Does the Netherlands spend EU grants in accordance with the rules?
Not only must the money from the EU be spent according to the rules, citizens must also be able to see that this is indeed the case. After all, there is a great deal of money involved that comes from households and businesses.
Each year, the Netherlands remits about €9 billion to the European Union (EU) (€9.7 billion in 2021, according to the 2021 Central Government Annual Financial Report). That said, the European Commission claims that the amount is considerably lower. This is because the Commission bases its figure on a different definition than that used by the Dutch government. For further information, see our web page entitled ‘How much does the Netherlands pay into the EU budget and how much does it receive?’.
The Netherlands’ contribution to the EU is the sum of:
- traditional own resources of the EU (such as customs duties);
- a percentage of VAT resources;
- a contribution based on gross national income (GNI contribution);
- a contribution based on non-recycled plastic packaging waste.
The Netherlands receives funds under shared management. These are in the period 2014-2020 the European agricultural funds (EAGF and EAFRD), the structural and investment funds (ERDF, ESF, FEAD and EMFF) and the migration and security funds (AMIF and ISF).
The EAGF, EAFRD, ERDF and AMIF have been continued for the period 2021-2027. The ESF has been renamed the ESF+. The new name for the fisheries fund is the European Maritime, Fisheries and Aquaculture Fund (EMFAF). The ISF has been split into two funds (ISF, to combat terrorism and crime) and the Integrated Border Management Fund (IBMF, a border management and visa instrument). A new fund has also been established under shared management: the Just Transition Fund (JTF). The Commission awards grants to member states after establishing where the green transition will have the most serious negative consequences.
All EU member states, i.e. including the Netherlands, manage the money received from these funds together with the European Commission. This means that every country is jointly responsible for ensuring that the money is properly spent. All citizens must be able to see that there have not been any irregularities and that no mistakes have been made.
The Netherlands also receives funds under programs where the European Commission has the sole responsibility for good management and correct spending of the funds. The most important program is Horizon2020 (renamed Horizon Europe in 2021). Based on the European Commission’s Horizon 2020 dashboard, this programme awarded a total of €5.38 billion to organisations in the Netherlands in the period 2014-2020.
Accounting for the spending of European money in the Netherlands
The Dutch government takes a serious view of its responsibility for the spending of European money.
On the third Wednesday in May, when the government submits its financial report and accounts to parliament, the responsible ministers declare that the euros the country received from the EU were spent in accordance with the rules. Until 2021 they had done so by means of a National Declaration in the Central Government Annual Financial Report. As from 2021, they do so by means of a separate EU section in the annual reports of the ministers responsible for funds under shared management. The regular, efficient and effective use of these funds is a shared responsibility of the EU and the member state. According to the ministries’ annual reports for 2021, the audit authority’s reports indicate that the management and control systems in place in the Netherlands functioned satisfactorily in 2020-2021.
For our report on the National Declaration, we checked every year until 2021 whether the National Declaration met the requirements. As from 2021, we will audit the preparation of the EU section in the ministries’ annual reports as part of our annual Accountability Audit of the preparation of operational management information. The Court of Audit can carry out additional audits of the regularity, efficiency and effectiveness of the expenditure concerned if it thinks they are necessary.
Other EU member states do not report on the spending of EU grants
Regrettably, it is far less clear whether European grants are spent in compliance with the rules in all EU countries. With the exception of Sweden, the other EU member states do not publish comparable reports on the spending of EU money in their countries. This situation is unlikely to change any time soon. On the other hand, the EU has decided that each member state should submit to the European Commission an ‘annual summary’ of the audit findings for each fund. These summaries are not made public, however, and also do not qualify as formal documents produced on behalf of a minister or the government of the country concerned. The Court of Audit will continue to monitor the transparency of the use of EU funds.
Since 2016, the government has included a separate section in the Central Government Annual Financial Report on the contributions system.
Audit of EU spending by the European Court of Auditors
The European Court of Auditors performs an annual audit of the ‘regularity’ of the spending of EU funds, i.e. whether EU funds have been spent in compliance with the rules. To date, it has never issued an unqualified opinion, as the EU member states make too many errors in their expenditure of EU funds.
Until 2016, the European Court of Auditors issued an adverse opinion every year on spending from the European budget. In 2016-2018 it issued a qualified opinion. The error rate declined during this period from about 4.4% in 2014 to about 2.6% in 2018. In its latest report on the 2021 anual reports, the European Court of Auditors again expressed an adverse opinion, as it had for 2019 and 2020. The error level in expenditure increased from 2.7% in 2019 and 2020 to 3% in 2021 and the errors were concentrated in high risk expenditure as in the previous years. See the blog by Board member Ewout Irrgang.