The lack of transparency requirements on the use of EU recovery funds risks generating corruption and undermining public support, argue Helen Darbishire and Karolis Granickas.
Helen Darbishire is the executive director of Access Info Europe; Karolis Granickas is the EU senior manager at Open Contracting Partnership.
One might think that fighting corruption in the use of the EU’s massive pandemic Recovery and Resilience Facility (RRF) — which totals over €672.5 billion in loans and grants — would be a priority for the European Commission.
Particularly so when the head of the EU’s anti-fraud office, OLAF, just warned that the EU faces a “big risk” of abuses in the use of these funds because not all member states are planning to report beneficiaries to the EU via an entirely voluntary system.
The risk is not only of corruption, but also the negative impact of corruption on the European project. More than half of Europeans think their government is run by private interests, according to a recent Transparency International survey, and it is precisely this kind of belief that is fuelling support for populist, anti-democratic forces.
With a significant portion of RRF funds due to be spent via public procurement, the concerns are amplified, as member states have a highly problematic track record.
The pandemic highlighted this, with pervasive problems in emergency procurement: fake and faulty masks flooded the continent through million-euro contracts awarded without competition; dubious deals in Germany have thrown the conservative party into crisis just months out from the elections, and emergency rules have been used to justify all kinds of unusual purchases, including tasers in Spain.
More generally, the EU has acknowledged that public procurement remains governments’ number one corruption risk and is concerned that up to €5 billion may be lost due to corruption every year. The spending bonanza around the RRF makes it especially vulnerable.
Despite these concerns, the European Commission’s Regulation on RRF spending does not require proactive publication of data. Quite the opposite: it says that, upon request from the Commission, the member state will provide the Commission with data, which will remain strictly confidential.
This will not be compensated by transparency at the national level. An extensive analysis carried out by the Open Procurement EU Coalition of the 22 countries’ national RRF plans submitted to the Commission has found that 20 are not planning to publish information on who receives the funds.
At best we found weak and general language about publishing information on how the money is used, with scarcely any details about what will be made public, how, when and where.
Just one country, Sweden, promises to publish audit reports and its reporting back to the Commission. Six countries did not commit to any transparency requirements at all: Austria, Croatia, Denmark, Germany, Poland, and Slovakia.
The lack of transparency seriously impedes the work of civil society watchdogs, anti-corruption groups, and investigative journalists. If even the Commission and OLAF don’t have proper oversight, then Europe is setting itself up to fail.
Beyond concerns about corruption and how it undermines trust in democracy, a lack of data will jeopardize the fight against climate change, a key priority of the RRF, as it will be impossible to know how we are advancing to the goal of 100% of procurement being green by 2030.
Without reliable public information, it will be hard to convince an increasingly cynical public that interventions have been a success, that the EU really is building back better.
It needn’t be this way. First, the Commission has time and — importantly — has power within the scope of the regulation to urge member states to change their plans.
Including strong transparency commitments can guarantee the publication of details on how funds were used, justifications for decisions taken, as well as sharing the audit reports and reporting back to the Commission.
Second, member states could integrate voluntary commitments to detailed publication on the beneficiaries of the funds and all other relevant spending details. Governments could commit to using the Arachne reporting system that would give OLAF oversight. A critical mass of countries making such commitments would put pressure on the laggards.
There is support for such action. The same Transparency International survey cited above found that almost two-thirds of Europeans believe citizens can make a difference in the fight against corruption. The demand for greater public oversight is clear.
Fraud monitoring is rightly the function of the state, but there are many public spending watchdogs, including our new coalition, Open Procurement EU, who can track spending, identify concerns and alert the appropriate authorities. The reality is, that is how most corruption scandals are exposed.
Rebooting our European economies amid an unprecedented pandemic and a crisis in democracy has to be a joint effort. We have an historic opportunity to strengthen the European project and trust in that project.
It will be a futile exercise if reporting mechanisms aren’t data-driven, proactive and accessible so that everyone can see with their own eyes that the money is being spent well.