Portugal did not meet eight PRR targets, but still had access to European financing
An audit carried out by the European Court of Auditors (ECA) concluded that eight milestones and goals associated with payments already made by the European Commission (CE) to Portugal under the Recovery and Resilience Plan (PRR) were, after all, not fulfilled satisfactorily. Italy, Austria, Czech Republic, FranceMalta and Greece were identified on the list of countries with irregularities.
At stake are objectives related to the operationalization of regional and subregionalof the National Emergency and Civil Protection Authority; the creation of a system mobile communications insurance for government employees; the implementation of the national strategy for ecological public procurement; and the expansion of the electric vehicle charging network.
For this work, with a horizon up to 2023, the TCE audited €53.5 billion and included the 23 subsidy payments, in the amount of €46.3 billion, as well as the calculation of the respective pre-financing, in the amount of € 7.2 billion. The analysis focused on 325 milestones and 127 targets and included on-the-ground verification of 30 of the targets in six Member States.
According to the report released this Wednesday, of the 452 milestones and goals examined globally, “16 did not meet payment or eligibility conditions”. This number results from seven checks disbursed to seven countries. The errors observed by the auditor are not limited only to unsatisfactory compliance with milestones and targets: they also include “measures initiated before the eligibility period and the replacement of recurring national budget expenditure”.
In a clarification session for journalists, João Leão, current member of the European Court of Auditors, said that the authority has already communicated the irregularities to the EC. Now, explained the former Portuguese Finance Minister, “it is up to the European Commission to follow up on this recommendation from the TCE”. The entity led by Ursula von der Leyen “may ask the Member States involved for additional information or even to take additional actions to meet these goals and milestones”, he concluded.
It should be remembered that theCountries benefiting from the Recovery and Resilience Mechanism (MRR) can request payments no more than twice a year, “provided that they sufficiently demonstrate satisfactory compliance corresponding milestones and goals”and should to accompany as requests for an audit summary and a management statement relating to the information presented. Num next step, the Commission’s control systems include reviews and audits before and after orders.
The problem, according to the Court, is that, although the EC has updated its audit strategy, there continue to be “persistent insufficiencies in the reporting and control systems of Member States, which call into question the protection of the EU’s financial interests, with a possible impact on the regularity of expenditure”. For this reason, the ECA calls on the Commission to strengthen its monitoring and control mechanisms.
Following the errors found, the authority European issued a “qualified opinion” on MRR expenditure. To remember that this instrument, criated to finance reforms and investments in areas such as the green and digital transition, it plays a crucial role in countries such as Portugal, which is fifth of the euro area receiving more funds as a percentage of GDP (2019): 10.4%, or equivalent to €22.2 billions.
Once again, the TCE raised concerns about the ability to absorb and execute funds until the end of the mechanism’s validity period, in 2026. The risk of not meeting targets and milestones in a timely manner could result in losses of funding, which which represents an additional challenge for the country. Recently, the Minister of Cohesion, Manuel Castro Almeida, warned of the risk of early elections, ensuring that, if they happen, the PRR will not be executed.
