They are stealing… Kozlov figured out where the European Union funds are leaking 0 11

One of the members of this team is a citizen of Latvia, a native of the city of Preili, Mikhail Kozlov. Last week, he presented a 578-page report for the 2024 financial year to the Saeima Committee on European Affairs.

Less America, More China

The total national income of the EU countries last year amounted to 17 trillion 776 billion euros. This is significantly less than the corresponding figures for the USA – about 27.2 trillion euros at the average annual exchange rate, but slightly exceeds China's achievements – 17.1 trillion euros.

The total expenditures of all EU countries last year amounted to 8833 billion EUR, against this background, the expenditure part of the EU budget was only 191.1 billion – that is, 2.2% of the government expenditures of the member states and only 1.1% of the total national product.

The largest share of the total expenditure pot consists of:

• natural resources and environment (64 billion or 33.8%);
• cohesion, resilience and values (61.4 billion or 32.1%);
• single market, innovation and digital area (25.9 billion or 13.5%);
• foreign relations and peace (15.4 billion or 8.1%);
• European public administration (13.3 billion or 6.9%);
• solidarity mechanism (5.2 billion or 2.7%);
• migration and border management (3.4 billion or 1.8%);
• security and defense (2.1 billion or 1.1%).

Regarding the last expenditure item, a very characteristic comparison is made with Lithuania's plan for 2026 – 4.79 billion. Accordingly, the European Union (as an organized entity, not the countries together) spent on military needs half as much as the small and not wealthy Baltic republic.

Latvia is represented by Mikhail Kozlov. Photo LETA.

At the same time, the European Union certainly has its own assets stored in banks – but the total value last year was only 518.5 billion euros, compared to liabilities of 827.3 billion euros.

"The difference of 308.8 billion euros consists of (negative) net assets… a part of the expenditures has been created that needs to be financed from future budgets," the auditors concluded.

Retired Eurocrats Earn More than Belgium's Budget

The audit of the European Union was conducted according to the standards of the International Federation of Accountants (IFAC), international auditing standards (ISA), and the ethical code (INTOSAI). "We adhered to the requirements of independence," emphasized the audit team.

"The level of errors in the budget expenditures reported for the period closed on December 31, 2024, is 3.6%. A significant portion of these expenditures has a substantial level of errors. This can mainly be said about expenditures that apply complex rules and are predominantly salary expenditures; in them, the error level is 5.2%. Salary expenditures in 2024 were 115.7 billion euros..."

At the same time, pensions and allowances for EU officials amounted to 93.1 billion euros in 2024 (compared to 90.8 billion the previous year). This exceeds the size of Belgium's budget, where most of them spent their working careers. For health insurance for EU clerks, 6.9 billion euros was spent in 2024 (compared to 6.3 billion the previous year). This figure is greater than what a relatively large country like Romania (population 19 million) receives from the European Union.

"The impact of the errors we identified is both significant and widespread," the report on EU fund expenditures states. The highest level of discrepancies was shown by 6 out of 28 countries. The quantitative value of errors is increasing.

In addition, euro auditors raised the question of whether funds can be given to Poland if it does not act in accordance with Brussels directives in its judicial reform. Although a final decision from the Court of the European Union is still awaited, the inspection team believes that "satisfactory compliance with these reporting points will be a prerequisite for any… payments to Poland."

Last year, the European Union committed 98.9% of the available amount, did not use 2.2 billion euros, carried over 1 billion to 2025, and canceled 1.2 billion.

"The absorption of funds was slower than expected"

This was noted by the auditors, assessing how the EU is approaching the end of the 2021-27 planning period. "There have been corresponding expenditures that need to be reimbursed to the beneficiaries of support," the report states. For 2024, this was 160.7 billion euros (compared to 155.2 billion the previous year). This amount is 4 times greater than Latvia's gross national product, estimated at 40.2 billion euros last year. Where do the identified deficiencies in the EU financial sphere come from? "Of these errors, 17% were unacceptable projects or beneficiaries, 15% were expenditures that did not occur or were not related to the project, 10% were unallocated direct personnel costs or other direct costs, 6% were incorrect declarations of agricultural area/animals or violations of obligations, and 4% were non-applicable actions." EU fund recipients make changes to contracts without conducting new procurement procedures; they engage in illegal or discriminatory procurement; they violate public procurement documentation.

"We define an 'error' as the monetary amount paid from the EU budget, although the payment conditions were not met. Therefore, our definition includes not only violations of applicable legislation that occurred in the activities of economic participants or due to inaction but also due to state and regional governing bodies or the Commission itself."

Meanwhile, last year auditors discovered 20 cases directly suspicious of fraud in EU funding violations. The European Public Prosecutor's Office (EPPO) was informed about this.

...In conclusion, it is worth noting the use of EU funds by country: the most prudent state as of 2024 was the Czech Republic, which spent 99.6% of the allocated 22 billion. At the bottom was Denmark – 85.5% of 1.56 billion. Latvia, however, ranked an honorable 3rd place, with 99.1% of 5.91 billion euros.