The EU Commission presented its proposal for the next Multiannual Financial Framework (MFF) yesterday. It proposes a budget of two trillion euros for the years 2028 to 2034. In focus: Better protection of the rule of law and EU values when using EU funds. Member States would no longer receive lump sums for individual projects. Instead, disbursements will be linked to the implementation of jointly agreed reforms. This new model is based on the principle of the Corona Recovery Fund: EU funds will only flow if a Member State fulfils specific rule of law and structural requirements.

The basis for a country’s reform agenda (so-called ‘national and regional partnership plans’) will be the Commission’s recommendations from its annual Rule of Law Report. Another new feature is that if money is forfeited due to unimplemented reforms, it will go to programmes that specifically strengthen democracy, civil society, media freedom and the fight against corruption.

Daniel Freund, Green coordinator in the Committee on Budgetary Control, comments:

“It is right that the Commission wants to link EU funds more closely to fundamental rights and the rule of law. But the new model also harbours risks: Where only the achievement of targets counts, but no checks are made on how money was actually spent, we are opening the door to fraud. This model must not simply be copied from the Corona recovery Fund. We need better controls, more transparency and a stronger role for the European Parliament. In the upcoming negotiations, we will therefore also campaign for sufficient resources for the EU anti-fraud authorities.”

“The fact that the German government considers the proposed increase in the EU budget to be “unacceptable” is outrageous. While special funds totalling 500 billion euros are being approved in Berlin, suddenly there is no money for joint European solutions? The moderate increase in the EU budget is basically little more than an inflation adjustment. In addition, we also have to pay the interest and repayments of the Corona Recovery Fund from the next EU budget framework. For climate protection, security and economic resilience, we need a strong EU with a strong budget.”

Performance-based model needs more control

The European Court of Auditors has repeatedly pointed out deficits in the transparency and supervision of the Corona Recovery and Resilience Fund (RRF). The Commission only checks whether a Member State has met agreed milestones and targets. However, it does not check whether expenditure was proportionate, correct or economical. This lack of cost control makes independent auditing and political control considerably more difficult, and the European Parliament is only involved to a limited extent. At the end of 2024, the European Public Prosecutor’s Office was already conducting 307 active fraud proceedings in connection with RRF. The estimated loss amounts to 2.8 billion euros – almost 30% of the total volume of fraud involving EU subsidies.