Radvilė Morkūnaitė-Mikulėnienė, ‘Bigger public debt, rising interest rates and high inflation in the context of Russia’s war of aggression against Ukraine are issues to be dealt with by increasing the capacity of the EU budget’

Press release, 13 October 2023

Photo by Olga Posaškova, Office of the Seimas

‘The financial statements of the European Union for the financial year 2022 offer a genuine and fair view of the situation, with revenue unaffected by error, but the level of error for expenditure from the EU budget of EUR 196 billion has increased significantly to 4.2 %. (compare with 3 % in 2021),’ underlined Ms Laima Liucija Andrikienė, Member of the European Court of Auditors (ECA), seconded by Lithuania, while presenting the ECA’s annual report on the implementation of the EU budget for the 2022 financial year at the joint meeting of the Seimas Committees on European Affairs and on Audit on 13 October 2023.

The ECA concludes that two thirds (66 %) of the audited expenditure is at high risk. ‘The level of error was material and widespread over the past three years, leading to a negative opinion of the auditors on EU expenditure in 2022. When examining the implementation of the Recovery and Resilience Facility (RRF), the auditors identified quantitative weaknesses in 11 payments and six of these payments were affected by material error. Therefore, the ECA has issued a qualified opinion on RRF expenditure,’ Ms Andrikienė said. 

The report also highlights that the EU’s debt increased to EUR 344.3 billion in 2022 (EUR 236.7 billion in 2021), mainly due to the new borrowing facility NextGenerationEU (NGEU), which   amounted to EUR 96.9 billion, as well as due to the borrowing costs affected by rising interest rates. In addition, high inflation rates have a significant impact on the EU budget. ‘According to the European Commission’s inflation forecast, the EU budget could lose nearly 10 % of its purchasing power by 2023,’ she said.

Photo by Olga Posaškova, Office of the Seimas

Ms Andrikienė also informed the listeners on Spotlight, the ECA’s initiative aimed at eliminating violence against girls and women. With a budget of EUR 497 million and an outreach in 26 countries around the world, the European Commission’s initiative aims to ensure that all girls and women, especially those who are marginalised and vulnerable, live free from violence and harmful practices. ‘The Commission’s attempt to address this problem has been an ambitious initiative with limited impact so far. The four-year programme is not enough to bring about changes in the world. The situation requires long-term measures and additional resources,’ Ms Andrikienė stressed.

Photo by Olga Posaškova, Office of the Seimas

Radvilė Morkūnaitė-Mikulėnienė, Chair of the Seimas Committee on European Affairs, was interested in the ECA’s planned audits on Ukraine. Zigmantas Balčytis, Chair of the Seimas Committee on Audit, looked into assessment of the use of RRF funds and the decrease in the purchasing power across the EU. Members of the Seimas raised questions on the implementation of the European Regional Development Programme under the EU Cohesion Policy for 2021–2027 designed to reduce the exclusion of Lithuanian regions. In particular, they took interest in ECA audits of the EU’s offshore renewable energy; the extent to which EU audits cover the integration of people with disabilities; the mechanisms in place following the detection of irregularities; and inspections by the European Union Anti-Fraud Office (OLAF).

The ECA is equivalent in status to the European Parliament, the Council of Europe and the European Commission. The equivalent status ensures the independence and authority of the said institutions. The ECA’s main task is to contribute to improving financial management by carrying out European Union audits. The ECA also reports to European citizens on how EU funds are spent.

Laima Liucija Andrikienė works for the fifth ECA College and is responsible for the financial and administrative matters of the European Union.

Aistė Pikiotienė, Adviser, Office of the Seimas Committee on European Affairs

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