Massimo Privitera, University of Antwerp
The pattern has become drearily predictable: the European Union creates massive funding mechanisms to address pressing crises, only to see them become breeding grounds for fraud and corruption. As new allegations emerge about misused recovery funds, Brussels now proposes yet another instrument – the Security and Defence Facility (SAFE) – that appears to repeat the very same design flaws that enabled previous scandals and sidelines the European Parliament.
For regions with below-average governance quality, the EU’s Structural Funds have long functioned less as a development tool and more as a resource curse, as argued by Alina Mungiu-Pippidi, BridgeGap’s Principal Investigator. These funds, intended to reduce economic disparities, have instead often perpetuated corruption networks in countries with weaker institutions.
The European Anti-Fraud Office (OLAF) continues to uncover staggering misuse of EU resources. In 2024 alone, OLAF recommended the recovery of €871.5 million in misused EU funds and prevented another €43.5 million from being improperly spent. Such an amount is slightly less than the one for 2023, yet it is in line with a decisive upward trend between 2020 and 2024 (Figure 1). These numbers represent more than just financial discrepancies—they reveal systemic vulnerabilities that seem to be designed into the very architecture of EU funding mechanisms.
Figure 1: Amounts recommended by OLAF for financial recovery 2020-2024 (EUR million)
Source: OLAF 2025
The structural weakness becomes particularly evident in how Member States implement measures to prevent fraud. A 2019 European Commission study on the European Structural and Investment Funds acknowledged that while Member States are required to implement “risk-based, effective and proportionate measures to prevent fraud,” the practical application varies dramatically across countries, with inconsistent results. This implementation gap creates perfect conditions for financial inflows to weaken governance rather than strengthen development ultimately. This phenomenon is especially relevant in countries or regions with a below-average quality of institutions/governance levels, which are, broadly speaking, those most frequently targeted by OLAF’s investigations into the misuse of EU funds (Figure 2).
Figure 2: Investigations concluded in 2024 concerning the use of EU funds under shared and indirect management or RRF, linked to Member states
Source: OLAF 2025
If the Structural Funds model was problematic, the Recovery and Resilience Facility (RRF)—the EU’s flagship €723 billion COVID-19 recovery program—has taken these deficiencies to new heights. Rather than learning from past mistakes, the RRF amplified them through reduced transparency and accelerated spending timelines.
As declared by the European Public Prosecutor’s Office (EPPO), by the end of 2024, 307 active cases related to the Recovery and Resilience Facility (RRF) were being handled. EPPO estimated the damage to the EU’s financial interests to amount to €2.8 billion, which represents 30% of the overall estimated damage for subsidy fraud. Furthermore, it expected this number to increase, in the context of the accelerated implementation of NextGenerationEU funding, of which the RRF is the centerpiece.
The design of the RRF contributed to its flaws. Unlike traditional EU funds that track actual expenditures, the RRF operates on a performance-based system where payments are made upon achievement of milestones and targets, with significantly reduced oversight. This system has created what some critics call a “transparency deficit”, and has prompted the European Court of Auditors (ECA) to issue recommendations for a strengthened oversight of similar performance-based systems in the future.
Just as the RRF’s implementation problems mount, the European Commission has proposed the Security Action for Europe (SAFE) instrument—using the same legal basis that raises familiar red flags about accountability and oversight.
The Commission’s SAFE proposal relies on Article 122 of the TFEU, a legal basis that allows the Council to adopt measures without involving the European Parliament. The EP, while recognizing the necessity of a swift response to crisis, already called for limiting the use of such an article as a legal basis, and has sought to enhance scrutiny through a new Rule 138, under which “the Commission will be invited to make a statement to Parliament explaining the reasons for the choice of Article 122 TFEU as legal basis”. Nevertheless, the fundamental democratic deficit remains, as the Parliament can question, but not prevent.
The European Parliament’s challenge to the SAFE regulation at the Court of Justice of the European Union represents a critical test for the EU’s institutional integrity. If the EU continues to create financial instruments that prioritize speed over accountability, it risks cementing a governance model where emergency justification permanently trumps democratic oversight.
The solution lies not in abandoning necessary investments in security, recovery, or cohesion, but in designing funding mechanisms that match their financial ambition with equally robust accountability. This means rejecting the false choice between rapid response and proper oversight, and instead creating systems that achieve both through genuine transparency and meaningful parliamentary engagement.