Changes from report parliamentary committee draft to plenary report

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

▸4 unchanged paragraphs

on the choice of performance indicators for audit and budgetary control in the context of financing measures to support the implementation of future European competitiveness

(2025/2034(INI))

The European Parliament,

– having regard to the Treaty on European Union,

Changed– having regard to the Treaty on the Functioning of the European Union,Union (TFEU), in particular Article 318 and Article 322(1)(a) thereof,

Changed– having regard to Council Regulation (EU, Euratom) 2020/2093 of 17 December 2020 laying down the multiannual financial framework for the years 2021 to 20271,2027,

Changed– having regard to Council Regulation (EU, Euratom) 2024/7652022/2496 of 2915 FebruaryDecember 20242022 amending Regulation (EU, Euratom) 2020/2093 laying down the multiannual financial framework for the years 2021 to 20272,2027,

Changed– having regard to Council Regulation (EU, Euratom) 2022/24962024/765 of 1529 DecemberFebruary 20222024 amending Regulation (EU, Euratom) 2020/2093 laying down the multiannual financial framework for the years 2021 to 20273,2027,

Changed– having regard to the Interinstitutional Agreement of 16 December 2020 between the European Parliament, the Council of the European Union and the European Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management, as well as on new own resources, including a roadmap towards the introduction of new own resources4,resources,

▸4 unchanged paragraphs

– having regard to the Commission communication of 8 June 2021 on the performance framework for the EU budget under the 2021-2027 MFF (COM(2021)0366) and the accompanying staff working document (SWD(2021)0133),

– having regard to the Commission proposal of 16 July 2025 for a Council regulation laying down the multiannual financial framework for the years 2028 to 2034 (COM(2025)0571),

– having regard to the Commission proposal of 16 July 2025 for a regulation of the European Parliament and of the Council establishing a budget expenditure tracking and performance framework and other horizontal rules for the Union programmes and activities (COM(2025)0545) and the accompanying impact assessment report (SWD(2025)0590),

– having regard to the Commission proposal of 16 July 2025 for a regulation of the European Parliament and of the Council on establishing the European Competitiveness Fund (‘ECF’), including the specific programme for defence research and innovation activities, repealing Regulations (EU) 2021/522, (EU) 2021/694, (EU) 2021/697, (EU) 2021/783, repealing provisions of Regulations (EU) 2021/696, (EU) 2023/588, and amending Regulation (EU) [EDIP] (COM(2025)0555),

Changed– having regard to Regulation (EU, Euratom) 2024/2509 of the European Parliament and of the Council of 23 September 2024 on the financial rules applicable to the general budget of the Union5Union (Financial Regulation)Regulation), and in particular Article 33 thereof,

▸5 unchanged paragraphs

– having regard to the publication of 18 July 2024 by Commission President Ursula von der Leyen entitled ‘Europe’s choice: political guidelines for the next European Commission 2024-2029’,

– having regard to the report of 9 September 2024 by Mario Draghi entitled ‘The future of European competitiveness’ (Draghi report),

– having regard to the report of 17 April 2024 by Enrico Letta entitled ‘Much more than a market’ (Letta report),

– having regard to the Commission communication of 29 January 2025 entitled ‘A Competitiveness Compass for the EU’ (COM(2025)0030),

– having regard to the Commission communication of 11 February 2025 entitled ‘The road to the next multiannual financial framework’ (COM(2025)0046),

Changed– having regard to its resolution of 7 May 2025 on a revamped long-term budget for the Union in a changing world6,world,

– having regard to the publications of the European Court of Auditors (ECA),

Changed– having regard to the study requested by its Committee on Budgets entitled ‘Performance framework for the EU budget – Concepts and practices’, published in March 20247,2024,

– having regard to Rule 55 of its Rules of Procedure,

Changed– having regard to the report of the Committee on Budgetary Control (A10-0000/2025),(A10-0268/2025),

A. whereas sound financial management, as defined in the Financial Regulation, requires that EU funds be implemented in accordance with the principles of economy, efficiency and effectiveness; whereas the concept of performance as regards the budget should be linked to the direct application of the principle of sound financial management;

Change 1

RemovedB. whereas in line with the Financial Regulation, a link should be established between the objectives set and performance indicators, results and principles of economy, efficiency and effectiveness; whereas progress in the achievement of objectives should be monitored with performance indicators that are relevant, accepted, credible, easy, robust and based on widely recognised scientific evidence; whereas an effective, transparent and comprehensive methodology should be defined, where relevant;

AddedB. whereas Article 318 TFEU requires the Commission to submit annually to Parliament and to the Council the accounts of the preceding financial year relating to the implementation of the budget, along with an evaluation report on the Union’s finances based on the results achieved; whereas, furthermore, under Article 322 TFEU, financial rules should be adopted that determine the procedure for implementing the budget and for presenting and auditing accounts; whereas using appropriate, reliable and transparent indicators for measuring the achievement of results and for the purposes of auditing may enhance the evaluation of budget implementation and comparison performed by Parliament and the Council on an annual basis;

RemovedC. whereas ensuring the EU’s sustainable prosperity and competitiveness forms part of the Commission’s political priorities for the period 2024-2029;

AddedC. whereas in line with the Financial Regulation, a link should be established between the objectives set and the performance indicators, the results and the principles of economy, efficiency and effectiveness; whereas the 2024 recast of the Financial Regulation has strengthened the legal basis of the performance framework and confirmed that progress in achieving objectives should be monitored using performance indicators that fulfil the RACER criteria (relevant, accepted, credible, easy, robust), that are based on widely recognised scientific evidence, that have clear definitions and that are made available in an open, machine-readable format; whereas, where applicable, these indicators should be broken down by gender and aggregable; whereas an effective, transparent and comprehensive methodology should be defined, where relevant;

AddedD. whereas the Commission proposal for a regulation establishing a budget expenditure tracking and performance framework establishes a single framework for performance budgeting; whereas the proposal defines ‘output indicator’ as a quantitative performance indicator that monitors what is directly produced or supported by the implementation of an activity, and ‘result indicator’ as a quantitative performance indicator that monitors the direct effects of supported activities; whereas ‘impact indicators’ are commonly used for measuring trends in the long-term objectives addressed by an intervention; whereas ‘input indicators’ are commonly used for measuring the financial, human, material, administrative or regulatory resources used to implement an intervention;

AddedE. whereas ensuring the EU’s sustainable prosperity and competitiveness, promoting social fairness and strengthening regional cohesion form part of the Commission’s political priorities for 2024-2029; whereas it is necessary to attract and mobilise private investment to deliver these objectives effectively, and completing the banking union and developing the savings and investment union will be essential to this end;

F. whereas the Draghi report has cautioned that the EU’s declining competitiveness, exacerbated by the increasingly unstable geopolitical environment, together with the succession of crises it has faced in recent years, poses an existential threat to the Union; whereas the report estimates that the EU needs to mobilise additional public and private investment equivalent to 4.4-4.7 % of EU GDP – approximately EUR 750-800 billion annually between 2025 and 2030 – to close the investment gap;

Change 2

ChangedE.G. whereas the Competitiveness Compass, also building on the Draghi report, sets out the Union’sEU’s strategic path to restore its competitiveness globally by focusing on three central pillars – innovation, decarbonisation and economic security – complemented by horizontal enablers such as simplification, increased coordination at EU and Member State level and a reinforced single market, in line with the Letta report;

Change 3

ChangedF.H. whereas the ECA has repeatedly found weaknesses in the design, implementation and accountability of the performance measurement systems used for EU funding programmes, and called for the increased use of performance indicators that measure and monitor the longer-term effects of EU spending; whereas ensuring the reliability of performance information is indispensable for the protection of the EU’s financial interests and for strengthening public trust in the EU budget;

Change 4

AddedI. whereas decisive measures are needed to increase Europe’s competitiveness in order to support higher levels of productivity, employment and prosperity; whereas the integrated single market remains the backbone of EU’s economic strength and the foundation of its long-term prosperity; whereas innovation, skills development and the free movement of goods, services, capital and labour are key drivers of competitiveness and growth;

General remarks on the performance framework for the EU budget and the use of performance indicators

Change 5

Changed1. Recalls the need to ensure that the EU budget delivers on the Union’sEU’s policy priorities, including boosting competitiveness, fostering sustainable and inclusive prosperity and securing the EU’s sovereignty and independence as a geopolitical actor; emphasises that regulatory changes are as important as funding measures in achieving these goals; underlines that EU spending should achieve tangible results in line with the principles of sound financial management and should be invested in areas where joint EU action has a greater impact and added value than national or subnational policy action;

Change 6

Removed2. Considers it imperative that the EU budget should become more results-focused; reaffirms the need to set and use performance indicators that are specific, measurable, achievable, relevant and time-bound (SMART) in order to monitor and evaluate progress towards achieving EU policy objectives;

Added2. Stresses that measures to enhance competitiveness should be accompanied by actions to promote social cohesion, so that economic progress translates into broader societal benefits; insists that any overarching performance framework for the EU budget should provide a balanced assessment covering both economic results and social impact;

Removed3. Notes with concern that the ECA, in its audits, has repeatedly found that most performance indicators used for EU funding programmes are input and output indicators, which do not provide relevant information on progress in achieving the objectives of EU-funded actions; regrets, furthermore, that in many cases baseline data for indicators was found to be missing and the underlying data used for the indicators was neither traceable nor reliable; calls on the Commission to ensure that indicators used for EU-funded projects are measurable, verifiable and based on reliable data sources that ensure the traceability of the underlying data, with clear baselines and definitions to prevent divergent interpretations;

Added3. Considers it imperative that the EU budget should focus more on results and that every euro spent should deliver measurable value for citizens and businesses; reaffirms the need to set and use performance indicators that are specific, measurable, achievable, relevant and time-bound (SMART), ensuring that the EU’s resources are spent efficiently, effectively and sustainably in order to monitor and evaluate progress towards achieving EU policy objectives; considers that all types of indicators are essential for assessing programme performance and that, therefore, a balance between input, output, result and impact indicators should be sought; underlines that performance indicators must be explicitly derived from the objectives of each programme; emphasises that the administrative burden involved, the cost of collecting data, and comparability and aggregability should also be considered when choosing the appropriate indicators;

Removed4. Regrets that the performance framework for the EU budget for the period 2021-2027 remains overly complex and fragmented; notes the Commission’s assessment8 that over 5 000 heterogeneous, non-aggregable performance indicators are being used under the 2021-2027 multiannual financial framework (MFF) and that around 7 000 milestones and targets have been defined under the Recovery and Resilience Facility (RRF) that address different needs, such as assessing performance in the context of the draft budget, and monitoring and evaluating programmes, Member State plans and payment disbursements;

Added4. Notes with concern that the ECA, in its audits, has repeatedly found that most performance indicators used for EU funding programmes are input and output indicators, which do not provide relevant information on progress in achieving the objectives of EU-funded actions; finds it regrettable, furthermore, that in many cases baseline data for indicators was found to be missing and that the underlying data used for the indicators was neither traceable nor reliable; is concerned that definitions of performance indicators diverge across funding programmes; calls on the Commission and the Member States to ensure that indicators used for EU-funded projects are measurable, verifiable and based on reliable data sources that ensure the traceability of the underlying data down to contract and final beneficiary level, with clear baselines and definitions to prevent divergent interpretations;

Removed5. Notes the Commission’s proposal that the 2028-2034 MFF, including the European Competitiveness Fund (ECF), be monitored through a standardised set of performance indicators applicable to all EU budget programmes, as set out in its proposal for a performance regulation9; notes that a simplified application of the performance framework has been proposed for the budgetary guarantees and financial instruments under the ECF;

Added5. Regrets the fact that the performance framework for the EU budget for 2021-2027 remains overly complex and fragmented; notes with regret the Commission’s assessment that over 5 000 heterogeneous, non-aggregable performance indicators are being used under the 2021-2027 multiannual financial framework (MFF), rendering it more difficult to comprehensively evaluate the effectiveness of EU spending across funding instruments, and that around 7 000 milestones and targets have been set under the Recovery and Resilience Facility (RRF) that address different needs, such as assessing performance in the context of the draft budget and monitoring and evaluating programmes, Member State plans and payment disbursements;

Removed6. Considers that the performance framework for the EU budget should be simplified so as to ensure a harmonised approach to measuring the effects of EU spending across the Member States, to reduce the overall administrative burden, rationalise reporting obligations and increase transparency by reducing information overload, while still enabling the effects of EU funding to be captured in full, including the added value of EU interventions that could not be achieved by Member States acting alone;

Added6. Stresses, in particular, that the design of the RRF does not ensure the sufficient traceability, transparency and auditability of the use of EU funds or the comparability of the results with those of other EU spending instruments; calls on the Commission to establish a more comprehensive, harmonised, transparent and verifiable performance indicator framework for future instruments, ensuring that Parliament and the ECA can fully exercise their oversight responsibilities; calls on the Commission to analyse the implementation of performance-based instruments in other country and regional contexts, identifying lessons learnt;

Removed7. Recalls that approaches to data collection vary across Member States and also within Member States, making the aggregation of performance data at EU level difficult; reiterates its call for the Commission to develop secure and interoperable IT infrastructure, while also capitalising on artificial intelligence, machine learning and data mining capabilities to improve policy delivery and facilitate monitoring, reporting and oversight; insists that indicator data and methodologies be made publicly available in real time through an interoperable monitoring, reporting and audit system, thereby increasing transparency and ensuring traceability down to project and final beneficiary level;

Added7. Notes the Commission’s proposal that the 2028-2034 MFF, including the European Competitiveness Fund (ECF), be monitored through a standardised set of performance indicators applicable to all EU budget programmes, as set out in its proposal for a performance regulation; notes that a simplified application of the performance framework has been proposed for the budgetary guarantees and financial instruments under the ECF;

Removed8. Considers it essential to verify and ensure the reliability of data used to establish performance indicators; notes with concern that, owing to the introduction and increasing use of delivery models, such as the RRF, that are based on financing not linked to costs – where disbursements are made against the achievement of previously set milestones and targets – weaknesses in data reliability can adversely affect the financial interests of the Union;

Added8. Considers that the performance framework for the EU budget should be simplified so as to ensure a harmonised and proportionate approach to measuring the effects of EU spending across the Member States in an accurate manner, rationalise the overall administrative burden and reporting obligations, especially for small and medium-sized enterprises (SMEs) and local authorities, and increase transparency by reducing information overload, while still enabling the effects of EU funding to be captured in full, including the added value of EU interventions that could not be achieved by Member States acting alone; calls on the Commission to streamline indicators, simplify templates, avoid duplicate data requests and apply the ‘once-only’ principle;

Removed9. Calls on the Commission to include in its performance reporting substantive information concerning the quality assurance used for the performance indicators; demands that any performance data reported by Member States be subject to independent verification, including by national audit bodies and the ECA, with results made available to Parliament;

Added9. Considers that impact can best be assessed through evaluations; stresses that the ECF and all future instruments must include mid-term evaluations by the Commission; calls on the Commission to ensure that corrective measures, including those recommended by the ECA following its audits, are introduced without delay if results fall short of objectives;

Added10. Underlines that simplification should not come at the expense of transparency, accountability and auditability, but should help rationalise reporting and make information on the performance of EU funding more accessible and useful; underlines, furthermore, that a reduction in the number of indicators should be accompanied by a cost-benefit and risk analysis; highlights the need for clearer links between spending and measurable policy outcomes;

Added11. Recalls that approaches to data collection vary across Member States and also within Member States, making it difficult to aggregate and compare performance data at EU level; reiterates its call for the Commission to develop secure and interoperable IT infrastructure, while also capitalising on artificial intelligence, machine learning and data mining capabilities to improve policy delivery and facilitate monitoring, reporting and oversight; stresses that the use of artificial intelligence in monitoring and data processing must be accompanied by robust human oversight and governed by ethical principles to prevent misuse and algorithmic discrimination or bias and ensure transparency and accountability, while guaranteeing data protection and full respect for fundamental rights;

Added12. Insists that indicator data and methodologies be made publicly available in real time through an interoperable monitoring, reporting and audit system, thereby increasing transparency and ensuring traceability down to project and final beneficiary level; recalls the importance of ‘final beneficiary transparency’ for EU funds; stresses that EU funding, including that under indirect management, must be transparent and should allow for effective auditing and prevention of double funding; insists further that this data should include comprehensive information regarding the social and environmental footprint of the projects financed;

Added13. Calls on the Commission to strengthen its performance reporting by integrating the financial and performance information related to EU funds and to publish clear, user-friendly performance and spending summaries, including one-page overviews and interactive dashboards with machine-readable datasets, in line with OECD recommendations;

Added14. Considers it essential to verify and ensure the reliability of data used to establish performance indicators; notes with concern that, owing to the introduction and increasing use of delivery models, such as the RRF, that are based on financing not linked to costs – where disbursements are made against the achievement of previously set milestones and targets – weaknesses in data reliability make it more difficult to protect the financial interests of the EU; insists, therefore, on mandatory ex ante and ex post verification of milestones and targets, systematic referral of suspected fraud or serious irregularities to the European Anti-Fraud Office and the European Public Prosecutor’s Office, and the possibility to suspend payments;

Added15. Calls on the Commission to include in its performance reporting substantive information concerning the quality assurance measures used for the performance indicators; underlines that a regular, transparent review of indicator relevance and reliability is essential to ensure credibility and public trust in EU spending; demands that performance data reported by Member States be subject to independent verification, including by national audit bodies and the ECA, with results made available to Parliament; further requests that verification reports and datasets be made available to the competent oversight authorities in a format that is accessible, comparable and verifiable, thus ensuring that citizens have access to the outcome of the scrutiny of the use of EU funds, while ensuring adherence to data protection and confidentiality rules;