Presenting the report of the European Court of Auditors, Annemie Turtelboom, Belgian member of the Court, underlined the low rate of absorption of structural funds by our country.
“In Belgium, one element is striking,” notes Annemie Turtelboom, Belgian member of the European Court of Auditors. It’s our low absorption rate.” In other words, we are not good at taking full advantage of the endowment of European money. “It is economically damaging, because the quicker this European money is absorbed, the quicker it enters the economy and the quicker the economy can benefit from this added value. And the speed with which a country absorbs funds is also a sign of good financial management,” adds Annemie Turtelboom.
Not a sign of good management
In 2023, the total amount of payments under the Structural and Investment Funds that had been granted for the period 2014-2020 reached €450.6 billion, which corresponds to an absorption rate of 91.5 % of the total allocation of 492.6 billion euros. But Belgium is below this average. “We are in 19th position, with an absorption rate of these funds of 88%,” regrets Annemie Turtelboom. This is a far cry from countries like the Czech Republic, Ireland or Hungary which have rates of 98-99%.
“We have never done an analysis by Member State and I therefore cannot say why Belgium is having so much difficulty absorbing these funds. It could be because of the complexity of the state, but I can’t really say for sure. But the situation is deteriorating. Five years ago, the absorption rate in Belgium was better than today. »
The Court is even more severe with regard to the budget of the European Union. A relatively small budget: it amounts to 191 billion euros, to which are added 48 billion from the FRR, the “recovery and resilience facility”, the main financing instrument of Next Generation EU, the post-covid recovery.
Adverse opinion
If the Court of Auditors has no major observations on the revenues of the European budget, it is on the other hand very critical on the expenditure side, on which it gives an “unfavorable opinion”, and this for the fifth year in a row!
The Court indeed notes a significant increase in errors. An error is an expenditure which should not have been financed from the Union budget, because, explains the Court, this money “is not used in accordance with the EU legislation in force and ‘is therefore not spent as intended by the Council and the European Parliament when adopting this legislation, or when it is not used in accordance with specific national rules’.
“We give a negative assessment of the general budget expenditure, because the error rate continues to increase. While it was 2.7% in 2019, 3% in 2021, 4% in 2022 and 5.6% in 2023,” underlines Annemie Turtelboom. This is particularly the case for the Cohesion Funds, which represent nearly 40% of the European budget, and for which the margin of error exceeds 9%,” she said. And we can think that what is true for the cohesion funds is also true for the FRR, the resilience fund, for which Belgium received an advance of 770 million last July. Annemie Turtelboom also gives the example of a French railway project which benefited from this resilience fund even though the purchase orders for this project had been issued before the covid period.
Errors and fraud
“Most of the errors concern non-compliance with rules on state aid and public procurement, and projects which are not normally subsidizable,” explains Annemie Turtelboom.
A mistake is not fraud, but it is also not a sign of good financial management. “I’ll give you an example. If at a certain moment an institution has a project for which it has not published a contract notice, it is entirely possible that it uses this money in a non-fraudulent way, but the fact that not all companies have not having the opportunity to participate in this market is also not a sign of good financial management. »
Why so many errors? “We see several reasons. First of all, it is the end of a multiannual framework, which means that there is a certain pressure (on national administrations) to absorb European budgets. It is therefore not always the best projects that are presented. In 2020, Member States also benefited from significant flexibility in reprogramming funds and reporting expenditure. Greater flexibility also meant that greater creativity was possible. And thirdly, in this post-covid period, it has become more difficult for authorities to carry out more checks and verifications, which of course also has a negative impact on the error rate. »
“The error rate is not a measure of fraud, inefficiency or waste,” recalls Annemie Turtelboom. This is an estimate of the amount of money that has not been used in accordance with current European or national rules. However, we regularly report cases of suspected fraud. This year, we reported twenty cases, compared to 14 in 2022. OLAF opened 4 investigations and 17 of these cases were simultaneously reported to the European Public Prosecutor’s Office, which opened 9 investigations,” she adds.
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