Commission to consider tools to speed up recovery of misspent agricultural funds
The Commission will assess if there is a need to incentivise EU countries to shorten the time for the reclamation of irregular payments, a spokesperson said after the European Court of Auditors (ECA) highlighted the lengthy process to return improper disbursements to the EU budget.
In a report published on 7 May, ECA warned that recovering misspent EU money can take years and the process may even slow down further.
This is a risk especially for expenditure corrections in direct aid to farmers, according to ECA. The main reason is that the Common Agricultural Policy (CAP) running until 2027 no longer embeds the 2006 principle whereby member states had to bear a part of the non-recovered amount in case the process took too long.
According to ECA estimates, the application of this rule resulted in the repayment of €234 million between 2015 and 2022.
For the CAP’s European agriculture guarantee fund (mostly consisting of direct subsidies to farmers), ECA detected €2.4 billion of irregular expenditure in 2007-2022, of which 52% had been recovered by the end of 2022, 9% was written off and 39% was still outstanding.
Thus, ECA recommended that the Commission assess adding new “incentives” in the next CAP cycle to “recover irregular expenditure […] in a more timely manner, and improve the recovery rates”.
“The Commission agrees” on the point, a Commission spokesperson said in an email comment. “The Commission will do this assessment insofar as it is observed that the recovery rate deteriorates”. In the evaluation, the Commission will consider “additional incentives” for member states “to improve the recovery rates in agriculture”.
Different situations
France, Italy, Spain, and Poland reported the highest amounts of the €2.4 billion of irregular expenditure in CAP direct payments for 2007-2022. Recovery rates were the highest in Austria (92%) and the lowest in Poland (17%). The share of waivers ranged between 0% in Austria and 48% in the Netherlands.
The situation is different in the European fund for rural development, co-financed by national authorities. Estimating the 2015-21 average recovery rate of the direct support fund and the rural development one, the auditors found that the first one was significantly lower, at 49%, compared to 78% for the latter.
This discrepancy, ECA stressed, is basically because the financial contribution by member states works as an incentive to recover the misspent funds more quickly.
Without similar incentives in the direct payments fund, the auditors warned, “there is the risk” that the rate of “recoveries in agriculture deteriorates”.
“The Commission believes that […] the overall debt management system is fit for purpose”, the spokesperson said, adding however that the EU executive “agrees with [the] recommendation […] to make an assessment on the need for additional incentives for member states to improve the recovery rates in agriculture”.
The Commission’s Directorate General for agriculture “will do this assessment insofar as it is observed that the recovery rate deteriorates,” the spokesperson concluded.
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