REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the follow-up to the discharge for the 2023 financial year
Date: 2025-06-27
Institutions: Directorate-General for Budget, European Commission
Subjects: EU budget, EU control, EU expenditure, administrative formalities, audit, budgetary control, budgetary discharge, financial year, management audit, multiannual financial framework

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 27.6.2025  COM(2025) 373 final  REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the follow-up to the discharge for the 2023 financial year  
 
 
REPORT ON THE FOLLOW-UP TO THE REQUESTS MADE BY THE EUROPEAN PARLIAMENT IN 
ITS DISCHARGE RESOLUTIONS AND THE COUNCIL IN ITS DISCHARGE RECOMMENDATION 
FOR THE FINANCIAL YEAR 2023 

Contents 
1. 

Introduction ................................................................................................................................... 1 

2. 

3. 

4. 

5. 

Protecting the EU’s financial interests ........................................................................................... 1 

Performance of the EU budget and impact of the RRF .................................................................. 6 

Transparency of EU funding ........................................................................................................... 7 

The Commission’s borrowing activities and new own resources .................................................. 9 

6.  Outstanding budgetary commitments – ‘reste à liquider’ (RAL) and measures to speed up the 
implementation of EU funds ................................................................................................................... 9 

7. 

Looking ahead .............................................................................................................................. 10 

1.  Introduction 

In  2023,  against  the  backdrop  of  Russia’s  war  of  aggression  against  Ukraine,  the  energy 
crisis, natural disasters and economic turmoil, the EU budget remained a source of stability, 
resilience,  and  strategic  investments  for  the  benefit  of  the  European  public,  farmers, 
researchers, businesses and regions across Europe and beyond. 

On  7 May  2025,  taking  account  of  a  recommendation  from  the  Council,  the  European 
Parliament  decided  to  grant  discharge  to  the  Commission  for  its  implementation  of  the 
EU budget in 2023. The Council recommendations and the European Parliament’s resolution 
contain  more  general  requests  and  specific  recommendations  to  the  Commission  regarding 
the implementation of the EU budget. 

This report on the follow-up to the 2023 discharge requests summarises the actions taken by 
the  Commission  in  response  to  both:  (i)  requests  made  by  the  European  Parliament  in  the 
‘political  priorities’  section  of  its  discharge  resolution1;  and  (ii)  the  main  requests  made  by 
the  Council  in  its  recommendation  on  the  discharge2.  The  report  is  a  part  of  the  Integrated 
Financial  and Accountability Reporting  of the Commission.  In the  last quarter of  2025, the 
Commission  will  issue  another,  more  detailed  report  that  will  reply  to  all  specific 
recommendations included in the discharge recommendations and resolution. 

2.  Protecting the EU’s financial interests 

The  Commission  attaches  the  utmost  importance  to  monitoring  the  use  of  EU  funds,  in 
cooperation with national authorities and implementing partners. 

1 European Parliament decision of 7 May 2025 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)) – 2024/2019(DEC). 
2 Council recommendation on the discharge to be given to the Commission in respect of the implementation of 
the general budget of the European Union for financial year 2023 (6179/24). 

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a.  Spending in line with EU values, including the rule of law 

Rule of law 

The Commission is acting on the Parliament’s call ‘to ensure strict and fast implementation 
of all elements of the [Rule of Law Conditionality] mechanism when Member States breach 
the  principles  of  the  rule  of  law  where  such  breaches  affect,  or  risk  affecting,  the  financial 
interests of the Union’3. 

The  Commission  contributes  to  ensuring  the  full  and  effective  use  of  the  Conditionality 
Regulation to protect the EU budget from breaches of the principles of the rule of law. 

For  example,  Hungary  is  subject  to  measures  under  the  Conditionality  Regulation  for  the 
protection  of  the  EU  budget  since  2022,  when  the  Council,  on  a  proposal  from  the 
Commission,  adopted  two  measures:  (i)  a  suspension  of  55%  of  budgetary  commitments 
from  three  cohesion  policy  programmes  and  (ii)  a  prohibition  on  entering  into  new  legal 
commitments  with  ‘Public Interest  Trusts’  (‘PITs’) and entities maintained by them for EU 
funding under direct and indirect management. 

On  13 December  2023,  under  the  procedure  set  out  in  the  Conditionality  Regulation,  the 
Commission  reassessed  Hungary’s  situation.  It  found  that  the  risk  to  the  EU  budget  had 
remained  unchanged  since  December  2022,  and  that  the  Council’s  measures  should  not  be 
adapted  or  lifted.  The  first  tranche  of  suspended  commitments  for  2022,  corresponding  to 
approximately  EUR 1.04 billion,  expired  at  the  end  of  2024  and  was  lost  for  Hungary. 
Similarly,  a  second  tranche  of  approximately  EUR 1.1 billion,  corresponding  to  2023 
commitments, will be lost for Hungary at the end of 2025, if the related measure is not lifted 
by then, and this will continue yearly on a rolling basis.  

On 2 December 2024, Hungary notified the Commission that it made legislative amendments 
to address conflicts of interest in the boards of PITs. However, in its decision of 16 December 
2024,  the  Commission  found  that  the  notified  legislative  amendments  do  not  adequately 
address the outstanding concerns. Therefore, the Commission did not propose any lifting or 
adaptation  of  the  measure  on  PITs  and  entities  maintained  by  them  to  the  Council.  The 
Commission clearly outlined the adaptations that would be needed to sufficiently remedy the 
situation.  

The  Commission  continues  to  monitor  developments  in  all  27  Member  States  under  the 
Conditionality Regulation as well as through its  annual  rule  of  law  report. Every situation is 
assessed individually, and the Commission  will not  hesitate to  take the  necessary steps if  a 
particular situation meets the criteria set out in the Regulation. 

Besides  the  Conditionality  Regulation,  the  Commission  has  at  its  disposal  two  other 
important  instruments  that  contribute  to  protect  the  EU  budget  from  breaches  of  the 
principles  of  the  rule  of  law:  (i)  the  horizontal  enabling  condition  on  the  EU  Charter  of 
Fundamental  Rights  under  the  Common  Provisions  Regulation,  and  (ii)  the  milestones  and 
targets  that  address  rule  of  law  challenges  under  national  recovery  and  resilience  plans 
(RRPs). 

3 See paragraph 10 – 2024/2019(DEC). 

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The  Commission  will  continue  to  apply  this  set  of  tools  and  any  other  instruments  at  its 
disposal.  As  indicated  in  the  recent  Communication  on  the  road  to  the  next  multiannual 
financial framework (MFF), respect for the rule of law will remain a condition for receiving 
EU funds, and the next MFF will include strong safeguards to this end. 

EU values 

The Commission notes that Parliament finds ‘it is imperative for the credibility of the EU that 
the Commission ensures that no EU funds are allocated to individuals or organisations linked 
to  any  kind  of  terrorist  movements  or  any  other  movement  expressing  extremist  views, 
inciting  violence  and/or  hatred,  that  are  directly  in  opposition  to  the  European  Union’s 
fundamental values’. 

The recent amendments to the Financial Regulation introduced explicit grounds under EDES 
for excluding entities from receiving EU funds if they have been found to engage in activities 
that are contrary to EU values. Through the Early Detection and Exclusion System (EDES), 
the  Commission  can  exclude  entities  linked  to  terrorist  financing,  terrorist  offences  or 
offences linked to terrorist activities from receiving EU funding.  

As regards funding to the United Nations Relief and Works Agency for Palestine Refugees in 
the Near East (UNRWA) specifically, on which the Parliament expresses strong concerns in 
its discharge resolution, the Commission recalls that in the aftermath of the 7 October 2023 
terrorist  attack  in  Israel,  it  reviewed  its  entire  financial  assistance  for  Palestine,  including 
programmes with UNRWA.  

The review confirmed that UNRWA complied with  its legal requirements vis-à-vis the EU, 
including the requirement not to support activities that contribute to terrorism financing. 

More recently, as set out in the 29 January 2024 Commission statement, UNRWA committed 
to  (i)  allow  an  audit  to  be  conducted  by  EU-appointed  independent  external  experts;  (ii) 
strengthen  its  Department  of  Internal  Investigations;  and  (iii)  carry  out  a  review  of  all 
UNRWA staff to confirm that they did not participate in the attacks. UNRWA has complied 
with these commitments.   

b.  Protecting the EU budget from fraudsters 

Revenue side 

In its 2023 Annual Report, as in the past, the European Court of Auditors (ECA) provided a 
clean opinion on the revenue side of the EU budget, reaffirming the stability and accuracy of 
revenue  collection  by  the  Commission.  Recalling  the  risks  to  the  EU’s  financial  interests 
from inadequate or ineffective customs controls of imported goods, the Parliament commends 
the efforts made by the European Anti-Fraud Office (OLAF) on the fight against fraud linked 
to customs duties and VAT. Furthermore, the Commission proposed an ambitious reform of 
the customs union  in 2023,  which is  currently under  negotiation with  the co-legislators.  By 
establishing an EU Customs Authority that will manage the new EU Customs Data Hub, this 
reform will also facilitate the early detection of risks affecting the collection of custom duties 
as part of an overall strengthening of the EU customs risk management, analytical and control 
capacity. 

Anti-fraud architecture 

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Preparatory work has started on a review of the EU’s anti-fraud architecture (AFA). A high-
level kick-off meeting took place on 14 March 2025, bringing together the main stakeholders: 
the  Commission,  the  European  Public  Prosecutor’s  Office  (EPPO),  OLAF,  the  ECA,  the 
European  Union  Agency  for  Criminal  Justice  Cooperation  (Eurojust),  and  the  European 
Union Agency for Law Enforcement Cooperation (Europol). Technical-level working groups 
have  been  established.  The  Commission  is  planning  to  issue  a  White  Paper,  proposing  the 
general orientations to be explored for the upcoming AFA review. 

Budgetary reinforcement of the EPPO and OLAF 

The  Commission  notes  the  Parliament’s  repeated  calls  ‘for  the  capacities  of  the  EPPO  and 
OLAF, as well as cooperation between them, to be strengthened further’. 

The  EPPO  was  originally  due  to  reach  its  full  size  at  115  staff  in  2023,  and  to  operate 
thereafter with stable staffing. The EPPO’s staff in the Central Office has, nevertheless, been 
increased to 307 in 2025. In 2024 and 2025, the EPPO received additional reinforcements to 
account for the participation of Poland and Sweden, address rising salary and housing costs, 
and achieve full independence of its IT system from the Commission. 

Notwithstanding  the  constraints  on  Commission  staffing,  which  also  impact  OLAF,  the 
OLAF 2025 budget provides for four additional external staff to monitor the flow of funds to 
Ukraine. 

Merits of the revision of the Financial Regulation regarding the fight against fraud 

Starting  from  the  post-2027  MFF,  the  revised  Financial  Regulation  will  strengthen  the 
protection  of  the  EU  budget,  inter  alia,  by:  (i)  extending  the  scope  of  the  EDES  to  include 
shared management, (ii) ensuring standardised electronic recording and storage of data on the 
recipients  of  EU  funding  and  their  beneficial  owners  in  all  management  modes  in  a  single 
integrated  IT system;  and  (iii) incorporate in  this single integrated IT system  a data-mining 
and risk-scoring tool – the use of which remains voluntary until a reassessment is made at the 
end of the MFF.  

Other notable changes to the Financial Regulation, which already apply since 30 September 
2024, include the possibility to exclude the following entities from receiving EU funding: (i) 
beneficial  owners  of  entities  found  to  be  in  an  exclusion  situation,  (ii)  entities  that  resist 
checks  or  audits  performed  by  OLAF,  the  EPPO  or  the  ECA,  (iii)  entities  that  incite 
discrimination, hatred, violence or violate EU values, where such actions negatively affect or 
risk affecting the performance of legal commitments. 

c.  Limiting spending errors 

Actions to reduce the level of error 

The Commission is acting on the Parliament’s and Council’s calls to take action to decrease 
the error rate. As acknowledged by the Parliament, Council and ECA, the complexity of the 
ways funds are disbursed is a key factor behind the risk of error. Therefore, the Commission 
is notably taking action to simplify spending rules.  

For the cohesion policy funds, based on findings and recommendations from the ECA and 
the  Parliament,  Member  States’  audit  authorities  and  the  Commission  agreed  at  the  end  of 
December 2024 on an action plan to improve the programme authorities’ detection capacity 
and the Commission will follow up on its implementation. The Commission also reviewed its 

4 

 
 
audit strategy for a strengthened on-the-spot supervision of the audit authorities’ work for the 
2021-2027  period.  In  parallel,  the  Commission  continues  to  promote  the  less  error-prone 
simplified cost options and financing not linked to costs in 2021-2027 programmes, and to 
carry out audits for programmes and areas (e.g. public procurement, State aid) considered as 
high risk.  

The delivery model for the 2023-2027 common agricultural policy (CAP) offers a potential 
for  simplification  by  allowing  Member  States  to  design  the  EU-funded  interventions  to 
address  their  country-specific  needs,  while  at  the  same  time  delivering  on  EU-level 
objectives. The new CAP also fosters the use of new technologies4, which should help tackle 
errors. The Commission will  no longer  determine an error rate for  agricultural expenditure, 
since it is performance-based. Instead, the Commission will group CAP expenditure in three 
categories of risk: low, medium and high, based on the assessment of the proper functioning 
of  governance  systems  put  in  place  by  the  Member  States.  Agricultural  expenditure  is 
traditionally low risk and there is no indication that this would change with the new delivery 
model for the CAP. 

On funding for research and innovation, Horizon Europe includes greater use of simplified 
forms of funding, such as lump-sum project funding and unit costs, which will significantly 
reduce the administrative burden for beneficiaries, and are therefore expected to contribute to 
the reduction of the error rate. 

Lastly,  the  Commission  is  currently  reviewing  its  audit  and  control  strategy  for  the 
Neighbourhood,  Development  and  International  Cooperation  Instrument  (NDICI)  to 
reduce the overall error rate, as well as to increase the efficiency of its controls. One of the 
main  deliverables  of  this  review  is  to  develop  a  sound  and  focused  risk-profile  system  to 
better  assess  and  address  the  risk  of  error,  at  both  project  and  entity  level.  Moreover,  the 
review also addresses the methodology of ex ante and ex post controls applied under NDICI 
to  further  increase  their  preventive  and  corrective  capacities,  as  well  as  to  improve  the 
accuracy of data generated for the risk profiling. 

In  relation  with  the  Recovery  and  Resilience  Facility  (RRF),  the  Commission  has  put  in 
place  a  robust  control  and  audit  system  and  adapted  it  in  line  with  its  own  experience  and 
based  on  findings  and  recommendations  from  the  ECA  and  the  Parliament.  This  included 
updating the methodology on audit work on the protection of the financial interests of the EU, 
reinforcing  controls  on the Member States’ internal  control systems  in the area of State aid 
and public procurement, and strengthening cooperation within the Commission. 

Exchanges between Commission and ECA on the level of error 

The  Commission  also  notes  that  the  discharge  resolution  calls  on  the  Commission  and  the 
ECA  ‘to  find  a  solution  to  the  divergent  approaches  before  the  2024  discharge’  and  to 
‘continue  to  engage  with  the  Court  in  order  to  increase  understanding,  convergence  and 

4 For example, the Member States have to  set up an Area Monitoring System (AMS), which uses Copernicus 
Sentinel  satellite  data  to  monitor  100%  of  the  declared  parcels  in  real  time.  This  allows  farmers  to  receive 
alerts whenever a required agricultural activity or practice has not taken place (yet). The farmers then have the 
possibility to fulfil the requirement (if still possible) or to amend their application, leading to fewer errors. 

5 

 
 
 
 
comparability  of  the  two  approaches  to  the  diverging  estimates  of  errors  in  Union 
expenditure’. 

A full alignment of methodologies between the ECA and the Commission is challenging due 
to the institutions’ distinct roles and missions. However, it is necessary for the differences to 
be understood by both institutions. To this end, the Commission and ECA services organised 
a  series  of  technical  workshops  in  March  2025  to  foster  common  understanding  of  the 
respective  methodologies  and  explored  the  potential  for  further  improvements  in  the 
Commission’s  management  and  control  systems.  As  a  follow-up  to  these  workshops,  the 
Commission  is  currently  developing  an  internal  action  plan  that  aims  to  lower  the  risk  of 
errors in EU spending under the MFF and to foster a common understanding with the ECA to 
determine  the  level  of  error.  For  example,  as  regards  cohesion  policy  expenditure,  the 
Commission and the ECA agreed to hold further technical meetings in 2025 to align on the 
quantification of errors in public procurement.  

The Commission also continues to engage with the ECA to address the differences in views 
and  interpretations  in  relation  to  the  RRF.  It  has  further  clarified  the  operationalisation  of 
eligibility  conditions  and  the  concept  of  double  funding  under  the  RRF.  The  Commission 
shares the Council’s wish not to introduce ‘new rules or more restrictive conditions imposed 
on Member States ex post’5, and notes that changing guidance on the interpretation of legal 
concepts  half-way  through  the  instrument’s  implementation  would  cause  new  legal  and 
practical issues for Member States. 

3.  Performance of the EU budget and impact of the RRF 

The  Commission  notes  the  call  from  the  Council  to  ‘continue  the  assessment  of  the 
performance of the EU budget, which is a measure of the true value delivered to EU citizens’ 
and ‘where applicable, to increase the focus on result-based performance indicators that can 
be directly linked to the EU actions’6. 

The Commission is fully committed to ensuring that every euro from the EU budget is well 
spent, in line with the rules and for the benefit of the European public. 

Performance is monitored annually through the ‘programme-performance statements’. These 
are part of the Annual Management and Performance Report, which includes the 2021-2027 
core  performance  indicators  by  spending  programme.  45%  of  these  indicators  are  results-
based, demonstrating a strong focus on results. 

the 
In  December  2024, 
NextGenerationEU  (NGEU)  green  bonds,  which  measured  the  concrete  climate  impact  of 
funded investments in terms of greenhouse gas emissions avoided. 

the  Commission  published 

impact  report  on 

the  second 

The  RRF’s  delivery  model  provides  clear  incentives  for  Member  States  to  address  long-
standing structural challenges.  

Offering direct financial support for the implementation of reforms has led to an acceleration 
of  the  implementation  of  the  Country-Specific  Recommendations  (CSRs)  issued  by  the 

5 See paragraph 11.4 of the Council discharge’s recommendation. 
6 See paragraph 5 of the Council discharge’s recommendation. 

6 

 
 
 
Council each year to  each Member State. Overall, a higher level of CSR implementation is 
reached more rapidly since the RRF has been established. 

For  example,  in  the  field  of  employment,  as  concluded  by  ECA7,  nearly  all  RRPs  feature 
reforms addressing structural challenges in Member States’ labour markets. In addition, many 
reforms  in  other  fields  (e.g.  education)  contribute  to  promoting  high-quality  employment, 
skills development, and the implementation of the European Pillar of Social Rights. 

Milestones and targets, as a measure of progress in implementation of measures in RRPs, also 
provide a very granular overview of Member States’ performance during the RRF’s lifetime. 

The Commission takes due note of the Parliament’s 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”8.  

The RRF mid-term evaluation9 highlighted areas for improvement, including the insufficient 
involvement of local and regional authorities, social partners and civil society organisations, 
or challenges in striking a balance between detailed milestones and targets and flexibility in 
implementation.  As the  Commission  prepares  for the next  MFF, it is  drawing lessons  from 
the  RRF  and  other  programmes,  identifying  best  practices  and  areas  for  improvement  to 
inform its future approach. 

4.  Transparency of EU funding 

Transparency is a guiding principle in the management of the EU budget. As an example, 
today  the  Financial  Transparency  System  (FTS)  includes  the  possibility  to  search  for 
information concerning all types of recipients under direct management. The objectives and 
results of the projects can be found on the EU's Funding and Tenders Portal. Thanks to the 
revision  of  the  Financial  Regulation,  the  Commission’s  commitment  to  transparency  will 
expand  with  the  next  MFF.  The  FTS  is  set  to  become  a  central  point  of  reference,  with 
information published on recipients in all management modes. 

On funding to non-governmental organisations (NGOs), the Parliament notes that the recent 
ECA report on transparency of EU funding granted to NGOs points to the fact that while the 
Commission  fully  complies  with  all  legal  obligations  with  respect  to  transparency10,  this 
could be further improved. The Commission will follow up on the ECA report, as set out in 
the Commission´s replies. 

The Commission acknowledged that some work programmes submitted by beneficiaries and 
annexed  to  operating  grant  agreements  included  specific  advocacy  actions  and  lobbying 
activities entailing a reputational risk for the EU. Although the Commission’s legal analysis 
of the agreements concluded that there was no breach of the contractual or Code of Conduct 
obligations by the entities concerned, the Commission issued internal guidance in May 2024 
to address any possible reputational risk for the EU. The Commission also updated its model 
call for proposals to ensure that future projects will comply with this guidance. Furthermore, 

7 Special report 10/2025, paragraph 20 
8 See paragraph 11 – 2024/2019(DEC). 
9 Mid-term evaluation of the Recovery and Resilience Facility - SWD(2024) 70 final 
10 See paragraph 23 – 2024/2019(DEC). 

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despite  the  lack  of  a  legal  requirement  to  disclose  information  about  advocacy  activities 
funded  through  operating  grants11,  the  Commission  further  promotes  transparency  by 
proactively  sharing  the  objectives  and  outcomes  of  funded  projects  on  the  EU  Funding  & 
Tenders Portal. Finally, interest representatives that register in the Transparency Register as 
not representing commercial interests, which would typically include NGOs, are required to 
report  their  lobbying  activities  and  declare  their  main  sources  of  funding  as  well  as  the 
amount of each contribution above EUR 10 000 exceeding 10% of their total budget and the 
name of the contributor in their registrations in the Transparency Register. 

In  the  multiannual  work-programme  2025-2027  for  LIFE,  the  Commission  has  included 
further  safeguards  to  ensure  that  operating  grants  do  not  require  specific  and  detailed 
activities  that  directly  target  EU  institutions  or  their  staff  or  members,  and  that  clarify  that 
beneficiaries  retain  full  responsibility  for  their  views.  In  a  statement  published  on  1  April 
202512,  the  Commission  committed  to  review  the  transparency  arrangements  and  the 
transparency  register.  The 
disclosure  requirements  for  beneficiaries  under  the  EU 
Commission  is  also  committed  to  ensure  that  the  LIFE  evaluation  committee  members  are 
independent  and  free  from  conflicts  of  interest.  It  is  mandatory  for  the  members  to  sign 
declarations  on  absence  of  conflict  of  interest  before  engaging  with  the  assessment  of 
proposals, and mitigation measures are in place in case conflicts of interest are identified. The 
European Climate,  Infrastructure and Environment  Executive Agency (CINEA)  will review 
the selection procedure for members of the LIFE evaluation  committee and will implement 
any necessary steps to ensure full transparency.  

Support  for  activities  related  to  policy  development  and  policy  implementation  remains  an 
important and legitimate funding objective, in line with the Regulations governing certain EU 
funding programmes as adopted by the European Parliament and the Council. This includes 
enhancing the involvement of pluralistic civil society organisations. 

The Commission also acknowledges and will follow up on the Parliament’s request to ‘make 
the results of the screening of grant agreements and other contracts available to the discharge 
authority’13. 

Lastly,  the  revised  Financial  Regulation  introduces  (i)  an  obligation  for  the  grant 
applicants (under direct management) to declare whether they are  an NGO and (ii) an 
NGO definition. 

With respect to transparency under the RRF, Member States must report on the 100 final 
recipients receiving the highest amount of funding for the implementation of measures under 
the  Facility.  The  Commission  published  additional  guidance  as  an  annex  to  its  2024  RRF 
Annual Report and reminded Member States of their obligations. Following the Parliament’s 
request,  in  the  context  of  the  2023  discharge,  the  Commission  requested  from  the  Member 
States a list of the names of the ‘100 final entities or natural persons that have received the 
largest amounts of funds under the RRF’, including contractors and sub-contractors. To date 
[June  2025],  the  Commission  has  received  lists  from  six  Member  States  and  has  provided 
them to the Parliament. 

11 On publication of information on recipients see Article 38 of the Financial Regulation. 
12 Commission statement on the LIFE Programme. 
13 See paragraph 21 – 2024/2019(DEC). 

8 

 
 
 
5.  The Commission’s borrowing activities and new own resources 

The Commission takes note of the Parliament’s concern about the level of outstanding debt 
from borrowing activities and the vulnerabilities with regards to interest rates that affect the 
debt  level14.  Since  2020,  the  Commission  has  profoundly  transformed  its  presence  on 
international capital markets, making the EU ‘one of the largest debt issuers in Europe’, as 
the Parliament duly points out. The Commission is using a mix of short-term and long-term 
borrowing  strategies  to  manage  interest  rates  and  repayment  timelines  effectively.  This 
includes  issuing  different  maturities  of  bonds,  which  helps  to  spread  repayment  obligations 
over  time.  The  timeline  for  repayment  of  debt  under  NGEU  extends  until  2058,  giving  the 
EU  an  extended  timeline  to  manage  repayments  without  causing  significant  disruptions  or 
compromising financial stability. 

To better address the financial risks linked to the Commission’s borrowing activities and the 
EU  budget  exposure,  the  role  of  the  independent  Chief  Risk  Officer  (CRO)  has  been 
extended in February 2025 to include oversight over all of the EU’s financial operations and 
assets under management.  In line with  the best  practices in  the financial  sector, the CRO  – 
together  with  a  newly  created  ‘risk  management  unit’  –  now  acts  as  the  second  line  of 
defence at the corporate level for the financial risk assessment of financial operations, in full 
independence from the first line15. 

The Commission shares the view that ‘swift progress on new own resources is essential’. In 
2023, the Commission presented a package of proposals amending the 2021 proposal which 
is comprehensive, brings sufficient revenue, minimises additional burden on Member States’ 
budgets  and  can  be  implemented  quickly.  The  Commission  is  also  working  on  other 
proposals. Introducing new own resources will require political will and engagement from all 
sides. 

6.  Outstanding  budgetary  commitments  –  ‘reste  à  liquider’  (RAL)  and  measures  to 

speed up the implementation of EU funds 

The Commission  notes that,  in  the discharge  resolution, the Parliament  ‘expresses  again  its 
deep concern that the accumulated outstanding  commitments (RAL  -  reste à liquider) have 
reached a record level of EUR 543 billion […] at the end of 2023’16. 

Outstanding commitments are amounts that have been committed but not yet paid.  

The  non-repayable  part  of  NGEU  contributed  EUR 238.6  billion,  which  represents  almost 
44%  of  the  total  RAL,  most  of  which  is  channelled  through  the  RRF.  In  this  regard,  the 
Commission supports Member States to ensure a swift and effective implementation of their 
RRPs  without  lowering  their  ambitions  or  weakening  critical  measures.  Where  measures 
become unachievable due to objective circumstances, Member States may request  revisions 
to  their  RRPs  to  address  implementation  bottlenecks.  Member  States  may  also  submit 
payment  requests  if  only  some  of  the  milestones  and  targets  are  fulfilled,  which  will  allow 
Member States to receive partial disbursements corresponding to the milestones and targets 

14 See paragraph 8 – 2024/2019(DEC). 
15 The first line of defence consists of the Commission departments managing EU borrowing, lending and asset 
management operations as well as budgetary guarantees.  
16 See paragraph 7 – 2024/2019(DEC). 

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already  implemented.  This  also  contributes  to  the  swift  implementation  of  the  RRP.  In  its 
Communication  “NextGenerationEU  -  The  road  to  2026”  adopted  on  4  June  2025,  the 
Commission  provides  guidance  for  Member  States  to  revise  and  streamline  their  RRPs  in 
view  of  the  approaching  2026  deadline.  The  Commission  encourages  Member  States  to 
remove from their RRPs milestones and targets that cannot be implemented by the 31 August 
2026 deadline and suggests existing and new options to ease implementation. 

Around  half  of  the  RAL  linked  to  MFF  programmes  at  the  end  of  2023  stems  from 
cohesion policy, and, by extension, from the Member States’ implementation of funds under 
shared management. 

With  the  level  of  project  selection  on  the  ground  reaching  around  half  of  the  available 
envelopes for 2021-2027 cohesion programmes, the financial implementation is also forecast 
to reach cruising speed in the short term. 

On 1 April 2025, the Commission adopted the legislative proposal on the mid-term review 
of  cohesion  policy  to  align  investment  priorities  with  the  evolving  economic,  societal  and 
geopolitical context as well as with the more ambitious climate and environment objectives. 
It  introduces  greater  flexibility  and  incentives  (such  as  a  co-financing  rate  of  100%  to 
frontload  investments  in  housing,  water  resilience,  energy  transition,  competitiveness  and 
defence) to facilitate the rapid deployment of resources  into these reinforced priorities, thus 
further speeding up absorption. 

On  22 April  2025,  the  Commission  adopted  new  targeted  amendments  to  existing  EU 
funding  programmes  to  support  faster,  more  flexible  and  coordinated  investments  in 
Europe’s  defence  technological  and  industrial  base.  The  targeted  amendments  will  notably 
broaden  the  scope  of  the  Strategic  Technologies  for  Europe  Platform  (STEP)  to  cover 
defence-related technologies and products.  These legislative proposals,  if  agreed by the co-
legislators, will also accelerate the implementation of EU funds. 

The  Commission  will  continue  to  monitor  the  implementation  of  the  overall  level  of 
outstanding commitments. It will also continue to propose levels of payment appropriations 
that adequately meet payment needs during the annual budgetary procedures 

7.  Looking ahead 

In July 2025, the Commission will present its proposal for the next MFF. 

This  proposal  will  take  account  of  the  recommendations  from  the  Parliament,  Council  and 
ECA in the context of the discharge. 

The  EU  budget,  with  over  50  spending  programmes  and  numerous  rules  and  criteria,  is 
currently hindered by complexity, which increases the risk of overlaps, reduces transparency, 
and  leads  to  gaps  in  funding  for  cross-cutting  priorities.  This  complexity  also  makes  it 
difficult  for  beneficiaries,  especially  small  and  medium  enterprises,  to  navigate  and  access 
EU funds, and may result in spending errors. 

A  simpler  EU  budget  would  facilitate  access  for  all  beneficiaries,  increase  the  speed  and 
quality of implementation, and enhance stakeholder involvement. 

By streamlining the financial landscape, eliminating overlaps, and offering a single gateway 
to EU funding for beneficiaries, the administrative burden, delays and errors can be reduced 

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considerably. This will ultimately improve the way the EU budget is spent and make it more 
effective and efficient in achieving its objectives. 

* * * 

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