By Nikolaj Nielsen

 

BRUSSELS, 13 Feb. - (ANA) - The EU’s €650 billion pandemic era fund remains wide open to fraud with weak accountability and oversight, according to financial watchdogs.

 

“This vast sum of money offers huge potential scope for fraudulent activity,” says Katarína Kaszasová of the Luxembourg-based European Court of Auditors (ECA).

 

Speaking to reporters on Wednesday (11 February), Kaszasová warned that built-in protections against fraud are at best patchy.

 

The fund, officially known as the Recovery and Resilience Facility (RRF), was set up in early 2021 to help member states deal with the economic fallout of Covid.

 

But payments in RRF are not linked to actual costs.

 

Instead, they are linked to targets and milestones. Disbursement of EU funds to national budgets also does not mean that the money has reached the final recipients in the real economy, posing questions of abuse.

 

EU states have until end of August this year to complete those milestones — with fraudsters likely cheating the taxpayer out of nearly €3bn, according to estimates from the European Public Prosecutor’s Office (EPPO).

 

Kaszasová and her team drew their conclusions based on audits carried out in Denmark, Spain, Italy and Romania and published in a report.

 

Of all member states, Spain and Italy received the most RRF loans and grants, totalling €102 billion and €194 billion respectively.

 

But the body over seeing Spain’s RFF plan is not actively involved in tackling fraud.

 

It also doesn’t use the commission’s data-mining tool to weed out possible abuse. Italy by comparison makes full use of the tool.

 

Recovered stolen money not returned to EU budget

The overall picture remains murky, says Kaszasová, citing weak detection and reporting of abuse.

 

She said it is unlikely that the EU will ever recover funds lost to fraud, noting that the RFF was drafted under significant time pressure.

 

As a consequence, while the law established broad anti-fraud obligations for member states, it lacked crucial specifics, she said.

 

Whistleblowing channels exist but have not yet been used. People are also confused on whether to report to the EU’s anti-fraud agency Olaf or to the EPPO.

 

The mastermind behind the RRF was Maarten Verwey, who currently heads the European Commission’s economic and finance department.

 

Verwey had already drafted a blueprint of the fund in 2017 to incentivise reforms in member states by essentially paying them large sums of money. An investment dimension was later added.

 

But when the pandemic hit, it took them only a weekend to re-work those plans.

 

“We put it out under a new name, and that was the recovery and resilience facility,” Verwey said last month, at a conference.

 

And unlike other EU funds, member states are not required to return money recovered from fraud to the EU budget.

 

Systematic reporting to the commission on RRF fraud will also end this year. It means the commission will not know if stolen money was ever clawed back.

 

The outstanding issues have taken on a more urgent nature given that the RRF architecture may meld into the next trillion euro seven-year EU budget.

 

EU states, for instance, will not have to report how the RRF is used after September.

 

For its part, the commission appears unconcerned because capitals will still be obliged to report cases to Olaf and the EPPO.

 

“Where member states fail to correct cases of fraud, corruption or conflict of interest, the commission takes the appropriate corrective actions,” the commission said, in response to Kaszasovár’s report.   - (ANA) -

 

 

AB/ANA/13 February 2026  - - -