Concerns Over Use of Cohesion Funds for Defense Initiatives
European Court of Auditors warns of risks associated with reallocating funds to new priorities including defense.
Brussels – The European Court of Auditors (ECA) has expressed significant concerns about the proposal to utilize cohesion funds for a range of new priorities, most notably defense.
According to the ECA, the mid-term program review proposed by the European Commission risks complicating governance structures, straining administrative capacity, and diverting focus from the core objective of reducing regional disparities across the EU.
Executive Vice President Raffaele Fitto has articulated that the European Union (EU) executive branch offers member states and local authorities the choice to allocate structural funds toward five newly prioritized areas: competitiveness, defense, housing policies, water management and security, and energy transition.
While these allocations are not obligatory and are subject to approval from EU co-legislators, the ECA highlighted that reallocating funds from cohesion policy to these new sectors may undermine the territorial approach intended to enhance efficacy in addressing regional inequalities.
The ECA has recommended that mitigation strategies be established to address these potential risks associated with shifting resources.
Specific to the defense initiative, regulators noted concerns regarding the application of transparency obligations and the 'do no significant harm' principle, which mandates that EU initiatives align with broader climate and environmental objectives.
Concerns have been raised about how these principles would intersect with defense spending, as such expenditures generally do not relate directly to structural funds.
Furthermore, the ECA has criticized the proposition to implement a 100 percent EU funding model for states and regions opting to utilize these resources for new priorities.
This approach, they argue, could disproportionately benefit wealthier regions, thus undermining the overarching objective of EU cohesion funds to support less affluent areas.
The recommendation from the ECA is to maintain existing co-financing rates to prevent inequities.
The proposal has provoked dissent within the European Parliament, particularly from the 5 Star Movement delegation, which criticized Fitto's plan.
In a statement, they urged for the proposal to be withdrawn or substantively revised ahead of the impending vote on the cohesion policy review.
According to the ECA, the mid-term program review proposed by the European Commission risks complicating governance structures, straining administrative capacity, and diverting focus from the core objective of reducing regional disparities across the EU.
Executive Vice President Raffaele Fitto has articulated that the European Union (EU) executive branch offers member states and local authorities the choice to allocate structural funds toward five newly prioritized areas: competitiveness, defense, housing policies, water management and security, and energy transition.
While these allocations are not obligatory and are subject to approval from EU co-legislators, the ECA highlighted that reallocating funds from cohesion policy to these new sectors may undermine the territorial approach intended to enhance efficacy in addressing regional inequalities.
The ECA has recommended that mitigation strategies be established to address these potential risks associated with shifting resources.
Specific to the defense initiative, regulators noted concerns regarding the application of transparency obligations and the 'do no significant harm' principle, which mandates that EU initiatives align with broader climate and environmental objectives.
Concerns have been raised about how these principles would intersect with defense spending, as such expenditures generally do not relate directly to structural funds.
Furthermore, the ECA has criticized the proposition to implement a 100 percent EU funding model for states and regions opting to utilize these resources for new priorities.
This approach, they argue, could disproportionately benefit wealthier regions, thus undermining the overarching objective of EU cohesion funds to support less affluent areas.
The recommendation from the ECA is to maintain existing co-financing rates to prevent inequities.
The proposal has provoked dissent within the European Parliament, particularly from the 5 Star Movement delegation, which criticized Fitto's plan.
In a statement, they urged for the proposal to be withdrawn or substantively revised ahead of the impending vote on the cohesion policy review.
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