European Court of Auditors: Estimated 3.8% of the EU budget was misspent in 2025

In their annual report published on October 8, the EU auditors warn that the estimated level of error in EU spending remains too high.

This matters for citizens, because weak spending checks can undermine confidence that funds reach eligible projects and deliver the intended results, the European Court of Auditors (ECA) said.

It also matters for policy makers, as negotiations are continuing on the EU’s next long-term budget for 2028-2034, the auditors said.

The ECA is urging them to ensure that the new budget model being discussed does not repeat the weaknesses identified in the Recovery and Resilience Facility (RRF), the main pillar of the EU’s pandemic recovery package. The new model would largely mirror the RRF. The ECA also cautions that the EU’s growing debt could put increasing pressure on future budgets and policy choices.

The auditors conclude that the EU’s 2025 accounts give a true and fair view, and that revenue transactions are error-free. However, the estimated level of error in EU spending rose to 3.8 per cent, from 3.6 per cent in 2024. They also found irregularities in the 45.4 billion euro spent under the RRF.

“Ambitious budgets demand equally ambitious safeguards,” ECA President Tony Murphy said. “If the EU moves to a new budget model where financing is no longer linked to costs, we must learn from experience and address what has not worked before, so that EU funds deliver the intended outcomes for citizens.”

This was the penultimate year of RRF implementation. Under the RRF, EU countries receive funds for achieving predefined milestones or targets.

By the end of 2025, 237.5 billion euro of the 359.9 billion euro committed under the RRF had been disbursed, leaving a third of available grant funds, that is, more than 122 billion euro, to be paid out in the RRF’s final year. However, member states differ significantly in how much of their RRF grant allocation they have used: only three out of 27 had drawn down at least 80 per cent of the funds.

Of the 37 RRF grant payments made to member states in 2025, nine did not comply with the stipulated rules and conditions.

For example, the auditors found unsatisfactory fulfilment of milestones and targets, breaches of public procurement rules, and irregularities concerning state aid.

They also identified weaknesses in the design of milestones and targets, gaps in the European Commission’s monitoring, and persistent problems with the reliability of member states’ control systems. The auditors therefore issued a qualified opinion on RRF expenditure.

Furthermore, EU countries were sometimes allowed to make their recovery-plan commitments easier or narrower without providing convincing reasons and evidence. In some cases, the changes were made only after a country had asked the Commission for payment. This poses the risk that countries could receive EU money for delivering less than originally promised

For traditional EU budget spending, the auditors found that errors were both significant and widespread.

They therefore issued an adverse opinion on EU spending for the seventh year in a row.

The highest error rates were in cohesion funding, which supports jobs, growth and regional development, and in spending on agriculture and the environment. The error rate for cohesion funding rose from 5.7 per cent in 2024 to 6.6 per cent in 2025, while the rate for agriculture and the environment increased from 2.6 per cent to 3.9 per cent.

The most common problems were funding projects or costs that were not eligible, and failing to follow public procurement rules.

The auditors also warn that the EU’s rising debt burden could weigh heavily on future budgets. EU borrowing could reach 1 trillion euro by 2027, largely due to NGEU, while interest costs alone for NGEU non-repayable support over 2028-2034 could be as much as 93 billion euro.

The Commission’s proposals for the next budget would also allow substantial new borrowing to support Ukraine, member-state national plans, and the possible use of the severe crisis mechanism.

The sums involved could be considerable. For example, loans to Ukraine approved or agreed since 2014 – including the 90 billion euro Ukraine aid loan decided in early 2026 – totalled as much as 170.1 billion euro, of which 70.3 billion euro had been disbursed by the end of 2025.

The auditors therefore urge caution in respect of future budgets: without an agreement on new sources of revenue, the EU budget could face a significant shortfall, forcing difficult choices such as higher national contributions and lower ambitions, they said.

(Photo: G Schouten de jel)