What changed between the plenary report and the adopted text

Changed:74.78. NotesStresses the importance of Union cohesion policy for economic and territorial convergence and development in the regions of the Union, as well as for supporting the implementation of the European Pillar of Social Rights; notes that the budget for the programmes under MFF headingHeading 2 ‘Cohesion, resilience and values’ was EUR 73,3 billion (38,4 % of the Union budget) distributed as follows: 47,8 % for the European Regional Development Fund (ERDF) and other regional operations, 18,9 % for the European Social Fund (ESF), 9,8 % for the Cohesion Fund (CF), 3,8 % for Erasmus+, 2,1 % for CEF Transport, and 3,8 % for other areas;

Added:148. Expresses deep concern over the Commission’s decision to proceed with the adoption of the ‘Rearm EU’ initiative without prior consultation of the European Parliament; regrets that such a decision bypasses the principle of institutional balance and undermines Parliament’s role as co-legislator in shaping strategic and budgetary priorities; urges the Commission to refrain from initiating substantial policy instruments that impact the Union’s financial and strategic architecture without ensuring full respect for the prerogatives of the Parliament;

Added:149. Notes that the European Parliament has called on the Union and its Member States to put in place a legal framework enabling Russia to be classified as a State sponsor of terrorism;

Added:192. Expresses deep concern regarding reports of an ongoing investigation involving the former Commissioner for Justice, who is alleged to have been engaged, during his time in office, in money laundering activities involving funds of unknown origin; calls on the Commission to fully cooperate with the Belgian authorities and to urgently clarify whether these activities were in any way connected to his official duties within the Commission;

Removed:2. PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION

Added:2. European Parliament decision of 7 May 2025 on discharge in respect of the implementation of the budget of the European Climate, Infrastructure and Environment Executive Agency for the financial year 2023 (2024/2019(DEC))

Removed:on discharge in respect of the implementation of the budget of the European Climate, Infrastructure and Environment Executive Agency for the financial year 2023

Removed:3. PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION

Added:3. European Parliament decision of 7 May 2025 on discharge in respect of the implementation of the budget of the European Education and Culture Executive Agency for the financial year 2023 (2024/2019(DEC))

Removed:on discharge in respect of the implementation of the budget of the European Education and Culture Executive Agency for the financial year 2023

Removed:4. PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION

Added:4. European Parliament decision of 7 May 2025 on discharge in respect of the implementation of the budget of the European Innovation Council and SMEs Executive Agency for the financial year 2023 (2024/2019(DEC))

Removed:on discharge in respect of the implementation of the budget of the European Innovation Council and SMEs Executive Agency for the financial year 2023

Removed:5. PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION

Added:5. European Parliament decision of 7 May 2025 on discharge in respect of the implementation of the budget of the European Research Council Executive Agency for the financial year 2023 (2024/2019(DEC))

Removed:on discharge in respect of the implementation of the budget of the European Research Council Executive Agency for the financial year 2023

Removed:6. PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION

Added:6. European Parliament decision of 7 May 2025 on discharge in respect of the implementation of the budget of the European Health and Digital Executive Agency for the financial year 2023 (2024/2019(DEC))

Removed:on discharge in respect of the implementation of the budget of the European Health and Digital Executive Agency for the financial year 2023

Removed:7. PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION

Added:7. European Parliament decision of 7 May 2025 on discharge in respect of the implementation of the budget of the European Research Executive Agency for the financial year 2023 (2024/2019(DEC))

Removed:on discharge in respect of the implementation of the budget of the European Research Executive Agency for the financial year 2023

Removed:8. PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION

Added:8. European Parliament decision of 7 May 2025 on discharge in respect of the implementation of the budget of the ninth, tenth and eleventh European Development Funds for the financial year 2023 (2024/2019(DEC))

Removed:on discharge in respect of the implementation of the budget of the ninth, tenth and eleventh European Development Funds for the financial year 2023

Removed:9. PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION

Added:9. European Parliament decision of 7 May 2025 on the closure of the accounts of the general budget of the European Union for the financial year 2023, Section III – Commission (2024/2019(DEC))

Removed:on the closure of the accounts of the general budget of the European Union for the financial year 2023, Section III – Commission

Removed:10. PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION

Added:10. European Parliament decision of 7 May 2025 on the closure of the accounts of the ninth, tenth and eleventh European Development Funds for the financial year 2023 (2024/2019(DEC))

Removed:on the closure of the accounts of the ninth, tenth and eleventh European Development Funds for the financial year 2023

Removed:11. MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

Added:11. European Parliament resolution of 7 May 2025 with observations forming an integral part of the decisions on discharge in respect of the implementation of the general budget of the European Union for the financial year 2023, Section III – Commission, executive agencies, and the ninth, tenth and eleventh European Development Funds (2024/2019(DEC))

Removed:with observations forming an integral part of the decisions on discharge in respect of the implementation of the general budget of the European Union for the financial year 2023, Section III – Commission, executive agencies, and the ninth, tenth and eleventh European Development Funds

Changed:(ix) continuously monitor the implementation by the Hungarian Government of measures foreseen in Council Implementing Decision (EU) 2022/2506 of 15 December 2022;2022/2506; assess to what extent the situation has improved or worsened, including in relation to the challenges faced by the Hungarian Integrity Authority, and take all necessary actions in accordance with the Conditionality Regulation;

Changed:189.196. Welcomes the entry into force of Regulation (EU) 2023/2841;2023/2841 of the European Parliament and of the Council ; takes note of cybersecurity investments, including EUR 30 million allocated to enhancing digital security in the Commission; calls on the Commission to spare no effort in further developing a cybersecurity culture, promoting training and awareness within the Union institution; stresses the importance of continued adequate investments in cybersecurity towards the longer term indicative target in the order of at least 10 % of total IT spending;

Removed:CHAPTER II - Recovery and Resilience Facility (RRF)

Added:CHAPTER II

Added:Recovery and Resilience Facility (RRF)

Changed:D. whereas the EDFs are managed almost entirely by the Commission’s DGDirectorate-General INTPAfor International Partnerships with a small proportion (7 %) of the 2023 EDF expenditure being managed by DGthe NEAR;Directorate-General for Neighbourhood and Enlargement Negotiations;

Changed:2. Underlines the importance of the principle of separation of powers in the Union and recalls that according to the Treaty, the institutions shall practice mutual sincere cooperation; believes that under no circumstances the actions of one Union institution should affect the independence of another institution; urges all other institutions to respect the role of the Parliament as the sole Union institution directly elected by the citizens and to refrain from any undue, direct or indirect interference in its legislative processes, thereby ensuring that Parliament’s decision making-processmaking process remains free and independent from other Union institutions or any other entities;

Changed:6. Is concerned that the Commission and the Court have different interpretations of what the “error‘error rate”rate’ represents, thus generating confusion; expresses its support for a common audit approach and methodology and strongly calls on both institutions to find a solution to the divergent approaches before the 2024 discharge; is concerned that the Commission is systematically underestimating the existing error level and that this could lead to an ineffective protection of the financial interests of the Union;

Changed:11. Takes note of the innovative nature of the RRF and its contribution to supporting Member States in recovering from the economic and social consequences of the pandemic and creating a more resilient European economy; is of the opinion that any shift to a performance-based approach based on the RRF as a model requires addressing the many issues identified in its implementation, as well as assessing data on its full impact, before using such a model; recalls the many problems identified in the implementation of the RRF which would need to be addressed, including, but not limited to: the lack of adequate consultation of the regional and local authorities and other relevant stakeholders, such as social partners and civil society organisations and the lack of their involvement in the implementation; the weak cross border dimension, which may hint to a reduced EU added value in that respect; the lack of a clear definition of the milestones and targets and their satisfactorily fulfilment; the insufficient flexibility; the common debt with long-term debt payment as a consequence; the serious transparency, audit and control problems of the program which make it impossible for the citizens to be informed about the final beneficiaries of actions funded by the Union and pushes Member States to use RRF funds to cover projects very similar to those financed by Cohesion funds but with a much more limited capacity of control; reiterates the concern about the interpretation of the Commission and Member States on what a “final‘final recipient”recipient’ of RRF funding represents, which is not in line with the agreement of the REPowerEU negotiations and maintains that ministries, public authorities or other contracting authorities cannot be listed as final recipients of RRF funding; further expresses concern about the findings of the Court in relation to the risk of double funding and financing of recurring budgetary expenditure which are not in line with the RRF legal basis;

Changed:13. Stresses the urgent need for significant de-bureaucratisation, streamlining and simplification of all Union policies and their funding in line with the recommendations in the Draghi report in order to ease the burdens for European businesses and increase European competitiveness, while ensuring the protection of the financial interests of the Union; underlines that simplification will also have a positive effect on error rates in the implementation of policies because many errors happen because of overcomplicated rules which are difficult to navigate, especially for small and medium sizedmedium-sized enterprises (SMEs), new applicants, spin-offs and start-ups;

Changed:19.20. Notes that there have been allegations from some Members of the Budgetary Control committee that grant agreements, concluded by the Commission included detailed lobbying activities which could be interpreted as potentially interfering with internal decision makingdecision-making in the Union Institutions;institutions; notes that the Commission took a series of measures to address the allegations by adopting guidance on funding for activities related to the development, implementation, monitoring and enforcement of Union legislation and policy, stating that while such grant agreements did not breach the EU legal framework, they could potentially entail a reputational risk for the Union; notes that all grant agreements include a disclaimer stating that ‘views of the beneficiary do not in any way represent views of the EU and that granting authority cannot be held responsible for them’; notes that such a disclaimer was further added in the 2024 call for proposals for operation grants;

Changed:28.31. Is seriously concerned by the Court’s estimation of the error level of 5,6 % in 2023 expenditure; notes that this is an accelerated deterioration compared to the previous two years (4,2 % in 2022 and 3.03,0 % in 2021); notes with concern that the Court continues to detect substantial issues in reimbursement-based expenditure where the estimated level of error is 7,9 %; notes that the effect of the errors found by the Court is estimated to be both material and pervasive; calls for the Commission’s financial management to be tightened up, in accordance with the recommendations made by the Court in its Annualannual Reportsreports and Specialspecial Reports,reports, in order to resolutely tackle the high error rate over the next few years; underlines the Court’s warning that the increasing European debt is placing growing pressure on the Union budget;

Changed:31.34. Notes that the increase is primarily caused by the estimated level of error under MFF headingHeading 2 -– cohesion, resilience and values, where the Court found 9,3 % of expenditure to be in breach of Union rules and regulations; recalls the underlying issues that are reported by the Court and that have been known for several years;

Changed:33.36. Notes with concern that the Commission´s own estimate of the risk at payment is only 1,9 % for 2023 and has been at that level since 2020; notes that the Commission estimates its capacity to correct and recover irregular expenditure during implementation of the associated programmes at 1,0 %, resulting in a risk at closure of 0,9 %; is concerned that again for this year the Commission’s risk at payment is not only below the Court estimated level of error of 5.65,6 % but also below the Court range, which is between 4.44,4 % and 6.86,8 %; highlights that the divergence between the Court’s overall error rate and the Commission’s risk at payment is also evident in some of the specific spending areas, in particular in headingHeading 2, even more than in the past; welcomes the Court’s estimate of the level of error as an important indicator for the existing risks;

Changed:40.43. Recalls that the time available for implementing shared management funds under the 2021-2027 MFF is shorter than under previous MFFs because of the n+2 for the last year, which, coupled with the high RAL, will raise the risk of decommitments; notes the Court’s observation that the Commission has increased its forecasted amount of decommitments from EUR 7,6 billion for 2023-2027, to EUR 8,1 billion for 2024-2027 to EUR 8,8 billion for 2025-2027, a 15 % increase in 2 years; underlines with concern that the Commission has underestimated its projections for the RAL in the last two years, and that the Commission therefore likely underestimates the amount of decommitments that will be made until 2027; notes the introduction of the “cascade‘cascade mechanism”mechanism’ following the mid-term review of the MFF 2021-2027 and the incentive to use decommitted amounts to cover increased interest costs for amounts borrowed by the Commission for NGEU;

Changed:46.49. Notes that the review of the Interinstitutional Agreement on the Transparency Register is due by July 2025; calls on the Commission to ensure that the process is as open as possible, to align financial reporting requirements across all categories of registrants (including funding sources and lobbying budgets), addressing also the risk identified in the Court’s Special Report on the EU Transparency Register (SR(Special Report 05/2024) regarding self-declarations on the category of interest representation; believes that, in order to address the recommendations of the Court, the resources of the secretariat of the Transparency Register should be increased;

Changed:55.59. Stresses that the Commission’s proposals concerning new own resources from 2021 comprising three elements, the first based on revenues from emissions trading (ETS), the second drawing on the resources generated by the Union’s carbon border adjustment mechanism, and the third based on the share of residual profits from multinationals that will be re-allocated to Member States under the OECD/G20 agreement on a re-allocation of taxing rights (“Pillar(‘Pillar One”)One’) are obvious candidates for such new resources; at the same time, points out that other sources might also be considered if they should prove to be easier for Member States to approve; welcomes other initiatives that may lead to new own resources for the Union budget;

Changed:58.62. Notes that the Court has examined 127 transactions covering the full range of spending under this MFF heading, notably the Horizon 2020 programme (90 transactions), Horizon Europe (7 transactions), the Connecting Europe Facility (CEF), space programmes and financial instruments, and also that it has reviewed the European Climate, Infrastructure and Environment Executive Agency’s (CINEA) ex ante control system for CEF grants in the transport and energy sectors and the regularity information given in the annual activity reports of the Directorate-General for Research and Innovation (DG RTD) and the European Health and Digital Executive Agency (HaDEA);(HADEA);

Changed:64.68. Notes with concern that the Court found errors relating to ineligible costs in 30 of the 97 research and innovation transactions in its sample, and that these errors represent 71 % of the Court’s estimated level of error for this heading in 2023; reiterates its concern that after 9 years of implementation of the Horizon 2020 programme, the calculation of personnel costs remains a major source of errors, as 22 of the 30 research transactions with quantifiable errors in the Court’s sample (around 73 %) are affected by the incorrect application of the methodology for calculating personnel costs; acknowledges both the Commission’s and the Court’s continued efforts to remedy this situation; welcomes that the Commission has accepted the Court’s recommendations to enhance beneficiaries'beneficiaries’ compliance with the daily-rate rules and to ensure clarity concerning daily-rate rules in Horizon Europe documents;

Changed:72.76. Is deeply concerned by the Court’s findings in relation to the European Climate, Infrastructure and Environment Executive Agency’s (CINEA)ex(CINEA) ex ante control system for CEF grants in the transport and energy sectors, in particular the Court’s conclusion that while the strategies for both CEF1 (2014-2020) and CEF2 (2021-2027) are based on a sound analysis of risks and past irregularities, the guidelines for ex-anteex ante checks on procurement were not detailed enough; fully supports the Court’s recommendation that the Commission should further develop these guidelines;

Changed:78.82. Notes the Court’s Review 03/2024 “An‘An overview of the assurance framework and the key factors contributing to errors in 2014-2020 cohesion spending”spending’ that provides a multi-annual overview covering six years of audit results, including an assessment of management and control issues, aiming to strengthen the assurance model; is concerned by the Court’s conclusion that, although the assurance framework for cohesion policy has helped to reduce the level of error, it has not been effective in bringing the overall level of error below the materiality threshold of 2 %; is worried that the Commission can rely only to a limited degree on the work of the national audit authorities, because of the systematic weaknesses; supports the Court’s recommendation to the Commission to strengthen the implementation of the assurance framework for the 2021-2027 cohesion spending; reminds the Commission of the discharge authority’s call to work closely with the Member States to improve the management and control system for Union expenditure to reduce the high error rate to below the 2 % materiality threshold;

Changed:80.84. Notes the Court’s categorisation of errors found in cohesion expenditure, with ineligible projects accounting for 29 %, ineligible costs for 26 % and serious non-compliance in public procurement procedures accounting for 21 % of errors and ERDF and CF related expenditure accounting for the largest share of errors (80 %); notes that expenditure under the ESF+, YEI (Youth Employment Initiative) and FEAD (Fund for European Aid to the Most Deprived) are proportionally less affected by error, as they together account for 16 % of errors, while they together account for around 20 % of the budget under this heading;

Changed:88.92. Recalls that following Article 15 of Regulation (EU) 2021/1060 of the European Parliament and of the Council (CPR) for the programming period 2021-2027, Member States need to comply with horizontal and thematic enabling conditions, which need to remain fulfilled and respected throughout the implementation period of the funds; recalls that when enabling conditions are not fulfilled at the time of submission of a payment application to the Commission for the specific objective concerned, the related expenditure will not be reimbursed from the Union budget until the Commission is satisfied that the enabling condition has been fulfilled; recalls the strong regrets of the discharge authority in relation to the Commission decision of 13 December 2023 considering that Hungary fulfilled the horizontal enabling condition related to judicial independence that enabled the Hungarian authorities to submit reimbursement claims of up to EUR 10.210,2 billion; notes with concern that since the release of these funds, the Hungarian government has not taken steps to reinstate the independence of the judiciary but on the contrary; reiterates its worries about the lack of adequate control mechanisms or unreliable public procurement procedures to guarantee sound financial management and the protection of the Union budget; believes that this decision politically contradicts the prolongation of the measures adopted under Regulation (EU, Euratom) 2020/2092 of the European Parliament and of the Council (the ‘Conditionality Regulation’);

Changed:89.93. Expresses deep concern over the findings in the 2023 Rule of Law Report regarding the rule of law situation in Hungary, particularly the persistent and systemic challenges in the judiciary and the media sectors; notes with alarm the increasing pressure on judicial independence, including concerns over the selection and promotion of judges, and recent reports of intimidation and interference in judicial decisions, as exemplified by the resignations of judges in protest against political influence; notes with concern in the same vein that the head of the Hungarian Integrity Authority, a key institution established as a condition set by the Commission for the release of Union funds under the Rule of Law Conditionality Regulation, is facing increasing pressure from the Hungarian government; calls on the Commission to ensure a coordinated and holistic approach across all relevant Union funds and legislative tools, emphasizingemphasising that Union funds must not be allocated to activities undermining democracy or reinforcing authoritarianism;

Changed:95.99. Recognises the disproportionate impact of the Russian war of aggression against Ukraine on eastern regions of the Union bordering Russia and Belarus; draws attention to the costs borne by these regions and Member States as a result of their shared border with hostile neighbouring countries, notably their need to increasingly direct public funding into security, defence and preparedness, while facing dramatically reduced resources due to a disruption in economic activities, cross-border trade and other exchanges, and in cohesion programmes, particularly Interreg programmes; notes the measures taken by the European Commission to support these regions, notably through flexibilities provided under cohesion policy; welcomes that providing support to eastern border regions most affected by Russia’s aggression is included in the mission letter of the Executive Vice President for Cohesion and Reforms; calls on the Commission to ensure the provision of adequate support for eastern regions of the Union bordering Russia and Belarus to cope with the disproportionate consequences of the Russian war of aggression, both in the short-termshort term through the 2026 draft budget and in the medium-termmedium term through the Commission’s proposal for the next MFF;

Changed:98.102. Emphasises the need for strict oversight of the allocation of funds to prevent misuse within the Erasmus programme; asks the Commission to gather evidence to investigate any case of fraudulent or suspicious recipients, in accordance with its duties outlined in the Financial Regulation and Erasmus+ grant agreements; calls for adequate safeguarding of the programme from abuse by organizationsorganisations whose activities are not aligned with the fundamental values of the Union (human dignity, freedom, democracy, equality, rule of law, human rights); recalls that the Commission is legally bound to ensure that programme beneficiaries commit to and ensure the respect of these values and do not commit professional misconduct;

Changed:(xiv) ensure the provision of adequate support for eastern regions of the Union bordering Russia and Belarus to cope with the disproportionate consequences of the Russian war of aggression against Ukraine, both in the short-termshort term and in the medium-term;medium term;

Changed:101.105. Notes that the budget for the programmes under MFF headingHeading 3 ‘Natural resources’ was EUR 59,5 billion (31,1 % of the Union budget) distributed as follows: 65,0 % for direct payments under the European Agricultural Guarantee fund (EAGF), 27,6 % for the Agricultural Fund for Rural Development (EAFRD), 4,2 % for market-related expenditure under the European Agricultural Guarantee Fund (EAGF), 1,9 % for Maritime and Fisheries, 0,9 % for Environment and Climate (LIFE), and 0,4 % for other areas;

Changed:102.106. Notes that the Court has examined a sample of 218 transactions covering the full range of spending under this MFF heading; notes that the Court also examined the regularity information given in the annual activity reports of the Directorate-General for Agriculture and Rural Development (DG AGRI) and the Directorate-General for Climate Action (DG CLIMA),Action, as well as selected systems in 20 Member States and the United Kingdom; notes that the Court estimates the level of error for ‘Natural Resources’ to be 2,2 % (2,2 % in 2022) and that the majority of the errors found affected rural development transactions;

Changed:103.107. Points out, however, that this is partly due to the complexity of environmental schemes in rural development programmes and the recognizedrecognised negative issue of “gold‘gold plating”plating’ at national level;

Changed:107.111. Notes that 2023 was the first year of the CAP 2023-2027 new delivery model, which integrates performance elements, agreed with the Member States in Strategic Plans, as basis for payments; notes that 2023 was a modest start of the new delivery model, EUR 63,65 million declared on the basis of generated outputs and therefore subject to a ‘performance clearance’ by DG AGRIAgriculture and Rural Development out of EUR 215,52 million declared under the CAP Strategic plans under sectoral interventions and rural development; notes that in 2024 payments under the new delivery model will have increased substantially; notes the Court’s observations as regards processing performance data for the Annual Performance Reports where Member States are in the process of setting-up systems and procedures and at times manually aggregate data, with associated risks for the reliability of data;

Changed:109.113. Recalls that both the Commission and Member States are responsible for addressing fraud in CAP spending; welcomes in that regard the work done in terms of anti-fraud risk assessments and the update of its anti-fraud strategy by the DG AGRI;for Agriculture and Rural Development;

Changed:117.121. Notes the concerns expressed by some members of the Budgetary Control Committee that certain grant agreements between the European Union Climate, Infrastructure and Environment Executive Agency (CINEA) and beneficiaries, such as CSOs and private companies, under the LIFE Programme include ‘work plans’ containing detailed advocacy actions towards Union institutions or their representatives, as well as other actions directed towards certain trade agreements which the Union was negotiating, or litigation measures to be pursued by the respective entities; acknowledges that this could be potentially interpreted as interfering with internal decision makingdecision-making in Union institutions; notes that the Commission has performed a legal analysis of the grant agreements that raised concerns of some Members of the CONT Committee, which concluded that there was no evidence that the entities concerned had breached their contractual or code of conduct obligations, yet the Commission asked some beneficiaries to make amendments to the grant agreements that contained the specific provisions that potentially entailed a reputational risk; further notes that all grant agreements include a disclaimer stating that 'views‘views of the beneficiary do not in any way represent views of the EU and that granting authority cannot be held responsible for them’;

Changed:122.126. Notes reports in the media that the President of the Commission hired a paid special adviser to deliver a report on the “Strategic‘Strategic Dialogue on the Future of EU Agriculture”Agriculture’ who received a salary equal to a Director-General in the Commission; is concerned by the remuneration of all the special advisers and the discretion the Commission has in deciding their remuneration, which creates arbitrary inequalities;

Changed:124.128. Notes that in 2023 the budget for the programmes under MFF headingHeading 4 ‘Migration and Border Management’ was EUR 2,7 billion (1,4 % of the Union budget spending) distributed as follows: 1,2 billion (46,5 %) for three decentralised agencies, the European Boarder Coast Agency (FRONTEX),(Frontex), the European Union Agency for Asylum (EUAA) and the European Union Agency for the Operational Management of Large-Scale IT Systems in the Area of Freedom, Security and Justice (EU- LISA);(eu-Lisa); 1 billion (38,6 %) for the Asylum, Migration and Integration Fund (AMIF), and 0,4 billion (14,9 %) for the Integrated Border Management Fund (IBMF);

Changed:125.129. Notes that in 2023 a significant portion of the spending under MFF headingHeading 4 still concerned the completion of projects remaining from the 2014-2020 MFF; notes that 18 % of AMIF national programmes for 2014-2020 remained undeclared at the end of 2023 and that the last annual accounts and the request for payment of the final balance for these funds will be provided by the Member States as part of the closure package by 31 December 2024 at the latest;

Changed:126.130. Notes that the Court examined a sample of 23 transactions, which is not large enough to be representative of the spending under MFF headingsHeadings 4 and 5 and, thus, it cannot provide a separate estimate of the error rate for these headings; further notes that the Court’s audit results show that the expenditure under MFF headingsHeadings 4 and 5 is affected by eligibility and procurement issues and that it is a high-risk area (7 out of 23 transactions audited, i.e. 30,4 %, were affected by errors); is concerned that the Court detected four quantifiable errors which had a financial impact on the amounts charged to the Union budget and that it also found further ten cases of non-compliance with legal and financial provisions (which had no direct financial impact on the Union budget); therefore, invites the Court to provide a clear estimate of the error rate for headingHeading 4; notes that the Commission concludes that the risk at payment in 2023 is 1,1 % for the expenditure on migration and border management;

Changed:127.131. Notes that the Commission has accepted the Court’s recommendation made in its annual report for 2023 to provide further guidance on applicable rules to the Member State authorities responsible for implementing DGDirectorate-General HOMEfor Migration and Home Affairs funding via shared management; regrets that the Commission has not yet fully implemented the Court’s previous recommendations that were due to be addressed by the end of 2023; notes that DG HOMEMigration and Home Affairs is undertaking a reassessment of its ex-anteex ante methodology to ensure the respect of the rules applicable to post-2021 generation of grants, and that this reassessment will also address the Court’s relevant recommendations and those of the IAS audit on the preparedness for closing actions and programmes funded under the Internal Security Fund (ISF) and the AMIF 2014-2020 through direct and shared management;

Changed:128.132. Notes with concern that two reservations on the declaration of assurance were issued in DG HOME’sMigration and Home Affairs’ Annual Activity Report (AAR) for 2023 and that one reservation concerns the implementation of AMIF and ISF 2014-2020 in several Member States and the other reservation concerns the implementation of Border Management and Visa Instrument (BMVI) 2021-2027 in one Member State; welcomes the Commission’s commitment to take remedial measures for the underlying issues that necessitated the reservations;

Changed:129.133. Welcomes the progress identified by the Court in its review of the preparatory work done by five memberMember stateState audit authorities in managing the transition of the AMIF, BMVI and ISF funds to the CPR of the 2021-2027 MFF; observes that these audit authorities reported to the Court that the support and guidance DG HOMEMigration and Home Affairs provided to them was satisfactory; notes with concern that at the time of the Court’s audit four out of five Member State audit authorities had not finalised their audit strategies;

Changed:131.135. Stresses that securing the Union’s external borders is a pillar of the New Pact on Migration and Asylum; notes with concern that the Commission reported that the number of irregular border crossings in the Union increased in 2023 to 380 000, compared to 330 000 in 2022; observes that the BMVI can support frontline Member States to ensure they have the resources for infrastructure, facilities and installations necessary to secure the external borders of the Union, including electronic border security enhancements and other tools for border surveillance as provided for in annexAnnex III ofto the BMVI regulation; notes the European Council conclusions of 9 February 2023 that the Union will step up its action to prevent irregular departures and loss of life, to reduce pressure on the borders of the Union and on reception capacities, to fight against smugglers and to increase returns; underlines the need to better protect vulnerable people from smuggling and trafficking networks and address the negative effects of the instrumentalisation of migrants as part of hybrid attacks, notably by pro-Russian forces, as well as by the Belarusian regime;

Changed:133.137. Notes the Court’s conclusion that the AMIF 2014-2020 was performing below expectations in terms of facilitating returns of migrants: also takes note of the fact that the Court and the Commission agree that progress in this area was particularly affected by COVID-19-related travel restrictions; further notes that in 2023 return measures were supported with EUR 29,8 million from the AMIF; considers that the Commission must provide stronger efforts to assist Member States in addressing irregular border crossing and in successfully implementing returns of third-country nationals, as well as the integration of legal migrants; looks forward to receiving consolidated information in 2025 on progress in this regard through the ex-postex post evaluation AMIF 2014-2020; highlights that the Commission should continue to take action on migration and asylum within the framework of external action, including the ‘Team Europe’ approach while also increasing the transparency of the programming and implementation of the Union home affairs funds in third countries and safeguarding the role of the Parliament;

Changed:(i) address the Court’s recommendations in a thorough and timely manner and share DG HOME’sMigration and Home Affairs’ revised ex-anteex ante methodology, once completed, with the discharge authority;

Changed:135.139. Notes that in 2023 the budget for the programmes under MFF headingHeading 5 ‘Security and Defence’ was EUR 1,4 billion (0,7 % of the Union budget spending) distributed as follows: 500 million (38,4 %) for the European Defence Fund (EDF), 300 million (19 %) for military mobility, 200 million (17,1 %) for decentralised agencies, namely the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA), Europol and European Union Agency for Law Enforcement Training (CEPOL), 200 million (13,1 %) for the ISF, and 200 million (12,4 %) for nuclear safety, decommissioning and other areas;

Changed:136.140. Notes that in 2023 a significant portion of the spending under MFF headingHeading 5 still concerned the completion of projects remaining from the 2014-2020 MFF; notes that 25 % of ISF national programmes for 2014-2020 remained undeclared at the end of 2023 and that the last annual accounts and the request for payment of the final balance for these funds will be provided by the Member States as part of the closure package by 31 December 2024 at the latest;

Changed:137.141. Notes with concern that, for the reasons explained in the section on migration and border management, the Court cannot provide a separate estimate of the error rate for MFF headingHeading 5 ‘Security and Defence’ and that, based on its audit results, the Court considers expenditure from this heading to be high-risk; therefore, invites the Court to provide an estimate of the error rate for this heading as well; notes that the Commission concludes that in 2023 the risk at payment was 0,5 % for the expenditure on security and defence;

Changed:139.143. Recalls the highly unstable geopolitical situation in the Union’s neighbourhood giving rise to greater security and defence challenges, including hybrid threats, and thereby to greater investment needs in security, defence and preparedness, since the beginning of Russia’s war of aggression against Ukraine; draws attention to the fact that MFF headingHeading 5, dedicated to security and defence, is the smallest of all MFF headings and regrets that the Union'sUnion’s current budget for ensuring the security and defence of its citizens is not equal to the challenges to be met either in the short or the long term; notes that in 2023 Union funding in support of the defence industry came exclusively from the EDF; recalls the role played by the EDF in supporting European technological expertise in emerging and disruptive technologies; welcomes that submissions to the 2023 EDF calls increased by 72 % compared to the previous year, demonstrating the strong and constantly growing interest of European defence industry actors and research organisations in the EDF and the high demand for funding in this sector; notes that under the 2023 calls, the Union committed EUR 1,15 billion for 61 defence R&DR & D projects, benefiting 581 legal entities from 26 Member States and Norway; notes that on average 17 entities from eight different Member States and Norway participate in each project; underlines the importance of a level playing field in supporting cross-border defence R&DR & D cooperation;

Changed:142.146. Recalls the Court’s observations in its Special Report 10/2023 regarding the limited availability of human resources at the Commission and the subsequent risk for the EDF; notes that the growing number of proposals to evaluate and projects to manage puts considerable pressure on human resources; further notes the large share of seconded national experts (17 %) among DGDirectorate-General DEFISfor Defence Industry and Space staff in 2023 and DG DEFIS’sDefence Industry and Space’s intention to reinforce staff by the selection of officials through specialised EPSO competitions in the field of space and defence, for which the reserve lists were finalised in November 2023;

Changed:143.147. Notes that the implementation of ‘Action Plan on Military Mobility 2.0’ is ongoing, with EUR 1,74 billion allocated for dual-use transport infrastructure projects under the Connecting Europe Facility (CEF) between 2021-2027; notes that so far the Union has co-funded 95 military mobility projects in 21 Member States and that 94 of these projects are still ongoing and most of them are expected to be finalised between 2026 and 2027; notes with concern that following three calls for proposals organised in 2021, 2022 and 2023, the entirety of the military mobility envelope under the CEF for the current programming period has thereby already been exhausted; considers that although making the budget quickly available by frontloading amounts into the 2022 and 2023 calls responded to the need to take into account the evolution of the security situation in Europe following Russia’s war of aggression against Ukraine, it simultaneously led to Union funding being unstable and unpredictable by leaving a gap of more than four years with no more Union funds available for military mobility calls to finance dual-use infrastructure projects until the post-2027 MFF; recalls the Court’s conclusions in its Special Report 04/2025 that the Actionaction Planplan was not built on sufficiently solid foundations and that progress towards its objective, namely ensuring swift and seamless movement of personnel, materiel and assets at short notice and on a large scale, has been variable due to design weaknesses and remaining obstacles to implementation; notes that the Commission considers that more action is needed to strengthen dual-use transport infrastructure corridors, including on regulatory issues such as cross-border movement permission procedures; notes the Court’s observation that the Commission had not carried out a robust assessment of the overall funding required to make its objectives and targets achievable; regrets that only EUR 300 million was spent on military mobility in 2023 and is concerned that calls for proposals under the military mobility envelope faced a four-time oversubscription rate, demonstrating the increased interest among Member States and project beneficiaries;

Changed:(iii) further strengthen military mobility in the Union by substantially increasing the funding available to improve dual-use transport infrastructure corridors and by taking action to eliminate administrative, procedural and regulatory barriers to cross-border military movements, while prioritising Union funding to projects that best respond to the current European threat landscape; taking into account the Court’s findings and recommendations in specialSpecial reportReport 04/2025;

Changed:145.151. Notes that the budget for the programmes under MFF headingHeading 6 ‘Neighbourhood and the world’ was EUR 15,2 billion (7,4 % of the Union budget) distributed as follows: 63,4 % for the Neighbourhood, Development and International Cooperation Instrument -– Global Europe (NDICI-Global Europe), 16,4 % for Humanitarian Aid (HUMA), 16 % for Pre-Accession Assistance (IPA III) and 4.24,2 % for other actions and programmes; notes that in total, payments for ‘Neighbourhood and the world’ reached 15.215,2 billion in 2023, representing approximatively 8 % of the overall Union expenditure excluding RRF;

Changed:148.154. Is concerned that the Court found a significant non-compliance with visibility rules in an EU-funded project under indirect management by DG NEAR,Neighbourhood and Enlargement Negotiations, which concerned a contribution agreement worth EUR 21.221,2 million signed with an international organisation in a project where the aim was to support Eastern partnership countries in tackling COVID-19; notes that the Court found that most donation certificates it checked did not contain any acknowledgment that the medical equipment donated was funded by the Union; recalls that beneficiaries of Union funds are required to clearly publicise the fact that the Union has financed or co-financed the action they are implementing; notes the Commission’s replies that it is discussing new communication and visibility guidelines with the United Nations to reduce the risks of errors on compliance with visibility rules;

Changed:149.155. Expresses concern that the Court, in its IT audit on the information system OPSYS’ component for managing user access and rights, found three shortcomings including (i) that the Directorate-General forDG International Partnerships (DG INTPA) had not formalised a procedure for granting and removing access rights for system administrators and to standard users; (ii) four cases in which standard users had more access rights than they needed for their jobs, which is not in line with the Commission’s IT standards; and that (iii) DG INTPAInternational Partnerships did not manage all administrator accounts belonging to staff of other directorates-general; is concerned that these weaknesses increase the risks of both inappropriate access to the system and non-compliance with the rules and procedures for implementing external action projects, and also undermine the integrity of system processes and data;

Changed:155.161. Notes that the Commission has been working in the last months with UNRWA, to enhance the neutrality processes and control systems in the Agency, in line with findings of the investigations by the UN OIOS on the allegations of involvement of 19 of its staff in the 7th7 October 2023 attack, and to monitor the application of the action plan presented by UNRWA on the implementation of the recommendations of the Independent Review Group led by former French Minister of Foreign Affairs Colonna to strengthen control and oversight; notes that the Commission has reassessed the Union’s 2024 funding decision for UNRWA and that, through an exchangeExchange of lettersLetters between Commissioner Várhelyi and UNRWA Commissioner General Lazzarini in April 2024, the Union reached an agreement about the Union’s conditional assistance for UNRWA, linked to a number of milestones in relation to three work streams, including the screening of UNRWA staff, an audit by the Union, as well as the reinforcement of the Department of Internal Investigations and Ethics office; notes that Union assistance was resumed;

Changed:156.162. Recalls the necessity for the Palestinian Authority to remove all educational materials and content that fail to adhere to UNESCOUnesco standards by the next school year, in particular those that contain antisemitism as defined by the International Holocaust Remembrance Alliance classification endorsed by the Union, incitement to violence, hate speech, and glorification of terrorism; recalls the provisions of previous discharge resolutions; stresses that financial support from the Union for the Palestinian Authority in the area of education should be provided on the condition that textbook content is aligned with UNESCOUnesco standards, that all anti-Semitic references are deleted, and that examples which incite to hatred and violence are removed, as repeatedly requested in the resolutions accompanying the discharge decisions; recalls the findings of the Georg Eckert Institute'sInstitute’s report funded by the Union, which revealed a complex picture on the textbooks; notes that the Union does not fund the Palestinian textbooks, and that neither are they the responsibility of UNRWA, which nevertheless reviews all issued textbooks to address any problematic content;); notes that the Commission will carry out close scrutiny to ensure that no Union funds are allocated, directly or indirectly, to the drafting, teaching, or exposure of such educational materials to Palestinian children, including those provided by UN organisations;

Changed:157.163. Notes DG NEAR’sNeighbourhood and Enlargement Negotiations’ acknowledgement in its AAR 2023 that projects in Kyiv received regular visits but security constraints limited on-site monitoring and project visits in other Ukrainian regions; further notes that the constraints on adequately monitoring projects in Ukraine led to a renewed reservation in the 2023 AAR of DG NEARNeighbourhood and Enlargement Negotiations and that corrective actions are being implemented, such as monitoring progress on project implementation through desk reviews, remote solutions and using a service provider;

Changed:160.166. Calls on the Commission in line with ECA’sthe Court’s recommendations in its opinion 03/2024 to integrate into the new MFF legislative proposal the recommendations of the External Action Guarantee complementing the Commission'sCommission’s evaluation, including increased use of blending (grants) in LDCs, fragile or conflict-affected countries and engaged coordination with stakeholders such as civil society;

Changed:161.167. Is concerned about the allocation of EFSD+ under the new flexible 'Support‘Support to Investments'Investments’ envelope in favour of benefiting countries where the Global Gateway investments are easier to implement at the expense of prioritising LDCs, and fragile and conflict-affected countries; calls for reporting on the volume of EFSD+ amounts allocated and contractualised in these countries and for transparency on how the quota of allocations to LDCs within country MIPs is respected within allocations of the regional MIPs;

Changed:166.172. Notes the Commission’s replies to written questions to Commissioners Jutta Urpilainen and Oliver Varhelyi that in 2023 approximately 45 % of the total errors are due to excess clearing, a practice where expenditure not incurred is included in the accounts as expenditure incurred, and that therefore such errors are temporary, since they will no longer exist after the final clearings; notes furthermore that, to reduce these temporary errors, the Commission has requested its partners to review their reporting templates to allow for easier identification of incurred expenditure, and that DG INTPAInternational Partnerships launched a special working group to screen the compliance of relevant organisations through a risk management framework; also notes that DG INTPAInternational Partnerships is currently reviewing its control strategy, which aims also to identify how ex-anteex ante controls can be strengthened and to improve the reporting of the pillar-assessed organisations to the Commission; calls on the Commission to report to the discharge authority on the effects of these actions;

Changed:167.173. Notes that the expected outcomes of DG INTPA’sInternational Partnerships’s ongoing review of its control strategy include the reinforcement of guidance on financial reporting and also on enhanced ex-anteex ante controls so as to prevent errors including on excess clearing; calls on the Commission to report to the discharge authority on the remedial measures taken upon finalisation of this review;

Changed:169.175. Stresses that, according to Court’s assessment, the Residual Error Rate (RER) study does not constitute an assurance engagement or an audit and is based on the RER methodology and manual provided by DG INTPA;International Partnerships; notes that DG INTPAInternational Partnerships clarifies that the RER study is meant to be a key indicator for the estimated financial impact of residual errors, i.e.,i.e. it measures the proper functioning of the internal control system and thus, demonstrates the Commission’s corrective capacity; stresses that, as in previous years, the Court has found limitations in the study; notes, furthermore, the Court’s opinion, as in previous years, that the RER methodology allows the contractor to rely entirely on the results of DG INTPA´sInternational Partnerships’ controls, and that relying on the work of other auditors is contrary to the purpose of an RER study; highlights the Court’s finding that in cases where these previous checks were carried out under the FAFA between the European Commission and the United Nations, the contractor is not always able to carry out additional substantive testing as the FAFA limits the Commission’s verification rights; highlights the Commission’s reply which recognised the limitations in terms of controls set in the FAFA; urges the Commission to look for workable solutions to resolve this issue;

Changed:170.176. Recalls that two EUTFs were created under the EDFs; recalls that EUTF for Africa has mobilised over EUR 5 billion, with 88%88 % of contributions (EUR 4.44,4 billion) coming from the EDF and the Union budget; deplores that, despite several requests from Parliament, the process of managing and allocating these funds still lacks transparency; is concerned by the ECACourt’s findings in its Special reportReport 17/2024 “The‘The EU trust fund for AfricaAfrica’. Despite new approaches, support remained unfocused; notes that, despite an innovative approach to identifying human rights risks in a difficult environment, these risks were not comprehensively addressed and that the Court found that the assessment of potential risks to human rights was not comprehensive; recalls that the Commission is unable to identify and report on the most efficient and effective approaches to reducing irregular migration and forced displacements in Africa according to the Court; regrets that the new monitoring system aggregates information from all EUTF projects, but suffers from issues of data accuracy; notes that the Union’s Africa trust fund is set to be phased out in 2025;

Changed:175.181. Encourages the Commission together with EPSOthe European Personnel Selection Office (EPSO) to ensure that necessary technical systems are put in place as quickly as possible and that processes are accelerated in order for the Commission and other Union institutions to be able to rely on EPSO for the selection of highly qualified and motivated candidates for all types of jobs in the institutions;

Changed:(i) ensure that Union Institutionsinstitutions can rely on EPSO to efficiently organise and complete selection procedures and other staff related procedures in order to provide Union Institutionsinstitutions with sufficient highly qualified and motivated candidates for open positions;

Changed:(iii) continue work on measures that will ensure that Union Institutionsinstitutions based in Luxembourg can continue to attract highly qualified staff for all types of job profiles;

Changed:198.205. 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‘satisfactory fulfilment of M&Ts";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- specificcountryspecific 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;

Changed:199.206. Notes that in 2023, the Commission disbursed a total of EUR 75 billion, and additional pre-financing payments of EUR 7.17,1 billion, which brought the total disbursements by the end of 2023 to EUR 220.8220,8 billion, divided into EUR 141.6141,6 billion in grants (40 % of the total EUR 357 billion for grants under the Recovery and Resilience Facility (RRF) envelope) and EUR 79.279,2 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;

Changed:202.209. 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(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'sCourt’s conclusions are based on extensive audit work and regrets that the Commission contests some of the Court'sCourt’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;

Changed:205.212. 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'sUnion’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;

Changed:210.217. Expresses concern about the Court’s findings in Special Report N°22/202422/2024 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,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,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;

Changed:211.218. 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'sCommission’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;

Changed:215.222. Expresses concerns that in 2023 the Commission had to introduce 10 additional control milestones for seven MembersMember 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 statesStates 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;

Changed:216.223. Regrets the findings of the Court'sCourt’s Special Report No 26/2023 that several policy areas in the RRF'sRRF’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;

Changed:218.225. 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,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;

Changed:219.226. Calls on the Commission to increase the number of ex-postex 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;

Changed:222.229. 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 DGDirectorate-General ECFINfor Economic and Financial Affairs covers the effectiveness of Member States’ controls on compliance with public procurement and state aid rules. however, stresses that while DG ECFIN’sEconomic and Financial Affairs’ 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;

Changed:225.232. 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’sEconomic and Financial Affairs’ Annual activityActivity reportReport cover this;

Changed:227.234. Notes that the Commission’s IAS, in its audit on ex-anteex ante controls of the RRF payment requests carried out in 2023, identified a very important issue according to which DG ECFIN,Economic and Financial Affairs, in cooperation with the Recovery and Resilience Task Force, should further develop and formalise the existing guidance for the cases where DG ECFINEconomic and Financial Affairs 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 ECFINEconomic and Financial Affairs should follow up the fulfilment of the formal confirmation on the Member State’s commitment,commitment; (ii) the criteria for determining the deadlines for the Member States to fulfil the commitments,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’;

Changed:228.235. Notes that the Commission checks during its “Protection‘Protection of the Financial Interest of the Union”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;

Changed:233.240. 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 ofto its 2024 Annual Report on the implementation of the RRF; re-iteratereiterate 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;

Changed:239.246. Highlights the RRF impact on the Union business and SMEs; notes that RRF has provided EUR 78 billion in direct support to SMEs, representing 12 % of total RRF expenditure, and that broader measures benefiting businesses amount to EUR 152 billion (23 % of total RRF spending); notes that EUR 2.752,75 million SMEs, approximately 11 % of all active SMEs in the Union, have received support through the RRF; underlines that nearly 600 000 businesses have benefited from digitalisation initiatives, while EUR 5.25,2 billion have been allocated to green transition projects, including renewable energy and hydrogen;

Changed:243.250. Recalls that, while Member States are not required to publish all data on final recipients, Regulation (EU) 2023/435 of the European Parliament and of the Council amending the RRF Regulation requires Member States to publish information on the 100 final recipients receiving the highest amount of funding under the RRF; welcomes that on 10 October 2024, the Commission published, as part of the RRF Annual Report 2024, a dedicated Annex to provide further clarity on the concept of final recipients under the RRF Regulation and the scope of the publication of data on the largest 100 final recipients; expresses deep concern over the interpretation of the Commission of the concept of “final‘final recipient”recipient’ under the RRF, as often they are listed only at the ministry level, and that the descriptions are vague, with many examples available in almost all lists provided by Member States; reiterates its demand that the list of 100 largest final recipients provides the factual natural person or entity that is the last in a chain of money transfers to be made available in a publicly accessible database to enhance accountability and enable independent oversight, while respecting the legal framework of Union data protection; is concerned that otherwise it will be problematic to measure the impact and guarantee visibility of the RRF funds to the citizens, although also takes into account the RRF Scoreboard and the project map; stresses that, should the Commission continue to refuse to ensure full transparency, Parliament must consider all available measures to enforce compliance, to prevent a similar interpretation from being applied to the transparency provisions in other financial regulations;

Changed:244.251. 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‘final recipient”recipient’ is in its Guidance on RRPs in the context of REPowerEU;

Changed:(vi) consistently and accurately apply the provisions related to the “final‘final recipients”,recipients’, of the RRF Regulation, by revising its Guidance on RRPs in the context of REPowerEU, and to communicate with Member States on the correct application of the definition of “final‘final recipients”;recipients’; calls on the Commission to come forward with proposals requiring Member States to publish details of all final recipients;

Changed:(ix) work closely with Member States to ensure that M&Ts, in particular those of a structural nature or linked with CSRs, are fully and diligently implemented, and that no revision of RRPs will be approved in cases where ambition has been lowered or important measures have been weakened; avoid, to the extent possible, the revision of plans that would represent a “re-packaging”‘re-packaging’ of planned measures into the RRPs if they don’t respect the conditions of the RRF Regulation;