European Parliament Signs Off EU Budget For 2022, But With Reservations

With more than 95% of the EU’s expenditure managed by the European Commission, MEPs today endorsed its budgetary management.

However they criticised the high error rate in the 2022 spending. This rose to 4.2%, up from 3% in 2021 and 2.7% in 2020, prompting MEPs to warn against underestimating the level of risk.

Similarly, the EU’s outstanding commitments in 2022 have reached a record-high (€450 billion, largely due to the NextGenerationEU package).

MEPs also expressed concern about member state reporting and control systems for the EU’s recovery and resilience funds and warn of the risk they pose to the EU’s financial interests.

In the resolution that accompanies the discharge decision, MEPs regret the “political contradiction” in disbursing the previously suspended funds to Hungary in exchange for its endorsement of aid for Ukraine.

They warned the Commission against “watering down” the EU’s climate goals and ask to speed up the pace of investments, noting that in 2022 the European Union fell short of the efficiency needed to achieve the goals set for 2030, 2040 and 2050.

Misuse of EU money by Hamas and diversifying the EU aid to Palestine

MEPs also adopted an amendment voicing concerns about “credible reports” that EU money “could have been partially misused” by Hamas and that UNWRA staff could have been involved in terrorist acts, MEPs urge the Commission to diversify the recipients of EU support to Palestinian civilians and to include the WHO, UNICEF and the Red Crescent. They also urge the Commission to guarantee independent controls of UNRWA.

Alleged COVID-19-related misuse of EU funds

Parliament also voiced concern about the alleged COVID-19-related misuse of European Union funds in Spain and Czechia for the purchase of medical equipment and urge the Commission to rely on external auditors if there is a “severe lack of capacity in a member state”, and called for in depth ex-post audits for all contracts awarded without procurement.

They also pointed to another recently uncovered alleged fraud in Portugal involving European Regional Development funds.

Appointment process for the new EU SME Envoy

In an amendment adopted by 382 votes in favour, 144 against and 80 abstentions, MEPs criticise the politicised process to appoint the EU’s SME Envoy “despite having been outqualified (…) by the two remaining female candidates from underrepresented Member States”, and who is an outgoing MEP from “President von der Leyen’s own German political party”.

They asked the Commission to select a new candidate using a “truly transparent and open process”.

“The budget is the most effective tool to deliver our political priorities, to improve the lives of citizens and to act in the face of crises of all kinds. That is why it must be protected by all means from any irregular use, be it errors or fraudulent behaviour”, rapporteur Isabel García Muñoz MEP said.

“We need greater simplification and flexibility, without undermining controls, measures to improve the absorption of funds and to make progress in digitisation to improve the management of European funds and fight fraud and corruption more effectively.”

European Council discharge delayed.

MEPs agreed (by 515 votes to 62 and 20 abstentions) to delay the vote on the Council discharge until the next plenary, awaiting a decision by member states to provide Ukraine with missile protection systems.

The annual discharge is a crucial part of Parliament’s budgetary oversight role. Its purpose is to hold the EU institutions accountable for spending the EU budget according to EU rules, principles of sound financial management and the EU’s political priorities. In their scrutiny process, MEPs take into account the annual report published by the EU Court of Auditors.