made by the Commission,Commission; notes that in 2023, the Court cannotchecked check452 M&Ts,M&Ts andincluded thus,in the23 lattergrant payments and that it does not provide an error rate due to the nature of the RRF’s spending model but estimates the minimum financial impact of its findings to be above the materiality threshold; is convinced that Member States should also bear responsibility for errors detected in post-disbursement;

Change 108 under “CHAPTER II - Recovery and Resilience Facility (RRF)”

Removed153. Notes that the Court audited 325 out of 542 milestones and 127 out of 135 targets included in 2023 payment requests for grants; regrets that the Court considers that 16 of them were affected by regularity issues (2.4 % of the total); is concerned by the fact that the Court considers that the requirements had not been satisfactorily fulfilled for seven M&Ts in six payments and that the Commission had still made the corresponding payments; notes that the Court's conclusions are based on extensive audit work and regrets that the Commission contests some of the Court's conclusions; notes that all of the RRF payments must be assessed against the framework communicated and applied by the Commission, which must take into consideration for each payment the opinion of the Economic and Financial Committee and the scrutiny by Member State experts under the comitology procedure;

Added201. Expresses deep concern that the Court was unable to verify the actual financial impact of erroneous or ineligible RRF payments due to the inherent limitations of the milestone and target-based assessment model; calls on the Commission to develop a more transparent error-tracking methodology to prevent misallocation and inefficiency;

Removed154. Notes with particular concern that the Court has identified what it considers to be nine cases of ineligible M&Ts linked to the continuation of a pre-existing project that either started before the eligibility period, or that were a substitution of recurring national budgetary expenditure; contests the Commission’s view that the eligibility period concerns only the date of start of works on a specific project rather than beginning of the preparatory or projection phase; regrets that such a view led to measures which were planned before the RRF eligibility period being included in the RRPs, thus casting doubts on the added value of the RRPs;

Added202. Notes that the Court audited 325 out of 542 milestones and 127 out of 135 targets included in 2023 payment requests for grants; regrets that the Court considers that 16 of them were affected by regularity issues (2.4 % of the total); is concerned by the fact that the Court considers that the requirements had not been satisfactorily fulfilled for seven M&Ts in six payments and that the Commission had still made the corresponding payments; notes that the Court's conclusions are based on extensive audit work and regrets that the Commission contests some of the Court's conclusions; notes that all of the RRF payments must be assessed against the framework communicated and applied by the Commission, which must take into consideration for each payment the opinion of the Economic and Financial Committee and the scrutiny by Member State experts under the comitology procedure; requests the Commission to ensure that all disputed payments related to unsatisfactorily fulfilled M&Ts undergo independent external review to strengthen public trust in the process; recommends an introduction of real-time tracking systems for disbursements and expenditures to prevent misallocations under the RRF and the MFF;

Added203. Notes with particular concern that the Court has identified nine potential cases of ineligible M&Ts linked to the continuation of a pre-existing project that either started before the eligibility period, or that were a substitution of recurring national budgetary expenditure; regrets the lack of clarity in the RRF Regulation, and does not share the Commission’s interpretation that the eligibility period concerns only the date of start of works on a specific project rather than the beginning of the preparatory or projection phase; regrets that such a view led to measures which were planned before the RRF eligibility period being included in the RRPs, and acknowledges that any measure must respect the scope, objectives and eligibility conditions set by the RRF Regulation; calls on the Commission to implement stricter verification mechanisms to prevent the inclusion of pre-existing projects that do not provide added value under the RRF framework;

Change 109 under “CHAPTER II - Recovery and Resilience Facility (RRF)”

Removed156. Reminds the Commission that the letter and spirit of the RRF Regulation must be strictly followed, and that the adoption of guidelines or other internal documents must be fully in line with the results of the negotiations between the co-legislators; is convinced that this has not been the case when the Commission adopted the provisions related to the interpretation of what a “final recipient” is in its Guidance on RRPs in the context of REPowerEU;

Added205. Notes with concern the Court’s finding that NGEU borrowing may more than double by 2026 while the bulk of repayment is deferred to future MFFs; recalls that the repayment of NGEU borrowing must start before the end of 2027, if unused appropriations remain available in the budget line to cover NGEU financing costs, and be completed by 2058 at the latest; notes that the Union budget exposure at the end of 2023 is expected to rise in 2024 and 2025, mainly due to RRF loans; is concerned that potential changes in market conditions might result in higher borrowing costs which, for the NGEU debt relating to grants, will have to be borne by the Union budget; is concerned that there is to date still no repayment plan for the NGEU common debt, and that the Union's debt continues to rise, with a large share of this increase attributed to the temporary recovery instrument, NGEU; is concerned that the increased debt and the associated higher interest costs will have long-term consequences for the Union’s fiscal stability, potentially leading to greater financial strain and a reduced capacity to respond to future challenges or invest in key strategic areas;

Removed157. Notes with concern the Court’s finding that NGEU borrowing may more than double by 2026 while the bulk of repayment is deferred to future MFFs; recalls that the repayment of NGEU borrowing must start before the end of 2027, if unused appropriations remain available in the budget line to cover NGEU financing costs, and be completed by 2058 at the latest; notes that the Union budget exposure at the end of 2023 is expected to rise in 2024 and 2025, mainly to RRF loans; is concerned that potential changes in market conditions might result in higher borrowing costs which, for the NGEU debt relating to grants, will have to be borne by the Union budget;

Change 110 under “CHAPTER II - Recovery and Resilience Facility (RRF)”

Removed159. Urges the Commission to minimise risks that Member States might chose not to receive parts or the entire amounts of the last payment request, thus avoiding the fulfilment of the last M&Ts and jeopardising the overall implementation of the RRPs; is extremely concerned about the additional risks of measures being reversed after the RRF lifetime, and urges the Commission, when making the final payments, to ensure that such situations will not occur;

Change 111 under “CHAPTER II - Recovery and Resilience Facility (RRF)”

Removed161. Expresses strong concerns about the Court’s observation that point to persistent weaknesses in the implementation of Member States control systems as this poses a risk to the availability of complete and accurate data underlying payment requests, access to those requests for control purposes, and the effective functioning of Member State control systems to protect the Union’s financial interests; recalls that, according to the RRF Regulation, Member State control systems have a key role to play in ensuring that the financial interests of the Union are protected effectively; urges the Commission to take decisive and swift action whenever necessary, and to make full use of the provisions of the RRF Regulation if deficiencies persist in the control systems of Member States;

Added208. Notes the Court’s findings in Special Report 13/2024 that additional reasons for slow absorption included measures not being suited to the RRF’s timeframe and underestimation of the time needed to implement them (due to public procurement and state aid rules); as well as uncertainties on implementing rules and how they should be applied including lacking guidance on the ‘do no significant harm’ principle (DNSH) and how to ascribe to it;

Removed162. Expresses concern about the Court’s findings in Special Report N°22/2024 on ‘Double funding from the EU budget: Control systems lack essential elements to mitigate the increased risk resulting from the RRF model of financing not linked to cost’; highlights that Member States can propose so-called ‘zero cost measures’, i.e. measures estimated to have no costs to be financed by the RRF, and for which there is no check at all for double-funding, as the Commission considers that measures which receive no RRF funds are free of risk from that perspective; also notes with concern the Court’s findings that from Member States’ perspective, the many layers of governance involved including national, regional or municipality level, make coordination and oversight very challenging; is concerned that when checks are performed, (i) they suffer from a very complicated environment with different IT tools used often not interoperable and data recorded in an often non-standardised way, leaving manual cross-checks across databases as the only possible tool to check for double funding, and (ii) Member States’ control systems rely to a large extent on self-declarations by recipients of EU funds; notes, however, that the Court did not find any case of double funding;

Added209. Expresses strong concerns about the Court’s observation that point to persistent weaknesses in the implementation of Member States control systems as this poses a risk to the availability of complete and accurate data underlying payment requests, access to those requests for control purposes, and the effective functioning of Member State control systems to protect the Union’s financial interests; recalls that, according to the RRF Regulation, Member State control systems have a key role to play in ensuring that the financial interests of the Union are protected effectively; urges the Commission to take decisive and swift action whenever necessary, including imposing financial corrections, and to make full use of the provisions of the RRF Regulation if deficiencies persist in the control systems of Member States;

Removed163. Notes the Commission’s observation that, according to the RRF Regulation, double funding is explicitly linked to costs and thus, there can be no double funding if the Member State has not submitted any cost estimate as part of its national plan; notes that the Commission underlines that no-cost reforms do not increase the financial envelope but are nevertheless essential criteria for the Commission's positive assessment of RRPs, as well as their full implementation for the relevant payments; points out that the Commission, shortly after the Court audit field work, acknowledged it had identified the first two potential cases of double funding;

Added210. Expresses concern about the Court’s findings in Special Report N°22/2024 on ‘Double funding from the EU budget: Control systems lack essential elements to mitigate the increased risk resulting from the RRF model of financing not linked to cost’; highlights that Member States can propose so-called ‘zero cost measures’, i.e. measures estimated to have no costs to be financed by the RRF, and for which there is no check at all for double-funding, as the Commission considers that measures which receive no RRF funds are free of risk from that perspective; also notes with concern the Court’s findings that from Member States’ perspective, the many layers of governance involved including national, regional or municipality level, make coordination and oversight very challenging; is concerned that when checks are performed, (i) they suffer from a very complicated environment with different IT tools used often not interoperable and data recorded in an often non-standardised way, leaving manual cross-checks across databases as the only possible tool to check for double funding, and (ii) Member States’ control systems rely to a large extent on self-declarations by recipients of Union funds; notes, however, that the Court did not find any case of double funding;

Change 112 under “CHAPTER II - Recovery and Resilience Facility (RRF)”

Added219. Calls on the Commission to increase the number of ex-post audits and on-the-ground inspections for RRF-funded projects, particularly in high-risk sectors such as digital infrastructure, energy where previous Union funding programmes have identified significant irregularities;

Added220. Warns that the inclusion of pre-existing projects and the substitution of recurring budgetary expenditures within the RRF framework undermines the additionality principle, effectively converting the instrument into a backdoor financing mechanism for Member States’ regular budgets, rather than fostering genuine post-crisis recovery and resilience; calls for an urgent review to prevent further dilution of the RRF’s purpose;

Added221. Advocates more decisiveness on the part of both the Commission and Member States in order to detect irregularities in the spending of RRF funds and to recover undue payments;

Change 113 under “CHAPTER II - Recovery and Resilience Facility (RRF)”

Added223. Stresses that delays in disbursement and absorption of RRF funds not only slow down economic recovery but also create substantial risks of last-minute, low-quality spending towards the end of the RRF period; calls on the Commission to introduce stricter interim evaluations to prevent a ‘use-it-or-lose-it’ rush that could lead to waste and misallocation;

Added224. Notes with serious concern that Member States may strategically forego their final payment requests to avoid fulfilling politically sensitive milestones and targets, thereby evading necessary but unpopular reforms; calls on the Commission to introduce financial penalties for incomplete RRF implementation to prevent manipulation of the payment structure;

Change 114 under “CHAPTER II - Recovery and Resilience Facility (RRF)”

Changed173.229. Is concerned by the Court reporting in its annual reports that by the end of 2023, the EPPO had 206 active investigations related to funds used to implement RRF measures and estimated potential damages of over EUR 1.8 billion (concerning both national and EUUnion funding); notes that the 206 open investigations concern ten Member States, with around 75 % of these cases coming from one country; is worried that at the end of 2023 the Member States’ management declarations had not reported a single case of detected suspected fraud, meaning that none of the EPPO open cases were reported by Member States themselves, casting doubts on Member States’ ability to detect and fight frauds; stresses that, while no investigation has yet been completed, the figures presented by the EPPO confirm that the risk of fraud is present in the RRF, and that they call into question the reliability of Member State management declarations in terms of reporting detected fraud and the remedial measures taken; calls for urgent reinforcement of fraud detection mechanisms, including a mandatory fraud risk assessment for all large-scale RRF projects; calls on the Commission to ensure that the EPPO has adequate resources to investigate cases of fraud related to RRF expenditure, given the increasing number of investigations and high estimated damages;

Change 115 under “CHAPTER II - Recovery and Resilience Facility (RRF)”

Added230. Warns that Member States’ self-reported fraud cases under RRF remain significantly underreported, creating a misleading picture of financial integrity;

Added231. Strongly regrets the lack of transparency in reporting fraud linked to RRF funds and insists that all Member States comply with standardised reporting obligations and use the Irregularity Management System (IMS);

Change 116 under “CHAPTER II - Recovery and Resilience Facility (RRF)”

Added234. Urges the Commission to minimise risks that Member States might chose not to receive parts or the entire amounts of the last payment request, thus avoiding the fulfilment of the last M&Ts and jeopardising the overall implementation of the RRPs; is extremely concerned about the additional risks of measures being reversed after the RRF lifetime, and urges the Commission, when making the final payments, to ensure that such situations will not occur;

Change 117 under “CHAPTER II - Recovery and Resilience Facility (RRF)”

Changed177.236. NotesStresses that for control and audits in the RRF, Member States should put in place arrangements to prevent, detect and correct corruption, fraud and conflicts of interests, and that the Commission performs ex-post and system audits on M&Ts; stresses that some confusion persists with respect to the role of the Court, which has developed a strategy (2021-2025 Strategy) for carrying out its responsibilities for the NGEU programme and the RRF, which some Member States perceive as an unnecessary overlap and administrative burden; is concerned that the Commission, both in its mid-term evaluation of the RRF of 21 February 2024 and its RRF Annual Report of 10 October 2024, acknowledged that Member States’ authorities at all levels found the audit and control procedures to be too complex, and that Member States complained about overlapping audits by national authorities, the Commission and the Court; fully supports the Court work on the RRF; welcomes that the Commission has admitted and accepted that the Court has a full audit mandate on RRF, which is one of the foundation for the Parliament discharge on the RRF funds; recommends to the Member States to cooperate with the European Court of Auditors;

Change 118 under “CHAPTER II - Recovery and Resilience Facility (RRF)”

Removed179. Highlights with concern that the facilitation of cross-border projects has not worked out; deplores that, despite the inclusion in the RRPs of several measures linked to Important Projects of Common Interest (‘IPCEIs’) and cross-border measures in the REPowerEU chapters, the national governance of the Facility has not sufficiently promoted cross-border cooperation; strongly insists that EU financing should be better linked with the achievement of common Union objectives and should generate EU added value;

Added238. Notes that one of the objectives of the RRF is to help Member States to implement ambitious reforms and investments that make their economies and societies more sustainable, resilient and prepared for the green and digital transitions; highlights with concerns the finding of the Court in its Special Report 15/2024 underlining the lack of relevance, quality and comparability of data submitted by the Member States, with data insufficient to evaluate progress on climate adaptation in the Member States, and thus paving the way for possible greenwashing; expresses concern that the RRF could become a financial vehicle for superficial rebranding of conventional expenditures as ‘green’; encourages the Commission to introduce a mechanism within the RRF framework to track the environmental impact of investments and ensure alignment with the Union’s climate objectives;

Added239. Highlights the RRF impact on the Union business and SMEs; notes that RRF has provided EUR 78 billion in direct support to SMEs, representing 12 % of total RRF expenditure, and that broader measures benefiting businesses amount to EUR 152 billion (23 % of total RRF spending); notes that EUR 2.75 million SMEs, approximately 11 % of all active SMEs in the Union, have received support through the RRF; underlines that nearly 600 000 businesses have benefited from digitalisation initiatives, while EUR 5.2 billion have been allocated to green transition projects, including renewable energy and hydrogen;

Added240. Highlights with concern that the facilitation of cross-border projects has not worked out; deplores that, despite the inclusion in the RRPs of several measures linked to Important Projects of Common Interest (‘IPCEIs’) and cross-border measures in the REPowerEU chapters, the national governance of the Facility has not sufficiently promoted cross-border cooperation; strongly insists that Union financing should be better linked with the achievement of common Union objectives and should generate EU added value;

Change 119 under “CHAPTER II - Recovery and Resilience Facility (RRF)”

Removed181. Welcomes that, in 2023, the Commission made progress in eliminating any possibility of misinterpretation of figures of the Recovery and Resilience Scoreboard and that the Scoreboard further addressed the related recommendation of the Court to improve the presentation of data displayed on the Scoreboard and to improve explanations with regard to its limitations, in particular by better explaining the underlying methodologies and explicitly stating, where applicable, that the data is estimated;

Added242. Urges the Commission not to approve any revision of RRPs, which may lead to a re-packaging of planned reforms or investments into the RRPs if they don’t respect the conditions of the RRF Regulation; notes that any revision should always aim to create added value and increase synergies;

Change 120 under “CHAPTER II - Recovery and Resilience Facility (RRF)”

Changed182.243. Recalls that, while Member States are not required to publish all data on final recipients, Regulation (EU) 2023/435 of the European Parliament and of the Council amending the RRF Regulation requires Member States to publish information on the 100 final recipients receiving the highest amount of funding under the RRF; welcomes that on 10 October 2024, the Commission published, as part of the RRF Annual Report 2024, a dedicated Annex to provide further clarity on the concept of final recipients under the RRF Regulation and the scope of the publication of data on the largest 100 final recipients; expresses deep concern over the interpretation of the Commission of the concept of “final recipient” under the RRF, as often they are listed only at the ministry level, and that the descriptions are vague, with many examples available in almost all lists provided by Member States; reiterates its demand that the list of 100 largest final recipients provides the factual natural person or entity that is the last in a chain of money transfers;transfers to be made available in a publicly accessible database to enhance accountability and enable independent oversight, while respecting the legal framework of Union data protection; is concerned that otherwise it will be problematic to measure the impact and guarantee visibility of the RRF funds to the citizens;citizens, although also takes into account the RRF Scoreboard and the project map; stresses that, should the Commission continue to refuse to ensure full transparency, Parliament must consider all available measures to enforce compliance, to prevent a similar interpretation from being applied to the transparency provisions in other financial regulations;

Change 121 under “CHAPTER II - Recovery and Resilience Facility (RRF)”

Added244. Reminds the Commission that the letter and spirit of the RRF Regulation must be strictly followed, and that the adoption of guidelines or other internal documents must be fully in line with the results of the negotiations between the co-legislators; is convinced that this has not been the case when the Commission adopted the provisions related to the interpretation of what a “final recipient” is in its Guidance on RRPs in the context of REPowerEU;

Added245. Notes that not being able to ascertain final recipients of RRF funding poses a severe risk to the transparency and traceability of Union funds and thus to the protection of the financial interests of the Union;

Change 122 under “CHAPTER II - Recovery and Resilience Facility (RRF)”

Changed184.247. Welcomes that the ‘FR recast’ establishes horizontal measures for a centralised website (Financial Transparency System) at Union level, covering all recipients of EUUnion funding, and notes that this website is due to overcome the current fragmentation, enhance transparency, and facilitate public scrutiny of recipients; notes that the Commission, as from the next MFF (i.e. post 2027) will be required to use the relevant data stored in the data mining and risk-scoring tool, Arachne, to feed the centralised website for transparency purposes, and that, in line with data protection rules, the website will include only public data, e.g. relevant data on recipients, contractors, subcontractors, and beneficiaries; further stresses that all Member States will have an obligation to provide the Commission with access to this data, to be fed into Arachne by automated means; regrets that the use of Arachne by Member States is not compulsory;

Change 123 under “CHAPTER II - Recovery and Resilience Facility (RRF)”

Added251. Calls on the Commission to grant full access to the Court to the new reporting tool on the Recovery and Resilience Facility (RRF), FENIX as soon as possible;

Change 124 under “CHAPTER II - Recovery and Resilience Facility (RRF)”

Changed(i) carefully balance auditing and control requirements with the administrative burden imposed on Member States and beneficiaries of future performance-based instruments;instruments, while maintaining a sufficient level of control and audit that would grant a solid protection of the Union financial interests;

Change 125 under “CHAPTER II - Recovery and Resilience Facility (RRF)”

Removed(v) consistently and accurately apply the provisions related to the “final recipients”, of the RRF Regulation, by revising its Guidance on RRPs in the context of REPowerEU, and to communicate with Member States on the correct application of the definition of “final recipients”;

Added(v) record and monitor systematically all irregularities and all frauds affecting RRF funds;

Removed(vi) streamline its control on the M&Ts through the implementation of a Single Audit approach, which would allow reducing the administrative burden, the consolidation of audit responsibilities between the Commission and the Court, and the coordination of audit timelines and requirements to avoid duplication and overlapping controls and audits;

Added(vi) consistently and accurately apply the provisions related to the “final recipients”, of the RRF Regulation, by revising its Guidance on RRPs in the context of REPowerEU, and to communicate with Member States on the correct application of the definition of “final recipients”; calls on the Commission to come forward with proposals requiring Member States to publish details of all final recipients;

Removed(vii) support Member States in making IT systems truly interoperable, so as to facilitate efficient data collection, reporting and exchange between various government departments/agencies to allow minimising the risks of double funding, actively cross-check between relevant databases, and communicate with Member States about their administrative capacities to ensure double funding does not occur;

Added(vii) streamline its control on the M&Ts through the implementation of a Single Audit approach, which would allow reduction of the administrative burden, the consolidation of audit responsibilities between the Commission and the Court, the coordination of audit timelines and requirements to avoid duplication and overlapping controls and audits, but at the same time ensuring the full protection of the Union financial interests;

Change 126 under “CHAPTER II - Recovery and Resilience Facility (RRF)”

Added(xii) develop a methodology based on quality and comparability of data to evaluate progress on green and digital transitions, as well as the tangible benefits, in the Member States;

Change 127 under “CHAPTER II - Recovery and Resilience Facility (RRF)”

Added(xv) perform, whenever a revision of the RRPs is proposed, a comprehensive analysis of new and existing measures and whether they would substitute recurring budgetary expenditure or would be in breach of other eligibility conditions of the RRPs;

Added(xvi) provide training and support to Member States to increase administrative capacities including training on specialised skills, knowledge and providing examples of best practices;

Change 128 under “CHAPTER II - Recovery and Resilience Facility (RRF)”

Changed(xiv)(xviii) use the recommendations of the Court from its work on the RRF and the experience gained in the implementation for the design of the next multiannual financial framework architecture including the implementation of future Union performance-based instruments;

Change 129 under “CHAPTER II - Recovery and Resilience Facility (RRF)”

Changed(xvi)(xx) ensure that any future revision, as well as the overall implementation, of RRPs is done in close cooperation with and consultation of local and regional authorities;authorities, and other relevant stakeholders in order to maximise the RRP’s impact;

Change 130 under “CHAPTER II - Recovery and Resilience Facility (RRF)”

Removed(xvii) build, in the next MFF, on a high-level of interoperability and data exchange between various government departments and agencies to facilitate efficient data sharing and real-time updates across multiple platforms in order to allow to track overlapping projects, minimising the risks of double counting and double funding;

Added(xxi) analyse the weaknesses present in performance-based instruments, and address these weaknesses when designing new programmes in the future;

Added(xxii) build, in the next MFF, on a high-level of interoperability and data exchange between various government departments and agencies to facilitate efficient data sharing and real-time updates across multiple platforms in order to allow to track overlapping projects, minimising the risks of double counting and double funding.