Introduction

The Recovery and Resilience Facility (RRF)[1] is the central funding mechanism of Next Generation EU[2], a temporary EU funding programme created in response to the COVID-19 pandemic. RRF funds are structured around six areas or “pillars”: green transition; digital transformation; economic cohesion, productivity and competitiveness; social and territorial cohesion; health, economic, social and institutional resilience; and policies for the next generation. For the first time, funding has been raised through bonds issued on behalf of the European Union.

The Regulation establishing the RRF[3] entered into force in February 2021. It provides financial support to Member States through grants and loans at a total amount of EUR 723.8 billion. Within maximum national allocations, the money is distributed based on national Recovery and Resilience Plans (RRPs) drawn up by the Member States.

The Recovery and Resilience Scoreboard gives an overview of progress in implementing the Facility and the national plans. A delegated act[4] defines common reporting indicators and sets out how Member States shall report on the overall performance of the RRF and the state of progress towards the achievement of its objectives to keep the Scoreboard updated.

In February 2023, the RRF Regulation was amended[5], as part of the REPowerEU Plan[6], to enable Member States to use RRF funds to undertake reforms and investments dedicated to diversifying energy supplies and to increasing the resilience, security and sustainability of the energy system.

The RRF is subject to “direct management”[7], as defined by the EU Financial Regulation^[8], whereby the Commission pays directly in instalments to Member States, based on the progress in the implementation of their national plans. To this end, the Commission regularly assesses the Member States’ achievement of milestones set out in these RRPs. Member States in turn manage the payment of the funds to the final recipients.

Ombudsman-OECD Good Practice Principles

The Ombudsman produced good practice principles for government transparency in the use of recovery funds in cooperation with the OECD.[9] A first group of good practice principles focuses on ensuring sufficient proactive and reactive transparency in the use of recovery funds. To the greatest extent possible, information related to the RRF should be proactively disclosed. To improve reactive transparency, clear guidelines for access to information and documents are needed, enabled by adequate systems for record keeping.

Further good practice principles contribute to the reflection on how to establish pan-European accountability and scrutiny, and a genuinely participatory exercise for the RRF. Ensuring oversight and scrutiny from civil society in the implementation and evaluation phases of the RRF is crucial. For instance, the Commission acknowledged that the European Semester has the potential to be a strong platform for the engagement of social partners, civil society and other stakeholders in the policymaking process, which would contribute to a more constructive dialogue and to greater ownership of reforms. To ensure multilevel governance on transparency, relevant regional and local public bodies should equally be involved in this pan-European dialogue. In addition, awareness could be raised about the complaint-handling mechanisms by which the public can voice concerns about suspected irregularities in the implementation of the RRF. Finally, clear and consistent public communication on the RRF and adequate data collection and publication are crucial for transparency and greater social accountability.

The Ombudsman’s Strategic Initiative

The Ombudsman carried out this strategic initiative to help provide insight into the transparency of the national recovery and resilience plans, public information and communication strategies on the RRF, and how the funds are supervised.

In February 2022, the Ombudsman set out questions to the Commission[10] and, in June 2022, the Commission sent its reply[11].

In October 2022, the Ombudsman requested further clarifications[12], to which the Commission replied in April 2023[13].

The following sections set out the Ombudsman’s questions to the Commission, the replies from the Commission, and the Ombudsman’s assessment on the three aspects covered by the strategic initiative:

1) Transparency of the national recovery and resilience plans and their evaluation

2) Information, communication and publicity

3) Supervisory mechanisms

1. Transparency of the national recovery and resilience plans and their evaluation

Civil society and journalists alike have voiced their concern over the lack of transparency concerning the negotiation and implementation of the national recovery and resilience plans. As the public interests at stake are great, the Ombudsman asked the Commission several questions regarding the mechanisms put in place to ensure transparency in the negotiations of the national plans and the measures taken to enable public scrutiny of the evaluation of the Member States’ milestones and reforms. Proactive and reactive transparency should be distinguished in this regard.

Proactive transparency

In general

This strategic initiative closely followed the Commission’s efforts to proactively inform the public about the RRF. The Ombudsman appreciates the progress made since the start of her initiative. As the Commission explained in its reply to the Ombudsman, on the country pages of the RRF website^[14], it published links to the RRPs and the annexes to the Council Implementing Decisions (approving the plans). These annexes reflect the national plans and contain the reforms and investments proposed by the Member States as well as a description and indicative timeline for their implementation. In addition, the relevant milestones and targets are indicated and described and there is an indicative timeline for their completion. The accompanying Commission staff working documents are also published. They include a more detailed description of the Commission’s assessment of the plans.

For the concrete implementation of the RRF, the Commission explained that the country pages contain links to the operational arrangements agreed with Member States with details^[15] on the monitoring arrangements and information on how the assessment of milestones and target fulfilment will be ensured. The Commission also publishes the preliminary assessments on the fulfilment of milestones and targets for all payment requests. In relation to those payment requests, the Commission’s Implementing Decisions and accompanying press material and Q&As are also made available.

This range of proactively published information gives a good overview of the Commission’s assessment of the plans, whilst the country pages on the RRF website help ensure the relevant information is in one place, addressing the earlier problem of dispersed information. However, the publication of the national plans remains the responsibility of Member States authorities. The final plans are thus only available in the official language(s) of the Member State. From its reply to the Ombudsman, it appears that the Commission does not intend to proactively publish machine translations of these plans, which it shared with the European Parliament and the Council in the context of the approval process. The Ombudsman continues to believe that it would be useful to publish the machine translations of the national plans, with appropriate disclaimers, so that this essential information can be the subject of pan-European scrutiny.

In addition, it remains regrettable that proactive transparency mainly happens only after the plans have already been approved, meaning it has been difficult for the public to follow the negotiations. For the implementation of the RRF, the Ombudsman therefore calls on the Commission to continue to publish its preliminary assessments of Member States’ payment requests and to inform the public about its supervisory work as will be set out in point 3.

The Ombudsman also welcomes the Commission’s commitment to continue reflecting on further documents that can be proactively published taking into account the relevance and usefulness of a document. In this regard, the abovementioned good practice principles can be helpful.

On final recipients of RRF funds

Information on the final recipients of RRF funds is crucial for meaningful accountability for the spending of these funds. Only this granular detail will allow stakeholders across the EU to provide an independent check on whether individual projects are in line with approved objectives, and to monitor potential conflicts of interest, fraud and corruption. This is in accordance with the principle of budgetary transparency, as described in the Financial Regulation[16], which states that citizens should know where, and for what purpose, funds are spent by the EU. As the RRF funds are subject to direct management, the final “beneficiaries” are, formally, the Member States. The Commission therefore points to the Member States as responsible for informing the public on which entities are the final recipients. Despite this, the Ombudsman welcomes that the Commission publishes online a map of sample projects[17] supported by the RRF, although it could be more detailed.

When it comes to communication by the Member States on the final recipients of funding, the European Parliament has regularly called for greater transparency. As a result[18], since February 2023[19], there is a requirement to create an easy-to-use public portal containing data on the 100 final recipients receiving the highest amount of funding for the implementation of measures under the RRF. The Ombudsman takes this as confirmation that there is a heightened awareness of the importance of ensuring the public is informed about where the RRF funds go. As it appears that not all Member States have set up their portals[20], the Ombudsman calls on the Commission to ensure that the remaining Member States establish their portals as soon as possible. In addition, the Ombudsman believes that the Commission should encourage the Member States to use this portal to include all recipients.

Reactive transparency

In relation to reactive transparency of RRF-related documents, the Commission explained to the Ombudsman that it has redeployed resources to the departments dealing with access to documents requests received in the context of the RRF, to improve efficiency in how such requests are handled. By April 2023, the Commission had received 128 initial access requests to documents concerning the RRF. It partially or fully disclosed more than 2000 documents after a case-by-case assessment and consultation of the national authorities for documents originating from the Member States.

The Ombudsman has dealt with and is currently dealing with several complaints concerning refused public access to documents related to the negotiations of the RRPs, in particular to the exchanges between the Commission and several Member States on their respective draft plans.[21] The inquiries at issue concern RRF-related documents of a diverse nature[22] that require a case-by-case assessment on the possibility of disclosure.[23]

In a case concerning the Danish and Swedish RRPs[24], the Ombudsman considered that the Commission had applied too broadly the exceptions foreseen under EU rules on public access to documents, which concern the protection of the public interest as regards financial, monetary or economic policy of the Union or the Member States[25] and the protection of an ongoing decision-making process[26]. The Ombudsman will thus continue to monitor how the Commission handles requests for public access to RRF related documents.

Of particular concern are the lengthy delays the Commission is incurring in dealing with some of these requests.[27] For instance, a journalist waited for over a year for a final decision on their access to documents request concerning the Commission’s analysis of Germany’s RRP.[28] Another journalist sought public access to documents concerning the national plans of Poland and the Netherlands. For the documents related to the Polish RRF, the Commission finally granted partial access nine months after the complainant’s initial request.[29] In August 2023, the Commission had still not taken a final decision on the Dutch RRF documents even though the complainant first requested access in June 2022.[30]

2. Information, communication and publicity

Information, communication and publicity on the national plans are provided for in the RRF Regulation[31]. Concretely, all Member States have provided an outline of their intended national communication strategy in their plans. The Commission explained that it communicated its expectations in this regard in a guidance document to support the Member States and that fulfilment of these elements is verified in partnership with the Member States to ensure consistency in communication activities on the RRF. The Member States’ communication strategies are also described in the Commission’s staff working documents but they were not considered decisive elements for approval of the national plans. In addition, as part of the financing agreement signed with the Commission[32], each Member State commits to ensure the visibility of the EU funding and to communicate on the RRF’s contribution to Europe’s recovery.

In addition to compiling the links to the Member States’ recovery plans themselves, the Commission also compiled the links to the Member States’ dedicated RRF websites on the country pages of its website. In its explanations to the Ombudsman, the Commission acknowledged that the information on these websites varies. While the Commission encourages detailed communication, it said that it has no legal basis to oblige all Member States to follow a common approach. In addition, the Commission is working with the Member States on media campaigns under the banner ‘Inform EU’[33], and it provides advice and guidance[34] on communication.

The Commission’s own communication strategy centres on the Recovery and Resilience Scoreboard. The Scoreboard shows the progress in the implementation of the RRF in real time, including the submission and outcome of payment requests. It also serves as a basis to prepare the Commission's annual reports on the implementation of the RRF and the review report to Parliament and the Council, as well as the Recovery and Resilience Dialogue between the Parliament and the Commission.[35] The Recovery and Resilience Scoreboard website contains: i) dedicated sections on the fulfilment of milestones and targets; ii) expenditure per policy area and a breakdown of green, digital and social expenditure under the Facility; iii) progress of disbursement; iv) reporting on 14 common indicators; and v) thematic analyses of measures.

The Ombudsman welcomes the Commission’s efforts in developing the RRF website and the Scoreboard and encourages it to continue its cooperation with the Member States in this regard. Communication on the RRF’s contribution in the areas it covers has an important impact on how the public perceives its success. In the light of growing concerns about delays in the implementation of the RRF, such communication is particularly important.[36]

As put forward in the Ombudsman’s good practice principles, the Scoreboard does not reflect Member States’ actual expenditure, since milestones and targets have no attributed cost. Instead, Member States report on RRF-related expenditure to Eurostat and the Commission. In this context, Member States in cooperation with the Commission could improve the ability of stakeholders to monitor the impact of projects and to protect the financial interests of the EU. For example, the Commission could make efforts to ensure that the common indicators of the Scoreboard are understood in the same way by all Member States, to support consistent application across and within Member States.

3. Supervisory mechanisms

The Ombudsman looked at the supervisory mechanisms used by the Commission to ensure that the RRF is used appropriately. In its replies, the Commission emphasised the role of the national control systems of the Member States, since Article 22 of the RRF Regulation imposes an obligation on the Member States to protect the financial interests of the EU. The Commission itself will assess the fulfilment of milestones and targets following a request for payment, carry out ex-post audits on milestones and targets, and conduct system audits on monitoring and control systems. In case of serious irregularities, it is first for the Member State to recover any affected funds. If a Member State fails or a serious breach of obligations by the national authorities occurs, the Commission can also recover funds. For this audit work, “the Commission has developed a risk-based audit strategy - over the lifetime of the RRF, both ex post and system audits will take place in every Member State”.

The Ombudsman appreciates that supervision and audit in the context of the RRF has had to be adapted to a situation whereby Member States are regarded, legally speaking, as the final recipients of the funds - a relatively novel approach to funding on this scale. Nevertheless, the Commission’s replies lack concrete details that would reassure an independent observer as to how it will safeguard the spending of these funds. For instance, the Commission does not specify when or how its ex post and system audits will be carried out and what procedures have been put in place to recover funds. In this regard, the European Court of Auditors considered that an assurance and accountability gap remains at EU level in protecting the financial interests of the Union and recommended that the Commission identify measures to address this.[37]

As regards data on final recipients specifically, they must be collected by Member States for control and audit purposes in accordance with the RRF Regulation[38]. According to the Commission, this data can be requested by the European Anti-Fraud Office (OLAF), the European Public Prosecutor’s Office (EPPO), the European Court of Auditors and the Commission itself. However, the Commission did not explain under what concrete circumstances this would happen. It only specified that such a request could be triggered “for checks concerning whether a specific target, selected for the audit [based on a sample], has indeed been satisfactorily fulfilled”. In its reply to the Ombudsman, the Commission said that it may not publish this data because of the limitation for control and audit purposes.

More generally, information on audits is presented in the annual activity report, which contains more detailed information[39] on how the Commission conducts its supervision activities. The concrete audit reports are not proactively published, in line with the Commission’s standard audit practice. Given the public interest connected to the spending of these funds, the Ombudsman considers that the Commission should make available information on the audits it carries out[40], once these have been completed and acted upon. Disclosing such information contributes to reinforcing public trust that the funds are indeed spent for the purposes they have been earmarked for. In light of this, the Ombudsman will thus continue to monitor the Commission’s RRF supervision activities.

Conclusion

This initiative has enabled the Ombudsman to gain an insight into how the Commission ensures transparency and accountability of the Recovery and Resilience Facility and how the Commission cooperates with the Member States to that end.

The Ombudsman welcomes the progress made since the start of her initiative and has identified a number of areas for improvement, outlined above. As the public interest surrounding the RRF is likely to remain high for the coming years, the Ombudsman intends to continue to monitor how the Commission ensures the transparency of and supervises the RRF. The Ombudsman will, in this context, consider the outcome of the Commission’s mid-term RRF evaluation[41] beginning of next year.

On this basis, the Ombudsman closes the initiative. The Ombudsman thanks the Commission for the detailed explanations provided and invites it to take into account the observations made above. She looks forward to exchanging with the Commission on these matters in the future.

 

[1] More information: https://commission.europa.eu/business-economy-euro/economic-recovery/recovery-and-resilience-facility_en

[2] More information: https://commission.europa.eu/strategy-and-policy/eu-budget/eu-borrower-investor-relations/nextgenerationeu_en

[3] Regulation 2021/241 establishing the Recovery and Resilience Facility: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32021R0241

[4] Commission Delegated Regulation 2021/2106 regarding the common indicators and the detailed elements of the recovery and resilience scoreboard: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv%3AOJ.L_.2021.429.01.0083.01.ENG&toc=OJ%3AL%3A2021%3A429%3ATOC

[5] Regulation 2023/435 regarding REPowerEU chapters in recovery and resilience plans: https://eur-lex.europa.eu/legal-content/en/TXT/?uri=CELEX%3A32023R0435

[6] More information: https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal/repowereu-affordable-secure-and-sustainable-energy-europe_en#how-repowereu-is-funded

[7] “Due to its exceptional nature, the RRF implementation will follow specific procedures. Funds will be disbursed directly to the Member States based on the progress in the implementation of national recovery and resilience plans.” More information: https://commission.europa.eu/funding-tenders/find-funding/funding-management-mode_en

[8] One of three forms of budgetary management under Regulation 2018/1046 on the financial rules applicable to the general budget of the Union, latest consolidated version: http://data.europa.eu/eli/reg/2018/1046/2022-12-14. The other forms of management of spending are indirect and shared management. Indirect management is where the Commission disburses money to a coordinator, who then pays the final recipients. Shared management is where the European Commission and the Member States manage the payments of EU money to final recipients jointly.

[9] See: https://www.ombudsman.europa.eu/en/news-document/en/163020 

[10] https://www.ombudsman.europa.eu/en/opening-summary/en/148742

[11] https://www.ombudsman.europa.eu/en/doc/correspondence/en/158511

[12] https://www.ombudsman.europa.eu/en/doc/correspondence/en/161530

[13] https://www.ombudsman.europa.eu/en/doc/correspondence/en/174448

[14] See: https://commission.europa.eu/business-economy-euro/economic-recovery/recovery-and-resilience-facility_en

[15] Frequency and format of exchange of information, modalities for access to data, monitoring steps, indicative timeline of payment requests, further specification of milestones and targets including verification mechanisms.

[16] See preamble of Regulation 2018/1046 on the financial rules applicable to the general budget of the Union, latest consolidated version: http://data.europa.eu/eli/reg/2018/1046/2022-12-14

[17] See: https://commission.europa.eu/business-economy-euro/economic-recovery/recovery-and-resilience-facility_en#map

[18] See: https://www.europarl.europa.eu/doceo/document/A-9-2022-0260_EN.html

[19] Article 1(10) of Regulation 2023/435 regarding REPowerEU chapters in recovery and resilience plans: https://eur-lex.europa.eu/legal-content/en/TXT/?uri=CELEX%3A32023R0435

[21] See 925/2022/LDS (https://www.ombudsman.europa.eu/en/case/en/61681), 1129/2022/SF (https://www.ombudsman.europa.eu/en/case/en/61897), 137/2023/SF (https://www.ombudsman.europa.eu/en/case/en/63201)

[22] The Commission also explained to the Ombudsman that the scope of the access requests varies significantly:

“types of documents disclosed so far include, by way of example: draft versions of the Commission proposals for Council Implementing Decisions (and Annexes) and of the Staff Working Documents (and Annexes), Economic Impact Assessment documents produced by the Commission services during the assessment of the RRPs; Commission Decisions approving the operational arrangements; correspondence from/with Member States; minutes of meetings with Member States’ authorities; documents submitted by the Member States during the preparation of the national plans; minutes of meetings and correspondence with third parties that are not Member States.”

[23] In Asesores Comunitarios (Judgment of 15 February 2023, Asesores Comunitarios, T-77/22, EU:T:2023:69, https://curia.europa.eu/juris/document/document.jsf;jsessionid=F37B1D1E07C3F9681329CB3F536BF956?text=&docid=270470&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=32346), the documents at issue were Spain’s national recovery plan, Spain’s letter announcing the official submission of the plan, the acknowledgement of receipt by the Commission and a letter from Spain with information on two components of its national recovery plan.

[24] See 925/2022/LDS (https://www.ombudsman.europa.eu/en/case/en/61681)

[25] Article 4(1)(a), fourth indent of Regulation 1049/2001 regarding public access to European Parliament, Council and Commission documents: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex:32001R1049

[26] Article 4(3) of Regulation 1049/2001

^[27] See OI/2/2022/OAM (https://www.ombudsman.europa.eu/en/recommendation/en/167661)

[28] See 187/2022/LDS (https://www.ombudsman.europa.eu/en/case/en/60962)

[29] See 2186/2022/SF (https://www.ombudsman.europa.eu/en/case/en/62960)

[30] See 409/2023/OAM (https://www.ombudsman.europa.eu/en/opening-summary/en/167336)

[31] Article 34 of the Regulation

[32] Article 10(2) of the agreements

[33] More information: https://ec.europa.eu/regional_policy/policy/communication/inform-network_en

[34] More information: https://international-partnerships.ec.europa.eu/knowledge-hub/communicating-and-raising-eu-visibility-guidance-external-actions_en

[35] More information: https://ec.europa.eu/commission/presscorner/detail/en/ip_21_6862

[36] More information: https://www.spglobal.com/ratings/en/research/articles/230719-eu-rrf-at-half-time-italy-and-spain-will-likely-need-extra-time-to-spend-their-funds-12790825 and https://www.ftm.eu/articles/recovery-files-evaluation?share=kmDWV1qOXCG5sINrOdhcBWZjZkqbhf6K%2BLRoYH5PVbkGEz157z7xqkjWz1uH%2Bi4%3D

[37] More information: https://www.eca.europa.eu/Lists/ECADocuments/SR-2023-07/SR-2023-07_EN.pdf

[38] Article 22(2)(d) of the Regulation

[39] See: https://commission.europa.eu/system/files/2023-06/ECFIN_AAR_2022_en.pdf#page69. For instance, as regards ex-post audits, the report specifies that: “Various criteria are used to determine the level of risk, such as the type and number of implementing bodies, the type and number of final recipients, the tagging of the measure and the complexity of the verification mechanism. For instance, measures such as the entry into force or publication of a law are considered as low risk.” Regarding system audits, the report puts forward that “such audits will have been performed in all Member States by the end 2023”.

[40] As the Commission for instance did in Annex 14 to the annual activity report mentioned: https://commission.europa.eu/system/files/2023-06/ECFIN_AAR_2022_annexes_en.pdf.

[41] More information: https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/13608-Recovery-and-Resilience-Facility-2020-2024-mid-term-evaluation_en