Questions surrounding how the EU budget is spent or audited have been, and will always be, of interest to EU citizens. Formally, the responsibility for the implementation of the budget rests with the Commission, but it is well known that the Member States have a crucial role to play, especially in the so-called ‘shared management’ implementation ‘mode’ or ‘type’. As the Commission notes, approximately 70% of the programmes are managed in this way. One can easily understand that rules, practices, and cultures will vary across the Member States and, indeed, across funds as well. Yet, little attention has been paid to the shared management of EU funds, particularly in legal scholarship. On 28-29 April 2022, an exploratory workshop was organised by Mariolina Eliantonio, Emilia Korkea-aho and Nikos Vogiatzis in Brussels on this field of study. As will be shown below, the workshop covered a variety of topics – with some having a clearer focus on one or more Member States and others touching upon issues of accountability and transparency (among others) regarding one (or more) funds. The purpose of this post is to briefly illustrate themes and areas that were covered in this event, as well as to highlight possible areas for future work and collaboration.
In her opening talk, Emilia Korkea-aho discussed the notion of governance in the shared management of EU funds. She noted that the notion is used in many different contexts with no clear understanding of what different ‘sub notions’ mean and how they relate to one another, if at all. She then provided an overview of the research that has been done on shared management or the national governance of EU funds in the past. Political science research, broadly understood, has covered the topic from many perspectives, but legal research has only recently paid any sustained attention to the national governance of EU funds. There is probably more than one reason for this divergence between the two fields, but one interesting aspect that relates to legal research is that most research has been conducted by those with practical experience in the management of EU funds. This may have deterred others with no comparable experience from entering a field that is known for its technical complexity.
The first presentation by Justyna Łacny considered the conditionality mechanism under Regulation 2020/2092 (which, as is known, has the objective to protect the EU funds from rule of law breaches in the Member States), with a particular focus on the judgments of the CJEU concerning Hungary and Poland. It was argued that, while the Court clarified several important aspects surrounding the mechanism, little clarification was provided as to the nature of the measures that may be imposed and – crucially – on the meaning of the principle of sound financial management. The next presentation by Annalisa Volpato examined accountability challenges in the shared management of agricultural funds. It was underlined that the new Common Agricultural Policy (CAP) is characterised by a clear emphasis on environmental objectives – what the author framed as the ‘new greening architecture’. Nevertheless, questions of accountability and transparency persist.
While remaining in the field of CAP, attention then shifted to one of the case studies on the implementation at the Member State level, namely Croatia; this was the focus of the presentation by Suzana Dikonić on the European Agricultural Fund for Rural Development. The presentation highlighted that the historical and social context, as well as how the state approaches the concept of rural development, matter. Moreover, the paper outlined how the domestic judiciary (at the highest level) initially hesitated, but ultimately ensured, access to courts for beneficiaries. The next presentation by Arne Pilniok focused on funds falling within the Area of Freedom, Security and Justice (AFSJ). It was underlined that security is becoming increasingly important at EU level; moreover, interoperability is a ‘cornerstone of EU security policy’. Open research questions include the need for transparency, the protection of fundamental rights, as well as the effectiveness of control by the Commission over the various schemes.
The second day of the workshop started with a presentation by Silvia Díez Sastre and Fernando Pastor Merchante on the strategic management of funds in Spain – in particular, the Recovery and Resilience Facility (RRF) (technically falling under direct management). The presentation questioned the extent to which regional and local authorities were involved in planning – thus raising the question of the desirable level of decentralisation in the management of funds. It was also noted that it would be interesting to compare the governance of RRF with that of Structural and Investment Funds. The next presentation by Iva Evguenieva (also on behalf of Orestes Suarez) proposed to undertake a comparative analysis of the performance, challenges, and good practices of management of Erasmus+ (technically indirect management) in Spain and Bulgaria from 2014 to 2020. The proposed research would seek to ascertain, among others, whether and to what extent factors such as support from national governments in encouraging Erasmus+ participation or the experience of national agencies or external experts (among others) influence the performance of Member States. Turning to the Netherlands, the next presentation by Jacobine van den Brink and Louise Verboeket first discussed the childcare benefits scandal from a legal perspective, before considering whether it is possible to review the proportionality of mandatory EU penalties in the context of the regulation of EU agricultural funds. Intending to strengthen the responsiveness of the law on EU funds to the interests and needs of recipients, they argued that there is more room to apply the proportionality principle in penalties.
The last panel returned to pertinent questions throughout the workshop, namely transparency, accountability, and solidarity. The first presentation by Helen Darbishire and Rachel Hanna sought to compare the transparency requirements of the RRF with CAP regulations; the former was found wanting. It was observed that the categorisation of RRF under direct management (by the Commission) raises questions; among others, since Member States are considered the recipients, more precise information on the actual recipients of funds may not be available. In addition, the internal control system of the Member States is viewed as the main instrument for safeguarding the financial interests of the Union. The next presentation by Kirsi-Maria Halonen examined public procurement rules in the management of Structural and Investment Funds. The high error rate (according to the European Court of Auditors) attributable to violations of public procurement rules was underlined, as well as the -often- insufficient expertise in procurement of domestic authorities responsible for managing or supervising the funds. It was also asked whether, to depart from a practice that effectively seeks to avoid risks, it is possible for project controllers to focus on the most serious errors. The concluding presentation by Leticia Díez Sánchez asked whether cohesion policy has effectively shifted from a social policy to an ‘efficiency-oriented instrument’. After a survey of relevant case-law by the Union judiciary (including on the limited standing for non-privileged applicants to contest decisions), it was observed that this process of ‘increased managerialism’ of cohesion may undermine the initial goal of reducing regional inequalities.
As can be seen from the above (necessarily brief) exposition, the shared management of EU funds and related areas are characterised by definitional uncertainties (i.e. whether and why some funds may or may not be included under the shared management ‘mode’), divergent administrative, legislative and judicial practice among Member States (which may be attributed to a plethora of factors), a high degree of regulatory complexity and, of course, persistent questions of accountability (including audit), transparency, and solidarity.
We would like to make two initial points. First, the shared management of EU funds has traditionally been approached from a vertical perspective: EU – one of the Member States. It would be useful to learn more about shared management from a horizontal perspective, attempting to provide a (comparative) idea of how the rules of shared management are applied across Member States, and what challenges they pose for the EU constitutional architecture. It is, however, clear that no individual is capable of managing such a plethora of rules, national practices, cultures, and languages to provide comparative understanding. Hence, the need to establish a community. Furthermore, rules can differ across funds so the use of the term ‘horizontal’ may be questioned from a methodological perspective if not accompanied with crucial disclaimers.
Second, further empirical (and doctrinal, theoretical, or other) work at the domestic level is highly desirable. We know very little, it seems, of how EU funds are managed at Member State level. As other – comparative – research has shown, the application of EU law by national administrations and courts is still underexplored, despite the paradigm of ‘indirect administration’ being prevalent in several EU policies and certainly in that of EU funds. Also here, however, ‘networked research’ with a group of scholars is crucial if one is to truly understand the intricacies of the national application of EU law.
The workshop thus aimed to take a first step in the creation of this community and any scholar interested in these themes, both from a horizontal (i.e., across funds) as well as vertical – comparative (across the Member States) perspective, is encouraged to contact the workshop convenors.
Posted by Professor Mariolina Eliantonio (Maastricht University), Professor Emilia Korkea-aho (University of Eastern Finland), and Dr Nikos Vogiatzis (University of Essex)
Suggested citation: M Eliantonio, E Korkea-aho, and N Vogiatzis, “The shared management of EU funds: new perspectives and challenges”, REALaw.blog available at https://wp.me/pcQ0x2-pT