Nearly €50 billion from the Recovery and Resilience Facility achieved minimal success in reforming public administrations across member states, European Union auditors warned on October 20, 2026. Governments favoured rapid digitalisation over difficult structural reforms, leaving core administrative challenges largely unaddressed, the European Court of Auditors reported.
Recovery Fund Fails to Fix Public Administration
Following the economic fallout of the COVID-19 pandemic, the European Union established the Recovery and Resilience Facility as the main financial instrument of the NextGenerationEU programme. To strengthen public administration in member states, the bloc earmarked €49.1 billion from the facility, which represents 8.5 percent of the total RRF funding of €577 billion.
These financial resources targeted critical sectors including digital transformation, e-government, public procurement, and competition. To unlock these funds, national governments had to submit recovery plans tied to country-specific recommendations issued through the European Semester, the EU economic policy coordination framework. However, a new audit reveals that this immense financial injection failed to address critical shortcomings in national administrations.
According to the European Court of Auditors, governments systematically gravitated toward measures that offered quick implementation rather than tackling deep-seated institutional flaws. Digital and e-government initiatives made up 53 percent of the sampled measures and captured 71 percent of their estimated costs.
While digital portals and online services expanded rapidly, fundamental governance and coordination challenges remained untouched. Auditors examined reforms across 15 member states, conducting on-site work in Czechia, Germany, Greece, and Spain.
Out of the public administration recommendations issued in 2019 and 2020, none were addressed in full by any member state.
- Only 36 percent of the examined public administration measures achieved significant results.
- More than half of the country-specific recommendations were addressed only marginally.
- Only 43 percent of the reviewed measures featured adequate performance indicators to track genuine improvements.
Auditors Flag Billions in Budget Irregularities
The findings on public administration run parallel to concerns about EU financial management. Auditors estimated that approximately 3.8 percent of European Union funds spent last year breached applicable rules.
Out of a total budget pool worth around €176.3 billion, roughly €6.7 billion was spent in non-compliance. Public procurement violations and ineligible project costs drove this non-compliance.
Auditors also scrutinised implementation tactics within pandemic recovery spending. Targets were occasionally altered to accommodate delayed or incomplete projects.
In Luxembourg, for instance, a telemedicine application initially designed for the entire population was scaled back to a limited user group. The EU Council approved the modification, allowing the project’s target to be officially lowered so that it could be considered met.
Essentially, the ambitions of these plans are being reduced to ensure that the funds are distributed anyway.
Tony Murphy, President of the European Court of Auditors
Commission Defends Fund Outcomes and Spending
The European Commission rejected the characterisation that recovery funds were wasted.
Member states were only required under the RRF Regulation to address a significant portion of their country-specific recommendations rather than every issue across all policy areas, the Commission noted.
Berlaymont officials argued that the apparent lack of measurable outcomes in some sectors stems from a current shortage of data rather than an absence of results.
Structural reforms inherently require years to produce visible effects, officials emphasised. The Commission highlighted that implementation occurred during an exceptionally turbulent period marked by high inflation, supply chain disruptions, the energy crisis, and the war in Ukraine.
As the European Union prepares its next long-term budget, how will future performance monitoring frameworks address these structural monitoring weaknesses?
