Changes from report parliamentary committee draft to plenary report

CHAPTER II - Recovery and Resilience Facility (RRF)

General remarks

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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;

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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;

197. Draws attention with utmost concern to the statement of the President of the Court, arguing that approximately half of the RRF disbursements had not reached the real economy, and questions if the other half may have been used either to substitute recurring budgetary expenditure or generate profit to Member States from the increased interest rates;

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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;

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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;

Court’s observations

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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;

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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;

204. Recalls that RRF funds shall not be used to replace recurring budgetary expenditure, unless in duly justified case; and is preoccupied by the Court’s findings that some M&Ts that were a substitution of recurring national budgetary expenditure were not adequately justified in the RRPs;

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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;

206. Notes the Court’s finding that payments from RRF were lower than expected in 2023; emphasises that the Court has criticised the slow disbursement and absorption of RRF funds; is concerned by the Court’s findings in Special Report 13/2024 that absorption of RRF funds has progressed with some delays, that Member States may not be able to complete all measures at the end of the RRF’s implementation period for which a significant proportion of funds have already been paid out, and that the second half of the RRF’s implementation period is more challenging with an increase in number of M&Ts, a shift from reforms to investments and more advanced stage of implementation, and a high proportion of measures to be completed in the last year;

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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;

207. Notes, conversely, that according to the Commission the achievement of M&Ts is broadly on track, as by 31 August 2024, over 40 % of the available RRF funds had been disbursed to Member States, with the disbursement of grants reaching 48 % and loans slightly exceeding 30 %; notes that the pace of payment requests has also accelerated since the second half of 2023 with the revision of the RRPs linked to the introduction of the REPowerEU chapters was finalised in 2023;

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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;

Removed164. Insists that, as a rule, measures already included in other national plans benefiting from EU funding (e.g. cohesion, agriculture, etc.) should not be included in RRPs, even if they do not incur any costs, as their inclusion raises doubts about the added value of the RRF; underlines that due to the different model of implementation, double funding between RRF and other EU financing instruments might be more difficult to identify, and urges the Commission to remain vigilant and pro-active in identifying any potential situation of double funding;

Added211. Notes the Commission’s observation that, according to the RRF Regulation, double funding is explicitly linked to budgetary costs and thus, there can be no double funding if the Member State has not submitted any cost estimate linked to a specific measure 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;

Removed165. Expresses concern about the Court’s finding in its Review 01/2023: ‘EU financing through cohesion policy and the RRF: A comparative analysis’ that reporting of fraud involving RRF expenditure still lacks a standardised approach with strong coordination and cooperation between Member States, which are obliged to report on cases of suspected fraud not in an integrated IT system, but in the management declaration accompanying every payment request, although Member States have also reported cases outside of the management declarations; regrets that there are no clear guidelines about exactly when a case of suspected fraud should be reported, whether there is a reporting threshold, and what standard information should be reported for each case and about the remedial measures taken;

Added212. Recalls that Article 9 of the RRF Regulation establishes additionality and complementarity between Union programmes and instruments funding as key principles; believes that, to respect these principles but avoid the risk of double financing, the same measures already included in other national plans benefiting from Union funding (e.g. cohesion, agriculture, etc.) should either not be included in RRPs or more thoroughly described, even if they do not incur any costs, in order to avoid double funding; underlines that due to the different model of implementation, double funding between RRF and other Union financing instruments might be more difficult to identify, and urges the Commission to remain vigilant and pro-active in identifying any potential situation of double funding;

Removed166. Urges the Commission not to approve any revision of RRPs, which may lead to a re-packaging of existing or planned reforms or investments into the RRPs; believes that this would be contrary to the principle of the RRF and would diminish its added value;

Added213. Regrets the lack of adequate safeguards to prevent double funding of projects under both the RRF and other Union financial instruments; calls for an automated cross-checking system between RRF and cohesion Funds, the Common Agricultural Policy, and other Union funding programmes to detect and eliminate duplicate claims;

Added214. Expresses concern about the Court’s finding in its Review 01/2023: ‘EU financing through cohesion policy and the RRF: A comparative analysis’ that reporting of fraud involving RRF expenditure still lacks a standardised approach with strong coordination and cooperation between Member States, which are obliged to report on cases of suspected fraud not in an integrated IT system, but in the management declaration accompanying every payment request, although Member States have also reported cases outside of the management declarations; regrets that there are no clear guidelines about exactly when a case of suspected fraud should be reported, whether there is a reporting threshold, and what standard information should be reported for each case and about the remedial measures taken; furthermore supports the request made by the Court to the Commission in the same review 01/2023 to obtain sufficient assurance from the Member States on the effectiveness of national systems to prevent, detect and correct fraud, corruption and conflicts of interest;

Added215. Expresses concerns that in 2023 the Commission had to introduce 10 additional control milestones for seven Members States to address the weaknesses identified in their control systems; reminds and supports the Court’s evaluation that the fact control milestones were introduced, which means that Member states systems were not fully functional when the plans started to be implemented, posing a serious risk to the regularity of the of the RRF expenditure and to the protection of financial interests;

Added216. Regrets the findings of the Court's Special Report No 26/2023 that several policy areas in the RRF's pillar containing health policies lack a corresponding common indicator to measure progress; is concerned that this impedes the proper monitoring and understanding of progress made towards achieving milestones and targets linked to health policies;

Added217. 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;

Audit and control

218. Welcomes that, based on the Court’s recommendations and the experience gained, the Commission, in 2023, published three methodological notes to clarify the application of the RRF Regulation, including its framework for (i) assessing the satisfactory fulfilment of M&Ts, upon conducting an assessment, and (ii) the application of the provisions related to the reversal of M&Ts, as well as a methodology to determine the amount to be suspended if a milestone or target is not satisfactorily fulfilled; takes note of the updated Guidance on RRPs, adopted on 19 July 2024, which provides additional guidance to ensure the continued adequacy of controls to identify and avoid any risk of double funding as well as the methodology for reductions and recoveries under the RRF in accordance with Article 24(8) of the RRF Regulation;

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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;

222. Is concerned with the Court’s counter-reply to the Commission’s replies on the existence of an assurance gap at Union level regarding compliance with Union and national rules on public procurement and State aid; notes that the Commission argues that the assurance provided by DG ECFIN covers the effectiveness of Member States’ controls on compliance with public procurement and state aid rules. however, stresses that while DG ECFIN’s AAR refers to Commission assessments of the existence and effectiveness of Member States’ controls, there is no conclusion regarding their effectiveness; expresses concern that, according to the Court, this represents an important limitation of the scope of the Commission’s declaration of assurance, meaning that the Commission still does not provide full assurance as to whether RRF expenditure – which the Commission manages directly – complies with the rules;

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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;

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225. Notes that the Commission’s replies that it extended the scope of its audit work beyond that required by the RRF Regulation to verify that the control procedures put in place in the Member States give the necessary assurance that Member States regularly and effectively verify compliance with public procurement and State aid rules and eligibility for RRF measures, but disagrees with the Commission’s opinion that the conclusions of DG ECFIN’s Annual activity report cover this;

226. Notes with concern that, as stated by the Commission in its mid-term evaluation of the RRF of 21 February 2024, a majority of Member States consider that the payment suspension methodology remains unclear when it comes to reforms because of the discretion given to the Commission in applying the methodology; urges the Commission to revise this methodology in order to avoid any double standards in its application;

227. Notes that the Commission’s IAS, in its audit on ex-ante controls of the RRF payment requests carried out in 2023, identified a very important issue according to which DG ECFIN, in cooperation with the Recovery and Resilience Task Force, should further develop and formalise the existing guidance for the cases where DG ECFIN requests that Member States make additional commitments concerning action stemming from audit and control milestones, in particular that the guidance should define (i) how DG ECFIN should follow up the fulfilment of the formal confirmation on the Member State’s commitment, (ii) the criteria for determining the deadlines for the Member States to fulfil the commitments, and (iii) the relations between the ‘commitment framework’, the ‘framework for assessing M&Ts under the RRF Regulation’ and the ‘Reversal of M&Ts under the Facility’;

228. Notes that the Commission checks during its “Protection of the Financial Interest of the Union” audits that Member States have a clear and codified process for transmitting cases of fraud, corruption, conflict of interest and double funding to all competent authorities, including the EPPO where relevant;

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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;

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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);

232. Recalls that the Financial Regulation recast in force since 30 September 2024 (‘FR recast’) provides for the extension of its scope of the Early Detection and Exclusion System (EDES) to shared management and direct management in cases where the budget is implemented with Member States, for programmes adopted or financed as from 1 January 2028; calls on the Commission to act on the most serious grounds for exclusion in order to better protect the financial interests of the Union;

233. Notes that, with a view to reducing the margin between the Commission and the Court, for different interpretations of M&Ts, the Commission has published its approach to the concepts of the start date of a measure and the concept of ‘substitution of recurring national budgetary expenditure’ as Annex II and Annex III of its 2024 Annual Report on the implementation of the RRF; re-iterate its calls on the Commission to keep working with the Court in order to bring the interpretation of M&Ts as close together as possible;

Implementation and impact

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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;

235. Emphasises that, according to the Commission’s mid-term evaluation of the RRF of 21 February 2024, Member States highlighted the need to mobilise more resources than initially planned to revise the RRPs, and that the efficiency of the performance-based approach is reduced by the ‘excessively complex procedures’ for the plan modifications, which do not distinguish between major or minor amendments and require Council approval for any modification;

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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;

237. Is concerned that the Commission Annual Report of 10 October 2024 on the RRF implementation highlighted the entry costs for Member States’ administrations, with room for further simplification; notes, according to this Commission’s Annual Report, that concerning the design of the instrument, in the mid-term evaluation Member States referred to the combined obligations linked to (i) the evidence needed to prove fulfilment of M&Ts, (ii) demanding reporting requirements, for example the common indicators and the bi-annual data; and (iii) the audit and control framework; recalls that Member States see room for simplifying control and audit procedures, ensuring better coordination among the actors involved and avoiding multiple checks; also notes, again according to the Commission RRF Annual Report 2024, that some national authorities also pointed to inflexibility in the Commission’s assessment of milestones and targets and the rigid and resource-intensive procedures to revise RRPs;

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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;