Check Against Delivery

 

Madame Chair, dear Ms HOHLMEIER,

Dear Rapporteur, Mr Chastel,

Honourable Members of Parliament,

Honourable Members of the European Court of Auditors,

Mr Lazarou and Mr Russo,

Ladies and gentlemen,

2020 was the most challenging year in living memory.

In the unprecedented crisis, Europe reacted decisively.

Cohesion Policy was one of the first responders.

Emergency support from cohesion under the Coronavirus Response Investment Initiatives  “CRII” and “CRII+”,

provided immediate liquidity to Member States and mobilised over 20 billion euros for emergency medical support.

Let me share with you the latest available information we have as regards COVID emergency measures, implementation of the funds and results achieved in the main priority areas:

By the end of 2020, programmes already delivered on the ground:

  • over 650 000 items of personal protective equipment and nearly 3 500 ventilators.
  • Working capital support to nearly 615 000  SMEs.
  • Emergency support to workers.

After CRII, REACT-EU continues emergency support to workers, the health sector and SMEs and prepares the green and digital transition with additional 50 billion euro.

The EU approved borrowing for these funds in June. That very same month, Cohesion policy made the first ever payments under Next Generation EU.

And in just 5 months, over 90% of the 2021 REACT-EU tranche has already been programmed.

In addition to the support to the most impacted sectors, Cohesion policy continued to deliver on European priorities to the benefit of our citizens.

In the first 9 months of 2021, we made a record 50 billion euros of payments to programmes.

Absorption now stands at 61%. This is an increase of 25 percentage points compared to 2019.

More than 350 billion euros are now allocated to projects. This is a selection rate of more than 112%, so we are confident that all funds will be absorbed before the eligibility deadline at the end of 2023.

I share with you figures that we will publish end of this year:

  • By end of 2020, more than 27 million people are better protected against extreme weather events.
  • Over 52 million people benefit from modernised healthcare.
  • 5.5 million more households have broadband access.
  • More than 2 700 mega watts of renewable energy production capacity was installed. This is an increase of 38% compared to 2019 and more than the double the figure at end 2018. And it is very timely investment in the context of our green transition and rising energy prices.

But let me stress that even in the crisis, we made clear to Member States that legality and regularity remained an absolute requirement. And we monitored this very closely.

Despite the difficult context, the error rate has decreased in a second consecutive year. The Court reported an error rate of 3.5%, down from 4.4% last year, and from 5% the year before.

So there is substantive progress.

I thank the ECA for the constructive approach and take good note of the observations and recommendations.

I also note that there is convergence in our assessments: the range of our error estimate remains fully within the interval reported by the Court of Auditors.

Our strengthened assurance model is working, especially our continuous preventive and corrective actions. And despite the many challenges of the pandemic, we are maintaining a good level of assurance.

Despite the obvious limitations of lockdown, audit authorities audited nearly 7 000 operations, more operations than ever, covering 22% of the total investment. They hardly used flexibility for simpler auditing.

The Commission conducted 50 audits on a risk basis. The AAR provides a detailed and differentiated picture for each and every programme. For the vast majority of programmes, 78%, we confirmed errors under the 2% threshold. And now we are closely monitoring the 30 programmes which present serious deficiencies as well as the 63 programmes in the previous accounting year which have not yet reached the expected materiality threshold of 2%.

Where necessary, we stop payments until all remedial actions are implemented. We also request additional financial corrections, reflected in the 1.5 billion euros of deductions already done by the Member States in 2020.

Ladies and gentlemen, our system of multiannual controls works. Multiannuality is key as an error detected in a given year can be corrected until the closure of the programme. And is being corrected.

For the 2014-20 programmes, our current estimate of the risk at closure is already below 2%, at 1.2% this year. So we are confident that by closure, we will be able to get all programmes below 2%.

We could not have done it alone: we rely on the 81 national audit authorities remain the cornerstone of our assurance model. We continue supervising and supporting them, in particular the 8 for which we found deficiencies, to maintain high standards.

We will continue to work closely with programme authorities to ensure a good pipeline of projects and to support good implementation and to prepare for the audit challenges ahead:

  • the increased funding under NextGenerationEU;
  • the risks of double funding or fraud;
  • the digitalisation of controls;
  • the interoperability of data.

We will take the opportunity with the upcoming revision of the financial regulation, with your help I hope, to further the efforts started with the CPR and develop the digitalisation of controls and audits and enhance the quality and interoperability of the data on recipients of EU funding, including with the use Arachne.

In this day and age, it is obvious that audit and control should take advantage of modern technology.

In conclusion, Cohesion policy has a real impact on the ground.

During the crisis, this was more important than ever. Our programmes adapted to the emergency within weeks. We accelerated investments to ensure continued delivery of Commission objectives. And in this challenging environment of 2020, we clearly demonstrated our multiannual corrective capacity.

Much has been done. But we are not complacent. We will continue to work on the current programmes until closure in 2025.

And I remain absolutely committed to transparency, to compliance and to performance.

We must deliver a recovery from the crisis, and a transition to a green and digital economy, for all regions, leaving no region left behind, and to do it in a way that is transparent and accountable, thus reinforcing the bonds with our citizens.

We welcome the Court’s recommendations, the active participation of this Committee, and we welcome your support to achieve this objective.