EP report says significant concentration of EU funds awarded by Malta end up “in the hands of few”

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A report drawn up by the European Parliament has found that a significant concentration of EU funds awarded by Malta and Cyprus ends up in the hands of few recipients. It also highlighted significant shortcomings in these countries’ management and control systems.

In a resolution adopted on Thursday by the European Parliament, MEPs have welcomed a Commission decision to carry out thorough on-the-spot checks in five Member States, including Malta, in order to avoid cases of conflicts of interest related to EU regional funds.

MEPs noted how the EU’s capacity to stop oligarchs from receiving EU funds is limited, due to highly fragmented reporting systems and lack of cooperation by the EU countries. In a text adopted by 409 votes to 61 and 42 abstentions on Thursday European Parliament points to the “unprecedented magnitude” of oligarchic groups which use government tools or criminal practices to benefit from the EU funds, with members of national governments and holders of political positions as part of the oligarchy in some Member States.

At the same time, EU’s capacity to stop oligarchs from receiving EU funds is limited, mainly due to highly fragmented reporting, MEPs say, by quoting “hundreds of regional, national and inter-regional reporting systems” that do not always reveal the final beneficiaries of EU agricultural and cohesion funds.

The report also points to problems in public procurement procedures, weak national control systems and lack of adequate protection of EU funds against conflicts of interest in some member states, including Malta.

Finnish MEP Petri Sarvamaa, who authored the report called for increased transparency and to stop the flow of EU subsidies into the hands of oligarchs. “In the light of recovery and resilience facility and potential new instruments it is clear that the issue could not be more important. The most important thing is that the Commission must finally start using all tools it has to prevent the misuse of EU funds. For example it is clear that the rule of law conditionality mechanism must be applied without any delay, if other available tools are not sufficient”.

MEPs have reiterated the urgent call to Commission to establish a EU-wide interoperable, digital reporting and monitoring system that would reveal the ultimate and aggregated beneficiaries of EU funds. They have also called for an EU annual ceiling on budget payments to the same beneficiary.

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