Category: Pandemic

MIL-OSI Europe: REPORT on discharge in respect of the implementation of the general budget of the European Union for the financial year 2023, Section V – Court of Auditors – A10-0047/2025

Source: European Parliament

2. MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

with observations forming an integral part of the decision on discharge in respect of the implementation of the general budget of the European Union for the financial year 2023, Section V – Court of Auditors

(2024/2023(DEC))

The European Parliament,

– having regard to its decision on discharge in respect of the implementation of the general budget of the European Union for the financial year 2023, Section V – Court of Auditors,

– having regard to Rule 102 of and Annex V to its Rules of Procedure,

– having regard to the report of the Committee on Budgetary Control (A10-0047/2025),

A. whereas in the context of the discharge procedure, the discharge authority wishes to stress the particular importance of further strengthening the democratic legitimacy of Union institutions by improving transparency and accountability and by implementing the concept of performance-based budgeting and good governance of human resources;

B. whereas the Court of Auditors (the ‘Court’) is the Union’s external auditor, entrusted, by way of independent, professional and impactful audit work, with assessing the economy, effectiveness, efficiency, legality and regularity of Union action to improve accountability, transparency and financial management, thereby enhancing citizens’ trust and responding effectively to current and future challenges facing the Union;

C. whereas, without prejudice to Articles 287 and 319 of the Treaty on the Functioning of the European Union (TFEU), each year since the close of the 1987 financial year, the Court has had its revenue and expenditure accounts audited by an independent external auditor and, since the report on the 1992 financial year, the external auditor’s reports have been published in the Official Journal of the European Union;

D. whereas management accountability to the budgetary authorities is provided via the annual activity report of the Secretary-General of the Court, the purpose of which, according to Article 74(9) of the Financial Regulation, is to provide information about the use made of resources, including systems, and about the efficiency and effectiveness of the Court’s internal control systems;

E. whereas, by performing its tasks in a transparent and independent way, the Court contributes to democratic oversight, public debate and the sound financial management of the Union;

F. whereas the Court has taken the position that, in order to assess the governance, accountability and transparency of the Union and the quality and reliability of the information and data reported on the implementation of Union policies, the best solution would be for the Court to be mandated to audit all Union institutions, bodies, offices and agencies set up by or under the Treaties and all the intergovernmental structures of key relevance to the functioning of the Union; whereas Parliament strongly supports the Court and would welcome initiatives that would strengthen the ability of the Court to deliver on its mandate;

1. Notes that the budget of the Court falls under MFF heading 7, ‘European public administration’, which amounted to EUR 12,3 billion in 2023 (representing 6,4 % of the total Union budget); notes that the Court’s budget of approximately EUR 0,2 billion represents approximately 1,5 % of the total administrative expenditure of the Union and less than 0,1 % of total Union spending;

2. Notes that the Court, in its annual report for the 2023 financial year examined a sample of 70 transactions under Administration, 10 more than were examined in 2022; further notes that the Court reported that administrative expenditure comprises expenditure on human resources, including expenditure on pensions, which in 2023 accounted for about 70 % of the total administrative expenditure, and expenditure on buildings, equipment, energy, communications and information technology, and that its work over many years indicates that, overall, that spending is low risk;

3. Welcome the continuous increase in the number of transactions audited by the Court under the heading Administration; take note of an audit planned on the Union civil service, but recalls the importance of having a more in-depth investigation into the administrative expenditure and repeats its call to include in its work comprehensive data on all institutions in order to provide a coherent basis for a consistent discharge procedure;

4. Notes that 21 (30 %) of the 70 transactions contained errors but that the Court, based on the 5 errors which were quantified, estimates the level of error to be below the materiality threshold;

5. Notes that the financial statements of the Court are audited by an independent external auditor in order to ensure the same principles of transparency, accountability and independence as the Court applies to its auditees;

Budgetary and financial management

6. Notes that the overall budget of the Court for 2023 amounted to EUR 175 059 922, equivalent to an increase of 7,97 % from EUR 162 141 175 in 2022; notes that the increase was primarily due to salary adjustments and nine new temporary posts related to NextGenerationEU; notes that for 2023 88,5 % of appropriations were for its Members and staff, while 11,5 % were for buildings, equipment and miscellaneous expenditure;

7. Notes that the implementation rate for commitments and payments was high, though slightly lower than in 2022; observes that the utilisation rate for appropriations stood at 97,92 %, and payments represented 94,45 % of total commitments, compared to 98,12 % and 95,26 %, respectively, in 2022;

8. Notes that Russia’s illegal and unjustified war of aggression against Ukraine in various ways created budgetary pressures for the Court, including through rising inflation and salary adjustments, strongly increasing electricity and heating costs;

9. Highlights that the budgetary execution for 2023 was impacted by two factors, which explain the slightly lower rate than in 2022:

1. the higher-than-budgeted level of inflation and the resulting price indexations affecting new and existing contracts, which triggered additional budgetary needs to cover non-salary expenditure and, in particular, the energy and IT budget lines; those increases in appropriations were eventually made possible mainly as a result of an underutilisation of some appropriations in Chapter 10 (Members of the Institutions), in Chapter 12 (Officials and temporary staff) and in Title 2 on budget lines such as Publications, Limited consultations, studies and surveys and Interpretation costs;

2. the higher turnover of contract staff and SNEs (some SNE contracts were not extended and a few SNEs passed an internal competition for temporary staff), delays and difficulties in recruitment procedures as for any European bodies located in Luxembourg;

10. Notes that, in the course of 2023, the Court carried out 36 budgetary transfers totalling EUR 5 676 379, which were aimed at ensuring that the Court’s various departments operated smoothly and that any related needs were met;

11. Notes that, in 2023, the Court purchased goods and services totalling EUR 23 426 750,05 (EUR 5 512 853 in 2022 and EUR 15 215 515 in 2021), of which purchases from local suppliers amounted to EUR 21 453 665,05 (EUR 4 848 701 in 2022 and EUR 10 144 812 in 2021);

12. Notes with satisfaction that the external auditor declared that the resources allocated had been used for their intended purpose and that the control procedures put in place by the authorising officers provided for the necessary guarantees to ensure that financial operations were in compliance with the applicable rules and regulations;

13. Welcomes that the overall mission budget of the Court (Members and staff) initially set at EUR 2 722 500 has declined by 4,4 % to EUR 2 602 500 given changes in the Court’s working methods following the pandemic;

14. Calls on the Court to conduct a comprehensive review of travel and meeting allowances, ensuring that expenditures are cost-effective, justified, and environmentally sustainable, including an increased reliance on hybrid meetings to reduce unnecessary spending and carbon emissions;

Internal management, performance and internal control

15. Welcomes the fact that, in 2023, the Court significantly increased its on-the-spot visits compared to the previous three years, when COVID-related travel and public health restrictions were still partly in place; notes that the Court spent a total of 4 897 days in Member States and outside the Union compared to 2 984 days in 2022, 1 156 days in 2021, 1 190 days in 2020 and 3 605 days in 2019;

16. Notes that, in the course of 2023, the Court presented 2 annual reports, 4 specific annual reports, 29 special reports, 4 opinions and 6 reviews, totalling 45 items;

17. Notes that of the 29 strategic measures of the Court’s 2021-2025 strategy, 1 has been cancelled and the other 28 fully implemented;

18. Appreciates that the Court measures the implementation of its recommendations based on the follow-up carried out by its auditors; notes that, in 2023, the Court analysed the recommendations addressed to the Commission and other institutions in its 2019 reports; appreciates that the analysis showed that of the recommendations that have been followed up, 100 % of the 15 recommendations made in the Court’s 2019 annual report and 85 % of the 208 recommendations in the Court’s 2019 special reports had been implemented either in full or in some or most respects;

19. Welcomes the readiness of the Court to respond to Parliament’s request to focus its audit work on the most pressing challenges, as well as to improve cooperation with Parliament’s CCC; stresses that the Court should have full access to fraud risk assessment tools, including Commission and Member State databases regarding fraud cases related to Union funding, to enhance early warning systems against fraudulent activities; regrets deeply that the Court’s access to FENIX, the new reporting tool on the Recovery and Resilience Facility (RRF), remains an open issue due to the fact the Commission only grants the Court access to some of the FENIX modules, and the information contained therein is not updated in a timely manner; urges the Commission to grant the Court full and immediate access to all FENIX modules without delay; notes that the Commission’s Directorate-General for Economic and Financial Affairs has endeavoured to grant the Court access to FENIX files within 2 weeks of approving a payment request; is alarmed, however, that in practice, that deadline is not being met in many cases and that delays of up to 2,5 months have been encountered in some instances, significantly slowing down the delivery of Court findings; recalls that the Commissioner for Budget in the CONT meeting on 10 October 2024 openly stated that the Court has a full mandate on the RRF which indicates the need for a speedy improvement of the Court’s access to all tools to deliver on its mandate;

20. Calls on the Court to expand its audit scope to include European Investment Bank (EIB) operations financed with the EIB’s own funds, given the EIB’s growing role in EU economic,financial, and industrial policy; urges the Commission and Member States to grant ECA the legal mandate required for this expansion;

21. Commends the timely and pertinent special reports on the implementation of the RRF, which enable the discharge authority to effectively exercise its prerogatives and provide recommendations to the Commission for enhancing the functioning of this instrument; urges the Court to strengthen its role in combating fraud in the Union budget by identifying weaknesses, engaging in anti-fraud discussions, intensifying audits, cooperating with fraud detection bodies, and providing relevant feedback to the discharge authority;

22. Notes that the Court, at the end of 2023, had 969 members of staff; notes that in 2023, women constitute 53 % of the staff and men 47 %, unchanged from the previous year, 2022; regrets that women represent only 30 % of senior management, a significant decline from 36,4 % in 2022; highlights that the overall proportion of women in management positions has decreased in 2023; calls on the Court to continue its efforts to promote gender balance for the middle and senior management;

Human resources, equality and staff well-being

23. Is alarmed that the recruitment process required additional effort, as around 50 % of candidates turned down the job offers from the Court, in part due to the limited attractiveness of Luxembourg as a place of employment and the high cost of living; notes, however, that the big audit firms present in Luxembourg are also facing challenges and are now turning to Asian markets to recruit auditors; stresses that such an approach cannot be applied by the Court due to security and eligibility concerns; acknowledges the Court’s efforts and encourages it to collaborate with other Luxembourg-based institutions within the High Level Interinstitutional Group to enhance Luxembourg’s appeal to prospective staff through identified measures, such as higher relocation allowances, housing allowances to mitigate high rental costs for lower-grade staff and reasonably priced temporary housing for short stays to make employment in Luxembourg more attractive;

24. Recalls the Treaty on the European Union, that the EU and its institutions, shall promote solidarity and equality between women and men;

25. Shares the Court’s concern that, in general, the audit profession is facing recruitment issues due to a lack of interest in audit and control jobs among young workers; calls for proactive solutions and immediate systematic inter-institutional cooperation to address this issue;

26. Shares the Court’s observations that EPSO competitions do not always achieve the objective of attracting and selecting relevant profiles of candidates from the private sector; highlights the several issues with EPSO competitions, for example technical problems with remote testing leading to the cancellation of one competition and putting all others on hold; acknowledges the concerns related to the recruitment and the selection procedures of new staff; encourages the Court to continue its effort to address this situation in order to safeguard the continuity of the Court’s activity; notes with appreciation that the Court has engaged in cooperation with EPSO in order to organise audit competitions at regular intervals; suggests possible cooperation with other relevant Union bodies in order to optimise hiring processes;

27. Appreciates the fact that the Court has organised flexible and varied selection procedures as provided for in the Staff Regulations and the Conditions of Employment of Other Servants of the European Union and has put in place procedures to retain talented staff;

28. Notes the teleworking regime (up to 10 days per month) offered by the Court in order to mitigate the recruitment challenges; welcomes the measures taken by the Court in 2023 in order to ensure the physical and mental well-being of staff;

29. Notes that the vacancy rate in December 2023 was 2,27 % and the staff turnover rate (number of staff leaving as a proportion of all staff) was 6,6 %;

30. Appreciates the Court’s effort to keep the vacancy rate low in 2023; however, fully shares the concern about the lack of geographical balance among new recruits, making the Court’s staff as a whole even less geographically representative; notes that, according to the Court, there is a risk that within the space of five years several Nordic Member States will not be covered by the audit given a potential absence of auditors from those Member States;

31. Welcomes the fact that the Court took various steps to tackle the issue of geographical balance, such as increasing publicity for the Court’s competition and vacancy notices in significantly underrepresented Member States, cooperating with Members of the Court to disseminate its notices and reaching out to potential candidates by attending career fairs in certain Member States; encourages further steps being taken into consideration, such as early engagement strategies, attracting young talent from the countries with low representation; notes with a certain regret that there is still some way to go to reach gender balance in middle and senior management;

32. Welcomes the fact that, at the end of 2023, all 29 additional posts required for the RRF audit of EUR 723,8 billion were filled; however, underscores that the materiality, complexity, large amounts and rapid disbursements from the RRF continue to pose challenges and that not all aspects of the RRF can be covered with the resources available, which allow the Court to assess the satisfactory fulfilment of milestones and targets and therefore the legality and regularity of RRF payments, but they are not sufficient to systematically cover compliance of RRF expenditure with Union and national laws; highlights the importance of ensuring that the Court is consistently provided with adequate staffing levels to fulfil both its mandate and additional responsibilities stemming from new financing instruments such as the RRF; commends the efforts done by the Court to carry out its duties regarding the RRF so far despite the lack of availability of fully adequate resources;

33. Is aware that the Court has no role in the selection process for Members under Article 286(2) TFEU; points out, however, that there is still an important gender imbalance among the Members of the Court, with only 10 women out of 27 members; regrets that 12 Member States have never nominated a woman to the Court; calls on the Court to evaluate its overall composition and provide this analysis to the Council and the Member States, in order to ensure that gender balance is appropriately considered in future nomination processes; reiterates its call for Member States to propose candidates of different genders, aiming for a more balanced and representative composition of the Court;

34. Regrets that over the years the Council repeatedly proceeds to nominate members of the Court despite those nominees being rejected by Parliament; underlines that Parliament should have a binding role in assessing the suitability of candidates for the Court;

35. Expresses regret that the Council has repeatedly nominated members of the Court despite their rejection by Parliament; emphasizes that Parliament should hold a binding role in evaluating the suitability of candidates for the Court;

36. Notes that, in 2023, the average absence due to illness was 10 days per staff member, compared to 12,2 days in 2022; notes furthermore that, in 2023, 4 staff members (compared to 8 in 2022) were absent due to prolonged illness, defined as lasting more than 200 days in a year;

37. Notes with concern that 7 cases of burnout were reported in 2023, reflecting the same troubling number as in 2022; welcomes the fact that the Court took several steps to reduce the risk of burnout by introducing a full wellbeing programme, offering a resilience training, publishing and implementing guidelines on returning to work after long-term sick leave, continuing to offer mental health first aid, and providing financial support to staff by covering the cost of 10 sessions with a psychologist of their choice;

38. Notes with appreciation that in 2023 the Court again exceeded the professional training target of five days of non-language training per years for auditors (6.7 days), in line with the International Federation of Accountants’ recommendations; notes in particular the training of the Court’s staff on the NGEU and the RRF;

39. Welcomes the adoption of a new policy in December 2022 to ensure a respectful and harassment-free workplace, focusing on prevention, awareness-raising, and early detection; highlights measures such as a presentation to all staff in January 2023 to enhance understanding of the policy, the rollout of a harmonized reporting form, and the publication of the first aggregated annual report on policy implementation;

40. Welcomes the Court’s Diversity and Inclusion Action Plan 2021-2025; notes with satisfaction the organisation of the third Disabilities Awareness Week and interinstitutional initiatives to foster inclusivity; emphasizes the ECA’s efforts, including its survey on workplace accessibility, participation in the Ombudsman Award for Good Administration, and the external audit on building accessibility in compliance with Luxembourg’s 2023 accessibility legislation;

41. Emphasises the critical role of the Court as the Union’s independent external auditor and guardian of its finances, which requires the Court to uphold the highest standards of integrity, professionalism, and accountability, serving as a model institution to inspire confidence and credibility; recalls that, in accordance with Article 285 TFEU, the members of the Court must exercise complete independence and adhere to the highest ethical principles, demonstrating integrity, objectivity, professional conduct, dignity, commitment, and loyalty;

Ethical framework and transparency

42. Welcomes the fact that the internal rules on reporting serious irregularities (whistleblowing) were updated in order to make them clearer and more detailed and to provide more information to staff; notes that there were no whistleblowing cases at the Court in 2023; notes furthermore that, in 2023, the Court also launched the process of updating the Court’s rules on conducting administrative investigations and disciplinary procedures, which was finalised in early 2024;

43. Notes that, in 2023, the Court organised 3 training events specifically dedicated to ethics, which attracted 60 participants; takes into account the fact that the Court’s ethics-related courses were open to all staff, including managers, and that the standard courses are compulsory for newcomers and cover public ethics and the Court’s anti-harassment policy; regrets that the ethics-related courses were not compulsory to all staff on a regular basis;

44. Appreciates the fact that the Court has organised 6 training courses on fraud, including fraud in procurement, VAT fraud, and fraud in relation to the RRF; welcomes the fact that, in June 2023, the European Anti-Fraud Office (OLAF) provided training on interviewing in cases of suspected fraud and corruption; notes that, in November 2023, the Court joined the European Public Prosecutor’s Office (EPPO) and OLAF in organising a 2-day course on public procurement fraud in the Union;

45. Is concerned by media’s report that an EPPO investigation on misuse of funds by the former President of the Court is currently blocked by the decision of the Court not to lift his immunity; requests the Court to fully cooperate with EPPO on any investigations they may activate and to report on the reasons for the decision not to lift the immunity;

46. Calls on the Court to ensure that all Members and senior staff publish their financial interests, gifts, and hospitality declarations in a public online database, in line with best practices in EU transparency rules;

47. Regrets that the Court has failed to fully cooperate with EPPO by refusing to lift the immunity of its former President and by denying EPPO access to conduct a search within its premises in relation to a probe into possible wrongdoing, which could be considered an interference with the proper conduct of an investigation, according to the EPPO; recalls that, as the Union’s external auditor, the Court is bound by the principles of accountability, integrity, and transparency, as well as the principle of mutual sincere cooperation between EU’s institutions; calls on the Court to ensure that immunity is not invoked to hinder legitimate judicial proceedings and to take all necessary measures to ensure full compliance with interinstitutional cooperation in the prevention and investigation of fraud;

48. Notes with concern that, according to media reports, the European Public Prosecutor’s Office (EPPO) has requested the lifting of immunity of several ECA staff members in 2023 and that, to date, the Court has refused to grant this request; stresses that while immunity serves to protect the independence of EU institutions, it should not be misused to shield individuals from legitimate judicial scrutiny; considers that requests for the lifting of immunity should only be refused in exceptional circumstances; calls on the Court to provide a detailed justification to the discharge authority for its decision in this case, outlining the specific legal and procedural concerns that led to the refusal, if any; further urges the Court to maintain a high level of transparency and accountability in its cooperation with EPPO and other EU bodies responsible for combating fraud and misconduct;

49. Notes that, in 2023, neither OLAF nor the European Ombudsman initiated any investigations involving the Court;

50. Welcomes that, in 2024, the Court, jointly with the Court of Justice, invited the Commission to participate in an interinstitutional dialogue with a view to agreeing on common rules regarding the use of official cars, which is in line with the remark included in Parliament’s resolutions of 11 April 2022 on discharge in respect of the implementation of the budgets of the Court of Auditors and of the Court of Justice; emphasises the call on all Union institutions to agree on a single system to be applied horizontally, which would reduce confusion and increase transparency and efficiency in the use of public money; notes that a working group will be created in the framework of the interinstitutional Preparatory Committee for Matters relating to the Staff Regulations; appreciates the Court’s readiness to align the rules with the applicable rules of the Commission, but reiterates the criticism already expressed on previous discharge resolutions on the new decision from 2022 concerning members’ travel, missions and use of drivers and cars, which is against the general principle that the use of the car fleet outside of the strict performance of the duties of the members of the Court should not take place under any circumstance;

51. Notes that, in 2023, the Court’s Internal Audit Service (IAS) made 16 audit recommendations with regard to ethics, the transparency portal, conflicts of interest for staff, the Ethics Committee and Members of the Court; notes that out of 16 recommendations, 5 recommendations were completed by 30 July 2024, 8 recommendations will be completed by the end of 2024, and the completion of 3 recommendations has been delayed;

52. Welcomes the extension of scope of information published on Members’ mission, but recalls Parliament’s request to provide information about missions for the whole mandate of the Members; welcomes the revision of the Code of Conduct of members which forbid Members from holding any honorary position in political organisation, implementing Parliament’s request for Members not to have formalised political links; takes note that conclusions of the internal audit report on ethics was to be communicated to the EP President and the Chair of the Budgetary Control Committee in the third quarter of 2024, and invites the Court to share this with the Committee of Budgetary Control in its entirety; invites the Court to publish refusal decisions in cases where Members or staff declare conflicts of interest, ensuring greater transparency in the audit process;

53. Notes that all the Members of the Court have their primary residence in Luxembourg, as required by Article 10 of the Code of Conduct for the Members and former Members of the Court of Auditors;

54. Welcomes the fact that the Court has revised the policy on public access to documents, reflecting the evolution of European case law, and simplified the procedure for dealing with requests to access documents and with confirmatory requests; recalls the fact that application of the Scandinavian principle of public access to official records in the Union was a prerequisite for some Member States to join the Union and underlines the fact that non-delivery would be detrimental to the reputation of the Union as a community based on the rule of law;

55. Regrets that an annual list of contracts above Directive threshold (>EUR 140 000 for services/supplies; >EUR 5 382 000 for works) concluded in 2023 is not available on the website of the Court; calls on the Court to publish that list as a separate document without undue delay and ensure user-friendly access to it;

56. Appreciates and awaits with eagerness the Court’s consolidation of all internal anti-fraud strategy rules into one joint document;

57. Continues to reject the rationale of the Court for its decision not to join the Transparency Register, as it does not have a vested interest in influencing decision making, beyond providing facts and objective feedback about Union programmes; notes that all of the Court’s reports are publicly available and subject to a rigorous clearing procedure with the auditees; reiterate its strong call for the Court to join the EU Transparency Register in order to adhere to basic principles of transparency while at the same time not creating any obstacles to the full independence of the Court;

58. Strongly encourages the Court to reconsider its position regarding the EU Transparency Register, established by the interinstitutional agreement of 20 May 2021 between the European Parliament, the Council of the European Union, and the European Commission on a mandatory transparency register1a;

59. Welcomes the significant progress made in 2023 towards establishing the Document Management Ecosystem (DOME), namely the delivery and implementation by means of concrete document approval processes of both the new electronic signature and the core approval module for PASS (Process to Approve, Sign and Send documents); encourages the Court to further pursue its objectives of digitalizing the review and approval workflows and improving their efficiency;

60. Notes that the Court continued being actively involved in the Emerging technology group of the Interinstitutional Committee for Digital Transformation; notes that the DATA Team (Data and Technology for Audit), established in 2021, continued working on the implementation of the development plan for better use of technology in support of the Court’s audit objectives; notes in particular the preparation of an analysis of AI opportunities and challenges for the Court and for its audit work; recalls the importance of improving the digitalisation of the audit work; welcomes all the efforts in this direction that the Court continues to make, whereas digitalisation combined with the increased number of on-the-spot visits, can define a system of efficient and accurate audit work;

Digitalisation, cybersecurity and data protection

61. Commends the Court for good progress in implementing its 2022-2024 cybersecurity plan over the past two years; notes that seven of the high-priority tasks have been completed, six are underway and one is on hold; notes that two of the medium-priority tasks have been completed, four are ongoing and three have not yet been started;

62. Appreciates the fact that the following tasks are among those completed:

1. the deployment of an EDR solution on the endpoints and adoption of a cloud-based XDR solution that correlates the telemetry sent by the EDR agents with threat intelligence data from varied sources to detect indicators of compromise;

2. a revamp of the architecture and configuration of the SIEM platform, which has improved the system‘s performance and reliability, coupled with additional sources of logs that have been added to enhance the security monitoring of the IT environment;

3. the replacement of the VPN appliances for remote access with a zero-trust cloud-based SASE service, which reduces the attack surface and allows granular remote access to applications;

4. the reinforcement of the protection against email threats by enabling new features on email security filters that allow improved detection of both spam and malicious attachments;

5. the execution of pen tests of Court departments exposed to the internet;

6. the deployment of a software tool to protect the confidentiality of sensitive information transmitted in file shares;

63. Urges the Court to develop a cybersecurity audit framework for EU institutions and agencies, ensuring harmonized security standards and resilience measures against cyber threats;

64. Notes with appreciation that the Court conducts at least three simulated phishing exercises per year to raise users’ awareness of that cyber threat; notes furthermore that the Court conducts a comprehensive cybersecurity risk assessment every three years; Suggests to the Court to organise on a regular basis compulsory training for al staff on cyber threat including good practices for a safe use of AI;

65. Notes with relief that there was no trace of data exfiltration or lateral movement of the intruder to other Court IT systems during the July 2023 cyber-incident, during which one of the perimeter security gateways was compromised by the exploitation of a software vulnerability; notes that the software vulnerability had been disclosed by the vendor just two days before the incident;

66. Commends the work of the Cybersecurity Service for the Union institutions, bodies, offices and agencies (CERT-EU), which notified the Court of the incident, helped to investigate its scope and performed the forensic analysis; notes that, in the aftermath of the incident, the Court has restored a clean backup of the system and applied the software update that remediated the vulnerabilities exploited by the attacker; notes furthermore that in the following weeks the Court gradually applied a few additional preventive measures recommended by CERT-EU to the appliances to ensure that any possible undetected trace of the malware was eradicated;

67. Notes with appreciation that the Court reviewed and updated its Cybersecurity Incident Response Plan in 2023 and created a form for recording such incidents in the IT service management tool; highlights the fact that the form took account of the lessons learned from the July 2023 incident in that it was geared towards collecting all information that could be useful in handling a cybersecurity incident;

Buildings

68. Notes that, in 2023, the work to upgrade the technical installations on all floors of the K2 building and optimise the use of its common spaces was completed; notes that the Court has committed EUR 6 445 635,82 from a total budget of EUR 6 902 185,54; commends the Court for not exceeding the estimated budget; calls on other Union institutions to follow the exemplary budgetary management of the Court;

69. Appreciates that, in February 2023, the results of an accessibility audit of all Court buildings to meet the needs of people with reduced mobility or other disabilities conducted by an external consultant were delivered; notes that the audit covered all three buildings, the common spaces, car parks and other spaces; is aware that the actions proposed are being reviewed and would normally be the subject of a specific project, but that their implementation will depend largely on budget availability;

Environment and sustainability

70. Notes that, in 2023, the Court invested a lot of its environmental impact reduction effort in energy-saving measures such as the replacement of traditional light bulbs with LEDs, the reduction of the number of hours of ventilation and the overhaul of certain technical systems in its buildings; notes furthermore that the Court introduced special energy-saving measures in the summer of 2023, which reduced electricity consumption by 12 % compared to the summer of 2022, generating savings of EUR 26 976;

71. Notes that, in 2023, the Court signed an agreement with the Luxembourgish authorities to establish a mobility plan; looks forward to updates about that initiative;

Interinstitutional cooperation

72. Highlights the fact that, in 2023, the Court’s auditors spent 1 370 days at Union institutions, bodies, offices and agencies and at various international organisations and private audit firms, compared to 945 days in 2022;

73. Calls for the formalization of an annual interinstitutional dialogue between the ECA, European Parliament, Council, and Commission on budgetary control, ensuring systematic follow-up on audit findings and improved oversight of EU expenditure;

74. Recalls once again that effective cooperation between the Court and the Commission will remain limited unless the Commission adopts the Court’s methodology for assessing error rates, which is based on an independent and comprehensive evaluation of all rule breaches, in contrast to the Commission’s focus on recoverable errors;

75. Welcomes the fact that the Court cooperates closely with both OLAF and the EPPO, including by organising workshops and awareness-raising events and by exchanging knowledge and experience; furthermore notes that the Court, in 2023, forwarded 20 cases of suspected fraud to OLAF and 17 such cases to the EPPO; emphasizes its position that all suspicions of fraud should be promptly referred to OLAF and EPPO for thorough investigation;

76. Calls on the Court to establish a structured fraud-detection collaboration mechanism with OLAF and EPPO, including real-time data-sharing agreements and a joint audit approach for high-risk EU funding areas;

77. Is convinced that a single integrated IT system for data-mining and risk scoring could be a valuable source of data, which would allow the Court, OLAF and the EPPO to strengthen their audit and control efforts; stresses that unlimited access should be provided to such a system and the data contained therein, that no unjustified restrictions should be placed on that access and that the exploration and use of further digital tools and emerging technologies should immediately be allowed as part of the Court’s audits;

78. Regrets that, despite improved access to European Investment Bank (EIB) documents and information, the Court lacks a mandate to audit operations financed with the EIB’s own funds; calls for that mandate to be granted to the Court, given the EIB’s mission to pursue Union objectives and its growing role in the Union’s economic and political landscape, which extends beyond utilising the Union budget to guarantee its operations; highlights Special Report 05/2023 of the Court entitled ‘The EU’s financial landscape – a patchwork construction requiring further simplification and accountability’ in which the Court stated that a public audit mandate should be established for all types of financing for Union policies;

79. Notes that, in 2023, the Court presented 29 special reports, 1 review and 1 opinion to 22 different Council committees and working parties; further notes that the same year Court representatives participated in 23 meetings focused on the discharge of the Union budget for the 2021 and 2022 financial years;

80. Notes with appreciation that the Members and management of the Court demonstrated active engagement in 2023, presenting their work at 120 meetings with national governments and governmental bodies across 25 Member States, the majority of which involved ministers or ministries of finance; further notes that in the same year, Members and staff of the Court presented their work at 91 meetings with national or regional parliaments in 19 Member States, primarily through committees focused on budgetary, financial, audit or EU affairs; urges the Court to intensify its engagement with the governments of countries where error rates are highest, fostering greater dialogue and collaboration in order to address those issues effectively;

Communication

81. Notes that, in 2023, the budget allocated for the Court’s communication and promotional activities amounted to EUR 225 000 with a utilisation rate of 81,13 % (EUR 182 549,84); notes that most of the budget was spent on both media monitoring services (EUR 81 650) and press actions (EUR 12 348), followed by expenditure on stakeholder relations, which mainly comprised the cost of a policy intelligence platform (EUR 57 891), communication activities (EUR 28 002,88), social media (EUR 1 486,52) and publications (EUR 1 171,44);

82. Strongly supports the Court’s growing media strategy, which resulted in a record of more than 22 000 online press articles related to its audit reports, other publications or the Court in general, thus confirming the upward trend in coverage observed over the recent years (2022: 20 000; 2021: 18 000); highlights the fact that nearly 54 000 posts on social media shows the continuation of an organic growth, with numbers for 2022 being an outlier (2022: 110 000; 2021: 49 000);

83. Welcomes the fact that, in 2023, the Court issued 45 press releases in 24 Union languages, as well as various information notes, media advisories and ready-to-use audio-statements in certain languages; notes furthermore that the Court held 21 online press briefings and 6 additional country-specific press briefings for the annual report; highlights the fact that, altogether, the Court’s briefings have attracted 590 journalists, most representing major national media outlets in the Member States;

84. Notes with appreciation that, in 2023, the Court launched a new website, receiving over one and half million visits, with around 700 000 unique visitors, which represents an increase of more than 14 % compared to 2022; welcomes the fact that, by the end of 2023, the Court’s three main social media accounts (X (ex-Twitter), LinkedIn and Facebook) had attracted over 48 000 followers, up from 45 000 in 2022 and 39 000 in 2021;

85. Highly appreciates that the Court assesses the likely impact and usefulness of its work, as perceived by the readers of its reports at Parliament, the Council, the Commission, Union agencies, Member States’ permanent representations, Member States’ agencies and SAIs, NGOs, academia, the media and other parties; in that regard, notes that, since 2018, the Court has carried out anonymised electronic surveys to ask its readers to provide qualitative feedback on selected reports and make general suggestions for its work; stresses that, in 2023, 85 % of around 1 060 respondents considered the Court’s reports useful for their work, and 78 % felt that they had an impact.

MIL OSI Europe News –

April 24, 2025
MIL-OSI Europe: REPORT on discharge in respect of the implementation of the general budget of the European Union for the financial year 2023, Section VI – European Economic and Social Committee – A10-0054/2025

Source: European Parliament

2. MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

with observations forming an integral part of the decision on discharge in respect of the implementation of the general budget of the European Union for the financial year 2023, Section VI – European Economic and Social Committee

(2024/2025(DEC))

The European Parliament,

– having regard to its decision on discharge in respect of the implementation of the general budget of the European Union for the financial year 2023, Section VI – European Economic and Social Committee,

– having regard to Rule 102 of and Annex V to its Rules of Procedure,

– having regard to the report of the Committee on Budgetary Control (A10-0054/2025),

A. whereas in the context of the discharge procedure, the discharge authority wishes to stress the particular importance of further strengthening the democratic legitimacy of the Union institutions by improving transparency and accountability, and by implementing the concept of performance-based budgeting and good governance of human resources;

B. whereas the European Economic and Social Committee (the ‘Committee’) is an advisory body of the Union providing a forum for consultation, dialogue and consensus among representatives of the various economic, social and civil components of organised civil society from the Member States;

C. whereas the Committee contributes to the Union decision-making process and, by ensuring links between Union policies and economic, social and civic circumstances, it pursues its missions of better law making, participatory democracy from the bottom up and the promotion of European values;

D. whereas the consultation of the Committee by the Commission or the Council is mandatory in certain cases, and the Committee may also adopt opinions on its own initiative while enjoying a wide area for referral as defined by the Single European Act, the Maastricht Treaty and the Amsterdam Treaty, allowing it to be consulted by Parliament;

E. whereas the Committee’s commission for financial and budgetary affairs (CAF) is the Committee’s supervisory body for all budgetary procedures and, in particular, the establishment of the budget estimates, the budget implementation, the annual activity report, the discharge and the follow up to the annual report of the Court of Auditors (the ‘Court’);

F. whereas in the last years the Committee has taken initiatives to attract and retain skilled staff, optimise its organisational structure and working methods and promote a respectful working environment, in the context of a limited budget;

1. Notes that the budget of the Committee falls under MFF heading 7 ’European public administration’, which amounted to a total of EUR 12,3 billion, i.e. 6,4 % of Union budget spending, in 2023; notes that, in 2023, the budget of the Committee represented 1,29 % of MFF heading 7 appropriations;

2. Notes that the Court o, in its Annual Report for the financial year 2023 (the ‘Court’s report’), examined a sample of 70 transactions under Heading 7, of which 21 (30 %) contained errors; further notes that for five of those errors, which were quantified by the Court, the Court estimated a level of error below the materiality threshold;

3. Notes from the Court’s report that administrative expenditure includes expenditure on human resources including pensions, which in 2023 accounted for about 70 % of the total administrative expenditure, and on buildings, equipment, energy, communications and information technology; welcomes the fact that the Court concluded, as it did in previous years, that, overall, administrative spending is low risk; notes that the Court did not identify any specific issue concerning the Committee in 2023;

Budgetary and financial management

4. Notes that the final adopted budget for the Committee was EUR 158 767 970 in 2023, representing an overall increase of 4,1 % compared to 2022; notes from the Committee’s replies to the questionnaire submitted by the Committee on Budgetary Control for the 2023 budgetary discharge (the ‘Questionnaire’) and the Committee’s annual activity report for 2023 (the ‘Annual report’) that the remuneration and allowances budget line (expenses with Committee’s staff and Members) increased by 8,4 % between 2022 and 2023 due to the inflation; notes from the Questionnaire that the budget for outside assistance for the operation, development and maintenance of software systems increased by 33,70 % from 2022 to 2023 due to the Committee having made the implementation of its digital strategy for 2024-2026 a priority in 2023; notes that, otherwise, the distribution of appropriations across other budget lines in the Committee’s 2023 budget remained comparable to previous years’ distribution;

5. Notes with satisfaction that the rate of the Committee’s budget implementation of current year commitment appropriations increased further from 96,12 % in 2022 to 98,70 % in 2023, leaving behind the lower budgetary implementation in previous years due to the COVID-19 pandemic and the related travel restrictions; notes further that the current year payment appropriations execution rate increased from 88,12 % in 2022 to 90,67 % in 2023; notes that the average payment time in 2023 was 20,14 days, higher than in 2022 (i.e. 18,34 days);

6. Notes that the carry-over of appropriations from 2023 to 2024 amounted to EUR 13 827 713 (i.e. approx. 8,70 % of the Committee’s budget for 2023), which represents a decrease from the previous year’s level of EUR 20 162 518 (i.e. approx. 13 % of the Committee’s budget for 2022); notes further with appreciation that the rate of implementation of the appropriations carried over from 2022 to 2023 was 86,76 % in 2023, compared to 76,91 % in 2022; encourages the Committee to continue the efficient use of the provided funds;

7. Notes that the Committee’s own services launched 12 negotiated procedures below EUR 60 000 in 2022, mainly for case studies, studies and logistical support; notes that the Committee also launched six procurement procedures with the joint services shared with the European Committee of the Regions (the ‘CoR’) mainly in the field of logistics and maintenance;

8. Notes that, in 2023, the Committee continued to improve the cost-effectiveness of its activities, including through hybrid work, increased teleworking, full dematerialisation of financial circuits and reduced energy consumption; notes from the Questionnaire that the Committee achieved financial savings of EUR 65 000 in 2023 due to a reduction in energy consumption; commends the Committee for having signed a new framework contract for medical checks that provides for lower prices, increased flexibility and better service overall than the previous contract; acknowledges the significant budgetary and administrative savings achieved by the Committee through interinstitutional cooperation, notably the joint services with the CoR and the outsourcing (Service level agreements) of specific services to the Commission in the handling of HR and the use of financial and HR management IT tools, as well as the participation in interinstitutional procurement procedures led by other institutions; notes from the Questionnaire that the total cost incurred by the Committee for the outsourcing of specific services to the Commission increased from EUR 743 600 in 2022 to EUR 793 000 in 2023;

9. Recalls that the Council decision of 25 May 2023 set the allowance for remote attendance of members of the Committee at non-statutory meetings at EUR 145 per remote meeting per day, which represents 50 % of the daily allowance for physical participation in 2023; considers that despite remote attendance being an important instrument for modern institutions given that, inter alia, it reduces the costs of meetings and allows broader participation, the allocation of an allowance for remote attendance of meetings, even if reduced and intended only for some types of events, is difficult to understand for the public, even more so when taking into consideration the difference paid to the members of the Committee and members of the CoR for remote attendance; notes with satisfaction from the Committee’s follow-up report to Parliament’s resolution on the implementation of the Committee’s budget for 2022 (the ‘Follow-up report’) that the application of that decision has already produced budgetary savings of EUR 1 677 000 due to lower travel costs and allowances paid, as well as environmental savings of some 553,66 tons of CO2, due to less travel in 2023; notes from the Annual report that the number of reimbursed meetings days attended remotely was 2006 (6 259 in 2022), with an average duration of 3 hours per meeting for a total cost of EUR 294 930 in 2023 (EUR 922 925 in 2022); welcomes multiple checks carried out by the Committee to prove the remote attendance of members prior to the payment of the allowance;

10. Notes that the impact of Russia’s war of aggression against Ukraine continued to put pressure on the Committee’s budget in 2023, through rising inflation and salary adjustments, challenges in building projects due to delays and higher raw material prices, the indexation of rental contracts (+10,3 % in 2023 compared to 2022), as well as indexation of maintenance and security service contracts (+13,50 % in 2023 compared to 2021); notes in particular that the energy costs increased from EUR 726 000 to EUR 3 125 000 between 2021 and 2022, before decreasing to EUR 1 923 391 in 2023; acknowledges the 2 % cap for non-salary-related expenses; commends in this context the Committee for its initiative in addressing challenges at budgetary level by e.g. implementing energy-saving strategies through short-term, as well as medium- and long-term measures, thus not needing an amending budget in 2023;

11. Notes a decrease in the current year appropriations for budget line 1004 (expenditure for Member’s travel, including subsistence and meetings allowances) from EUR 19,790 million in 2022 (of which EU 15,895 million were paid) to EUR 19,761 million in 2023 (of which EU 18,344 million were paid); notes with satisfaction an improvement in the implementation rate of those appropriations from 80,31 % in 2022 to 92,83 % in 2023; notes that the Committee President participated in 35 missions totalling EUR 71 926 in 2023 against 26 missions totalling EUR 38 042 in 2022;

12. Notes from the Questionnaire that the Joint Directorate for Innovation and Information Technology of the Committee and the CoR allocates some 3 % of its IT budget to cybersecurity which is far from the 10 % target provided for in the relevant legislation; calls on the co-legislators and the Commission to take this into account in the framework of the annual budgetary procedure;

Internal management, performance and internal control

13. Notes from the Annual report that, as part of its annual work programme for 2023, the Committee had a total of 31 objectives designed for all entities of its administration and, as part of the general secretariat’s strategy for 2021-2025, the Committee has five core values and five key strategic objectives; notes from the Questionnaire that the number of opinions produced and participations in high-level meetings are key indicators for measures the Committee’s performance; takes note from the Questionnaire that the Committee has performance indicators in various areas, such as IT, HR, translation and communication; asks the Committee to include in its future reporting a list of all key performance indicators and objectives, per activity, as well as the target ( %) set for achieving them and the level ( %) of their achievement;

14. Notes that the Committee pursues its mission through opinions, which refer to legislative proposals made by the Commission (referrals), own-initiative opinions, which call on the Union institutions to take action, and exploratory opinions, which feed into the Commission’s work on its planned initiatives, and that the Committee’s positions can be highlighted in resolutions or included in evaluation and information reports; commends the Committee for its performance in assisting Parliament, the Council and the Commission in the legislative cycle in 2023; notes in that context that, in 2023, the Committee adopted 213 opinions and reports, an increase from 202 in 2022 and organised 146 hearings and 23 conferences, compared to 116 and 29 in 2022, respectively; notes that Committee’s members participated in 429 high-level meetings, summits and conferences in 2023 compared to 345 in 2022;

15. Appreciates that the Committee has taken action in 2023 to improve the visibility and impact of its work in connection with the format of its opinions, the methodology for follow-up opinions, cooperation with Parliament and the Commission and other projects of transversal nature, as well as innovative initiatives such as the EU Youth test, the enlargement candidate member initiative and the European Circular Economy Stakeholder Platform, among other;

16. Commends the initiatives undertaken by the Committee aimed at fostering the active engagement of youth in the policy-making process;

17. Welcomes the pilot project implemented between September 2022 and April 2023 with the aim of strengthening the follow-up of selected opinions in respect of all institutions, whereas 19 opinions were selected for reinforced follow-up under that project; notes from the Questionnaire the overall positive results of that pilot project, such as improving the Committee’s capacity to undertake follow-up actions, improved prioritisation of Committee’s work and increased outreach and impact of the opinions selected;

18. Highlights that the efficient management of limited resources remained a key challenge throughout 2023 due to staffing constraints, compounded by increased activities under a continuous stable staffing policy; notes the Committee’s plan to introduce a new approach to strategic workforce planning and staff allocation, leveraging data collection on staff skills, active listening across the organisation, and reflections on strategic priorities by the Committee’s political bodies; invites the Committee to keep the Parliament informed of the outcome of this new plan, as this it could inspire other institutions who face similar, recurrent challenges resources wise;

19. Notes with regard to internal control standards (ICS), that the 2023 compliance exercise showed improvements compared to 2022; notes in that context that compliance, namely the extent to which the requirements of the 16 ICS are implemented, increased from 80,30 % in 2022 to 87,40 % in 2023, while effectiveness, namely the extent to which the implementation of those requirements works as intended, increased from 74 % in 2022 to 78,10 % in 2023; notes further that the 2023 annual risk assessment exercise showed that the application of internal controls decreased inherent risks (in category ‘critical’ and ‘very important’) by 53 %, from 40 to 19, in 2023;

20. Notes that a restructuration of the Internal Audit Service (IAS) took place in 2023, strengthening its compliance with international audit standards and streamlining and documenting all its process;

21 Notes that, in the area of financial transactions, the Committee’s internal audit service (IAS) adopted a new decision on the assessment of risks for the implementation of a simplified procedure in the beginning of 2023; notes further that the Committee’s Bureau adopted a new internal audit charter and an audit committee charter including procedural rules in 2023;

22. Notes from the Annual report and the Questionnaire that in 2023, the IAS launched four audits, namely on meeting authorisations, selecting the consultative commission on Industrial change, strategic cycle and duration and distance allowances for Committee’s members; calls on the Committee to keep the discharge authority informed on the outcome of those audits and implement all open recommendations resulted from previous audits (on institutional deadlines, interpreting, verification, ethics and integrity, statutory rights and payment times);

Human resources, equality and staff well-being

23. Notes that, at the end of 2023, the Committee was employing 707 staff members, compared to 706 in 2022; notes further that 49 contract agents and 130 temporary agents (of which 52 recruited in 2023) were employed in 2023 (compared to 50 contract agents and 128 temporary agents in 2022); notes, in addition, that the Committee was employing 12 interim agents and 10 external staff working intra muros, excluding external services providers in the fields of logistics and IT; takes note that the occupation rate was 95,50 % in 2023 compared to 95,10 % in 2022 and the staff turnover rate was 7 % in 2023;

24. Welcomes the ongoing efforts of the Committee to improve its HR framework with a view to becoming an attractive employer and a workplace, where every individual is valued and can fully develop their potential; notes that as part of implementing its HR strategy for 2023-2025, the Committee delivered on several key milestones in 2023, with new decisions being adopted on working conditions (hybrid working, overtime, special leave), diversity and inclusion strategy and action plan for 2023-2027, staff mobility and the methodology on sensitive posts, as well as on staff appraisal and promotions system, among other; notes with satisfaction the positive results of the staff satisfaction survey published in May 2023, whereby both staff and managers expressed high levels of satisfaction with various HR related, matters in particular on working arrangements, a topic on which it appears the Committee has found the perfect balance;

25. Notes that the Committee became a net importer of talent (from other institutions) for the second consecutive year as a result of implementing a targeted attractiveness and retention plan; acknowledges nevertheless persistent challenges due to reliance on temporary agents amid a shortfall of EPSO reserve lists, posing risks to expertise retention; underlines the importance of permanent staff in maintaining skills, continuity and productive working environment; recommends the Committee to implement initiatives to respond to those challenges by, for example, organising internal competitions;

26. Notes that with a view to better distributing its scarce resources, an external HR mapping audit, commissioned by the Committee, was finalised in 2023; notes with concern that the results of that audit confirmed the heavy workload in many different services across the Committee, thus putting at risk the fulfilment of the Committee’s mission and obligations; calls on the Committee to implement that audit’s recommendations, including revising the appraisal and performance system by 2025, adopting the new working conditions decision, and conducting regular staff engagement monitoring; stresses the importance of strategic workforce planning to optimize resource allocation, ensure alignment with the high-level priorities set by political authorities and continue its cost-efficiency efforts;

27. Notes that in 2023 the positive trends initiated in 2022 in relation to recruitment of staff continued; commends the Committee for the actions taken in this area such as the alignment of publication of vacancy posts with the publication of new EPSO reserve lists or the publication of job opportunities on the Committee’s website and Linkedin, among other; asks the Committee to keep Parliament informed of the outcome of its pilot project on employer branding activities; underlines that the on-boarding of newcomers constitutes an important factor of strategic alignment by ensuring that staff are informed of the rules and strategies in place in an institution; commends the Committee for having strengthened the on-boarding of new staff members in 2023 through an updated welcome booklet and on-boarding letter, a welcome pack with eco-friendly goodies, a feedback loop on the on-boarding experience, improved welcome session timing, a revamped Newcomers’ Corner, and on-boarding tips for managers;

28. Recalls that the Committee adopted Decision 282/23A, effective 1 January 2024, establishing a flexible, trust-based hybrid working policy while offering staff an improved work-life balance and enhancing adaptability and efficiency; asks the Committee to inform the discharge authority about the developments in this regard in timely manner;

29. Welcomes the appointment of a female Secretary-General in January 2024 as a positive development towards achieving gender balance; regrets however that the percentage of women in senior management remained low in 2023, with only two out of seven senior management positions currently being held by women; welcomes nevertheless that the Committee considers the gender balance of its staff and in particular in the senior management as an important factor and invites the Committee to swiftly improve the situation at the highest levels of the Committee, by ensuring a balanced representation in line with the Committee’s commitments to diversity and inclusion;

30. Regrets that the Committee was unable to provide data on cases of burnout in 2023 and rejects the Committee’s position expressed in its follow-up report whereby burnout as such is not a recognised medical diagnosis and the reasons for burnout may be manifold; recalls the importance of statistical data on burnout with the aim ofhelping to take decisions on staff well-being, which should be also based on lessons learned from past very unfortunate experiences, and on external evaluations of the current framework; acknowledges data protection constraints but stresses the value of anonymised statistical data to support informed managerial decisions; notes with concern the findings highlighting heavy workloads in several services due to limited human resources; welcomes the adoption of new working arrangements as a positive step, but encourages the Committee to take further steps to ensure the publication of anonymised data on burnout cases;

31. Notes that, in 2023, the Committee was employing staff members from all Member States, with some of them being overrepresented (e.g. Belgium, Italy.); notes that in 2023 24 % of managers employed by the Committee were from the 13 Member States that joined the Union after 2004, which represents a slight increase compared to 21 % in 2022 and 19 % in 2021; reiterates its encouragement to the Committee to continue to take action to reach a proper geographical distribution within its staff, with a particular focus on management level;

32. Welcomes the Committee’s efforts to create a healthy work environment for its staff members; commends particularly the emphasis placed by the Committee on mental and physical health of staff, and the efforts made with regard to awareness-raising about health-related issues; notes the Committee’s measures on the management of sick leave, such as medical part-time and extended remote working, to ensure that staff on long-term sickness related absence return to work in a timely fashion, as well as an increase in the percentage of staff with no absences from 27 % in 2022 to 30 % in 2023; observes with satisfaction that the Committee arranged a free of charge skin cancer screening campaign on the Committee’s premises where 104 staff members over four days were consulted by external dermatologists in 2023;

Ethical framework and transparency

33. Welcomes the adoption of the new diversity and inclusion strategy, effective until 2027; commends the specific awareness-raising actions on disability undertaken in early 2024; notes with satisfaction that diversity and inclusion training remains mandatory for managers and recommended for staff; acknowledges the Committee’s strong commitment to fostering a fully inclusive workplace; encourages the Committee to take further steps to monitor the representation of employees with disabilities and ensure the publication of anonymised data in this regard;

34. Notes that the Committee continued its internal reform process with the adoption of a decision on the general implementing provisions on administrative investigations and implementing rules for disciplinary proceedings in 2023; commends the Committee for having taken this last step necessary to fully implement the measures for a reinforced ethical framework of the Committee; notes from the Follow-up report that the Committee and the internal auditor have agreed on an action plan relating to the audit of the Committee’s ethics and integrity, with eight recommendations implemented and closed and two recommendations still open to be implemented by March 2025; asks the Committee to keep the discharge authority informed on the progress made in this matter;

35. Notes that the Committee continued to train staff and raise awareness about topics related to whistleblowing, conflicts of interest and other ethical issues in 2023: notes in this context with satisfaction the results of the staff engagement survey carried out in 2023 showing a high awareness rate among staff, with regard to the Committee’s ethical framework, in particular on the networks of confidential counsellors (93 %) and ethics counsellors (83 %); observes that the Committee organised 12 training sessions on those topics with a total participation of 79 staff members in 2023; commends the Committee for organising compulsory training on respect and dignity at work for all staff, including managers;

36. Notes that one harassment complaint was reported in 2023 and closed the same year, as a result of investigation and mediation by the Committee, without sanctions being imposed; recalls that the Committee is a civil party in the ongoing legal proceedings initiated by Belgian national authorities against a former member accused of misconduct that is currently before the Belgian courts; asks the Committee to inform Parliament about developments in that case; believes that fostering a culture of respect and dignity, supported by a zero-tolerance policy on harassment, is crucial to prevent future allegations and to ensure a safe and inclusive working environment within the Committee;

37. Reiterates that a zero-tolerance policy against harassment is needed to protect the wellbeing of staff and is a duty of any employer; reminds that in addressing harassment claims a lesson learned approach should be put in place in order to avoid any possible wrongdoing; still considers that an external and independent investigation into the case currently under legal proceeding would be beneficial to improve the Committee’s reaction to similar cases;

38. Appreciates the Committee’s readiness to cooperate with the Union’s investigative bodies, namely the European Anti-Fraud Office (OLAF) and the European Public Prosecutor’s Office (EPPO) and the Ombudsman; notes that two OLAF cases were opened in 2023, both of which were dismissed in the same year: one for lack of sufficient evidence and the other referred to the Committee for follow-up; asks the Committee to keep the discharge authority informed of the progress made in the second case; notes further that the Ombudsman opened an enquiry in 2023 in relation to the management of a case involving allegations of harassment; asks the Committee to inform the discharge authority of the outcome of that enquiry;

39. Notes with satisfaction the Committee’s work towards more transparency in its activities in 2023; notes in that context the adoption of a decision broadening the range of documents available online via the Transparency Register, such as the Committee’s meeting minutes and attendance lists, as well as a decision requesting the Committee’s members to meet only registered stakeholders, publish their list of meetings and attach their “legislative footprint” to their opinions; appreciates that the Committee publishes online information on its annual budget, performance indicators, expenditure or public procurement; calls for the publication of all meetings held by EESC members with third parties;

40. Noes with satisfaction that the Committee has put solid rules and procedures in place to prevent conflicts of interests and avoid revolving doors with regard to staff who engage in outside activities or members who take on jobs after no longer being a Committee member; notes in this context that the Committee has introduced a new “Declaration of financial interests form” in 2023; notes that the form is to be declared by members, delegates, alternates and advisors for both their remunerated and non-remunerated posts or activities outside the Committee; commends further the Committee for its involvement in 2023 in the political negotiations to create the Inter-institutional Ethics Body tasked with setting ethical standards to strengthen transparency and integrity;

41. Notes that the Committee Bureau, on 21 March 2023, adopted several transparency measures in accordance with the principles laid down with respect to the EU Transparency Register, such as a recommendation for office-holding members to only meet with registered stakeholders, the obligation for office holding members to publish their lists of meetings and a voluntary ‘legislative footprint’ for rapporteurs; notes that several actions were taken to implement the Bureau decision, including the issuing of a service note laying down practical modalities for the implementation of the decision, an awareness training campaign, and the provisions of template messages to be included in correspondence between Committee members and external stakeholders encouraging to join the EU Transparency Register (if applicable);

42. Urges the EESC to implement real-time tracking of declared conflicts of interest, requiring all members and senior staff to publicly disclose financial interests, assets, and external affiliations annually, to prevent undue influence on decision-making;

43. Notes an absence of cases in areas of fraud, conflicts of interest and whistleblowing in 2023; notes that the effectiveness of the Committee’s anti-fraud measures was reviewed in order to develop an anti-fraud strategy which is still missing despite several requests from Parliament in its discharge resolutions to take action to improve the overall anti-fraud system; recalls the importance of a comprehensive anti-fraud strategy and calls on the Committee to keep the discharge authority informed of the outcome of that exercise that should have culminated with the adoption of an anti-fraud strategy in 2024;

Digitalisation, cybersecurity and data protection

44. Notes that the combined IT budget of both the Committee and the CoR was EUR 12 700 000 in 2023, compared to EUR 11 712 000 in 2022, i.e. an increase of 8,4 %, whereas EUR 350 000 of that budget (or 3 % thereof) was paid for cybersecurity in 2023; notes further that 6,24 % of the Committee’s total budget for 2023 represented expenditure for actions implementing the new ‘Digital Strategy 2024-2026’ (DS2026) prepared by the Joint Directorate for Innovation and Information Technology (DIIT) in 2023;

45. Notes that DS2026 envisions a future where technology integrates with the Committee’s core mission, focusing on efficiency, speed, and continuous digital evolution, putting both administration and members at the centre of digital transformation and aiming to improve service delivery, empowerment, and adaptability; notes that DS2026 is structured around eight objectives, eight key principles and four major projects such as the adoption of Ares and EdiT which are expected to be rolled out in 2026 and 2025, respectively; notes with satisfaction from the Questionnaire the progress made by DIIT in implementing DS2026 in 2023, with actions taken such as the adoption of staff guidelines on artificial intelligence, integration of amendment flows with translation tools and establishment of a project management office, among many other;

46. Notes from the Annual report the Committee’s actions in the area of protection of personal data and its processing; notes that in 2023 the Committee created a new online version of its register of records and a new joint register of records with the CoR, whereas the former had 121 records and the latter had 25 records at the end of 2023; notes further that the Committee adopted a new procedure for handling data breaches, published a data protection guide and implemented several awareness-raising initiatives for its staff and members in 2023; notes lastly that the EDPS launched one enquiry in 2023 related to the management of an external audit, and continued an older enquiry on the use of cloud services under the Cloud II contracts by Union institutions, whereas for both enquiries the conclusions are still pending; asks the Committee to keep the discharge authority informed on the follow-up on these matters;

47. Notes that the Committee finalised in 2023 its project for the equipment of all its meetings rooms, whereas an additional 14 such rooms were equipped with technologies that make them fully operational in hybrid mode; appreciates that the Committee conducted all procurement procedures for high value contracts in a fully digitalised way, used the Qualified electronic signature for any type of contractual agreements and provided trainings to staff on the transition to the Public Procurement Management Tool system and the Funding and Tenders Portal in 2023;

48. Commends the Committee for its concrete actions to ensure its staff acquire the necessary digital skills in an increasingly digitalised workplace in 2023; notes in this context the activities, such as “mini-hackatons”, organised in the framework of a peer-to-peer network established with the CoR to foster better use and understanding of collaborative digital tools, as well as peer-to-peer coaching and experience exchanges; notes that the outcome of those activities was integrated into the Committee’s training offer;

49. Notes that in October 2023 guidelines for staff members on the use of Artificial Intelligence (AI) were adopted, that an information session was provided for all staff members, highlighting opportunities and challenges, and that further communication to staff members was provided through knowledge-based articles on the Committee’s intranet to raise awareness;

50. Notes that the work continued adopting and applying the NIST Cybersecurity Framework within both the Committee and the CoR in 2023, whereas the actions taken that year focused on some of that framework’s principles, i.e. protect and detect principles; notes that mitigation strategies are implemented using the “Essential Eight” Cybersecurity Framework; notes further that the Committee did not encounter any cyber-attacks in 2023, but it did encounter brief Denial of Service (DoS) attacks against the Committee’s externally hosted corporate websites at the end of 2022 and the start of 2024;

51. Urges the EESC to increase its cybersecurity budget to at least 10% of its total IT expenditures in line with EU cybersecurity directives, ensuring enhanced protection against cyber threats, especially for sensitive data related to policy and budgetary matters;

Buildings

52. Acknowledges receipt of the Committee’s report of 3 June 2024 informing the discharge authority about the Committee’s building policy, in compliance with Article 266(1) of the Union’s Financial Regulation; notes with satisfaction from that report that the Committee, with the CoR, achieved one of the major priorities of their 2017 Building Strategy, i.e. “geographical concentration of the buildings”; notes further that this achievement already brought savings due to the lower cost of renting the entire VMA compared to the three buildings previously rented; understands that those savings are approx. EUR 1,8 million, which,- according to that report, is equivalent to the rent paid for the B100 building; notes that the Committee is currently working on the update of its 2017 long-term building strategy, and that this work should be finished by the end of 2025; calls on the Committee to keep the discharge authority informed on the outcome of this exercise;

53. Welcomes the finalisation of renovations (i.e. fitting-out works) of the newly acquired VMA building, which included the installation of smart energy saving technologies; supports the Committee’s plan to carry out technical and environmental audits of all its buildings, whereas the outcome of those audits should allow for the identification of all technical installations and building components that need to be fully or partially renovated or kept as they are, thereby aligning with the European Green Deal objectives; invites the Committee to update the discharge authority on the outcome of those audits and their follow-up;

54. Notes that the task force on “new ways of working”, established in 2022, issued a first prospective report in 2023, focusing on the available office spaces and possible optimisation options; notes the Committee’s plan to continue that exercise with a participatory process with staff members to co-design the future workspaces; invites the Committee to keep the discharge authority informed on the progress made on this matter;

55. Welcomes the commitment of the Committee and the CoR to systematically apply the “design for all” principle to their infrastructure, ensuring accessibility of their building by design; notes that the two committees took a range of different measures to ensure accessibility of their buildings to people with various kinds of disabilities in 2023, including upon modernisation of its elevators in the JDE building;

Environment and sustainability

56. Welcomes the Committee’s green practices and commends the further reduction of gas, electricity and water consumption and carbon emissions and an increase in the recycling rate in connection with the Committee’s activities in 2023 compared to 2019; notes a slight deterioration, compared to 2019 levels, of the rate of waste volume, from -66 % in 2022 to -56 % in 2023 due to higher office presence;

57. Notes that the energy efficiencies and emissions reductions have been achieved through investments in innovative energy-efficient building installations, including through smart energy saving technologies installed in the VMA building, the purchase of 100 % green electricity, the introduction of (customised) environmental criteria in all tender procedures with value of EUR 60 000 or more, the use of paperless workflows and other measures such as reducing the operating hours for lighting, reducing the winter reference temperature in all buildings to 19 degrees or closing buildings in periods of low staff presence, among many other measures; notes that the reduction in the Committee’s energy consumption corresponds to a 3,4 % rate and a financial gain of EUR 65 395;

58. Notes from the Follow-up report that the smart energy saving technologies installed in the recently renovated VMA building contributed to a reduction in the Committee’s energy consumption (gas and electricity) of 20 % to 30 % in 2023; reiterates however its call on the Committee to provide the Parliament with an update on the return on investments of those technological installations;

59. Welcomes that the Committee adopted an energy-saving strategy, with short-, medium- and long-term measures; notes in this context that the Committee started an environmental audit of all its buildings in order to identify, among other, the level of the energy performance of the current structures and pieces of equipment, as well as estimate the environmental return of the necessary investments compared to the overall costs (maintenance, consumption etc.) over a 30-year period; notes further that studies on energy efficiency measures are planned for 2024 and 2025; calls on the Committee to keep the discharge authority informed on the progress made on those matters;

60. Recalls that in 2022, the electricity produced by Committee’s solar panels was 15,5 MWH or 0,25 % of the Committee’s yearly consumption, whereas in 2023 the same figure decreased to 5,75 MWh; notes with satisfaction from the Questionnaire that the Committee is leading by example with regard to measures and actions taken in favour of sustainable mobility;

Interinstitutional cooperation

61. Commends the close cooperation established by the Committee with the CoR at administrative level, through the new cooperation agreement signed in 2022, whereby the two committees share premises and joint services in the areas of translation, infrastructure, logistics, security, procurement, financial management and IT, while maintaining full institutional autonomy; welcomes the positive development in 2023 when the two committee further agreed on the development and funding of a shared communication area with joint-audio visual facilities in the JDE building; asks the Committee to identify and inform the Parliament on the budgetary savings made during the first year of implementing that agreement in the audio-visual area; reiterates its call on the Committee to pursue and expand that cooperation in other areas with a view to avoiding duplication and further rationalising the operating costs of services available in the premises shared by the Committee and the CoR; invites the Committee and the CoR to explore the possibility of setting up a single administration for their joint services, keeping separate directorates or units for the services dealing with matters related to their specific and independent mandates; encourages the Committee and the CoR to continue their efforts to develop further cooperation and synergies;

62. Observes that budgetary savings and efficiency gains continued to be realised through active cooperation between the Committee and other Union institutions in 2023, including by organising the Committee’s plenary sessions on Commission and Parliament premises, where the venues and associated services are provided either free of charge or at rates below external market prices;

63. Notes with satisfaction that the Committee and Parliament re-negotiated in 2023 and signed in 2024 their inter-institutional agreement, whereas the agreement aims to provide more relevant and timely contributions throughout the legislative cycle and to reinforce bilateral cooperation; welcomes that the new Protocol of Cooperation of the Committee with the Commission, signed in 2022, already brought improvements to the Committee’s impact for example at pre-legislation phase through exploratory opinions; encourages the further reinforcement of political, legislative, and communication synergies between the Committee and Parliament, particularly in the context of the European Citizens’ Initiative and the European Semester;

64. Reiterates its appreciation for the outsourcing (Service level agreements) of specific services to the Commission in the handling of HR and the use of financial and HR management IT tools, as well as for the Committee’s participation in inter-institutional procurement procedures led by other institutions, whereby the Committee continued to benefit from synergies in the area of IT, corporate travel, insurance, transportation, translation and audio-visual equipment in 2023;

65. Notes the Committee’s role in reinforcing the links with and between the national economic and social councils (NESCs) of the Member States; notes from the Questionnaire the measures that the Committee has taken to reinforce the network of and the online community with the NESCs, such as the establishment of joint working groups and exchange programmes, working on collaborative IT platform, and participation in common events, among others; calls for continued cooperation on topics of common interest and the exchange of good practices, emphasisiziing the vital role of civil society in addressing the Union’s current challenges;

Communication

66. Notes that the Committee’s overall budget for communication in 2023 was EUR 2,15 million, an increase compared to EUR 1,5 million in 2022; notes that this budget was primarily allocated to the four flagship events organised in 2023 (European Citizens’ initiative, Your Europe, Your Say! The organic food awards and the 14th Civil Society Prize), the improvement and/or revamping of the Committee’s social media, external website and audio-visual production, as well as for media and press publications; commends the Committee for its communication activities delivering on this communication priorities for 2023, such as the Blue Deal initiative, COP28, the resolution on democracy, and the Committee’s 65th anniversary, among others;

67. Commends the Committee for its efforts in connection with its strategic communication in 2023; notes that the Committee adopted a new communication strategy aimed at strengthening its image and outreach; notes that, as part of that strategy, the Committee web-streamed its main events, mostly in all Union languages, introduced new communication tools such as the ‘Reporting from the plenary’ video series focused its communication resources on the Committee’s flagship events for 2023 and deployed special efforts to increase its outreach on social media;

68. Calls on the EESC to strengthen its monitoring and reporting on labour rights, social inclusion, and human rights violations within EU-funded programs, ensuring greater accountability in its advisory functions and policy recommendations;

69. Notes that the number of the social media followers on the Committee’s corporate platforms increased substantially by 25,000 in 2023; notes that by the end of 2023, the Committee reached 61 416 followers on X, which is an increase of 5 % compared to 2022, 61 761 followers on LinkedIn, which is an increase of 30 % compared to 2022, 46 868 followers on Facebook, which is an increase of 5.3 % compared to 2022 and 17 428 followers on Instagram, which is an increase of 45 % compared to 2022;

70. Welcomes the Committee’s positive approach towards the use of open-source solutions for its online communication; notes that in July 2023, the Committee opened its first account on the EU Voice Mastodon platform, a decentralised, free and open-source social media network that connects users in a privacy-oriented and advertising-free environment; observes throughout the second half of 2023, that the Committee actively communicated on the Mastodon account, feeding it every working day with posts on its activities and priorities and raising awareness about the Union; takes note of the Committee’s decision to discontinue its presence on that platform as of 2024.

MIL OSI Europe News –

April 24, 2025

MIL-OSI Europe: RECOMMENDATION on the draft Council decision inviting Member States to accept, in the interest of the European Union, the amendments to the International Health Regulations (2005) contained in the Annex to Resolution WHA77.17 and adopted on 1 June 2024 – A10-0064/2025

Source: European Parliament

PR_NLE-AP_LegAct

Symbols for procedures

* Consultation procedure

*** Consent procedure

***I Ordinary legislative procedure (first reading)

***II Ordinary legislative procedure (second reading)

***III Ordinary legislative procedure (third reading)

(The type of procedure depends on the legal basis proposed by the draft act.)

CONTENTS

Page

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

EXPLANATORY STATEMENT

ANNEX: ENTITIES OR PERSONS FROM WHOM THE RAPPORTEUR HAS RECEIVED INPUT

PROCEDURE – COMMITTEE RESPONSIBLE

FINAL VOTE BY ROLL CALL BY THE COMMITTEE RESPONSIBLE

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

on the draft Council decision inviting Member States to accept, in the interest of the European Union, the amendments to the International Health Regulations (2005) contained in the Annex to Resolution WHA77.17 and adopted on 1 June 2024

(17046/2024 – C10‑0005/2025 – 2024/0299(NLE))

(Consent)

The European Parliament,

– having regard to the draft Council decision (17046/2024),

– having regard to the request for consent submitted by the Council in accordance with Article 168(5) and Article 218(6)(a), sub-points (iii) and (v), of the Treaty on the Functioning of the European Union (C10‑0005/2025),

– having regard to Rule 107(1) and (4) of its Rules of Procedure,

– having regard to the recommendation of the Committee on Public Health (A10-0064/2025),

1. Gives its consent to the draft Council decision;

2. Instructs its President to forward its position to the Council and the Commission.

EXPLANATORY STATEMENT

The International Health Regulations (2005) are the primary instrument under international law to notify the World Health Organization (WHO) of disease outbreaks, and defining the Parties’ rights and obligations in handling public health events and emergencies that have a cross-border potential. They are legally binding for 196 countries.

In light of the experience of the COVID-19 pandemic, in January 2022, the Executive Board of WHO, through decision EB150(3), urged Member States to take all appropriate measures to consider potential amendments to the International Health Regulations (2005), to strengthen the global preparedness and response capacity to public health emergencies.

Amongst other, the amendments have introduced a “pandemic emergency”, which constitutes the highest level of global alert that the Director-General may issue.

They imply the issuance of Temporary Recommendations to States Parties – which, by definition, are not legally binding – to guide them in preparing for and responding to the Public Health Emergency of International Concern (PHEIC). They also enshrine the principle of solidarity and equity through increased cooperation between the Member States themselves, as well as with WHO, and set up a coordinating financial mechanism for more efficient use of funds to build up the core capacities needed for the IHR.

Countries are better supported by WHO when investigating undetermined disease outbreaks and the WHO’s publication of information on events that threaten public health is simplified. Furthermore, the amendment package includes provisions on possible recommendations by WHO on the availability and distribution of relevant healthcare products, the maintenance of essential supply chains, the travel possibilities by healthcare staff, and the possibility of using digital proof in healthcare crises.

This Decision does not make use of the possibility for the Union to exercise its external competence concerning areas in relation to which Union rules do not already exist. The Member States remain competent in respect of the matters covered by the amendments, as far as the amendments do not affect Union rules or alter the scope thereof, including foreseeable future developments of those rules. In addition, Member States remain solely responsible for the definition of their health policy and for the organisation and delivery of health services and medical care, in accordance with Article 168(7) TFEU. Furthermore, this Decision does not create additional financial obligations for Member States. None of the amendments is contrary to Union law, and it is therefore not necessary to make reservations in respect of the amendments falling within the competence of the Union.

The Union needs to be ready for more effective independent actions, but needs to also be ready to cooperate with international partners. Only within the framework of international cooperation, future global health threats can be prevent and mitigated effectively.

The Rapporteur welcomes the finalization of the IHR amendments negotiations by the Commission, and supports the Council Decision inviting Member States to accept, in the interest of the European Union, the amendments to the International Health Regulations (2005).

ANNEX: ENTITIES OR PERSONS FROM WHOM THE RAPPORTEUR HAS RECEIVED INPUT

The rapporteur declares under his exclusive responsibility that he did not receive input from any entity or person to be mentioned in this Annex pursuant to Article 8 of Annex I to the Rules of Procedure.

PROCEDURE – COMMITTEE RESPONSIBLE

Title	Amendments to the International Health Regulations contained in the Annex to Resolution WHA77.17 and adopted on 1 June 2024
References	17046/2024 – C10-0005/2025 – 2024/0299(NLE)
Date of consultation or request for consent	28.1.2025
Committee(s) responsible	SANT
Rapporteurs Date appointed	Adam Jarubas 19.2.2025
Discussed in committee	19.3.2025
Date adopted	9.4.2025
Result of final vote	+: –: 0:	27 8 0
Members present for the final vote	Christine Anderson, Vytenis Povilas Andriukaitis, Bartosz Arłukowicz, Monika Beňová, Stine Bosse, Marie-Luce Brasier-Clain, Laurent Castillo, Veronika Cifrová Ostrihoňová, Christophe Clergeau, Margarita de la Pisa Carrión, Ondřej Dostál, Viktória Ferenc, Martin Häusling, Romana Jerković, Ondřej Knotek, András Tivadar Kulja, Peter Liese, Ignazio Roberto Marino, Tilly Metz, Letizia Moratti, Elena Nevado del Campo, Michele Picaro, Jessica Polfjärd, Oliver Schenk, Tomislav Sokol, Dario Tamburrano, Laurence Trochu, Vlad Vasile-Voiculescu, Tiemo Wölken
Substitutes present for the final vote	Valérie Deloge, Marta Temido, Ingeborg Ter Laak, Kristian Vigenin
Members under Rule 216(7) present for the final vote	Sakis Arnaoutoglou, Sandra Gómez López
Date tabled	14.4.2025

MIL OSI Europe News –

April 24, 2025

MIL-OSI USA: Governor Newsom’s investment to prevent and prosecute organized retail crime yields 14,133 prosecution case referrals
Source: US State of California 2
Apr 23, 2025
What you need to know: 14,133 cases have been referred to district attorneys’ offices through a community grant investment proposed by Governor Gavin Newsom to root out organized retail crime and hold bad actors accountable.

Sacramento, California – Marking a significant accomplishment of the law enforcement community in battling organized retail theft, Governor Gavin Newsom today announced 14,133 referrals for prosecution in the first year of the state’s organized retail theft and vertical prosecution grants.

Proposed by Governor Newsom and distributed by the Board of State and Community Corrections (BSCC) from October 2023 to December 2024, this grant funding of $267 million to 55 communities has enabled cities and counties to hire more police and secure more felony charges against suspects.

As we continue investing in public safety, we keep seeing strong, positive results – more officers, more crime deterrents and more case prosecutions. Our commitment to our neighborhoods is paying off.

Governor Gavin Newsom

According to program participants, of the 14,133 case referrals for prosecution, 10,932 were for organized retail theft, 3,161 were for motor vehicle theft and 40 were for cargo theft. Of the 1,150 people convicted of theft-related property crimes, a total of 373 of those related to organized retail theft. Of those organized retail theft convictions, 88% were felonies.

The funding is split between two grant programs with unique applicants for each. The prevention program grantees compile arrest and referral data, while prosecution grant participants record charges, convictions and sentencing. Future reporting may include updates on charges, convictions and sentencing as they move through the criminal justice legal system.

“The ORT grants are enabling our law enforcement partners to transform their approach in combating organized retail theft,” said BSCC Board Chair Linda Penner. “The impact is broad and successful.”

Dedicated prevention and prosecution programs

The organized retail theft grant program is made up of two separate, competitive three-year grants: prevention and vertical prosecution. The prevention grant provided 38 law enforcement agencies with over $242 million in funding for purchasing new equipment, launching enhanced enforcement operations, hiring new staff, and establishing partnerships with the retail community.

“The ORT Grant has led to phenomenal results in Fresno. We have been able to build relationships and trust with our retailers, and work closely with our partner law enforcement agencies – we are now sharing intelligence across the entire Central Valley,” said Fresno Police Department Deputy Chief Michael Landon. “When you are able to give talented people the resources they need to get the job done, it’s a real game-changer in solving crime.”

Notable highlights include:

Recovery of $1.2 million of stolen property and $400,000 seized by the Fresno Police Department. The Department also credits the grant funding with lowering their auto theft rate by 38%. License plate reader equipment purchased through grant funding assisted police in locating a suspect in a carjacking incident that included the safe recovery of a three-year old child sitting in the vehicle when it was stolen.

San Francisco Police Department arrested eight individuals suspected of participating in 23 organized retail theft incidents, responsible for the theft of $84,000 of stolen goods from various Walgreens locations.

San Ramon Police Department conducted targeted investigations that led to warrants for two individuals responsible for over $42,000 in thefts from ULTA Beauty and Sephora stores, as well as three people connected to over $100,000 in losses at multiple ULTA locations.

The vertical prosecution grant funded an effective prosecution model that allows a prosecutor to focus on a case from beginning to end, providing victims and law enforcement a single point of contact. Over $24 million was provided to 13 district attorneys’ offices.

“The Vertical Prosecution Grant has been a catalyst for enhancing communication and empowering our community, from retailers to law enforcement,” said Sonoma County Chief Deputy District Attorney Scott Jamar. “It has allowed us to concentrate our efforts using technologically assisted analytics to identify suspects, often in real-time, and build prosecutable cases. This is smart law enforcement.”

Notable highlights include:

Sonoma County District Attorney’s Office identified multiple organized retail theft suspects as a direct result of working with retailers and the Santa Rosa Police Department through grant-funded technology, resulting in the arrests of two suspects for jewelry theft and recovering $16,000 worth of jewelry in less than 96 hours. The county now has monthly “blitz” operations.

Yolo County District Attorney’s Office launched a new innovative Direct-to-DA retailer reporting program designed to dramatically expedite the investigation and prosecution of retail crimes. The “FastPass to Prosecution” program was launched in the Fall of 2023 and led to successful prosecution of organized retail theft crimes.

Stanislaus County District Attorney’s Office developed a successful public education strategy, along with a single point of contact for retailers and law enforcement agencies with bi-monthly meetings. The stronger partnership has led to an increase in the number of arrests for theft, with some retailers reporting 90% reductions in losses, in addition to improved employee morale.

In addition to the first-year report, the BSCC also launched online dashboards displaying data for both grant programs.

New data suggests violent and property crime went down in 2024. According to an analysis of Real Time Crime Index data by the Public Policy Institute of California, property crime dropped by 8.5% and violent crime dropped by 4.6% in 2024, compared to 2023. Burglary and larceny also went down by 13.6% and 18.6%, respectively, compared to pre-pandemic levels.

Cracking down on retail theft

The BSCC recently released $127 million to continue funding mental health services, substance-use disorder treatment and diversion programs in local communities. Potential applicants for this funding include drug and mental health treatment programs eligible under both Proposition 47 and Proposition 36. Although Proposition 36 did not include a funding mechanism to support its related programs, the BSCC has discretion to use funding from Proposition 47 for this purpose.

Citing ongoing progress to takedown organized retail crime statewide, Governor Newsom recently announced the state’s Organized Retail Crime Task Force has been involved in over 3,700 investigations, leading to the arrest of approximately 4,200 suspects and the recovery of over 1.3 million stolen goods valued at more than $56 million.

Last August, Governor Newsom signed into law the most significant bipartisan legislation to crack down on property crime in modern California history. Building on the state’s robust laws and record public safety funding, these bipartisan bills offer new tools to bolster ongoing efforts to hold criminals accountable for smash-and-grab robberies, property crime, retail theft, and auto burglaries. While California’s crime rate remains at near historic lows, these laws help California adapt to evolving criminal tactics to ensure perpetrators are effectively held accountable.

California law provides existing robust tools for law enforcement and prosecutors to arrest and charge suspects involved in organized retail crime — including up to three years of jail time for organized retail theft. The state has the 10th toughest threshold nationally for prosecutors to charge suspects with a felony, $950. 40 other states — including Texas ($2,500), Alabama ($1,500), and Mississippi ($1,000) — require higher dollar amounts for suspects to be charged with a felony.

Saturating key areas

Working collaboratively to heighten public safety, the Governor tasked the California Highway Patrol (CHP) to work with local law enforcement areas in key areas to saturate high-crime areas, aiming to reduce roadway violence and criminal activity in the area, specifically vehicle theft and organized retail crime. Since the inception of this regional initiative, there have been nearly 6,000 arrests, about 4,500 stolen vehicles recovered, and nearly 300 firearms confiscated across Bakersfield, San Bernardino and Oakland.

Stronger enforcement. Serious penalties. Real consequences.

California has invested $1.1 billion since 2019 to fight crime, help local governments hire more police, and improve public safety. In 2023, as part of California’s Public Safety Plan, the Governor announced the largest-ever investment to combat organized retail crime in state history, an annual 310% increase in proactive operations targeting organized retail crime, and special operations across the state to fight crime and improve public safety.
Recent news

Apr 22, 2025

News SACRAMENTO – Governor Gavin Newsom today announced the following appointments:Claire Cullis, of Carmichael, has been appointed Deputy Secretary of Business and Consumer Relations at the California Business, Consumer Services, and Housing Agency. Cullis has been…

Apr 22, 2025

News What you need to know: The Governor and First Partner marked Earth Day at Chico State University with students from the Center for Regenerative Agriculture and Resilient Systems. CHICO – Governor Gavin Newsom and First Partner Jennifer Siebel Newsom celebrated…

Apr 22, 2025

News What you need to know: Classes resumed in person at Palisades Charter High School today at a new temporary site in Santa Monica. All eight public schools that were damaged in the fires are now back to learning in person. LOS ANGELES – Today, Governor Gavin Newsom…

MIL OSI USA News –
April 24, 2025
MIL-OSI Europe: Answer to a written question – Is there really a plan to merge the European Health Emergency Preparedness and Response Authority (HERA)? – E-000664/2025(ASW)
Source: European Parliament
The Commission established the Health Emergency Preparedness and Response Authority (HERA) in 2021 in response to the pandemic, to ensure better preparedness and response capacities against health emergencies.

Given the national competences in the area of health, HERA was shaped with a distinctive governance model, set up within the Commission but with the HERA Board assisting and advising with high-level representation from each Member State.

The Commission has concluded a review of the implementation of HERA and on 26 March 2025 published a report[1] that was transmitted to the Parliament, the Council and the HERA Board.

The report acknowledges that HERA has made a significant contribution to reinforcing EU preparedness and response capabilities for medical countermeasures and beyond, but also identifies a number of areas where further work is needed to make the most of the potential to better protect the health of citizens.

To ensure adequate coordination mechanisms for responding to major public health emergencies, the Commission also relies on other tools such as the Emergency Response Coordination Centre[2].

The Preparedness Union Strategy has underlined the need for renewed efforts in the area of preparedness. Funding arrangements for preparedness, including health preparedness under the future Multiannual Financial Framework are being analysed.

The Political Guidelines for the Commission 2024-2029 announced a new strategy on medical countermeasures and a wider EU stockpiling strategy.

The Commission is also pursuing other workstreams related to health security such as the implementation and evaluation of the Serious Cross-border Health Threats Regulation[3] and the evaluation of the European Centre for Disease Control[4].

[1] https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM:2025:147:FIN

[2] https://civil-protection-humanitarian-aid.ec.europa.eu/what/civil-protection/eu-civil-protection-mechanism_en

[3] Regulation (EU) 2022/2371 of the European Parliament and of the Council of 23 November 2022 on serious cross-border threats to health and repealing Decision No 1082/2013/EU.

[4] As defined in Article 31 of the amended Regulation (EC) No 851/2004 of the European Parliament and of the Council of 21 April 2004 establishing a European centre for disease prevention and control.
Last updated: 23 April 2025
MIL OSI Europe News –
April 24, 2025
MIL-OSI Europe: REPORT on the control of the financial activities of the European Investment Bank – annual report 2023 – A10-0068/2025

Source: European Parliament

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

on the control of the financial activities of the European Investment Bank – annual report 2023

(2024/2052(INI))

The European Parliament,

– having regard to the European Investment Bank Group (‘EIB Group’) 2023 activity report of 1 February 2024 entitled ‘A Blueprint for Sustainable Living’, and to the EIB Group document of 2 February 2023 entitled ‘EIB Group Operational Plan 2023-2025’,– having regard to the European Investment Bank (‘EIB’, ‘the Bank’) Investment Report 2023/2024 entitled ‘Transforming for competitiveness’, published on 7 February 2024,

– having regard to the EIB document of 8 May 2023 entitled ‘Mid-term review of the EIB Energy Lending Policy’,

– having regard to the EIB Group report on the implementation of the EIB Group Transparency Policy in 2023, published on 1 July 2024,

– having regard to the EIB Group document of 27 November 2023 entitled ‘The EIB Group PATH Framework – Version 1.2 of November 2023 – Supporting counterparties on their pathways to align with the Paris Agreement’,

– having regard to the EIB Group and EIB documents of 21 June 2024 entitled ‘EIB Group 2024-2027 Strategic Roadmap’ and of 29 November 2023 entitled ‘EIB Global Strategic Roadmap’,

– having regard to the EIB Group Sustainability Report 2023, published on 25 July 2024,

– having regard to the EIB information note of 6 February 2023 entitled ‘The European Investment Bank’s approach to human rights’,

– having regard to the EIB Group Complaints Mechanism Report 2023, published on 10 June 2024,

– having regard to the EIB Group document of 14 October 2024 entitled ‘Diversity, Equity and Inclusion at the EIB Group’,

– having regard to the EIB publication of 23 September 2024 entitled ‘EIB Audit Committee Annual Reports for the year 2023’,

– having regard to the EIB Group report of 15 July 2024 entitled ‘EIB Group activities in EU cohesion regions 2023’,– having regard to the EIB report of 19 October 2023 entitled ‘EIB Investment Survey 2023 – European Union overview’,

– having regard to the EIB Group report of 26 June 2024 entitled ‘EIB Group support for EU businesses: Evidence of impact in addressing market failures’,

– having regard to the joint communication from the Commission and the High Representative of the Union for Foreign Affairs and Security Policy of 5 March 2024 entitled ‘A new European Defence Industrial Strategy: Achieving EU readiness through a responsive and resilient European Defence Industry’ (JOIN(2024)0010),

– having regard to European Court of Auditors Special Report 22/2024 entitled ‘Double funding from the EU budget’,

– having regard to the EIB Group report of 29 December 2023 entitled ‘European Investment Bank Group Risk Management Disclosure Report – June 2023’,

– having regard to the joint communication of 19 March 2025 from the Commission and the High Representative of the Union for Foreign Affairs and Security Policy entitled ‘Joint White Paper for European Defence Readiness 2030’ (JOIN(2025)0120),

– having regard to Rule 55 of its Rules of Procedure,

– having regard to the report of the Committee on Budgetary Control (A10-0068/2025),

A. whereas the EIB Group includes the EIB and the European Investment Fund (EIF); whereas the EIB stands as the world’s largest multilateral development bank; whereas the EIB is treaty-bound to contribute to EU integration; whereas the EIB’s key priorities include providing funding for projects to foster European integration and social cohesion; whereas the EIF acts as a dedicated body for supporting the European Union’s policy objectives in the areas of entrepreneurship, job creation and economic cohesion;

B. whereas, as a bank owned by the EU Member States, the EIB is governed by a Board of Governors, a Board of Directors and a Management Committee, and it maintains robust internal mechanisms for accountability, governance and audit; whereas the EIF is owned by the EIB (60 %), the EU (30 %) and financial institutions (10 %) from the Member States, the UK and Türkiye, and is managed by the General Meeting of EIF shareholders, the Board of Directors and the Chief Executive, with independent internal mechanisms for accountability, governance and audit, some of which are shared at the Group level;

C. whereas both the EIB and the EIF operate within a competitive market but are held to high standards of transparency and stakeholder engagement as EU bodies;

D. whereas the EIB Group promotes EU policies both within and outside the EU and collaborates closely with other EU and national institutions, aligning its financing with the EU’s political priorities; whereas the EIB Group outlined eight strategic priorities in its Strategic Roadmap for 2024-2027: climate action, digital transformation, defence, cohesion, agriculture, social infrastructure, external financing and promoting the Capital Markets Union;

E. whereas the EIB is also tasked with securing resources through borrowing activities, which are crucial for implementing the EU’s policies;

F. whereas the European Council’s strategic agenda for 2024-2029 envisages an enhanced role for the EIB Group as a driver of EU defence and security, and emphasises the need to boost EU competitiveness and improve citizens’ economic and social well-being through significant collective investment efforts, leveraging both public and private funding;

G. whereas the Draghi report on the future of European competitiveness [1] proposed numerous ways to expand the EIB’s role in financing EU policies and to enable the EIB to assume more risk;

H. whereas the EIB Group’s core mission is to bolster Europe’s potential for job creation and economic growth; whereas its investments should tackle inequalities by improving access to jobs, training opportunities, housing and education in order to address poverty and unemployment; whereas it is crucial to overcome barriers to financing for small and medium-sized enterprises (SMEs) and mid-caps; whereas public lending and guarantee schemes serve as vital countercyclical policy tools, especially during economic downturns, and help mitigate structural market failures;

I. whereas the EIB is a cornerstone of the European financial architecture for development and the largest multilateral lender in the EU’s neighbouring regions, including the Eastern Neighbourhood countries, the Western Balkans, the Middle East, and North Africa; whereas the EIB is expected to help close the gap in productive investment between Europe and its main competitors by increasing investment in innovation, communication technology and intellectual property;

J. whereas the success of the EU’s policy objectives and their effective implementation increasingly depend on the EIB Group; whereas the depth and quality of Parliament’s oversight of the EIB’s financial operations should therefore be in line with the intensity of EIB-Commission cooperation, which has become very significant;

K. whereas the EIB’s business model requires the highest standards of integrity, accountability and transparency, and robust measures must be implemented and regularly updated to combat financial fraud, corruption, money laundering, terrorism, organised crime and both tax evasion and avoidance; whereas the EIB Group has a control framework aimed at preventing and mitigating sanctions risks;

L. whereas the EIB Group adheres to the Basel Committee on Banking Supervision’s definition of compliance risk, with the aim of preventing the risk of legal or regulatory sanctions, material financial loss, or damage to reputation; whereas the Bank takes appropriate measures to mitigate such risks by ensuring strict compliance with legal and regulatory frameworks, both at EU and international level;

Financial operations and performance

1. Acknowledges that the EIB has operated effectively and efficiently in a landscape marked by significant global challenges, including geopolitical tensions, climate change impacts and other factors influencing the global economy; suggests exploring both the EIB’s effectiveness and efficiency through thoughtful analysis, particularly focusing on the impact on competitiveness and growth;

2. Recognises that EIB financing is becoming increasingly crucial in the context of high interest rates and constrained public finances; expects the EIB, in the context of a challenging economic outlook and increased global competition, to address constraints to EU competitiveness, such as volatile energy prices, skills shortages in key sectors and insufficient investments in innovation and new technologies;

3. Notes that the EIB Group achieved strong consolidated results amounting to EUR 2.272 billion in 2023 under the International Financial Reporting Standards (IFRS), compared to EUR 2.327 billion in 2022, reflecting a year-on-year decrease of 2.4 %; calls for a detailed analysis of the factors contributing to this decrease, especially since the period was marked by steady economic growth; observes that EIB reserves reached over EUR 56 billion in 2023, up from EUR 53.9 billion in 2022 and EUR 36 billion in 2014;

4. Notes that the EIB’s total liquidity ratio remained well within internal limits to the end of 2023 and that the EIB’s Common Equity Tier 1 (CET1) ratio stood at 33.1 % in 2023, significantly higher than the average ratio of significant institutions supervised by the European Central Bank (ECB) at that time; emphasises that maintaining the EIB’s AAA rating with a ‘stable’ outlook is crucial for securing favourable market financing at preferential rates and should be preserved; underlines that the EIB’s high credit standing is key to its successful business model;

5. Calls on the EIB to maintain its strong capital position and consistently high profits, but notes that the Bank has potential to absorb potential fluctuations in returns without compromising shareholder capital or its credit rating, has the capacity to take on more risk in strategic investments and is well-equipped to invest more in higher-risk innovative projects where private capital remains hesitant;

6. Highlights that the EIB’s total disbursements reached EUR 54.4 billion in 2023, with EUR 53.4 billion from its own resources, compared to EUR 54.3 billion (EUR 53.3 billion from its own resources) in 2022; observes that the EIF’s disbursements on private equity investments amounted to EUR 139.7 million in 2023, compared to EUR 113.7 million in 2022; notes that, according to an economic model developed jointly by the EIB’s Economics Department and the Commission’s Joint Research Centre, the EIB Group’s overall investment within the EU in 2023 is expected to create around 1 460 000 new jobs in the EU-27 by 2027 and boost the EU’s GDP by 1.03 percentage points; calls on the EIB Group to ensure a more balanced geographical distribution of investments to maximise their impact across all EU regions, promoting cohesive and inclusive growth throughout the Union, with particular attention to under-represented and less developed areas;

7. Recalls that the EIB’s Statute mandates geographical balance among its staff and that the selection of staff members must be based on merit, while also considering fair representation of nationals from all Member States; encourages the Bank to continuously monitor geographical balance among its staff and to adjust the recruitment process accordingly, if needed;

8. Welcomes the fact that the EIB Group upholds a rigorous policy against tax fraud, tax evasion, tax avoidance, money laundering and terrorism financing;

InvestEU, the simplification of the multiannual financial framework, and the Recovery and Resilience Facility

9. Welcomes the adoption, on 13 December 2023, of the EIB Group Operational Plan 2024-2026, which outlines the priorities and activities for implementing the EIB Group’s strategy over the next three years; calls for adjustments to new market conditions, including simplification and a reduction of bureaucracy to remove barriers to financing for SMEs, which must be significantly increased; acknowledges that increasing higher-risk activities and mandates is crucial for providing effective support to high value-added and innovative sectors;

10. Recalls that the EIB Group has been allocated 75 % (EUR 19.6 billion) of the EU budgetary guarantee under the InvestEU Regulation [2]; highlights that, in 2023 alone, the EIB approved 30 operations under InvestEU totalling EUR 9.1 billion; believes that in order to stay competitive, significant investments are needed, primarily from the private sector; believes that focusing on innovative projects, start-ups and scale-ups would enhance European competitiveness and growth; notes that this requires mobilising private investments; calls, therefore, on the EIB to play a more significant role in strategic de-risking through guarantees, thereby encouraging private capital investment;

11. Stresses that, within the current 2021-2027 multiannual financial framework, the EIB manages 87 mandates from the Commission, increasing to about 130 if those relating to shared management and assigned by local governments and the Member States are included, and notes that the EIB produces no fewer than 457 reports a year for these; points out that de-bureaucratisation and simplification are deemed necessary to enable better use of resources;

12. Emphasises that the EIB is managing six Recovery and Resilience Facility (RRF) mandates in four Member States, signed in 2021 (Greece and Italy), 2022 (Romania) and 2024 (Spain), totalling EUR 8.7 billion; acknowledges that the adoption of ‘financing not linked to costs’ instruments, which have significantly expanded with the RRF, inherently raises the risk of errors and double funding; expresses its concern about the transparency, auditing and monitoring of the implementation of the RRF; calls on the EIB to cooperate with Member States to address government capacity constraints and the lack of technical skills so as to ensure that RRF resources are managed as effectively as possible, in alignment with national structures and complying with all RRF reporting requirements, especially in the implementation of investment projects and reforms; urges the Commission and the EIB, in its advisory role, to refrain from proposing new financing mechanisms based on the RRF model without taking corrective measures, including in the upcoming post-2027 multiannual financial framework; stresses that, while the EIB seeks simplification, it must not compromise the soundness of EU resource management or the ability to maintain oversight and accountability, as mandated by the Treaties;

Energy security

13. Notes the EIB’s continued support for security of supply, which mainly takes the form of reinforcing electricity grids and cross-border infrastructure, of reducing energy demand through energy efficiency projects and of fostering low-carbon power generation; commends the fact that the EIB has supported new dimensions of energy security, such as demand response and energy storage, and has promoted the development of a sustainable supply of critical raw materials (CRM) needed for the energy transition; calls for an urgent analysis of the real impact of these projects implemented to date, especially of their impact on the availability and cost of energy and thus on the general competitiveness of European companies;

14. Reiterates the need to address energy poverty and emphasises the need for a fair and inclusive energy transition; recalls that the energy crisis is exacerbating inflation, increasing food insecurity and straining household budgets; encourages the EIB to leverage the Just Transition Mechanism and the Modernisation Fund to support regions and populations most affected by the energy transition; stresses the importance of using the Just Transition Mechanism to support workers and regions affected by the phase out of fossil fuels, ensuring access to retraining and quality jobs; recognises that numerous sectors are grappling with challenges stemming from the combined effects of adaption to European Green Deal objectives and the repercussions of the energy crisis and inflation; stresses that accelerating the deployment of innovative low-carbon technologies requires bringing their costs to a level that is competitive with fossil fuels and adjusting to the ongoing reform of the green policies;

15. Acknowledges that the REPowerEU plan is a crucial new element in the EU policy response to the energy crisis; notes that, in July 2023, the EIB Group increased the financing targets of the October 2022 commitment from EUR 30.0 billion until 2027 to EUR 45.0 billion (REPowerEU+), in order to scale up its efforts to support the EU’s energy security; calls for a clear overview of potential double funding of energy projects;

16. Underlines that in 2023, the EIB provided approximately EUR 21.4 billion in financing for energy-related projects, of which around EUR 19.8 billion in the EU and EUR 1.6 billion outside the EU; considers it necessary to increase not only the volume of financing for energy-related projects, but also the efficiency of the investments; underlines, in this regard, the importance of the EIB’s combined offer of competent technical assistance and innovative financial support, and encourages the Bank to expand the range of innovative financing products offered to economic operators, going beyond the standard market offer;

17. Believes that hydrogen and its derivatives, particularly when sourced from renewable energy, can significantly contribute to the EU’s decarbonisation goals and reduce dependence on fossil fuels; urges the EIB to take a leading role in mobilising private investments, which are essential for scaling up hydrogen production across the EU, while ensuring technological neutrality and supporting a diverse range of innovative solutions for decarbonisation, including further scientific research aimed at enhancing and stabilising the efficiency of hydrogen technology; encourages the Bank to consider the cost-effectiveness of such projects from the perspective of their total life cycle;

Defence and security policy

18. Welcomes the significant role that the EIB Group plays in supporting the EU’s defence and security policy by providing funding and leveraging private investment to enhance the Union’s strategic autonomy and resilience; stresses the importance of the EIB’s investment capabilities, supporting initiatives that contribute to strengthening the EU’s defence industry, advancing cybersecurity infrastructure and promoting innovation in critical defence technologies;

19. Appreciates that security and defence is set as one of the Bank’s core priorities in its Strategic Roadmap for 2024-2027; highlights that in May 2024, the EIB’s Board of Directors approved the EIB Group Security and Defence Industry Action Plan, which follows the EIB Group 2022 Strategic European Security Initiative aimed at supporting innovation in dual-use technology, in order to enhance support for the EU’s security and defence industry; notes, with satisfaction, that EIB Group support is provided to SMEs and innovative start-ups within the security and defence sector under the ‘dual-use’ principle, upholding the ‘credible civil use’ criterion, but waiving the revenue test; welcomes the decision of the EIB Board of Directors of 21 March 2025 to expand the Bank’s eligibilities for financing Europe’s security and defence industry and infrastructure, by ensuring that excluded activities are as limited as possible in scope;

20. Welcomes the EIB’s targeted investments in both defence and civilian infrastructure and emphasises the need for strategic investment in technologies that serve both civilian and defence purposes, in line with the EU’s broader goals of promoting innovation and enhancing the Union’s security; calls on the EIB Group to conduct a review of the impact of the extension of its new dual-use goods policy;

21. Stresses the importance of SMEs, start-ups and mid-caps in the security and defence industry and in developing a common European market for defence; believes that smaller actors play a crucial role in strengthening the Union’s capacity and autonomy to develop innovative defence products; encourages the EIB to further support cross-border research and development (R&D) cooperation, particularly by paving the way for smaller actors to take part in the defence supply chains; stresses that greater EIB investment in the defence sector can encourage investment by commercial banks in the same area and considers it necessary to increase the flexibility of lending to SMEs in this regard;

22. Notes that the resources allocated to support the defence and security sector mainly come from the European Defence Fund (EDF) (EUR 8 billion), the EIB Strategic European Security Initiative (SESI) (EUR 8 billion) and the European Defence Industry Programme (EDIP) (EUR 1.5 billion); calls for a dedicated capital allocation on defence and the further adjustment of the scope of eligible investments in order to meet the ambitious role of contributing to Europe’s peace and security set by the White Paper on European Defence Readiness 2030 for the EIB Group; welcomes the integration of the EIB’s existing EUR 8 billion SESI into a cross-cutting and permanent public policy goal and the removal of a predefined ceiling for financing in this area; believes that these measures will allow the Bank to respond to the investment needs in security and defence, while safeguarding its operations and strong financial position; believes that the decision by the Board of Governors in June 2024 to increase the gearing ratio of the Bank will enable increased investments in areas of strategic importance, including in security and defence;

23. Underlines the added value of the innovative measures that the EIB has adopted to accelerate investments in security and defence, and of the ‘one-stop shop’ that acts as the single point of entry for clients and external stakeholders, to whom it offers expert assistance to streamline access and speed up deployment of financing available under the SESI; encourages the EIB to continue developing and implementing agreed upon measures that simplify client procedures and further accelerate investment processes, while ensuring that the AAA rating is preserved;

24. Notes, with appreciation, that in June 2023, the EIB approved an increase in SESI for security investments in the EU from EUR 6.0 billion to EUR 8.0 billion for the period from 2022 to 2027, also including the space and cybersecurity sectors; encourages the EIB to strengthen institutional partnerships with the EU Agency for the Space Programme and other potentially relevant partners, in accordance with EU competition rules;

25. Commends the EIB’s cooperation with all relevant stakeholders, including Member State governments, the European Defence Agency (EDA) and the NATO Innovation Fund; appreciates, in particular, the EIB Group’s cooperation with the EDA and welcomes the signing of an update to the memorandum of understanding between the two bodies on 3 October 2024, which will allow them to strengthen strategic partnerships and jointly identify financing needs to better support research, development and innovation (RDI) in the area of security and defence in the Union;

26. Invites the EIB to further strengthen such collaboration with key stakeholders with a view to increasing impact, synergies and complementarity with EU defence programmes, ensuring that its investments complement broader EU defence policy goals and contribute to achieving economies of scale in European defence capabilities; asks the EIB to enhance regional security and resilience, particularly in Eastern Europe and the Mediterranean through the creation of infrastructure that supports regional security and fosters greater cooperation between EU Member States on defence matters; stresses, furthermore, the importance of exploring cooperation with the NATO Innovation Fund in order to improve access to financing for technology start-ups, in parallel to the deployment of the EIF Defence Equity Facility;

Social infrastructure and housing

27. Asks the EIB to increase risk-taking for projects providing essential services with long-term clear and measurable benefits; welcomes, in this vein, the EIB Group’s actions and measures in the area of housing and social infrastructure that contribute to affordable housing, social inclusion and regional development, while also supporting sustainability and innovation; calls on the EIB to prioritise its investments towards these goals in order to achieve better economic growth, social inclusion and regional cohesion, while also supporting the EU’s sustainability objectives; invites the Bank to focus on sustainable urban development and inclusive growth by ensuring that the EU’s housing and infrastructure needs are met for a stronger, more cohesive and prosperous Europe;

28. Emphasises that housing purchase and rental costs have surged significantly in recent years, reducing the affordability of many metropolitan areas in the EU and limiting access to housing; stresses that the EIB must play a stronger role in addressing the housing crisis; welcomes the inclusion of support for social infrastructure in the EIB Group’s eight strategic priorities for 2024-2027 and agrees that investments in energy-efficient, sustainable and accessible housing, and education within easy reach are crucial for boosting productivity and fostering strong and resilient societies; encourages the EIB to prioritise investments in housing cooperatives, energy-efficient social housing and renovation projects targeting low-income households; believes that addressing the EU’s major housing investment gaps requires overcoming both financial and non-financial investment barriers and the large-scale mobilisation of resources and capacities;

29. Welcomes that the EIB, in collaboration with the Commission, has initiated a pan-European investment platform aimed at promoting affordable and sustainable housing, combining advisory services and financing, and encourages the participants to continue this initiative;

30. Welcomes the EIB’s commitment to easing the pressure on housing markets in Europe; stresses that housing purchase and rental prices have increased significantly in recent years, reducing the affordability of many metropolitan areas in the EU and compromising access to these; emphasises that EIB analysis shows that the EU needs about 1.5 million new housing units per year to cope with demand, and that about 75 % of the EU’s building stock needs to be renovated, representing an additional 5 million units per year; welcomes the fact that the EIB supports the reconstruction of existing housing and the construction of new social and affordable accommodation; encourages the EIB to mobilise more funding for affordable housing projects among the Member States;

31. Calls for the strengthening of technical assistance and financial expertise in support of local and regional authorities, especially in areas with low investment capacity, in order to improve access to EIB funding; believes that cooperation with local authorities, local governments and civil society representatives should foster the development of social housing suitable for all, and especially for the most vulnerable citizens of the concerned Member State; is aware that the effectiveness of the EIB’s action in the housing and social infrastructure sector also depends on the removal of policy and regulatory hurdles;

32. Notes that, in 2023, the EIB signed EUR 8.3 billion in financial support for energy efficiency operations, of which 65 % was for energy efficiency in buildings; invites the EIB to prioritise long-term affordable and accessible solutions, and sustainable investments, such as energy-efficient renovations and the reuse of vacant buildings;

33. Believes that the related investments should ensure sufficient durability before any change of destination or use is authorised;

34. Invites the EIB to build on its long-standing experience as an accelerator of European investments and to also deploy its potential in the education and training and healthcare sectors, including through advisory services; calls on the Bank to strengthen support for healthcare capacities, both within and outside the EU, thus ensuring a stronger role for Europe in the world;

Support for SMEs, mid-caps, start-ups, scale-ups and businesses in rural and remote areas, the Capital Markets Union and the role of the EIF

35. Highlights that SMEs, start-ups and scale-ups are vital for the EU’s economy; notes that these businesses encounter significant hurdles in accessing financing, markets and talent, which constrains their growth; asserts that business growth, dynamism and public investment are essential for fostering innovation, competitiveness and productivity; encourages the EIB Group to continue addressing these challenges, notably in the current geopolitical context, through customised financial programmes, risk-sharing mechanisms and targeted financial instruments, while ensuring the additionality of public resources for these purposes and avoiding the crowding out of private capital; notes that different instruments to support lending to businesses can be combined depending on the context, and that different EIB Group instruments target different market failures and firm types; stresses the need to provide technical assistance to SMEs before project approval, in order to improve access to EIB funding;

36. Notes that the development of a well-functioning securitisation market can be a key first step towards establishing a strong Capital Markets Union (CMU); believes that the CMU will benefit consumers and SMEs by offering high-yield investment opportunities in the real economy and will eventually boost the venture capital market by improving access to diversified funding sources; believes that financing European scale-ups with European capital should be a priority, as exemplified by the European Tech Champions Initiative, which was launched in February 2023 to finance promising European tech companies and prevent the sale of businesses to foreign investors because of the lack of European investment; encourages the EIF to explore establishing the second generation of this initiative; observes that the European Tech Champions Initiative is complemented by the European Scale-up Initiative, which aims to provide crucial financing for Europe’s high-tech companies in their late-stage development; notes that these investments should be in line with policy actions at EU and national level; is aware of the comparative weaknesses of the European venture capital market in respect of other competitors’ markets, and that European start-ups and scale-ups are often obliged to relocate or search for foreign buyers or rely on sources of financing other than venture capital, hence less suited to high-growth;

37. Acknowledges the mission of the EIF to support access to financing for European micro, small and medium-sized enterprises; believes that the EIF should significantly step up its activities for the development of the European venture capital ecosystem, while maintaining a geographical balance; calls for the EIF’s activities to be strengthened, enabling increased investment in high-growth sectors, enhancing risk-sharing between public and private investors, and promoting innovation throughout Europe; considers it necessary to monitor the rate of increase in support for micro, small and medium-sized enterprises;

38. Encourages the EIF to further develop its monitoring tools to better track the long-term performance of venture capital funds and SME financing operations, especially in terms of job creation, innovation diffusion and regional impact; stresses also the critical role of large European companies in Europe’s economic structure, particularly those operating in essential sectors such as energy, defence and infrastructure; calls for a balanced approach that ensures the EIB continues to support large European companies in securing investment capital for major projects and research and development initiatives, thereby enhancing Europe’s global competitiveness;

39. Praises the support provided by the EIB Group to about 400 000 SMEs and mid-caps in 2023 alone, with EUR 31.1 billion in financing, including loans and guarantees for businesses (of which EUR 14.9 billion was deployed by the EIF), resulting in the mobilisation of over EUR 134 billion, and notes that it teamed up with almost 300 partner institutions across Europe to this end; encourages the EIB to continue its role in improving access to financing for SMEs, which often face barriers to funding from traditional financial institutions, providing targeted financing to ensure sufficient resources to grow and thrive; welcomes and calls for the constant expansion of the number of partner institutions to reach a wide geographical and sectoral coverage;

40. Recalls that the deployment of the European Guarantee Fund ended in 2023 and that its disbursements to help SMEs to recover from the adverse impact of the pandemic reached approximately 200 000 SMEs across the EU; recalls the concerns expressed in previous resolutions about the transparency of the decision-making processes and information about final recipients;

41. Welcomes that EIF measures on anti-money-laundering, countering the financing of terrorism and tax avoidance encompass risk assessments for products and transactions, thorough due diligence on counterparties and screening the ownership structures and key individuals against sanctions and adverse media; welcomes the introduction of mandatory staff training and the conclusion of an agreement with the Financial Intelligence Unit of Luxembourg on the reporting of and follow-up on any suspicious transactions detected;

Key policy areas of cohesion, climate action and environmental sustainability, and digitalisation

42. Appreciates that in its 2021-2027 Cohesion Orientation, the EIB committed to dedicating at least 40 % of its total financing in the EU between 2022 and 2024 to projects in cohesion regions; notes that, in 2023, such financing amounted to EUR 29.8 billion, equivalent to 45 % of the Bank’s total signatures in the EU; underlines that the share of EIB financing allocated to less developed regions increased from 24 % in 2022 to 26 % in 2023, totalling EUR 17.2 billion, well above the 21 % target set in the EIB Cohesion Orientation for 2023; reiterates the call for the EIB to continue monitoring, analysing and addressing the shortcomings that prevent certain regions or countries from fully benefiting from the EIB’s financial support and assistance;

43. Acknowledges the role played by the EIF in contributing to economic and social cohesion in the Union through a wide range of financial instruments; notes that EIF commitments to credit guarantees, venture capital and private equity investments for cohesion regions in 2023 stood at EUR 6.8 billion, representing 48 % of total EIF commitments in the EU; notes that in 2023, the EIF was especially active in Central and Eastern Europe;

44. Notes that the EIB Environmental and Social Sustainability Framework includes revised environmental and social policy and standards promoting an integrated approach to impact and risk assessment and management;

45. Acknowledges that over the past 15 years, EIB Advisory has supported over 1 000 projects in cohesion regions; calls on the Bank to actively promote financing opportunities in less developed and transition regions, including by boosting the presence of advisory services in EIB local offices; considers it necessary to also take into account the geographical distribution of EIB support for increasing social cohesion;

46. Highlights the EIB’s initiatives in cohesion regions to support the healthcare sector, including the HERA Invest programme, a EUR 100 million guarantee established with the Commission to support research and development in addressing pressing cross-border health threats; encourages the EIB to promote targeted investments in key systemic enablers such as healthcare, education, social housing, digital connectivity and local financing for cities and regions, ensuring a better geographical balance, either through direct lending or financial instruments, and to leverage synergies between EU grants and EIB loans to enhance cross-border rail connectivity, which is crucial for better integration within the EU single market;

47. Acknowledges the EIB’s strategic orientation since 2019 to be the EU Climate Bank; emphasises that in 2023 alone, the EIB signed EUR 41.8 billion in financing for climate action and EUR 25.1 billion for environmental sustainability (EUR 35.1 billion and EUR 15.9 billion respectively in 2022); notes that EIB financing for climate change adaptation totalled EUR 2.7 billion in 2023, corresponding to 6.4 % of its total climate action (compared to EUR 1.9 billion, or 5.4 %, in 2022); welcomes that climate action and environmental sustainability financing, as a whole, accounted for 60 % of EIB financing in 2023; calls for maintaining technological neutrality in its investment strategy in climate and sustainable financing;

48. Recalls that the EIB Energy Lending Policy (ELP), adopted in 2019, established a ‘phase out support to energy projects reliant on unabated fossil fuels’ and introduced a transition period during which the Bank could continue to approve projects already under appraisal, but the Board of Directors did not approve any such project after the end of 2021; remarks that, in 2022, the EIB Group introduced a temporary and exceptional extension of the exemptions to the Paris Alignment for Counterparties Framework (so-called PATH) in support of REPowerEU, to cover projects with high innovative content and renewable energy projects and electric vehicle charging infrastructure in the EU; observes that, in 2023, the EIB Group decided to apply the same temporary and exceptional extension also for projects in the spirit of REPowerEU outside the EU; notes that such temporary and exceptional extensions are expected to run until 2027, subject to a Climate Bank roadmap review expected in 2025; recalls its previous resolution [3] and maintains that PATH offers the appropriate framework for supporting counterparties on their pathways to align with the Paris Agreement objectives; emphasises that the EIB is expected to intensify its engagement with all of its clients to foster the development of their decarbonisation plans;

49. Notes the EIB Group Climate Bank Roadmap mid-term review, approved in 2023, which includes a simplified Paris Alignment framework for microenterprises, the revision of the PATH framework’s disclosure requirements for financial intermediaries and a temporary extension of the list of countries in which the EIB can act as a sole financier of climate adaptation projects due to their particular vulnerability to climate change;

50. Welcomes the EIB Group’s inclusion of agriculture and bioeconomy among its key priorities, but notes that agriculture, fisheries and forestry received only 1.1 % of the EIB’s lending stock in 2023; considers it important for the EIB to programme significant amounts for financing the agricultural sector and through simplified procedures;

51. Underlines that agriculture is a key driver of growth and development in rural areas; acknowledges the increasing challenges faced by the agricultural sector and the need for EU farmers to adapt to the European Green Deal objectives, cope with the energy crisis and manage rising inflation; calls on the EIB Group to enhance support and foster innovation for this vital sector, which plays a significant role in ensuring food security, leveraging the EU’s One Health approach by integrating human, animal, plant and environmental health to create sustainable, resilient and productive agri-food systems; highlights the financial challenges faced by farmers, particularly young and small operators, noting that farmers and the enterprises in this sector experience lower success rates when applying for financing;

52. Stresses that EIB support should have a just transition approach in order to achieve sustainable agriculture that protects the environment, human health and animal welfare, while improving farmers’ livelihoods, in particular for small and medium-sized farms; maintains that supporting rural areas is essential for promoting balanced and inclusive development, generational renewal and equal access to financial opportunities for women and men; reiterates its call on the EIB Group to increase its involvement in the agricultural sector by improving access to funding;

53. Appreciates that the EIB Group is one of the key supporters of digitalisation in the EU, particularly in financing digital infrastructure and supporting innovative digital start-ups; encourages the EIB to enhance its support for digital networks strengthening the EU’s technological autonomy and innovation in key technologies;

54. Believes that reducing digital inequality and preventing social exclusion requires significant public investment in telecommunications infrastructure, particularly in rural areas; encourages the EIB to support European citizens in acquiring adequate digital literacy to fully participate in society, with a special focus on the elderly and those with disabilities;

55. Recognises the critical role of the cybersecurity sector in protecting businesses and governments from advanced digital threats and foreign influence; welcomes the increase in security investments from EUR 6 billion to EUR 8 billion, financed through the SESI to address security challenges, including those in the New Space industry;

56. Welcomes the EIB’s focus on gender equality and women’s economic empowerment, resulting in a total of EUR 5.8 billion in investment in this field in 2023 (compared to EUR 5.1 billion in 2022); believes that the EIB could further increase microfinance loans to women-led businesses, which still face discrimination in access to financing;

57. Highlights that the security of supply of critical raw materials is crucial for both the green and digital transitions, as well as for the defence sector and the EU industrial base in general; calls on the EIB to increase investments in the CRM sector to help diversify the supply of both primary and secondary raw materials and to develop circular economy solutions, in particular R&D for alternative materials, such as bio-based materials; welcomes, in this regard, the adoption on 21 March 2025 of a new CRM strategic initiative, with an expected EUR 2 billion in financing for CRM investment in 2025, a new CRM Task Force and a dedicated one-stop shop to build and manage a pipeline of CRM operations and advisory activities and increased technical expertise and partnerships;

The EIB’s activities outside the EU

58. Underlines that in EIB Global’s second year of existence, it provided financing amounting to EUR 8.4 billion (compared to EUR 9.1 billion in 2022); notes that, as EIB Global financing is limited to 50 % of the total cost of a project, investment co-financing with development finance institutions and multilateral development banks is recurring; calls on the EIB and the Commission to invest in internal audit and independent control functions to guarantee the integrity and soundness of all operations;

59. Recalls that EIB Global is among the key implementing actors of the European Global Gateway and, as such, is expected to apply the highest standards of transparency and accountability;

60. Notes the adoption by the EIB Board of Directors of the EIB Global Strategic Roadmap and its commitment to respect and promote human rights and the rule of law in the projects it supports;

61. Highlights the importance of ensuring that the EIB Group’s interventions in Ukraine are guided by the priorities for the country’s reconstruction agreed with the EU, and are consistent with the methods and frameworks laid out in the Ukraine Plan and with the provisions of the EU Treaties; notes that the EIB is further enhancing its efforts to address fraud and corruption in relation to the EIB Group projects implemented in Ukraine; calls for the continued application of appropriate conditionality on the financial assistance provided to Ukraine, with a focus on ensuring effective oversight mechanisms, such as access to information and premises, and the monitoring of visits, and calls for conditionality to be extended to all non-EU countries for which it provides financing;

62. Urges the strengthening of the administrative and audit capacity of Ukrainian authorities responsible for implementing, monitoring, controlling and supervising funded actions, in particular for the prevention of fraud, corruption, conflicts of interest and irregularities; reiterates that the EIB should have clear and unrestricted oversight at all times;

63. Believes that a greater role for the EIB will bring added value for both the reconstruction of Ukraine and the enlargement process and for prospective partnerships under the EU’s Global Gateway agenda and neighbourhood policy and in support of the Sustainable Development Goals; encourages the Commission to maximise cooperation with the EIB to leverage the EU’s strategic autonomy, particularly on energy and raw materials;

64. Welcomes the adoption, in 2024, of the Ukraine Facility, which follows the EIB’s EU for Ukraine (EU4U) initiative and establishes a support mechanism based on EU budget resources; encourages the Member States to ensure that solid support continues to be provided to the country, in line with its needs;

65. Stresses that, in order to support Ukraine, the EIB has built up a loan portfolio of over EUR 7 billion since the beginning of the conflict with Russia in 2014; underlines that, as of 31 December 2023, the EIB’s exposure (disbursed and not yet disbursed) amounted to EUR 5.750 billion, predominantly covered by EU guarantees under the External Lending Mandate; notes that, in addition, the Bank also granted financial guarantees on exposures to counterparties located in Ukraine, fully covered by EU Comprehensive Guarantees, for a signed amount of EUR 388.7 million at the end of 2023 (compared to EUR 478.8 million at the end of 2022);

66. Notes the growing financial engagement of the EIB in Ukraine; calls on the Bank to provide regular, detailed updates to the budgetary authority and relevant audit bodies regarding the disbursement and implementation of funds covered by EU guarantees;

67. Underlines the disproportionate impact of the Russian war of aggression against Ukraine on eastern EU regions bordering Russia and Belarus; draws attention to the costs borne by these regions and Member States as a result of their shared border with hostile neighbouring countries, notably their need to increasingly redirect public funds towards security, defence and preparedness, while dealing with severely reduced resources due to a disruption in economic activities, cross-border trade and other exchanges, and in cohesion programmes; calls on the EIB to take this into account in its financing decisions;

68. Welcomes the significant investments made in Moldova to support economic resilience, improving energy security, enhancing infrastructure and aiding the country’s progress towards EU integration; acknowledges that in the Western Balkans, EIB Global invested EUR 1.2 billion in 2023, plus an additional EUR 700 million to enhance road safety and improve railway networks; welcomes the adoption of the Reform and Growth Facility for the Western Balkans in 2024 and the Reform and Growth Facility for Moldova approved by the European Parliament;

69. Recognises the role played by the EIB in supporting the Western Balkans on their path to Union membership, in line with the EU’s enlargement policy; observes that EIB Global invested EUR 1.2 billion in the Western Balkans in 2023, mobilising a total of over EUR 6 billion in investments; notes that the majority of the financing was allocated to sustainable connectivity, followed by credit lines for SMEs, infrastructure projects in the healthcare, education and skills sectors, and water supply and sanitation;

70. Asks the EIB to collaborate with other bilateral and multilateral institutions to develop and apply common methodologies for development impact analysis, with a view to ensuring added value and long-term, positive impacts;

EIB accountability architecture

71. Recalls that internal oversight at the EIB is headed by the Inspectorate General (IG), which comprises three accountability-related divisions – operations evaluation, the complaints mechanism and fraud investigation – that hold complementary roles, contributing to the consistent handling of allegations and complaints;

72. Observes that the EIB Complaints Mechanism (EIB-CM) handled a total of 104 cases in 2023 (97 in 2022); notes that 60 new complaints were received in 2023 (54 in 2022), of which 44 were considered admissible and 29 were related to EIB-financed projects, of which 27 were located outside Europe;

73. Notes that the EIB Procurement Complaints Committee is the independent EIB committee handling complaints about project procurement procedures relating to EIB-financed projects outside the EU;

74. Welcomes the efforts of the Investigative Division (IG/IN) to cooperate and coordinate efforts with the other components of the EU’s anti-fraud architecture, in particular the European Anti-Fraud Office (OLAF) and the European Public Prosecutor’s Office (EPPO), which received 37 % of the referrals made for investigations in 2023 (27 cases out of 74); encourages the IG/IN to strengthen its cooperation with all components of the EU’s anti-fraud architecture;

75. Notes that the IG/IN carries out proactive fraud detection activities using the Fraud and Integrity Risk Scoring Tool and the Corruption Risk In Procurement robot and that, in 2023, 24 reviews identified targets for three full and in-depth proactive integrity reviews; invites the Bank to assess how these digital tools could be further enhanced to support transparency and financial accountability;

76. Regrets the fact that, despite repeated calls by Parliament, the IG/IN annual report does not provide adequate information about the financial magnitude of the cases it handles, the funds or mandates affected, the kinds of projects concerned, the mitigating measures adopted, the role of the EIB services and of the intermediaries or partners in the cases, or even the Member States concerned; invites the representatives of the IG/IN to increase the level of engagement, interactions and transparency with Parliament, especially regarding the control of the financial activities; reiterates its call to the IG/IN to go beyond providing a mere narrative description of a few case studies, and to periodically report valuable insights into the extent to which financial interests are safeguarded; suggests that the IG/IN adopt a reporting model similar to those used by other investigative bodies, such as EPPO and OLAF, where a proper balance between transparency and duty of confidentiality or of professional secrecy is pursued;

77. Is aware that the EIB Exclusion Policy provides for an autonomous exclusion process that is not fully equivalent to the Commission’s Early Detection and Exclusion System in terms of decision-making standards, results and remedies; reiterates its call on the EIB Group and the Commission to cooperate in identifying the potential gaps and proposing remedies, including an expedited procedure to enforce EIB exclusion decisions via the Early Detection and Exclusion System; observes that in 2023, exclusion proceedings based on IG/IN findings excluded five companies from participating in any EIB-financed activity for a period of five years;

78. Welcomes the approval, in 2023, of the EIB Group’s Internal Control Framework Policy; acknowledges the results of the group alignment process between the EIB and the EIF insofar as they reflect the different business models and governance structures of the two entities; refers, in particular, to the Audit Committee’s remarks that both internal audit and the internal control framework should evolve to become group functions;

79. Notes that the EIB’s independent external auditor is the third line of defence; points out that the regular rotation of auditors and assignments allows fresh perspectives, and therefore observes that the EIB external auditor should be rotated periodically, yet its mandate was extended until 2027 and it has been the auditor of the EIB Group since 2009;

80. Appreciates that the EIB Group Risk Management Framework and EIB Group’s semi-annual Risk Management Disclosure Reports are effective and are aligned with the requirements and technical standards of the European Banking Authority;

81. Stresses that, in 2023, despite difficult market conditions, the EIB’s portfolio continued to exhibit very low levels of non-performing exposures (NPEs); takes the view that even if a significant portion of the Bank’s loan portfolio benefits from credit enhancements or from EU Member State guarantees, the high quality of the EIB’s portfolio results from the diligent implementation of very effective EIB lending policies;

82. Highlights that the EIB does not fall within the scope of application of the EU’s legislation applicable to credit institutions, in particular the Capital Requirements Regulation [4] and Directive [5] (CRR, CRD), thus the Bank is entitled to determine its capital and liquidity requirements in a manner that is adequate and appropriate to its activities, its mission and the market conditions; points out that the EIB Group is committed to conform to the best banking and market practices and can determine their applicability in line with the proportionality principle; stresses that the implementation of these norms should not create unwarranted burden; welcomes the fact that the EIB Group voluntarily performed the Review and Evaluation Process; points out that this should be in line with the EIB’s governance structure and mission;

83. Understands that, in line with the EU’s evolving needs, the EU institutions approved, in 2024, the change in statute proposed by the EIB Board of Governors by amending the statutory limit on its gearing ratio [6] and raising it from 250 % to 290 %, to enable the EIB to invest more without increasing its equity base;

84. Notes that the amended gearing ratio paves the way for increased risk-taking; acknowledges that investments in renewable energy, sustainable infrastructure and innovative technologies are crucial for the EU’s competitiveness, but often carry greater risk because of the uncertainty of returns; points out that increased risk-taking may increase the volatility of the EIB’s returns, but observes that the EIB maintains capital buffers that would support expanded risk activities;

85. Is alarmed by the situation of Northvolt AB, a battery manufacturer considered pivotal in the green transition; stresses that Northvolt has benefited from a substantial EIB lending package of slightly over EUR 942.6 million as part of the debt financing to expand a gigafactory site; notes that Northvolt filed for bankruptcy in March 2025; calls on the EIB to provide details about the evaluation and decision-making process to fund Northvolt AB and the causes that led to the failure of the project;

86. Stresses that the expansion of the gigafactory site was expected to increase the annual output capacity for battery production and was of strategic importance for global competitiveness and was consistent with the EU’s strategies in the sector;

87. Calls on the Commission and the EIB Board of Directors to launch an in-depth internal review without undue delay to verify the financial damage, the reasons for and the background to the failure of this flagship project and to learn from this experience in order to prevent the recurrence of a similar situation or enable the early detection thereof;

88. Maintains that the greatest added value of EU support lies in fostering higher-risk investments in innovative projects, scaling up EU strategic goals and enabling long-term transition projects that cannot get funding from the private sector; believes that to effectively pursue its targets in innovation and competitiveness, the InvestEU programme should focus on financing higher-risk and more scale-up investment and that the EIB Group should take on more and larger high-risk projects, which should involve primarily and preferentially European investors, combining a more risk-absorption-oriented deployment of InvestEU resources with an equivalent orientation in the use of the EIB Group’s own financial resources; urges the EIB to introduce stricter conditions to prevent EU public financing from being used to subsidise companies relocating production outside Europe, ensuring that all EIB-funded projects contribute to long-term European industrial resilience;

89. Is aware that members of the EIB’s Management Committee are often civil servants in their countries of origin before beginning their terms at the EIB, which typically last for two to six years, and that they are therefore entitled to pursue professional development opportunities subject to certain conditions during the cooling-off period (which has been extended to a period of 24 months after the end of their term at the EIB); notes that Management Committee members are asked to inform the Ethics and Compliance Committee and seek approval as soon as possible for any negotiations regarding prospective employment;

90. Strongly echoes Parliament’s repeated calls to strengthen the mechanism to prevent conflicts of interest within the EIB and to improve the handling of such cases, and to better define the terms under which EIB vice-presidents can participate in decisions about operations in their countries of origin, and insists that these matters be addressed in a future revision of the Management Committee code of conduct;

91. Highlights that on 31 October 2023, the European Ombudsman ruled in Case 611/2022/KR that a former vice-president had participated in approving financing agreements between the EIB and a national promotional bank [7] in his country of origin just weeks before becoming the Chief Executive Officer of that national promotional bank, despite the EIB’s Chief Compliance Officer advising against such actions during the appointment process; understands that this case predates the entry into force of the current Management Committee code of conduct, which now includes specific provisions regarding the prospective employment of its members; notes that, in the future review of the rules applicable to its Ethics and Compliance Committee, the EIB has committed to consider the European Ombudsman recommendation to make public the Committee’s decisions;

92. Observes that mitigating measures, such as ring-fencing and cooling-off periods, are the most common precautionary clauses to be used when handling a revolving-doors case and understands that such measures are implemented and are complied with by the members of the Management Committee, including those recently reported on in the media;

93. Shares the view of the European Ombudsman that the role of the EIB Ethics and Compliance Committee should be strengthened when it comes to overseeing the intended new jobs of Management Committee members and that it should be able to impose and enforce risk-mitigating measures; understands that the role of the Ethics and Compliance Committee has become more prominent in recent years and that internal discussions are ongoing on how to enhance its efficiency;

94. Invites the Bank to boost the participation of European companies in procurement processes launched for projects financed by the EIB; encourages the Bank to advise borrowers to prioritise eligibility for European companies in order to strengthen European competitiveness;

95. Reiterates its call on the EIB to ensure proper geographical representation, including at middle and senior management levels, and calls on it to publish an annual breakdown of the gender and nationality for middle and senior management positions;

Scrutiny, transparency and oversight

96. Strongly regrets the fact that the European Court of Auditors (ECA) still lacks full access to all data relating to EIB operations; acknowledges that not all the activities of the EIB are directly financed by the EU and, therefore, not all activities are automatically accessible to the ECA; insists that the ECA should have access to the necessary information to comprehensively and exhaustively assess all EIB operations involving EU funds, including those conducted through financial intermediaries, designed to implement EU policies; calls on the ECA to fully scrutinise, to the best of its abilities, all operations involving the EU budget to any degree;

97. Observes that the main relevant audit tasks are entrusted to the EIB Audit Committee, which is a fully independent body; believes that the participation of qualified external representatives in specific Audit Committee tasks could enhance the objectivity of the Audit Committee’s analyses;

98. Notes that the EIB’s Transparency Policy strikes a compromise between the principle of openness and the need to safeguard sensitive information; observes that the policy indicates what information should be published proactively and when – stipulating, for instance, that project summaries should be published at least three weeks before the project’s financing is considered for approval by the EIB Board of Directors – and sets out the relevant derogations; calls for these summaries to provide meaningful information to stakeholders;

99. Notes that in 2023, 449 projects were approved by the EIB Board of Directors and that almost all (94 %) of the project summaries were published, in the majority (57 %) of cases before approval; observes that all EIB operations conducted through financial intermediaries are published on the EIB’s website and that the EIB provides details on request;

100. Recalls that all EIB documents are accessible to the public in line with the presumption in favour of disclosure; emphasises that all applicants should be informed in advance about public access to documents, and any refusals should be based solely on specified exceptions; stresses that the EIB should consider publishing, in a timely manner, information regarding the rationale and context for projects and the explanation of their alignment with and contribution to EU policy goals; calls on the EIB to systematically publish audit results of its largest financial operations, ensuring independent scrutiny of its risk management and impact assessments; expects the EIB to limit non-disclosure to the applicable exceptions listed in Regulation (EC) No 1049/2001 [8] and Regulation (EC) No 1367/2006 [9]; calls for the full implementation of the Ombudsman’s recommendations issued following its inquiries into EIB disclosure policy and related requests for access to documents;

101. Recalls that all recipients of EU funding have a general obligation to acknowledge its origin and ensure the visibility of any EU funding received; calls on the EIB Group to ensure that final recipients comply with the visibility criteria of the EU’s financial support;

102. Highlights that the Bank is working to reduce the time needed to bring a product from conception to market availability (time to market) by fully digitising its project cycles; calls for the Bank to intensify its efforts in the digitalisation of its operations;

103 Reiterates its call on the EIB to strengthen and fully implement its policy on tax fraud, evasion and avoidance, including by refraining from funding beneficiaries or financial intermediaries which have been found to be, or are at high risk of being, involved in such practices;

104. Reiterates that more structured dialogue between Parliament and the EIB would be enhanced by the adoption of a memorandum of cooperation; praises, in this connection, the EIB’s unprecedented cooperation with Parliament for the preparation of this resolution, noting that it is a tangible expression of openness and transparency;

Follow-up on Parliament’s recommendations

105. Urges the EIB to continue reporting on the status of previous recommendations issued by Parliament, particularly regarding the outcomes achieved and the impact of the actions taken to implement its priorities and the EU’s policies, especially as regards:

(a) impact (economic, environmental and social) of its investment strategy and results achieved in contributing to the balanced and steady development of the internal market in the interests of the Union;

(b) actions adopted to enhance the prevention and countering of conflicts of interest, fraud, corruption and other potential forms of misconduct;

(c) new measures to strengthen transparency;

(d) measures to strengthen support for SMEs and eligible economic operators during the implementation of EU policies;

(e) follow-up on the calls and requests adopted via the present resolution;

°

° °

106. Instructs its President to forward this resolution to the Council and the Commission, and asks that the Council and the EIB Board of Directors hold a debate on Parliament’s positions presented herein.

MIL OSI Europe News –

April 24, 2025

MIL-OSI Europe: REPORT on discharge in respect of the implementation of the budget of the EU joint undertakings for the financial year 2023 – A10-0056/2025

Source: European Parliament

1. PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION

on discharge in respect of the implementation of the budget of the Clean Aviation Joint Undertaking for the financial year 2023

(2024/2031(DEC))

The European Parliament,

– having regard to the final annual accounts of the Clean Aviation Joint Undertaking for the financial year 2023,

– having regard to the Court of Auditors’ annual report on the EU Joint Undertakings for the financial year 2023, together with the Joint Undertakings’ replies [1],

– having regard to the statement of assurance [2] as to the reliability of the accounts and the legality and regularity of the underlying transactions provided by the Court of Auditors for the financial year 2023, pursuant to Article 287 of the Treaty on the Functioning of the European Union,

– having regard to the Council’s recommendation of 17 February 2025 on discharge to be given to the Joint Undertaking in respect of the implementation of the budget for the financial year 2023 (05757/2025 – C10‑0025/2025),

– having regard to Article 319 of the Treaty on the Functioning of the European Union,

– having regard to Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012 [3], and in particular Article 71 thereof,

– having regard to Regulation (EU, Euratom) 2024/2509 of the European Parliament and of the Council of 23 September 2024 on the financial rules applicable to the general budget of the Union [4], and in particular Article 71 thereof,

– having regard to Council Regulation (EU) 2021/2085 of 19 November 2021 establishing the Joint Undertakings under Horizon Europe and repealing Regulations (EC) No 219/2007, (EU) No 557/2014, (EU) No 558/2014, (EU) No 559/2014, (EU) No 560/2014, (EU) No 561/2014 and (EU) No 642/2014 [5], and in particular Article 26 thereof,

– having regard to Commission Delegated Regulation (EU) 2019/887 of 13 March 2019 on the model financial regulation for public-private partnership bodies referred to in Article 71 of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council [6],

– having regard to Rule 102 of and Annex V to its Rules of Procedure,

– having regard to the opinion of the Committee on Transport and Tourism,

– having regard to the report of the Committee on Budgetary Control (A10-0056/2025),

1. Grants the Executive Director of the Clean Aviation Joint Undertaking discharge in respect of the implementation of the Joint Undertaking’s budget for the financial year 2023;

2. Sets out its observations in the resolution below;

3. Instructs its President to forward this decision and the resolution forming an integral part of it to the Executive Director of the Clean Aviation Joint Undertaking, the Council, the Commission and the Court of Auditors, and to arrange for their publication in the Official Journal of the European Union (L series).

2. PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION

on the closure of the accounts of the Clean Aviation Joint Undertaking for the financial year 2023

(2024/2031(DEC))

The European Parliament,

– having regard to the final annual accounts of the Clean Aviation Joint Undertaking for the financial year 2023,

– having regard to the Court of Auditors’ annual report on the EU Joint Undertakings for the financial year 2023, together with the Joint Undertakings’ replies [7],

– having regard to the statement of assurance [8] as to the reliability of the accounts and the legality and regularity of the underlying transactions provided by the Court of Auditors for the financial year 2023, pursuant to Article 287 of the Treaty on the Functioning of the European Union,

– having regard to Article 319 of the Treaty on the Functioning of the European Union,

– having regard to Rule 102 of and Annex V to its Rules of Procedure,

– having regard to the opinion of the Committee on Transport and Tourism,

– having regard to the report of the Committee on Budgetary Control (A10-0056/2025),

1. Approves the closure of the accounts of the Clean Aviation Joint Undertaking for the financial year 2023;

2. Instructs its President to forward this decision to the Executive Director of the Clean Aviation Joint Undertaking, the Council, the Commission and the Court of Auditors, and to arrange for its publication in the Official Journal of the European Union (L series).

3. PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION

on discharge in respect of the implementation of the budget of the Circular Bio-based Europe Joint Undertaking for the financial year 2023

(2024/2031(DEC))

The European Parliament,

– having regard to the final annual accounts of the Circular Bio-based Europe Joint Undertaking for the financial year 2023,

– having regard to the Court of Auditors’ annual report on the EU Joint Undertakings for the financial year 2023, together with the Joint Undertakings’ replies [13],

– having regard to the statement of assurance [14] as to the reliability of the accounts and the legality and regularity of the underlying transactions provided by the Court of Auditors for the financial year 2023, pursuant to Article 287 of the Treaty on the Functioning of the European Union,

– having regard to the Council’s recommendation of 17 February2025 on discharge to be given to the Joint Undertaking in respect of the implementation of the budget for the financial year 2023 (05757/2025 – C10‑0025/2025),

– having regard to Article 319 of the Treaty on the Functioning of the European Union,

– having regard to Rule 102 of and Annex V to its Rules of Procedure,

– having regard to the opinion of the Committee on Transport and Tourism,

– having regard to the report of the Committee on Budgetary Control (A10-0056/2025),

1. Grants the Executive Director of the Circular Bio-based Europe Joint Undertaking discharge in respect of the implementation of the Joint Undertaking’s budget for the financial year 2023;

2. Sets out its observations in the resolution below;

3. Instructs its President to forward this decision and the resolution forming an integral part of it to the Executive Director of the Circular Bio-based Europe Joint Undertaking, the Council, the Commission and the Court of Auditors, and to arrange for their publication in the Official Journal of the European Union (L series).

4. PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION

on the closure of the accounts of the Circular Bio-based Europe Joint Undertaking for the financial year 2023

(2024/2031(DEC))

The European Parliament,

– having regard to the final annual accounts of the Circular Bio-based Europe Joint Undertaking for the financial year 2023,

– having regard to the Court of Auditors’ annual report on the EU Joint Undertakings for the financial year 2023, together with the Joint Undertakings’ replies [19],

– having regard to the statement of assurance [20] as to the reliability of the accounts and the legality and regularity of the underlying transactions provided by the Court of Auditors for the financial year 2023, pursuant to Article 287 of the Treaty on the Functioning of the European Union,

– having regard to Article 319 of the Treaty on the Functioning of the European Union,

– having regard to Rule 102 of and Annex V to its Rules of Procedure,

– having regard to the opinion of the Committee on Transport and Tourism,

– having regard to the report of the Committee on Budgetary Control (A10-0056/2025),

1. Approves the closure of the accounts of the Circular Bio-based Europe Joint Undertaking for the financial year 2023;

2. Instructs its President to forward this decision to the Executive Director of the Circular Bio-based Europe Joint Undertaking, the Council, the Commission and the Court of Auditors, and to arrange for its publication in the Official Journal of the European Union (L series).

5. PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION

on discharge in respect of the implementation of the budget of the Clean Hydrogen Joint Undertaking for the financial year 2023

(2024/2031(DEC))

The European Parliament,

– having regard to the final annual accounts of the Clean Hydrogen Joint Undertaking for the financial year 2023,

– having regard to the Court of Auditors’ annual report on the EU Joint Undertakings for the financial year 2023, together with the Joint Undertakings’ replies [25],

– having regard to the statement of assurance [26] as to the reliability of the accounts and the legality and regularity of the underlying transactions provided by the Court of Auditors for the financial year 2023, pursuant to Article 287 of the Treaty on the Functioning of the European Union,

– having regard to the Council’s recommendation of 17 February2025 on discharge to be given to the Joint Undertaking in respect of the implementation of the budget for the financial year 2023 (05757/2025 – C10‑0025/2025),

– having regard to Article 319 of the Treaty on the Functioning of the European Union,

– having regard to Rule 102 of and Annex V to its Rules of Procedure,

– having regard to the opinion of the Committee on Transport and Tourism,

– having regard to the report of the Committee on Budgetary Control (A10-0056/2025),

1. Grants the Executive Director of the Clean Hydrogen Joint Undertaking discharge in respect of the implementation of the Joint Undertaking’s budget for the financial year 2023;

2. Sets out its observations in the resolution below;

3. Instructs its President to forward this decision and the resolution forming an integral part of it to the Executive Director of the Clean Hydrogen Joint Undertaking, the Council, the Commission and the Court of Auditors, and to arrange for their publication in the Official Journal of the European Union (L series).

6. PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION

on the closure of the accounts of the Clean Hydrogen Joint Undertaking for the financial year 2023

(2024/2031(DEC))

The European Parliament,

– having regard to the final annual accounts of the Clean Hydrogen Joint Undertaking for the financial year 2023,

– having regard to the Court of Auditors’ annual report on the EU Joint Undertakings for the financial year 2023, together with the Joint Undertakings’ replies [31],

– having regard to the statement of assurance [32] as to the reliability of the accounts and the legality and regularity of the underlying transactions provided by the Court of Auditors for the financial year 2023, pursuant to Article 287 of the Treaty on the Functioning of the European Union,

– having regard to Article 319 of the Treaty on the Functioning of the European Union,

– having regard to Rule 102 of and Annex V to its Rules of Procedure,

– having regard to the opinion of the Committee on Transport and Tourism,

– having regard to the report of the Committee on Budgetary Control (A10-0056/2025),

1. Approves the closure of the accounts of the Clean Hydrogen Joint Undertaking for the financial year 2023;

2. Instructs its President to forward this decision to the Executive Director of the Clean Hydrogen Joint Undertaking, the Council, the Commission and the Court of Auditors, and to arrange for its publication in the Official Journal of the European Union (L series).

7. PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION

on discharge in respect of the implementation of the budget of the Europe’s Rail Joint Undertaking for the financial year 2023

(2024/2031(DEC))

The European Parliament,

– having regard to the final annual accounts of the Europe’s Rail Joint Undertaking for the financial year 2023,

– having regard to the Court of Auditors’ annual report on the EU Joint Undertakings for the financial year 2023, together with the Joint Undertakings’ replies [37],

– having regard to the statement of assurance [38] as to the reliability of the accounts and the legality and regularity of the underlying transactions provided by the Court of Auditors for the financial year 2023, pursuant to Article 287 of the Treaty on the Functioning of the European Union,

– having regard to Article 319 of the Treaty on the Functioning of the European Union,

– having regard to Rule 102 of and Annex V to its Rules of Procedure,

– having regard to the opinion of the Committee on Transport and Tourism,

– having regard to the report of the Committee on Budgetary Control (A10-0056/2025),

1. Grants the Interim Executive Director of the Europe’s Rail Joint Undertaking discharge in respect of the implementation of the Joint Undertaking’s budget for the financial year 2023;

2. Sets out its observations in the resolution below;

3. Instructs its President to forward this decision and the resolution forming an integral part of it to the Interim Executive Director of the Europe’s Rail Joint Undertaking, the Council, the Commission and the Court of Auditors, and to arrange for their publication in the Official Journal of the European Union (L series).

8. PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION

on the closure of the accounts of the Europe’s Rail Joint Undertaking for the financial year 2023

(2024/2031(DEC))

The European Parliament,

– having regard to the final annual accounts of the Europe’s Rail Joint Undertaking for the financial year 2023,

– having regard to the Court of Auditors’ annual report on the EU Joint Undertakings for the financial year 2023, together with the Joint Undertakings’ replies [43],

– having regard to the statement of assurance [44] as to the reliability of the accounts and the legality and regularity of the underlying transactions provided by the Court of Auditors for the financial year 2023, pursuant to Article 287 of the Treaty on the Functioning of the European Union,

– having regard to Article 319 of the Treaty on the Functioning of the European Union,

– having regard to Rule 102 of and Annex V to its Rules of Procedure,

– having regard to the opinion of the Committee on Transport and Tourism,

– having regard to the report of the Committee on Budgetary Control (A10-0056/2025),

1. Approves the closure of the accounts of the Europe’s Rail Joint Undertaking for the financial year 2023;

2. Instructs its President to forward this decision to the Interim Executive Director of the Europe’s Rail Joint Undertaking, the Council, the Commission and the Court of Auditors, and to arrange for its publication in the Official Journal of the European Union (L series).

9. PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION

on discharge in respect of the implementation of the budget of the European High Performance Computing Joint Undertaking for the financial year 2023

(2024/2031(DEC))

The European Parliament,

– having regard to the final annual accounts of the European High Performance Computing Joint Undertaking for the financial year 2023,

– having regard to the Court of Auditors’ annual report on the EU Joint Undertakings for the financial year 2023, together with the Joint Undertakings’ replies [49],

– having regard to the statement of assurance [50] as to the reliability of the accounts and the legality and regularity of the underlying transactions provided by the Court of Auditors for the financial year 2023, pursuant to Article 287 of the Treaty on the Functioning of the European Union,

– having regard to Article 319 of the Treaty on the Functioning of the European Union,

– having regard to Council Regulation (EU) 2021/1173 of 13 July 2021 on establishing the European High Performance Computing Joint Undertaking and repealing Regulation (EU) 2018/1488 [53], and in particular Article 19 thereof,

– having regard to Rule 102 of and Annex V to its Rules of Procedure,

– having regard to the opinion of the Committee on Transport and Tourism,

– having regard to the report of the Committee on Budgetary Control (A10-0056/2025),

1. Grants the Executive Director of the European High Performance Computing Joint Undertaking discharge in respect of the implementation of the Joint Undertaking’s budget for the financial year 2023;

2. Sets out its observations in the resolution below;

3. Instructs its President to forward this decision and the resolution forming an integral part of it to the Executive Director of the European High Performance Computing Joint Undertaking, the Council, the Commission and the Court of Auditors, and to arrange for their publication in the Official Journal of the European Union (L series).

10. PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION

on the closure of the accounts of the European High Performance Computing Joint Undertaking for the financial year 2023

(2024/2031(DEC))

The European Parliament,

– having regard to the final annual accounts of the European High Performance Computing Joint Undertaking for the financial year 2023,

– having regard to the Court of Auditors’ annual report on the EU Joint Undertakings for the financial year 2023, together with the Joint Undertakings’ replies [55],

– having regard to the statement of assurance [56] as to the reliability of the accounts and the legality and regularity of the underlying transactions provided by the Court of Auditors for the financial year 2023, pursuant to Article 287 of the Treaty on the Functioning of the European Union,

– having regard to Article 319 of the Treaty on the Functioning of the European Union,

– having regard to Rule 102 of and Annex V to its Rules of Procedure,

– having regard to the opinion of the Committee on Transport and Tourism,

– having regard to the report of the Committee on Budgetary Control (A10-0056/2025),

1. Approves the closure of the accounts of the European High Performance Computing Joint Undertaking for the financial year 2023;

2. Instructs its President to forward this decision to the Executive Director of the European High Performance Computing Joint Undertaking, the Council, the Commission and the Court of Auditors, and to arrange for its publication in the Official Journal of the European Union (L series).

11. PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION

on discharge in respect of the implementation of the budget of the European Joint Undertaking for ITER and the Development of Fusion Energy for the financial year 2023

(2024/2031(DEC))

The European Parliament,

– having regard to the final annual accounts of the European Joint Undertaking for ITER and the Development of Fusion Energy for the financial year 2023,

– having regard to the Court of Auditors’ annual report on the EU Joint Undertakings for the financial year 2023, together with the Joint Undertakings’ replies [61],

– having regard to the statement of assurance [62] as to the reliability of the accounts and the legality and regularity of the underlying transactions provided by the Court of Auditors for the financial year 2023, pursuant to Article 287 of the Treaty on the Functioning of the European Union,

– having regard to Article 319 of the Treaty on the Functioning of the European Union,

– having regard to Article 106a of the Treaty establishing the European Atomic Energy Community,

– having regard to Council Decision No 2007/198/Euratom of 27 March 2007 establishing the European Joint Undertaking for ITER and the Development of Fusion Energy and conferring advantages upon it [65], and in particular Article 5 thereof,

– having regard to Commission Delegated Regulation (EU) 2019/715 of 18 December 2018 on the framework financial regulation for the bodies set up under the TFEU and Euratom Treaty and referred to in Article 70 of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council [66],

– having regard to Rule 102 of and Annex V to its Rules of Procedure,

– having regard to the opinion of the Committee on Transport and Tourism,

– having regard to the report of the Committee on Budgetary Control (A10-0056/2025),

1. Grants the Director of the European Joint Undertaking for ITER and the Development of Fusion Energy discharge in respect of the implementation of the Joint Undertaking’s budget for the financial year 2023;

2. Sets out its observations in the resolution below;

3. Instructs its President to forward this decision and the resolution forming an integral part of it to the Director of the European Joint Undertaking for ITER and the Development of Fusion Energy, the Council, the Commission and the Court of Auditors, and to arrange for their publication in the Official Journal of the European Union (L series).

12. PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION

on the closure of the accounts of the European Joint Undertaking for ITER and the Development of Fusion Energy for the financial year 2023

(2024/2031(DEC))

The European Parliament,

– having regard to the final annual accounts of the European Joint Undertaking for ITER and the Development of Fusion Energy for the financial year 2023,

– having regard to the Court of Auditors’ annual report on the EU Joint Undertakings for the financial year 2023, together with the Joint Undertakings’ replies [67],

– having regard to the statement of assurance [68] as to the reliability of the accounts and the legality and regularity of the underlying transactions provided by the Court of Auditors for the financial year 2023, pursuant to Article 287 of the Treaty on the Functioning of the European Union,

– having regard to Article 319 of the Treaty on the Functioning of the European Union,

– having regard to Article 106a of the Treaty establishing the European Atomic Energy Community,

– having regard to Rule 102 of and Annex V to its Rules of Procedure,

– having regard to the opinion of the Committee on Transport and Tourism,

– having regard to the report of the Committee on Budgetary Control (A10-0056/2025),

1. Approves the closure of the accounts of the European Joint Undertaking for ITER and the Development of Fusion Energy for the financial year 2023;

2. Instructs its President to forward this decision to the Director of the European Joint Undertaking for ITER and the Development of Fusion Energy, the Council, the Commission and the Court of Auditors, and to arrange for its publication in the Official Journal of the European Union (L series).

13. PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION

on discharge in respect of the implementation of the budget of the Global Health EDCTP3 Joint Undertaking for the financial year 2023

(2024/2031(DEC))

The European Parliament,

– having regard to the final annual accounts of the Global Health EDCTP3 Joint Undertaking for the financial year 2023,

– having regard to the Court of Auditors’ annual report on the EU Joint Undertakings for the financial year 2023, together with the Joint Undertakings’ replies [73],

– having regard to the statement of assurance [74] as to the reliability of the accounts and the legality and regularity of the underlying transactions provided by the Court of Auditors for the financial year 2023, pursuant to Article 287 of the Treaty on the Functioning of the European Union,

– having regard to Article 319 of the Treaty on the Functioning of the European Union,

– having regard to Rule 102 of and Annex V to its Rules of Procedure,

– having regard to the opinion of the Committee on Transport and Tourism,

– having regard to the report of the Committee on Budgetary Control (A10-0056/2025),

1. Grants the Executive Director of the Global Health EDCTP3 Joint Undertaking discharge in respect of the implementation of the Joint Undertaking’s budget for the financial year 2023;

2. Sets out its observations in the resolution below;

3. Instructs its President to forward this decision and the resolution forming an integral part of it to the Executive Director of the Global Health EDCTP3 Joint Undertaking, the Council, the Commission and the Court of Auditors, and to arrange for their publication in the Official Journal of the European Union (L series).

14. PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION

on the closure of the accounts of the Global Health EDCTP3 Joint Undertaking for the financial year 2023

(2024/2031(DEC))

The European Parliament,

– having regard to the final annual accounts of the Global Health EDCTP3 Joint Undertaking for the financial year 2023,

– having regard to the Court of Auditors’ annual report on the EU Joint Undertakings for the financial year 2023, together with the Joint Undertakings’ replies [79],

– having regard to the statement of assurance [80] as to the reliability of the accounts and the legality and regularity of the underlying transactions provided by the Court of Auditors for the financial year 2023, pursuant to Article 287 of the Treaty on the Functioning of the European Union,

– having regard to Article 319 of the Treaty on the Functioning of the European Union,

– having regard to Rule 102 of and Annex V to its Rules of Procedure,

– having regard to the opinion of the Committee on Transport and Tourism,

– having regard to the report of the Committee on Budgetary Control (A10-0056/2025),

1. Approves the closure of the accounts of the Global Health EDCTP3 Joint Undertaking for the financial year 2023;

2. Instructs its President to forward this decision to the Executive Director of the Global Health EDCTP3 Joint Undertaking, the Council, the Commission and the Court of Auditors, and to arrange for its publication in the Official Journal of the European Union (L series).

15. PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION

on discharge in respect of the implementation of the budget of the Innovative Health Initiative Joint Undertaking for the financial year 2023

(2024/2031(DEC))

The European Parliament,

– having regard to the final annual accounts of the Innovative Health Initiative Joint Undertaking for the financial year 2023,

– having regard to the Court of Auditors’ annual report on the EU Joint Undertakings for the financial year 2023, together with the Joint Undertakings’ replies [85],

– having regard to the statement of assurance [86] as to the reliability of the accounts and the legality and regularity of the underlying transactions provided by the Court of Auditors for the financial year 2023, pursuant to Article 287 of the Treaty on the Functioning of the European Union,

– having regard to Article 319 of the Treaty on the Functioning of the European Union,

– having regard to Rule 102 of and Annex V to its Rules of Procedure,

– having regard to the opinion of the Committee on Transport and Tourism,

– having regard to the report of the Committee on Budgetary Control (A10-0056/2025),

1. Grants the Executive Director of the Innovative Health Initiative Joint Undertaking discharge in respect of the implementation of the Joint Undertaking’s budget for the financial year 2023;

2. Sets out its observations in the resolution below;

3. Instructs its President to forward this decision and the resolution forming an integral part of it to the Executive Director of the Innovative Health Initiative Joint Undertaking, the Council, the Commission and the Court of Auditors, and to arrange for their publication in the Official Journal of the European Union (L series).

16. PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION

on the closure of the accounts of the Innovative Health Initiative Joint Undertaking for the financial year 2023

(2024/2031(DEC))

The European Parliament,

– having regard to the final annual accounts of the Innovative Health Initiative Joint Undertaking for the financial year 2023,

– having regard to the Court of Auditors’ annual report on the EU Joint Undertakings for the financial year 2023, together with the Joint Undertakings’ replies [91],

– having regard to the statement of assurance [92] as to the reliability of the accounts and the legality and regularity of the underlying transactions provided by the Court of Auditors for the financial year 2023, pursuant to Article 287 of the Treaty on the Functioning of the European Union,

– having regard to Article 319 of the Treaty on the Functioning of the European Union,

– having regard to Rule 102 of and Annex V to its Rules of Procedure,

– having regard to the opinion of the Committee on Transport and Tourism,

– having regard to the report of the Committee on Budgetary Control (A10-0056/2025),

1. Approves the closure of the accounts of the Innovative Health Initiative Joint Undertaking for the financial year 2023;

2. Instructs its President to forward this decision to the Executive Director of the Innovative Health Initiative Joint Undertaking, the Council, the Commission and the Court of Auditors, and to arrange for its publication in the Official Journal of the European Union (L series).

17. PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION

on discharge in respect of the implementation of the budget of the Chips Joint Undertaking (before 21.9.2023 Key Digital Technologies Joint Undertaking) for the financial year 2023

(2024/2031(DEC))

The European Parliament,

– having regard to the final annual accounts of the Chips Joint Undertaking for the financial year 2023,

– having regard to the Court of Auditors’ annual report on the EU Joint Undertakings for the financial year 2023, together with the Joint Undertakings’ replies [97],

– having regard to the statement of assurance [98] as to the reliability of the accounts and the legality and regularity of the underlying transactions provided by the Court of Auditors for the financial year 2023, pursuant to Article 287 of the Treaty on the Functioning of the European Union,

– having regard to Article 319 of the Treaty on the Functioning of the European Union,

– having regarding to Council Regulation (EU) 2023/1782 of 25 July 2023 amending Regulation (EU) 2021/2085 establishing the Joint Undertakings under Horizon Europe, as regards the Chips Joint Undertaking,

– having regard to Rule 102 of and Annex V to its Rules of Procedure,

– having regard to the opinion of the Committee on Transport and Tourism,

– having regard to the report of the Committee on Budgetary Control (A10-0056/2025),

1. Grants the Executive Director of the Chips Joint Undertaking discharge in respect of the implementation of the Joint Undertaking’s budget for the financial year 2023;

2. Sets out its observations in the resolution below;

3. Instructs its President to forward this decision and the resolution forming an integral part of it to the Executive Director of the Chips Joint Undertaking, the Council, the Commission and the Court of Auditors, and to arrange for their publication in the Official Journal of the European Union (L series).

18. PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION

on the closure of the accounts of the Chips Joint Undertaking (before 21.9.2023 Key Digital Technologies Joint Undertaking) for the financial year 2023

(2024/2031(DEC))

The European Parliament,

– having regard to the final annual accounts of the Chips Joint Undertaking for the financial year 2023,

– having regard to the Court of Auditors’ annual report on the EU Joint Undertakings for the financial year 2023, together with the Joint Undertakings’ replies [103],

– having regard to the statement of assurance [104] as to the reliability of the accounts and the legality and regularity of the underlying transactions provided by the Court of Auditors for the financial year 2023, pursuant to Article 287 of the Treaty on the Functioning of the European Union,

– having regard to Article 319 of the Treaty on the Functioning of the European Union,

– having regard to Rule 102 of and Annex V to its Rules of Procedure,

– having regard to the opinion of the Committee on Transport and Tourism,

– having regard to the report of the Committee on Budgetary Control (A10-0056/2025),

1. Approves the closure of the accounts of the Chips Joint Undertaking for the financial year 2023;

2. Instructs its President to forward this decision to the Executive Director of the Chips Joint Undertaking, the Council, the Commission and the Court of Auditors, and to arrange for its publication in the Official Journal of the European Union (L series).

19. PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION

on discharge in respect of the implementation of the budget of the Single European Sky ATM Research 3 Joint Undertaking for the financial year 2023

(2024/2031(DEC))

The European Parliament,

– having regard to the final annual accounts of the Single European Sky ATM Research 3 Joint Undertaking for the financial year 2023,

– having regard to the Court of Auditors’ annual report on the EU Joint Undertakings for the financial year 2023, together with the Joint Undertakings’ replies [109],

– having regard to the statement of assurance [110] as to the reliability of the accounts and the legality and regularity of the underlying transactions provided by the Court of Auditors for the financial year 2023, pursuant to Article 287 of the Treaty on the Functioning of the European Union,

– having regard to Article 319 of the Treaty on the Functioning of the European Union,

– having regard to Rule 102 of and Annex V to its Rules of Procedure,

– having regard to the opinion of the Committee on Transport and Tourism,

– having regard to the report of the Committee on Budgetary Control (A10-0056/2025),

1. Grants the Executive Director of the Single European Sky ATM Research 3 Joint Undertaking discharge in respect of the implementation of the Joint Undertaking’s budget for the financial year 2023;

2. Sets out its observations in the resolution below;

3. Instructs its President to forward this decision and the resolution forming an integral part of it to the Executive Director of the Single European Sky ATM Research 3 Joint Undertaking, the Council, the Commission and the Court of Auditors, and to arrange for their publication in the Official Journal of the European Union (L series).

20. PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION

on the closure of the accounts of the Single European Sky ATM Research 3 Joint Undertaking for the financial year 2023

(2024/2031(DEC))

The European Parliament,

– having regard to the final annual accounts of the Single European Sky ATM Research 3 Joint Undertaking for the financial year 2023,

– having regard to the Court of Auditors’ annual report on the EU Joint Undertakings for the financial year 2023, together with the Joint Undertakings’ replies [115],

– having regard to the statement of assurance [116] as to the reliability of the accounts and the legality and regularity of the underlying transactions provided by the Court of Auditors for the financial year 2023, pursuant to Article 287 of the Treaty on the Functioning of the European Union,

– having regard to Article 319 of the Treaty on the Functioning of the European Union,

– having regard to Rule 102 of and Annex V to its Rules of Procedure,

– having regard to the opinion of the Committee on Transport and Tourism,

– having regard to the report of the Committee on Budgetary Control (A10-0056/2025),

1. Approves the closure of the accounts of the Single European Sky ATM Research 3 Joint Undertaking for the financial year 2023;

2. Instructs its President to forward this decision to the Executive Director of the Single European Sky ATM Research 3 Joint Undertaking, the Council, the Commission and the Court of Auditors, and to arrange for its publication in the Official Journal of the European Union (L series).

21. PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION

on discharge in respect of the implementation of the budget of the Smart Networks and Services Joint Undertaking for the financial year 2023

(2024/2031(DEC))

The European Parliament,

– having regard to the final annual accounts of the Smart Networks and Services Joint Undertaking for the financial year 2023,

– having regard to the Court of Auditors’ annual report on the EU Joint Undertakings for the financial year 2023, together with the Joint Undertakings’ replies [121],

– having regard to the statement of assurance [122] as to the reliability of the accounts and the legality and regularity of the underlying transactions provided by the Court of Auditors for the financial year 2023, pursuant to Article 287 of the Treaty on the Functioning of the European Union,

– having regard to Article 319 of the Treaty on the Functioning of the European Union,

– having regard to Rule 102 of and Annex V to its Rules of Procedure,

– having regard to the opinion of the Committee on Transport and Tourism,

– having regard to the report of the Committee on Budgetary Control (A10-0056/2025),

1. Grants the Executive Director of the Smart Networks and Services Joint Undertaking discharge in respect of the implementation of the Joint Undertaking’s budget for the financial year 2023;

2. Sets out its observations in the resolution below;

3. Instructs its President to forward this decision and the resolution forming an integral part of it to the Executive Director of the Smart Networks and Services Joint Undertaking, the Council, the Commission and the Court of Auditors, and to arrange for their publication in the Official Journal of the European Union (L series).

22. PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION

on the closure of the accounts of the Smart Networks and Services Joint Undertaking for the financial year 2023

(2024/2031(DEC))

The European Parliament,

– having regard to the final annual accounts of the Smart Networks and Services Joint Undertaking for the financial year 2023,

– having regard to the Court of Auditors’ annual report on the EU Joint Undertakings for the financial year 2023, together with the Joint Undertakings’ replies [127],

– having regard to the statement of assurance [128] as to the reliability of the accounts and the legality and regularity of the underlying transactions provided by the Court of Auditors for the financial year 2023, pursuant to Article 287 of the Treaty on the Functioning of the European Union,

– having regard to Article 319 of the Treaty on the Functioning of the European Union,

– having regard to Rule 102 of and Annex V to its Rules of Procedure,

– having regard to the opinion of the Committee on Transport and Tourism,

– having regard to the report of the Committee on Budgetary Control (A10-0056/2025),

1. Approves the closure of the accounts of the Smart Networks and Services Joint Undertaking for the financial year 2023;

2. Instructs its President to forward this decision to the Executive Director of the Smart Networks and Services Joint Undertaking, the Council, the Commission and the Court of Auditors, and to arrange for its publication in the Official Journal of the European Union (L series).

23. MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

with observations forming an integral part of the decisions on discharge in respect of the implementation of the budget of the EU joint undertakings for the financial year 2023

(2024/2031(DEC))

The European Parliament,

– having regard to its decision on discharge in respect of the implementation of the budget of the Clean Aviation Joint Undertaking for the financial year 2023,

– having regard to its decision on discharge in respect of the implementation of the budget of the Circular Bio-based Europe Joint Undertaking for the financial year 2023,

– having regard to its decision on discharge in respect of the implementation of the budget of the Clean Hydrogen Joint Undertaking for the financial year 2023,

– having regard to its decision on discharge in respect of the implementation of the budget of the Europe’s Rail Joint Undertaking for the financial year 2023,

– having regard to its decision on discharge in respect of the implementation of the budget of the European High Performance Computing Joint Undertaking for the financial year 2023,

– having regard to its decision on discharge in respect of the implementation of the budget of the European Joint Undertaking for ITER and the Development of Fusion Energy for the financial year 2023,

– having regard to its decision on discharge in respect of the implementation of the budget of the Global Health EDCTP3 Joint Undertaking for the financial year 2023,

– having regard to its decision on discharge in respect of the implementation of the budget of the Innovative Health Initiative Joint Undertaking for the financial year 2023,

– having regard to its decision on discharge in respect of the implementation of the budget of the Chips Joint Undertaking for the financial year 2023,

– having regard to its decision on discharge in respect of the implementation of the budget of the Single European Sky ATM Research 3 Joint Undertaking for the financial year 2023,

– having regard to its decision on discharge in respect of the implementation of the budget of the Smart Networks and Services Joint Undertaking for the financial year 2023,

– having regard to Rule 102 of and Annex V to its Rules of Procedure,

– having regard to the opinion of the Committee on Transport and Tourism,

– having regard to the report of the Committee on Budgetary Control (A10-0056/2025),

A. whereas the Single European Sky ATM Research 3 Joint Undertaking, the Clean Aviation Joint Undertaking, the Innovative Health Initiative Joint Undertaking, the Clean Hydrogen Joint Undertaking, the Circular Bio-based Europe Joint Undertaking, the Europe’s Rail Joint Undertaking, the Smart Networks and Services Joint Undertaking and the Global Health EDCTP3 Joint Undertaking were set up by Council Regulation (EU) 2021/2085 of 19 November 2021 establishing the Joint Undertakings under Horizon Europe and repealing Regulations (EC) No 219/2007, (EU) No 557/2014, (EU) No 558/2014, (EU) No 559/2014, (EU) No 560/2014, (EU) No 561/2014 and (EU) No 642/2014 [133], the latter being referred to as the Single Basic Act (SBA);

B. whereas the Key Digital Technologies Joint Undertaking was set up by Council Regulation (EU) 2021/2085 of 19 November 2021 establishing the Joint Undertakings under Horizon Europe and repealing Regulations (EC) No 219/2007, (EU) No 557/2014, (EU) No 558/2014, (EU) No 559/2014, (EU) No 560/2014, (EU) No 561/2014 and (EU) No 642/2014; whereas the Key Digital Technologies Joint Undertaking was transformed into the Chips Joint Undertaking in July 2023 pursuant to Council Regulation (EU) 2023/1782 of 25 July 2023 amending Regulation (EU) 2021/2085 establishing the Joint Undertakings under Horizon Europe, as regards the Chips Joint Undertaking [134];

C. whereas the European Joint Undertaking for ITER and the Development of Fusion Energy was established in April 2007 by the Council Decision of 27 March 2007 establishing the European Joint Undertaking for ITER and the Development of Fusion Energy and conferring advantages upon it (2007/198/Euratom)[135];

D. whereas the European High-Performance Computing Joint Undertaking was set up by Council Regulation (EU) 2021/1173 of 13 July 2021 on establishing the European High Performance Computing Joint Undertaking and repealing Regulation (EU) 2018/1488 [136];

E. whereas the Single European Sky ATM Research 3 Joint Undertaking is a public-private partnership for the development of modernised air traffic management (ATM) in Europe and for the acceleration through research and innovation of the delivery of the Digital European Sky;

F. whereas the Clean Aviation Joint Undertaking is a public-private partnership focusing on research and innovation in order to transform aviation towards a sustainable and climate neutral future;

G. whereas the Innovative Health Initiative Joint Undertaking is a public-private partnership focusing on interdisciplinary, sustainable, and patient-centric health research and innovation;

H. whereas the Clean Hydrogen Joint Undertaking is a public-private partnership in the field of hydrogen and fuel cells technology research and innovation;

I. whereas the Chips Joint Undertaking is a public-private partnership focusing on research and innovation in key digital technologies essential for Europe’s competitive leadership in digital economy, in particular in the electronic components and systems sector;

J. whereas the Circular Bio-based Europe Joint Undertaking is a public-private partnership focusing on research and innovation for a sustainable and competitive circular bio-based industries sector;

K. whereas the Europe’s Rail Joint Undertaking is a public-private partnership for research and innovation in the railway sector;

L. whereas the European High-Performance Computing Joint Undertaking is a public-private partnership enabling the pooling of resources for the development and deployment of high-performance computing in Europe;

M. whereas the Smart Networks and Services Joint Undertaking is a public-private partnership focusing on strengthening Europe’s technological leadership and its strategic alignment with the telecommunications industry and fostering the uptake of digital solutions;

N. whereas the Global Health EDCTP3 Joint Undertaking is a public-private partnership focusing on reducing the socioeconomic burden of infectious diseases in sub-Saharan Africa thanks to new and improved health technological applications as well as improving the preparedness and response to infectious diseases for global purposes;

O. whereas the aim of the European Joint Undertaking for ITER and the Development of Fusion Energy is to provide the Union’s contribution to the ITER international fusion energy project, to implement the broader approach agreement between Euratom and Japan, and to prepare for the construction of a demonstration fusion reactor and related facilities;

General

1. Notes that the role of the joint undertakings should be to support research and innovation activities in the areas of transport, energy, health, circular bio-based industries, key electronic components, supercomputing, and network systems; calls on the joint undertakings to promote the transformation of scientific knowledge into marketable innovations, and to establish mechanisms to ensure that their activity leads to an increase in European competitiveness in the world;

2. Underlines that under the current multiannual financial framework, according to the Court of Auditors, joint undertakings are expected to receive a combined budget of EUR 17 billion from the Union cash contribution and to leverage EUR 21,1 billion of contributions from other members;

3. Notes that the nature of joint undertakings is based on public-private partnerships that steer investment and leverage public and private funds to fund common goals; reminds, in that regard, that the contributions of private members must meet established targets in order for such partnerships to remain mutually beneficial; calls on joint undertakings which allow in-kind contributions to additional activities (IKAA) to avoid, where possible, an excessive reliance on such contributions in order to meet established targets;

4. Acknowledges the significant contributions of the joint undertakings in advancing research, innovation, and technology development across various sectors, including aviation, rail, and air traffic management, as integral to achieving the Union’s strategic objectives of sustainability, digital transformation, and competitiveness.

5. Welcomes the annual report of the Court of Auditors on the European Union’s joint undertakings for the financial year 2023 (the ‘Court’s report’); underlines that the mission of the Court of Auditors is crucial for the sound implementation of the Union budget and for oversight of the budget;

6. Welcomes the fact that the Court of Auditors provided the discharge authority with an annual report on EU Joint Undertakings which contains a specific statement of assurance for each of the joint undertakings as regards their annual accounts and underlying transactions; shares the view that in addition to the legal provisions binding the Court, the institutional framework of joint undertakings renders these worthy of specific attention from the Court of Auditors; calls for the continuation of this good practice; welcomes the good cooperation of joint undertakings with the Court during the drafting of the Court’s report and welcomes the explanations provided on some of the observations and emphases of matter made in the replies provided by the joint undertakings;

7. Welcomes the fact that two joint undertakings attained financial autonomy during the financial year 2023, namely the Smart Networks and Services Joint Undertaking on 24 October 2023 and the Global Health EDCTP3 Joint Undertaking on 23 November 2023; notes furthermore that as a result, the Court of Auditors audited these two joint undertakings for the first time, in addition to the nine joint undertakings the Court of Auditors had already audited for the financial year 2022;

8. Stresses its awareness that some joint undertakings were affected significantly during the financial year 2023 by important events with an impact likely to alter their performance; emphasises, more precisely, that:

(a) Russia’s war of aggression against Ukraine has had a significant impact on the Union economy and on supply chains, affecting greatly the activities of some joint undertakings;

(b) the aftermath of the COVID-19 pandemic is still felt throughout Europe today and during the financial year 2023, still constituted a massive shock to economic and administrative activities;

(c) the high levels of inflation caused by the two aforementioned events had an impact on the supplies and delivery time for the joint undertakings;

9. Acknowledges the benefits of joint undertakings, the importance of public-private cooperation in fostering innovation, promoting research and development and the economic benefits of the partnerships; notes that by pooling resources and expertise from both sectors, public and private, joint undertakings can face the challenges more effectively; underlines the importance of transparency, accountability and efficient use of public funds by joint undertakings;

10. Recognises the value of initiatives fostering stakeholder engagement and participation, such as open calls for expressions of interest and joint calls across the joint undertakings, as instrumental in leveraging the collective expertise and resources; draws particular attention to the joint call for proposals launched by Europe’s Rail Joint Undertaking and the Single European Sky ATM Research 3 Joint Undertaking – the first joint call of its kind from joint undertakings aimed at developing an integrated air and rail network for a sustainable multimodal transport system;

11. Recalls that joint undertakings must conduct their operations according to sound financial management, thereby contributing effectively to Union policy objectives as well as to the sound implementation of the Union budget; nevertheless is concerned with a series of elements, in light of the findings of the Court of Auditors, as presented in this resolution;

Annual accounts

12. Notes that the Court’s report finds that the 2023 annual accounts of the eleven joint undertakings audited present fairly, in all material respects, their financial position as of 31 December 2023, the results of their operations and cash flows, and changes in net assets for the year ended, in accordance with their financial regulations and the accounting rules adopted by the Commission’s accounting officer; notes furthermore that as a result, the Court issued unqualified audit opinions on the reliability of the annual accounts of the joint undertakings;

13. Notes that the Court’s report finds that the underlying transactions to the annual accounts are legal and regular in all material respects; notes furthermore that as a result, the Court issued unqualified audit opinions on the legality and regularity of both the revenue and the payments underlying the accounts of the joint undertakings;

14. Takes note of the fact that, in the view of the Court of Auditors, insufficient guidance was provided to the Smart Networks and Services Joint Undertaking and the Global Health EDCTP3 Joint Undertaking on their first-time annual accounts, especially as regards the need for clarity in distinguishing the financial resources managed by the Commission before they attained their financial autonomy and by the joint undertakings after they attained it; echoes the Court’s recommendation for action in this regard which recommends that accounting guidelines should be developed in a clear and comprehensible way which should specify the rules for the presentation of the first annual accounts of new joint undertakings and that these guidelines should include instructions on how to separate the financial resources implemented by the Commission from those implemented by a joint undertaking after it attained its financial autonomy; notes that the risk to the reliability of annual accounts was deemed to be low for all joint undertakings except for the Smart Networks and Services Joint Undertaking and the Global Health EDCTP3 Joint Undertaking, for which the risk to reliability was deemed to be medium, due to the complexities brought about by the transfer of budget appropriations and assets from the responsibility of the Commission to the responsibility of the joint undertaking;

15. Takes note of the fact that the annual accounts of the European Joint Undertaking for ITER and the Development of Fusion Energy are produced on the basis of the baseline of the ITER project in place in 2023 but that the latter is the subject of an ongoing revision, the result of which is likely to result in significant changes for the European Joint Undertaking for ITER and the Development of Fusion Energy and its estimated total cost at completion; underlines that the joint undertaking concerned should take all actions necessary to ensure that the future baseline and its consequences for the need for Union cash contributions to the joint undertaking do not constitute a liability for the Union budget; notes from the hearing of the joint undertaking concerned in the Committee on Budgetary Control that at the time of the hearing and according to the joint undertaking concerned, it was too early to provide an estimate of the financial impact of this revision; is furthermore concerned by the delays impacting the ITER project, due to factors beyond the joint undertaking’s control;

16. Is concerned by the potential impact that the reorganisation of the European Joint Undertaking for ITER and the Development of Fusion Energy will have on its activities, notably the short to medium-term instabilities and operational risks for the joint undertaking; welcomes the awareness of the joint undertaking concerned of these issues and the explanation provided on its views on the situation; welcomes the additional information provided during the hearing of the joint undertaking concerned in the Committee on Budgetary Control, notably as regards the fact that the risk for business continuity has so far been mitigated thanks to a strong reliance on existing programmes and projects; welcomes the flexibility brought along by the new matrix structure;

17. Takes note of the fact that the risk to the legality and regularity of revenue was deemed to be low for all joint undertakings;

Budgetary and financial management

18. Notes that the total available budget in 2023 for the eleven joint undertakings audited by the Court amounted to EUR 4,25 billion in commitment appropriations and EUR 3,87 billion in payment appropriations, according to the Court of Auditors, which considers that the total available budget includes unused appropriations from previous years, which the joint undertakings entered again in the budget of the current year and assigned revenues and reallocations to the next year; notes more precisely that:

(a) the total available budget in 2023 for the Single European Sky ATM Research 3 Joint Undertaking amounted to EUR 111,2 million in commitment appropriations (compared to EUR 158,8 million in 2022) and EUR 241,5 million in payment appropriations (compared to EUR 146,9 million in 2022); understands furthermore that according to the report on budgetary and financial management of the Single European Sky ATM Research 3 Joint Undertaking, its total budget execution rate for the financial year 2023 reached 92 % for commitment appropriations and 81 % for payment appropriations, indicating that there were no severe issues related to the pace of implementation of the budget; nevertheless stresses the low execution rate of its payment appropriations dedicated to infrastructure and operating expenditure, which reached 55 %; notes the explanation of the joint undertaking and generally calls on the joint undertaking to ensure a healthy pace of implementation for each section of its budget;

(b) The total available budget in 2023 for the Clean Aviation Joint Undertaking amounted to EUR 269 million in commitment appropriations (compared to EUR 411,2 million in 2022) and EUR 486,4 million in payment appropriations (compared to EUR 415,3 million in 2022); understands furthermore that according to the report on budgetary and financial management of the Clean Aviation Joint Undertaking, its total budget execution rate for the financial year 2023 reached 98,58 % for commitment appropriations and 51,18 % for payment appropriations, indicating that there were serious issues related to the pace of implementation of the budget; notes in particular that the execution rates of its two operational expenditure titles stand at 80,50 % and 81,11 % respectively for payment appropriations; furthermore stresses the low execution rate of its payment appropriations dedicated to infrastructure expenditure, which reached 60,52 %; deeply regrets the important amount allocated to title 5 of its budget for unused payment appropriations of EUR 177 million, which has a technical execution rate of 0 %; notes the explanation of the joint undertaking and generally calls on the joint undertaking to ensure a healthy pace of implementation for each section of its budget;

(c) The total available budget in 2023 for the Innovative Health Initiative Joint Undertaking amounted to EUR 223,2 million in commitment appropriations (compared to EUR 272,4 million in 2022) and EUR 225,9 million in payment appropriations (compared to EUR 174,8 million in 2022); understands furthermore that according to the report on budgetary and financial management of the Innovative Health Initiative Joint Undertaking, its total budget execution rate for the financial year 2023 reached 92,65 % for commitment appropriations and 90,29 % for payment appropriations, indicating that there were no severe issues related to the pace of implementation of the budget; nevertheless stresses the low execution rates of its commitment and payment appropriations dedicated to infrastructure expenditure, which reached 68,67 % and 67,30 % respectively; notes the explanation of the joint undertaking and generally calls on the joint undertaking to ensure a healthy pace of implementation for each section of its budget;

(d) The total available budget in 2023 for the Clean Hydrogen Joint Undertaking amounted to EUR 268,9 million in commitment appropriations (compared to EUR 314,3 million in 2022) and EUR 327,8 million in payment appropriations (compared to EUR 118,3 million in 2022); understands furthermore that according to the report on budgetary and financial management of the Clean Hydrogen Joint Undertaking, its total budget execution rate for the financial year 2023 reached 96,62 % for commitment appropriations and 85,43 % for payment appropriations, indicating that there were no severe issues related to the pace of implementation of the budget; nevertheless stresses the low execution rate of payment appropriations dedicated to its operational expenditure financed under Horizon 2020 which reached 69,41 %; moreover stresses the low execution rate of its commitment and payment appropriations dedicated to infrastructure expenditure, which reached 71,21 % and 60,60 % respectively; notes the explanations of the joint undertaking and generally calls on the joint undertaking to ensure a healthy pace of implementation for each section of its budget;

(e) The total available budget in 2023 for the Chips Joint Undertaking amounted to EUR 835,7 million in commitment appropriations (compared to EUR 261,4 million in 2022) and EUR 518,4 million in payment appropriations (compared to EUR 222,2 million in 2022); understands furthermore that according to the report on budgetary and financial management of the Chips Joint Undertaking, its total budget execution rate for the financial year 2023 reached 100 % for commitment appropriations and 37 % for payment appropriations, indicating that there were serious issues related to the pace of implementation of the budget; in particular, stresses the extremely low execution rate of payment appropriations dedicated to operational expenditure, which reached 36 %; notes the explanation of the joint undertaking but deeply regrets such a low execution rate and generally calls on the joint undertaking to ensure a healthy pace of implementation for each section of its budget; takes note of the fact that these elements, in relation to the increased funding that the Chips Joint Undertaking benefited from in 2023 and which the Chips Joint Undertaking had to implement, led the Court to consider the risk to budget management to be medium for this joint undertaking;

(f) The total available budget in 2023 for the Circular Bio-based Europe Joint Undertaking amounted to EUR 227,4 million in commitment appropriations (compared to EUR 264,2 million in 2022) and EUR 137,4 million in payment appropriations (compared to EUR 80,3 million in 2022); understands furthermore that according to the report on budgetary and financial management of the Circular Bio-based Europe Joint Undertaking, its total budget execution rate for the financial year 2023 reached 97,6 % for commitment appropriations and 90,3 % for payment appropriations, indicating that there were no severe issues related to the pace of implementation of the budget; nevertheless stresses the low execution rates of commitment and payment appropriations for the part of its administrative expenditure dedicated to salaries, which reached 64 % and 57 % respectively, as well as the low execution rate of payment appropriations for the part of its administrative expenditure dedicated to other administrative expenditure, which reached 54 %; notes the explanation of the joint undertaking and generally calls on the joint undertaking to ensure a healthy pace of implementation for each section of its budget;

(g) The total available budget in 2023 for the Europe’s Rail Joint Undertaking amounted to EUR 102,6 million in commitment appropriations (compared to EUR 171,4 million in 2022) and EUR 120,3 million in payment appropriations (compared to EUR 180,8 million in 2022); understands furthermore that according to the report on budgetary and financial management of the Europe’s Rail Joint Undertaking, its total budget execution rate for the financial year 2023 reached 97 % for commitment appropriations and 82 % for payment appropriations, indicating that there were no severe issues related to the pace of implementation of the budget; nevertheless stresses the low execution rate of payment appropriations for the part of its operational expenditure financed under Horizon 2020, which reached 67 %; notes the explanation of the joint undertaking and generally calls on the joint undertaking to ensure a healthy pace of implementation for each section of its budget; points out that Europe’s Rail Joint Undertaking postponed final payments to 2024 due to technical issues experienced by beneficiaries; takes notice of the several projects that did not fully claim their budgets, reducing the need for operational payments by approximately EUR 4,1 million; calls on the joint undertaking concerned to elaborate a plan on how to improve the accounting reporting obligations; highlights the importance of supporting the joint undertaking given rail’s inherent advantages in terms of environmental performance, land use, energy consumption, and safety;

(h) The total available budget in 2023 for the European High-Performance Computing Joint Undertaking amounted to EUR 1136 million in commitment appropriations (compared to EUR 1374,5 million in 2022) and EUR 1058 million in payment appropriations (compared to EUR 629,9 million in 2022); understands furthermore that according to the report on budgetary and financial management of the European High-Performance Computing Joint Undertaking, its total budget execution rate for the financial year 2023 reached 83% for commitment appropriations and 19 % for payment appropriations, indicating that there were serious issues related to the pace of implementation of the budget; in particular, stresses the extremely low execution rate of payment appropriations dedicated to operational expenditure, which reached 19 %; notes the explanation of the joint undertaking but deeply regrets such a low execution rate; moreover stresses the low execution rate of its commitment and payment appropriations dedicated to administrative expenditure, which reached 45 % and 42 % respectively; notes the explanation of the joint undertaking and generally calls on the joint undertaking to ensure a healthy pace of implementation for each section of its budget; takes note of the fact that these elements, in relation to the increased funding that the European High-Performance Computing Joint Undertaking benefited from in 2023 and which the European High-Performance Computing Joint Undertaking had to implement, led the Court to consider the risk to budget management to be medium for this joint undertaking; welcomes the additional information provided during the hearing of the joint undertaking concerned in the Committee on Budgetary Control on the reasons behind this slow execution rate;

(i) The total available budget in 2023 for the Smart Networks and Services Joint Undertaking amounted to EUR 134,7 million in commitment appropriations and EUR 122,9 million in payment appropriations; understands furthermore that according to the report on budgetary and financial management of the Smart Networks and Services Joint Undertaking, its total budget execution rate for the financial year 2023 reached 99 % for commitment appropriations and 89 % for payment appropriations; deems that given the short period of time during which the joint undertaking had attained financial autonomy in the financial year 2023, there are no sufficient grounds on which the European Parliament could express its view on the quality of the financial management of the joint undertaking while doing so in good faith; nevertheless notes that due to this situation, the risk to the legality and regularity of administrative expenditure was deemed as medium for the joint undertaking;

(j) The total available budget in 2023 for the Global Health EDCTP3 Joint Undertaking amounted to EUR 136,4 million in commitment appropriations and EUR 2,2 million in payment appropriations; understands furthermore that according to the report on budgetary and financial management of the Global Health EDCTP3 Joint Undertaking, its total budget execution rate for the financial year 2023 reached 100 % for commitment appropriations and 47 % for payment appropriations; deems that given the short period of time during which the joint undertaking had attained financial autonomy in the financial year 2023, there are no sufficient grounds on which the European Parliament could express its view on the quality of the financial management of the joint undertaking while doing so in good faith; nevertheless notes that due to this situation, the risk to the legality and regularity of administrative expenditure was deemed as medium for the joint undertaking;

(k) The total available budget in 2023 for the European Joint Undertaking for ITER and the Development of Fusion Energy amounted to EUR 807 million in commitment appropriations (compared to EUR 981,2 million in 2022) and EUR 631,5 million in payment appropriations (compared to EUR 844 million in 2022); understands furthermore that according to the report on budgetary and financial management of the European Joint Undertaking for ITER and the Development of Fusion Energy, its total budget execution rate for the financial year 2023 reached 73 % for commitment appropriations and 95 % for payment appropriations, indicating that there were serious issues related to the pace of implementation of the budget; in particular, stresses the low execution rate of commitment appropriations dedicated to operational expenditure, which reached 70 %; notes the explanation of the joint undertaking and takes note of the resulting transfers made back to the initially planned Euratom and ITER Host State contributions and generally calls on the joint undertaking to ensure a healthy pace of implementation for each section of its budget; takes note of the fact that these elements, which are related to delays and implementation difficulties, led the Court to consider the risk to budget management to be medium for this joint undertaking;

19. Echoes the Court’s concerns as regards unused appropriations in the implementation of programmes of certain joint undertakings and calls on the joint undertakings concerned to avoid the reoccurrence of similar situations, as the accumulation of unused appropriations leads to cash surpluses, which are therefore not available to the Union for the financing of other activities and programmes; underlines that this is not in line with the principle of sound financial management and has resulted in a total of EUR 1,5 billion of cash surplus for the financial year 2023; echoes the Court’s recommendation for action in this regard which recommends that the joint undertakings concerned should develop corrective mechanisms to reduce their cash surpluses to a reasonable level and subsequently align their cash requests for each financial year with their estimated spending needs, in coordination with the Commission; is aware of possibilities under the financial rules of the joint undertakings concerned for unused appropriations to be entered in the estimate of revenue and expenditure of up to the three financial years following their reception; is nevertheless concerned more precisely with:

(a) the shortcomings in the cash planning of the Clean Aviation Joint Undertaking, following the request for additional Union financial contributions of EUR 178 million in excess of cash needs for planned payment in 2023, resulting in a cash surplus of EUR 237 million at the end of 2023; takes note however of the explanation of the joint undertaking; nevertheless repeats its call for the Clean Aviation Joint Undertaking to avoid the reoccurrence of similar situations and welcomes the adjustments announced by the joint undertaking for 2024;

(b) the shortcomings in the cash planning of the Chips Joint Undertaking, following the request for additional EU financial contributions of EUR 196 million in excess of cash needs for planned payment in 2023, resulting in a cash surplus of EUR 438 million at the end of 2023; takes note however of the explanation of the joint undertaking; nevertheless repeats its call for the Chips Joint Undertaking to avoid the reoccurrence of similar situations and welcomes the ambition announced by the joint undertaking for 2024;

(c) the shortcomings in the cash planning of the European High-Performance Computing Joint Undertaking, following the request for additional Union financial contributions of EUR 488,6 million in excess of cash needs for planned payment in 2023, resulting in a cash surplus of EUR 840,7 million at the end of 2023; understands the situation faced by the joint undertaking which led to this surplus and welcomes the additional information provided during the hearing of the joint undertaking concerned in the Committee on Budgetary Control, notably as regards the expectations for projects related to Artificial Intelligence to provide an opportunity for an important cash-out; nevertheless repeats its call for the European High-Performance Computing Joint Undertaking to avoid the reoccurrence of similar situations;

20. Stresses that all joint undertakings shall strengthen internal financial controls and public transparency mechanisms, ensuring that funds are distributed efficiently and in a manner consistent with EU strategic objectives;

21. Echoes the Court’s concerns as regards the contribution of members to certain joint undertakings, in particular as regards the possibility that some joint undertakings could not meet their contribution targets or only do so through high reliance on in-kind contributions to additional activities and calls on the joint undertakings concerned to take all actions necessary to prevent these situations from arising in the future; underlines that meeting contribution targets is the responsibility and obligation of the concerned joint undertakings and that failing to meet contribution targets goes against the founding idea of joint undertakings; is concerned, more precisely, with:

(a) the situation of the Single European Sky ATM Research 3 Joint Undertaking, whose operational contribution target of its member Eurocontrol only reached a level of 70 %, which resulted in the joint undertaking not having the planned contributions at its disposal to fully implement its part of Horizon 2020; takes notes of the fact that this element did not however lead the Court to consider the risk to programme implementation to be medium or high for this joint undertaking, as it was deemed to be low;

(b) the situation of the Circular Bio-based Europe Joint Undertaking, which performed well in reaching its contribution target under Horizon 2020, however notably did so through a revision of the balance between the targets for in-kind contributions to operational activities and for in-kind contributions to additional activities, the latter being raised to EUR 2 444,5 million, which corresponds to 90 % of the overall target; underlines that such a reliance on in-kind contributions to additional activities presents a risk to the implementation of the Horizon 2020 programme; underlines the substantial impact of the revision performed by the joint undertaking; takes notes of the explanation of the joint undertaking and of the fact that additional activities contribute to the overall objectives of the joint undertaking; nevertheless stresses that this constitutes an excessive reliance on in-kind contribution to additional activities to meet established targets and calls on the joint undertaking to avoid the reoccurrence of such a situation; takes note of the fact that these elements led the Court to consider the risk to programme implementation to be high for this joint undertaking;

(c) the situation of the European High-Performance Computing Joint Undertaking, whose contribution from private members under Horizon 2020 only reached a reported amount of EUR 18,4 million against a target of EUR 420 million, which constitutes a severe difference; notes furthermore that such a situation might occur again under Horizon Europe and Digital Europe as the contribution target for private members has increased significantly to EUR 900 million while the financing arrangements that caused difficulties for private members under Horizon 2020 remain in place; takes note of the fact that these elements led the Court to consider the risk to programme implementation to be high for this joint undertaking; understands from the additional information provided during the hearing of the joint undertaking concerned in the Committee on Budgetary Control that this issue is being dealt with in cooperation with the Governing Board; nevertheless echoes the Court’s recommendation for action in this regard which recommends that the European High-Performance Computing Joint Undertaking should support the Commission’s reassessment of the current target in order to ensure that it can attain its contribution target for private members under Horizon Europe and Digital Europe and stresses once again that reaching contribution targets should not simply be considered as an ambition but as a duty;

22. Underlines that to promote better efficiency, the Single Basic Act of the joint undertakings provides for an obligation for joint undertakings to achieve synergies via the establishment of back-office arrangements operating in a series of identified areas; understands that four areas have been identified as a priority by the joint undertakings concerned, namely accounting activities, legal activities, information and communication technologies and human resources; particularly welcomes in that regard:

(a) the fact that the back-office arrangements dedicated to accounting activities have been operational since December 2022 and were therefore in operation for the entirety of financial year 2023, which could be observed in the production of the annual accounts as well as the fact that the Europe’s Rail Joint Undertaking took the lead in operating these back-office arrangements;

(b) the fact that the Circular Bio-based Europe Joint Undertaking and the Innovative Health Initiative Joint Undertaking took the lead in operating back-office arrangements for the management of common recruitment, the legal framework of human resources and the digitalisation of human resources;

(c) the fact that the Clean Hydrogen Joint Undertaking and the Innovative Health Initiative Joint Undertaking took the lead in operating back-office arrangements for the management of Information and Communication Technologies services;

(d) the fact that the Clean Aviation Joint Undertaking, the Europe’s Rail Joint Undertaking and the European High-Performance Computing Joint Undertaking took the lead in operating back-office arrangements for the management of administrative procurements;

(e) the fact that joint undertakings are further implementing the joint strategic ICT plan of the joint undertakings located in the White Atrium building;

23. Calls on the joint undertakings concerned by the obligation under the Single Basic Act to keep reporting on their establishment of back-office arrangements, to provide clear information on which joint undertakings operate tasks for other joint undertakings in certain areas, to include as soon as possible communication, logistics, events and meeting room management as well as the support for audit and anti-fraud strategies on the list of priorities and to provide information on the areas to be considered for the establishment of back-office arrangements in the future, once arrangements in the areas identified as a priority have been concluded;

Procurement and tenders

24. Echoes the Court’s concerns as regards procurement procedures and calls on joint undertakings to ensure that the compliance with relevant legal provisions and the necessary complexity of certain procurement procedures do not lead to an increased risk to the legality and regularity of operational expenditure; is concerned, more precisely, by:

(a) the situations of the Innovative Health Initiative Joint Undertaking and of the Chips Joint Undertaking, for both of which the Court of Auditors observed weaknesses in the design and evaluation of one significant procurement procedure; takes notes of the fact that this element did not however lead the Court to consider the risk to operational control expenditure to be medium or high for this joint undertaking; nevertheless stresses the fact that such weaknesses may result in irregular contracts and payments if not addressed in future procurement procedures; welcomes the readiness of the joint undertakings to take action on these specific cases and to improve their procurement processes;

(b) the fact that the Court of Auditors has evaluated the risk to operational contract expenditure to be medium for the European High-Performance Computing Joint Undertaking and the European Joint Undertaking for ITER and the Development of Fusion Energy because of their complex procurement procedures for high-value contracts;

25. Underlines the financial exposure of the European High-Performance Computing Joint Undertaking to a supplier facing difficulties which is evaluated by the joint undertaking as ranging from a potential low impact of EUR 0 to an estimated maximum impact of EUR 88 million; understands from the annual accounts of the joint undertaking that this situation is being carefully scrutinised; calls on the joint undertaking to take all actions necessary to minimise financial liabilities; welcomes the additional information provided during the hearing of the joint undertaking concerned in the Committee on Budgetary Control, especially as regards the additional guarantees requested by the joint undertaking concerned to minimise this financial liability as well as the explanation provided on the key role of this specific supplier;

26. Takes note of the fact that the levels of detail and the level of accessibility vary when it comes to the quantitative data provided by the joint undertakings on the gender balance of experts selected to work with the joint undertakings; calls on all joint undertakings to increase transparency and to include clear quantitative data on gender balance among the experts selected in their future Annual Activity Reports; calls on all joint undertakings to intensify their efforts to promote gender equality at all levels and to ensure that gender balance remains a horizontal priority in all activities related to procurement, grants and tenders and to provide explanations when gender balance cannot be achieved;

27. Takes note of the fact that the levels of detail and the level of accessibility vary when it comes to the quantitative data provided by the joint undertakings on the geographical distribution of experts selected to work with the joint undertakings; calls on all joint undertakings to include clear quantitative data on the geographical distribution of the experts selected in their future Annual Activity Reports; calls on all joint undertakings to ensure that geographical distribution remains a horizontal priority in all activities related to procurement, grants and tenders and to provide explanations when sufficient geographical distribution cannot be achieved;

28. Calls for a fair and equitable geographical distribution of funding from the joint undertakings, ensuring that regions with lower innovation capacity and SMEs receive adequate support;

Staff and recruitment

29. Is concerned with the state of play of recruitment within the European High-Performance Computing Joint Undertaking, which received 39 additional posts to be recruited by the end of the financial year 2023 in order to implement the significant funds received under the current multiannual financial framework but which only managed to recruit 21 additional staff; is furthermore concerned with the assessment of the Court of Auditors which determined that the recruitment procedures of the joint undertakings were not sufficiently transparent due to a lack of clear and previously agreed upon scoring-grids to assess candidates and their qualifications as well as due to a lack of sufficient documentation on the underlying decision-making process; regrets that in the view of the Court of Auditors, this situation may have resulted in a lack of equal treatment of candidates; reminds that it is paramount to avoid the application of double standards during the recruitment process and requests for all necessary actions to be taken in this regard; echoes the Court’s recommendation for action in this regard which recommends that the European High-Performance Computing Joint Undertaking should use its increased staff effectively to achieve its recruitment target by the end of 2024 and that, in order to increase the transparency of its recruitment procedures and to substantiate the decision-making processes of the selection committee, the European High-Performance Computing Joint Undertaking should use a pre-agreed scoring grid during the pre-selection phase, in line with the practice of other joint undertakings and Union bodies; welcomes the readiness of the joint undertaking to integrate recommendations for improvements;

30. Emphasises the need for a coherent and fair staffing policy across all Joint Undertakings to ensure adequate and inclusive working conditions, career development opportunities, and work-life balance for staff; calls for the implementation of measures to prevent excessive reliance on temporary contracts and precarious employment; underlines the importance of mental health support structures, flexible working arrangements, and fair internal promotion opportunities to improve staff well-being;

31. Calls on all joint undertakings to implement concrete measures to improve gender balance in leadership positions and decision-making bodies, including setting gender balance targets and regularly monitoring progress; stresses the need to address gender pay gaps and ensure equal opportunities for career advancement;

32. Takes note of the fact that the Court considered the risk to the legality and regularity of administrative expenditure to be low for all joint undertakings except for the Chips Joint Undertaking and the European High-Performance Computing Joint Undertaking for which it was deemed to be medium due to their high recruitment level, as well as for the Smart Networks and Services Joint Undertaking and the Global Health EDCTP3 Joint Undertaking, due to their recent financial autonomy;

33. Is concerned with the situation of the European Joint Undertaking for ITER and the Development of Fusion Energy as regards different aspects related to the management of human resources observed by the Court of Auditors, especially as regards the use of external service providers, notably:

(a) the important reliance of the joint undertaking on external service providers, as it was observed that near to half of the staff of the joint undertaking consisted of external service providers (361 external service providers and 429 statutory staff in 2023) which makes that situation a critical issue with a potential large-scale impact on the capacity of the joint undertaking to manage its human resources in a sustainable manner while ensuring a capacity for retention of knowledge and institutional memory, which also allow for financial gains in the long run;

(b) the fact that the joint undertaking did not adopt a unique formal definition of external service providers, which resulted in a lack of clarity in its assessment of their impact on statutory staff needs; notes furthermore that the risk register of the joint undertaking did not include all the potential risks related to a high level of reliance on external service providers in the long term, which might prevent the internal control of the joint undertaking from having adequate mitigating measures put in place to address those risks;

(c) the findings of the audit conducted on this matter by the Commission’s internal audit service which revealed that the joint undertaking had not set up a centralised function for the coordination and management of external service providers, nor had it set up a methodology for assessing its aggregate human resources needs, and in particular its needs for external service providers; underlines that it was observed that the joint undertaking’s decision on the use of external service providers was therefore based on budgetary concerns rather than human resources needs;

(d) the lack of transparency in the reporting of the joint undertaking on its human resources; particularly as regards the presentation of permanent and non-permanent staff figures, given that 224 of the 386 temporary and contract staff had in reality an indefinite contract and could therefore have been considered as permanent staff from a practical point of view; calls on the joint undertaking to underline such nuances in the future in its reporting on human resources;

(e) echoes the Court’s recommendation for action which recommends that the European Joint Undertaking for ITER and the Development of Fusion Energy should establish a centralised coordination and management function for external service providers and adopt a comprehensive methodology to regularly assess its total human resources needs based on the expected workload and required skills and that the joint undertaking concerned should also supplement its risk register with the most important risks deriving from its high level of use of external service providers in the long run;

(f) welcomes the commitments made by the joint undertaking and welcomes its explanation of the challenges leading to an important use of external service providers; is nevertheless concerned with this important dependency and the related risks; calls on the joint undertaking to provide more detailed information in the future on the decision-making processes leading to the use of external service providers;

34. Takes note of the fact that the levels of detail and the level of accessibility vary when it comes to the quantitative data provided by the joint undertakings on the gender balance among their staff and within their governing bodies and structures in their Annual Activity Reports; calls on all joint undertakings to include a clear section dedicated to quantitative data on gender balance among their staff and within their governing bodies and structures in their future Annual Activity Reports, including the disaggregation of data between different levels of responsibility and different types of contract; calls on all joint undertakings to ensure that gender balance remains an objective at all levels of responsibility and to persist in their efforts to enhance it, in order to ensure a fair representation of society within their staff and to promote a healthy and productive working environment and to provide explanations when gender balance cannot be achieved;

35. Takes note of the fact that the levels of detail and the level of accessibility vary when it comes to the quantitative data provided by the joint undertakings on the geographical distribution within their staff and within their governing bodies and structures in their Annual Activity Reports; calls on all joint undertakings to include a clear section dedicated to quantitative data on geographical distribution among their staff and within their governing bodies and structures in their future Annual Activity Reports, including the disaggregation of data between different levels of responsibility and different types of contract; calls on all joint undertakings to ensure that a satisfactory geographical distribution remains an objective at all levels of responsibility and to provide explanations when a sufficient geographical distribution cannot be achieved;

36. Welcomes the work of the EU Agencies Network (EUAN) and its Working Group on Diversity and Inclusion which led to the EUAN Charter on Diversity and Inclusion; invites joint undertakings to adopt this Charter;

37. Underlines that joint undertakings shall ensure that funded projects contribute to social well-being and inclusivity, respect workers’ rights and labour conditions and align with the principles of a just transition to sustainable technologies;

Management and control systems

38. Welcomes the work of the Court of Auditors on the examination of grant payments made by the ten joint undertakings implementing research and innovation projects, especially as regards its complementary audit of a sample of grant payments at beneficiary level under Horizon 2020; is concerned with the results of this examination which showed that there were persistent systemic errors, especially as regards declared personnel and equipment costs; calls for correction of the systemic errors;

39. Underlines that the Court of Auditors found one case of quantified and serious error in payments under Horizon 2020 for the Clean Aviation Joint Undertaking, the Innovative Health Initiative Joint Undertaking, the Clean Hydrogen Joint Undertaking, the Circular Bio-based Europe Joint Undertaking, as well as for the Europe’s Rail Joint Undertaking; welcomes the initiatives taken in this regard to raise awareness at beneficiary level; calls on all joint undertakings to ensure the legality and regularity of operational expenditure and underlines that the Court of Auditors deemed the risk to the interim and final grant payments of the joint undertakings to be medium;

40. Calls on the Commission to implement: i) mandatory financial training for beneficiaries of the joint undertakings to prevent recurrent accounting errors; ii) automated verification tools to enhance accuracy in personnel cost calculations; iii) stronger ex-ante audit procedures to ensure proper use of Union funds;

41. Welcomes the fact that according to the extrapolation of the Court of Auditors for all joint undertakings, the average error rate is just below the materiality threshold of 2% for grant expenditure, as well as the fact that the residual error rates calculated by the Commission’s common audit service were also below the materiality threshold;

42. Takes note of the fact that the number of Horizon Europe and Digital Europe interim payments was too small to feature in the sample audited by the Court of Auditors in 2023;

43. Takes note of the fact that there were several changes to the internal control framework of joint undertakings under Horizon Europe, notably the fact that the Commission no longer intends to make specific representative ex-post audits on behalf of individual Horizon Europe stakeholders, such as joint undertakings; notes furthermore that the Commission plans to apply the same change to grant payments under Digital Europe;

44. Is concerned with the lack of communication, collaboration and coordination between the risk management of the European Joint Undertaking for ITER and the Development of Fusion Energy and its internal audit functions, as well as with the related lack of an integrated risk management process and the fact that the joint undertaking could not provide satisfactory evidence that it regularly uses risk management information when planning internal audit activities; echoes the Court’s recommendation for action in this regard which recommends that the joint undertaking concerned implement an integrated risk management process in its internal control framework in order to manage its risks effectively; welcomes the plans of the joint undertaking to take action on this issue;

45. Underlines the importance of implementing a comprehensive and up to date business continuity plan and disaster recovery plan for the joint undertakings; regrets in that regard that at the end of the financial year 2023, the joint undertakings, with the exception of the European Joint Undertaking for ITER and the Development of Fusion Energy, did not have a satisfactory policy in place in this regard; welcomes the plans of the joint undertaking to take action on this issue;

46. Points out that the Smart Networks and Services Joint Undertaking and the Global Health EDCTP3 Joint Undertaking still had not fully implemented the Commission’s internal control framework and calls on these two joint undertakings to fully implement that framework;

Fraud, ethics and conflicts of interests

47. Takes note of the fact that the Court of Auditors made one notification of suspected fraud to the European Anti-Fraud Office (OLAF) during its audit of the financial year 2023; understands that the case was later dismissed by OLAF as no fraud was observed in relation to the staff matter concerned; welcomes the diligence of the Court of Auditors and the cooperation within the anti-fraud architecture;

48. Underlines the importance of implementing an internal control policy on sensitive functions for the joint undertakings; stresses that such a policy can prevent and mitigate the risk of inappropriate or fraudulent action; regrets that at the end of the financial year 2023, the Single European Sky ATM Research 3 Joint Undertaking, the Clean Hydrogen Joint Undertaking, the Chips Joint Undertaking, the European High-Performance Computing Joint Undertaking as well as the European Joint Undertaking for ITER and the Development of Fusion Energy did not yet have a policy in that regard; stresses the critical nature of this situation and urges the joint undertakings to take action without unnecessary delays;

49. Takes note of the situation in the Chips Joint Undertaking referred to by the Court of Auditors, which saw one of its former senior staff members who had left the joint undertaking recently take up a new occupational activity without prior notice to the joint undertaking concerned; calls on the joint undertaking concerned and all other joint undertakings to conduct active monitoring of the new occupational activities of former senior staff members as well as of staff members occupying a sensitive function; welcomes the additional information provided by the joint undertaking concerned on this specific case;

50. Calls on all joint undertakings to enhance their transparency policies, particularly regarding potential conflicts of interest; urges joint undertakings to publish declarations of interest for their members of boards of management, scientific committees, and external experts, ensuring that any financial, professional, or personal ties to entities benefiting from funding from the joint undertakings are disclosed; insists on the introduction of a mandatory ‘cooling-off’ period for senior staff of the joint undertakings before they can take up employment in organisations that receive funding from the joint undertakings;

51. Takes note of the information reported by the joint undertakings on their activities related to prevention, detection, and correction of fraud; calls on all joint undertakings to strengthen their role and identify their weaknesses by engaging further in anti-fraud discussions and to report on such elements and to include in their future reports a clear presentation of the legal framework and policies put in place in this regard;

Remarks on the follow-up of Joint Undertakings to the previous discharge exercise

52. Welcomes the fact that joint undertakings have produced a follow-up report to the European Parliament resolutions with observations forming an integral part of the decisions on discharge in respect of the implementation of the budget of the joint undertakings for the financial year 2022; notes that these reports provide the views of the joint undertakings on the issues underlined by the European Parliament to a satisfactory extent;

53. Welcomes the fact that the Court’s report also includes an analysis of the follow-up of joint undertakings to previous observations and recommendations for actions published by the Court; notes in this regard that out of 37 observations not sufficiently addressed at the end of 2022, 16 were closed and 21 remained open at the end of 2023; furthermore notes that out of the 15 recommended actions in the annual reports of 2021 and 2022, 9 had been fully implemented, 2 in most respects, 3 in some respects and 1 not implemented at all; understands that some recommendations that still need to be implemented further mainly relate to human resources issues which the joint undertakings can only implement in cooperation with the Directorate-General for Budget of the Commission and once applications are ready to be implemented; understands that the recommendations that had to be implemented before the end of 2023 were implemented in due time;

54. Welcomes the fact that the Court of Auditors has now provided a deadline for implementation for each of its open recommendations for action, which were defined in cooperation with the joint undertakings to ensure their feasibility; calls on all joint undertakings to continue to report back to the Court of Auditors and the European Parliament on these issues;

55. Notes with concern the persistent challenges related to cost overruns, delays, and governance issues in the implementation of the ITER project; calls for improved financial oversight and enhanced budgetary transparency, including more detailed public reporting on cost developments, spending efficiency, and progress toward key project milestones; stresses the need for stricter auditing mechanisms to ensure that Union contributions to the project are effectively utilised; urges the joint undertaking to strengthen internal governance by ensuring regular and independent evaluations of project risks and by increasing accountability mechanisms for senior management;

Other priorities for the joint undertakings

56. Is aware of the administrative and budgetary constraints of joint undertakings and in respect of these constraints, calls on joint undertakings to better disseminate their contribution to research and innovation activities through accessible communication material intended for academic and research institutions, public and private organisations and European and national authorities; calls for this accessible communication material to promote the opportunities for procurement contracts and grants offered by the joint undertakings in the area of research and innovation activities;

57. Calls on joint undertakings to proactively engage in communication activities in order to reach a wide range of EU citizens in a pedagogical effort to present their contribution to common goals and the need for institutionalised partnerships that involve private members;

58. Calls on the joint undertakings to establish the cooperation with universities in order to reach out to young European graduates to strengthen their future recruitment processes;

59. Calls on joint undertakings to continue to report effectively and to the extent of their capacity on their contribution to employment and to the competitiveness of the European economy, in light of the necessity for all important stakeholders of the European Union in the area of research and innovation to focus on the reindustrialisation of the European Union;

60. Calls on joint undertakings to continue to ensure a sufficient level of participation of private firms, especially of small and medium-sized enterprises, which constitute the strongest asset of the European economy;

61. Calls on joint undertakings to report effectively on their contribution to horizontal priorities of the budget of the European Union, including as regards climate mainstreaming and to provide explanations where relevant on how their activities can contribute to the objectives of the European Green Deal;

62. Calls on all joint undertakings to continue to act with diligence in the conduct of their activities when dealing with international stakeholders, especially in light of the regime of restrictive measures put in place by the European Union; underlines the particular situation of the European Joint Undertaking for ITER and the Development of Fusion Energy in this regard and welcomes the explanations provided during the hearing of the joint undertaking concerned in the Committee on Budgetary Control on measures put in place to prevent any issues in the framework of the ITER project;

63. Calls on all joint undertakings to ensure that their staff are making a good use of possible synergies with other entities from the European Union, such as agencies, in all relevant areas and in order to increase the efficiency and impact of their operations; calls on all joint undertakings to ensure that their staff are making good use of the platform that constitutes the EU Agencies Network (EUAN);

64. Emphasies the need for digital sovereignty in research funded by the Union; in that regard puts special emphasis on the Chips Joint Undertaking, Euro European High Performance Computing Joint Undertaking, and the Smart Networks and Services Joint Undertaking who shall prioritise projects that enhance Union autonomy in semiconductor manufacturing, artificial intelligence, and cybersecurity; asks the Commission to ensure that projects funded by joint undertakings: i) are not excessively reliant on third-country suppliers for critical technologies; ii) contribute to the Union’s industrial resilience and strategic independence; iii) foster domestic R&D in key digital sectors;

Call for a follow-up

65. Calls on each joint undertaking considered for the granting of discharge for the financial year 2023 to produce an individual follow-up report on all actions taken to address the specific issues mentioned in this resolution and to submit this follow-up report signed by the (Executive) Director of the joint undertaking to the European Parliament by no later than 30 September 2025;

66. Underlines that follow-up reports may also contain the general views of the joint undertakings on this resolution and on other matters relevant for the discharge authority; expects the joint undertakings to draft this report with a comprehensive approach, to touch on all issues addressed by the European Parliament concerning their activities, and to do so in good faith and cooperation.

ANNEX: ENTITIES OR PERSONS FROM WHOM THE RAPPORTEUR HAS RECEIVED INPUT

Pursuant to Article 8 of Annex I to the Rules of Procedure, the rapporteur declares that he received input from the following entities or persons in the preparation of the report, prior to the adoption thereof in committee:

Entity and/or person

European Court of Auditors

European High Performance Computing Joint Undertaking

The list above is drawn up under the exclusive responsibility of the rapporteur.

Where natural persons are identified in the list by their name, by their function or by both, the rapporteur declares that he has submitted to the concerned natural persons the European Parliament’s Data Protection Notice No 484 (https://www.europarl.europa.eu/data-protect/index.do), which sets out the conditions applicable to the processing of their personal data and the rights linked to that processing.

OPINION OF THE COMMITTEE ON TRANSPORT AND TOURISM (29.1.2025)

for the Committee on Budgetary Control

on discharge in respect of the implementation of the budget of the EU joint undertakings for the financial year 2023

(2024/2031(DEC))

Rapporteur for opinion: Gheorghe Falcă

OPINION

The Committee on Transport and Tourism calls on the Committee on Budgetary Control, as the committee responsible, to incorporate the following into its motion for a resolution:

1. Welcomes the ‘clean’ opinion for the 2023 financial year provided by the European Court of Auditors (‘the Court’) in relation to the reliability of the annual accounts, as well as the legality and regularity of the revenues and payments underlying the accounts of the Clean Aviation Joint Undertaking (CAJU), the Single European Sky ATM Research 3 Joint Undertaking (SESAR 3 JU), and the Europe’s Rail Joint Undertaking (EU Rail);

2. Notes the Court’s observations directed at all three Joint Undertakings (JU) concerning their outdated business continuity and disaster recovery plans; welcomes the measures taken by the JUs following the Court’s assessment to ensure that these plans are regularly updated and adapted to organisational changes and emerging risks in the operating environment;

3. Welcomes the 2023 activities related to the calls for proposals and grant management carried out by the three JUs under their respective programmes; recognizes the value of initiatives fostering stakeholder engagement and participation, such as open calls for expressions of interest and joint calls across the JUs, as instrumental in leveraging the collective expertise and resources; draws particular attention to the joint call for proposals launched by EU-Rail and SESAR 3 JU – the first ever cross-joint undertaking synergy topic call aimed at developing an integrated air and rail network for a sustainable multimodal transport system;

4. Takes notice of the back-office arrangements signed by the three JUs in 2023, facilitating their collaboration with the other joint undertakings for efficiency gains in various shared areas, including human resources, accounting, ICT, and procurement;

5. Acknowledges the significant contributions of the JUs in advancing research, innovation, and technology development across various sectors, including aviation, rail, and air traffic management, as integral to achieving the EU’s strategic objectives of sustainability, digital transformation, and competitiveness.

Part I – Discharge in respect of the implementation of the budget of the Clean Aviation Joint Undertaking (CAJU)

1. Takes notice of the reduced 2023 commitment budget of CAJU (EUR 269 million, down from EUR 411,2 million in 2022), reflecting the lower value of the Horizon Europe calls launched in 2023; points out that its increased 2023 payment budget (EUR 468,4 million, up from EUR 415,3 million in 2022) covered the interim payments for the ongoing Horizon 2020 projects and the significant pre-financing for grant agreements planned by the end of 2023 under the Horizon Europe programme;

2. Observes that the members’ commitments for the JU’s operational and additional activities under Horizon 2020 programme exceeded their operational contribution targets, therefore, at the end of 2023, CAJU still had to pay around EUR 41 million (or 2,4%) in the coming years for projects yet to be completed, and to validate in-kind contributions to its operational activities of EUR 244,3 million and in-kind contributions to additional activities of EUR 153,4 million;

3. Notes that the implementation rate for the 2023 operational payment appropriations under the Horizon Europe programme decreased to 51%, primarily due to the slower start of the CAJU’s technically complex activities and delays in ongoing Horizon 2020 activities; notes that in 2023, CAJU requested EUR 178 million in additional EU financial contributions, exceeding the cash needs and resulting in a EUR 237 million cash surplus, which indicates shortcomings in its cash planning; notes that it is imperative to make the accumulated cash surplus available for other urgent EU needs and urges CAJU to define its goals and future financial resource needs more clearly, to prevent similar situations in the future [137]a;

4. Notes that the technical activity under the Clean Sky 2 (CS2) programme mostly completed in 2023 and acknowledges the progress made in finalisation of the remaining technology maturation and demonstration activities, notably in delivering a series of key demonstrators in the programme’s different System & Platform Demonstrator (SPD) areas;

5. Points out that the 20 projects selected in the first call for proposals of the Clean Aviation programme successfully kicked-off in January 2023, committing 40% of the funding available over the life cycle of the programme (EUR 736 million); takes notice of the second call launched in February 2023, which resulted in the signature of 8 grant agreements for a maximum amount of approximately EUR 137 million (7,5% of the funding available), that will aim at definition of novel aircraft concepts, innovative propulsion architectures, as well as new fuselage and wing designs;

6. Draws attention to the open call for expression of interest published by CAJU in May 2023, targeting private stakeholders to become Associated Members of CAJU; notes that, following the evaluation, 20 new Associated Members from 12 different countries acceded to the Clean Aviation Partnership in December 2023, bringing the number of its Members to 59.

Part II – Discharge in respect of the implementation of the budget of the Single European Sky ATM Research 3 Joint Undertaking (SESAR 3 JU)

1. Takes notice of the reduced 2023 commitment budget of SESAR 3 JU (EUR 111,2 million, down from EUR 158,8 million in 2022), reflecting the lower number of calls for Horizon Europe projects; points out that its increased 2023 payment budget (EUR 241,5 million, up from 146,9 million in 2022) covered the interim payments for the ongoing Horizon 2020 projects and the significant pre-financing payments for the grant agreements and contracts planned by the end of 2023 under the Horizon Europe programme;

2. Highlights that by the end of 2022, EU and the JU’s private members met their operational contribution targets, while Eurocontrol committed only 70% of its target; notes that this shortfall prevented SESAR 3 JU from receiving all planned contributions necessary for the full implementation of its part of the Horizon 2020 programme; further notes that by the end of 2023, the JU had EUR 36,8 million (6,6%) in outstanding payments for incomplete projects and contracts, and needed to validate in-kind contributions of EUR 105,1 million;

3. Regrets that at the end of 2023, SESAR 3 JU still lacked a policy on the management of sensitive functions, essential to prevent or mitigate the risk of inappropriate actions and corruption, in accordance with the European Commission’s Internal Control Principles; notes that in 2023, the Commission’s Internal Audit Service observed that the JU’s business continuity plan (BCP) and the related disaster recovery plan (DRP) had not been updated since 2016; calls on SESAR 3 JU to regularly update its BCP and DRP1b [138];

4. Welcomes the successful closure in 2023 of the remaining projects funded under the SESAR 2020 programme, integrating their outcomes into the new Digital European Sky (DES) programme; points out that the 2023 exploratory and industrial research calls under DES resulted in 50 projects, covering the nine SESAR flagship areas; welcomes three new Digital Sky Demonstrator projects funded under the Connecting Europe Facility along to the five already managed by the SESAR 3 JU; notes that 58 DES projects that involve more than 300 different beneficiaries, represent a total investment of more than EUR 600 million;

5. Welcomes the update of the European ATM Master Plan, commenced by SESAR 3 JU in order to set out the vision and prioritize the digital solutions necessary to deliver DES; points out that the update campaign includes extensive consultations with stakeholders to ensure a collaborative and aligned approach towards achieving the strategic objectives leading to ATM modernization; expects the Governing Board to have it adopted by December 2024.

Part III – Discharge in respect of the implementation of the budget of the Europe’s Rail Joint Undertaking (EU-Rail)

1. Notes that the reduced commitment and payment budgets for 2023 (respectively, EUR 102,6 million and 120,3 million, down from EUR 171,4 million and 180,8 million in 2022) reflected the lower value of calls for Horizon Europe projects and the diminishing level of payments related to Horizon 2020 projects;

2. Observes that the members’ commitments for the JU’s operational and additional activities under the Horizon 2020 programme exceeded their operational contribution targets, noting that at the end of 2023, EU-Rail still had to pay around EUR 40,5 million (or 10.8%) for projects and contracts yet to be completed, and to validate in-kind contributions to its operational activities of EUR 44,7 million;

3. Remarks that although the 2023 implementation rate for operational payment appropriations of Horizon 2020 programme increased to 67% (from 47% in 2022), it remained below expectations; points out that EU-Rail postponed final payments to 2024 due to technical issues experienced by beneficiaries; takes notice of the several projects that did not fully claim their budgets, reducing the need for operational payments by approximately EUR 4,1 million; calls on EU-Rail to take action to improve the implementation rate for operational payment appropriations and to elaborate a plan on how to improve the accounting reporting obligations1c [139];

4. Commends the strong cooperation of the JU with the European Union Agency for Railways to ensure the interoperability of the developed projects; commends the collaboration with the sectoral associations, third country programmes and other programmes, partnerships, and bodies, to establish further synergies;

5. Welcomes the commitment of the JU to facilitate R&I activities to deliver an integrated European railway network by design, eliminating interoperability barriers and delivering smart, sustainable, and resilient railway system to ensure a harmonized approach to the evolution of the Single European Rail Area; commends the integrated EU-Rail programme for its continued efforts to disseminate information on the benefits of rail transportation and travel to European citizens, and recognizes the complementarity between its R&I output, particularly in fostering interoperability, and the key objectives outlined in the European Green Deal and the Smart and Sustainable Mobility Strategy; acknowledges the progress made under the programme, based on its System Pillar, the “generic system integrator” for the future of the EU rail, providing governance, resources, and outputs to support a coherent and coordinated approach to railway system development, as well as on its Innovation Pillar, which encompasses advanced operational and technological solutions aimed at creating a more efficient railway system, including large-scale demonstrations and exploratory research; takes notice of the 2023 decision of the Governing Board to establish the Deployment Group to advise on the market uptake of rail innovation developed by EU-Rail and to support the deployment of innovative solutions;

6. Welcomes the 2023 achievements under the European Digital Automatic Coupler (DAC) Delivery Programme that facilitated cooperation among rail stakeholders, enhancing the implementation of DAC for European rail freight;

7. Congratulates the JU for its continued, active reporting on its contributions to the United Nation’s Sustainable Development Goals (SDGs), as well as its contribution to completing the Single European Railway Area;

8. Highlights the importance of supporting the JU given rail’s inherent advantages in terms of environmental performance, land use, energy consumption, and safety.

ANNEX: ENTITIES OR PERSONS
FROM WHOM THE RAPPORTEUR HAS RECEIVED INPUT

The rapporteur for the opinion declares under his exclusive responsibility that he did not receive input from any entity or person to be mentioned in this Annex pursuant to Article 8 of Annex I to the Rules of Procedure.

INFORMATION ON ADOPTION BY COMMITTEE ASKED FOR OPINION

Date adopted	29.1.2025
Result of final vote	+: –: 0:	31 6 6
Members present for the final vote	Oihane Agirregoitia Martínez, Daniel Attard, Tom Berendsen, Rachel Blom, Nikolina Brnjac, Nina Carberry, Benoit Cassart, Carlo Ciccioli, Anna Maria Cisint, Vivien Costanzo, Johan Danielsson, Valérie Devaux, Siegbert Frank Droese, Gheorghe Falcă, Jens Gieseke, Borja Giménez Larraz, Sérgio Gonçalves, Roman Haider, Sérgio Humberto, Dariusz Joński, François Kalfon, Martine Kemp, Sophia Kircher, Elena Kountoura, Luis-Vicențiu Lazarus, Julien Leonardelli, Vicent Marzà Ibáñez, Alexandra Mehnert, Ştefan Muşoiu, Jan-Christoph Oetjen, Philippe Olivier, Matteo Ricci, Rosa Serrano Sierra, Stanislav Stoyanov, Kai Tegethoff, Elissavet Vozemberg-Vrionidi, Kosma Złotowski
Substitutes present for the final vote	Alberico Gambino, Jutta Paulus, Dario Tamburrano, Kris Van Dijck, Ana Vasconcelos
Members under Rule 216(7) present for the final vote	Elisabeth Grossmann

FINAL VOTE BY ROLL CALL IN COMMITTEE ASKED FOR OPINION

31	+
PPE	Tom Berendsen, Nikolina Brnjac, Nina Carberry, Gheorghe Falcă, Jens Gieseke, Borja Giménez Larraz, Sérgio Humberto, Dariusz Joński, Martine Kemp, Sophia Kircher, Alexandra Mehnert, Elissavet Vozemberg-Vrionidi
Renew	Oihane Agirregoitia Martínez, Benoit Cassart, Valérie Devaux, Jan-Christoph Oetjen, Ana Vasconcelos
S&D	Daniel Attard, Vivien Costanzo, Johan Danielsson, Sérgio Gonçalves, Elisabeth Grossmann, François Kalfon, Ştefan Muşoiu, Matteo Ricci, Rosa Serrano Sierra
The Left	Elena Kountoura, Dario Tamburrano
Verts/ALE	Vicent Marzà Ibáñez, Jutta Paulus, Kai Tegethoff

6	–
ESN	Siegbert Frank Droese, Stanislav Stoyanov
NI	Luis-Vicențiu Lazarus
PfE	Rachel Blom, Julien Leonardelli, Philippe Olivier

6	0
ECR	Carlo Ciccioli, Alberico Gambino, Kris Van Dijck, Kosma Złotowski
PfE	Anna Maria Cisint, Roman Haider

Key to symbols:

+ : in favour

– : against

0 : abstention

INFORMATION ON ADOPTION IN COMMITTEE RESPONSIBLE

Date adopted	18.3.2025
Result of final vote	+: –: 0:	20 4 2
Members present for the final vote	Georgios Aftias, Arno Bausemer, Damian Boeselager, Gilles Boyer, Olivier Chastel, Caterina Chinnici, Tamás Deutsch, Dick Erixon, Daniel Freund, Esteban González Pons, Niclas Herbst, Monika Hohlmeier, Virginie Joron, Kinga Kollár, Giuseppe Lupo, Marit Maij, Csaba Molnár, Fidias Panayiotou, Jacek Protas, Julien Sanchez, Jonas Sjöstedt, Carla Tavares, Tomáš Zdechovský
Substitutes present for the final vote	Bert-Jan Ruissen, Annamária Vicsek, Michal Wiezik
Members under Rule 216(7) present for the final vote	Vilija Blinkevičiūtė, Gaetano Pedulla’

FINAL VOTES BY ROLL CALL BY THE COMMITTEE RESPONSIBLE

Final votes on proposals for decisions

Clean Aviation Joint Undertaking

21	+
ECR	Bert-Jan Ruissen
NI	Fidias Panayiotou
PPE	Georgios Aftias, Caterina Chinnici, Esteban González Pons, Monika Hohlmeier, Kinga Kollár, Jacek Protas, Tomáš Zdechovský
Renew	Gilles Boyer, Olivier Chastel, Michal Wiezik
S&D	Vilija Blinkevičiūtė, Giuseppe Lupo, Marit Maij, Csaba Molnár, Carla Tavares
The Left	Gaetano Pedulla’, Jonas Sjöstedt
Verts/ALE	Damian Boeselager, Daniel Freund

4	–
ECR	Dick Erixon
ESN	Arno Bausemer
PfE	Virginie Joron, Julien Sanchez

2	0
PfE	Tamás Deutsch, Annamária Vicsek

Key to symbols:

+ : in favour

– : against

0 : abstention

Circular Bio-based Europe Joint Undertaking

22	+
ECR	Bert-Jan Ruissen
NI	Fidias Panayiotou
PPE	Georgios Aftias, Caterina Chinnici, Esteban González Pons, Niclas Herbst, Monika Hohlmeier, Kinga Kollár, Jacek Protas, Tomáš Zdechovský
Renew	Gilles Boyer, Olivier Chastel, Michal Wiezik
S&D	Vilija Blinkevičiūtė, Giuseppe Lupo, Marit Maij, Csaba Molnár, Carla Tavares
The Left	Gaetano Pedulla’, Jonas Sjöstedt
Verts/ALE	Damian Boeselager, Daniel Freund

4	–
ECR	Dick Erixon
ESN	Arno Bausemer
PfE	Virginie Joron, Julien Sanchez

2	0
PfE	Tamás Deutsch, Annamária Vicsek

Key to symbols:

+ : in favour

– : against

0 : abstention

Clean Hydrogen Joint Undertaking

21	+
ECR	Bert-Jan Ruissen
NI	Fidias Panayiotou
PPE	Georgios Aftias, Caterina Chinnici, Esteban González Pons, Niclas Herbst, Monika Hohlmeier, Kinga Kollár, Jacek Protas, Tomáš Zdechovský
Renew	Gilles Boyer, Olivier Chastel, Michal Wiezik
S&D	Vilija Blinkevičiūtė, Giuseppe Lupo, Marit Maij, Csaba Molnár, Carla Tavares
The Left	Gaetano Pedulla’
Verts/ALE	Damian Boeselager, Daniel Freund

3	–
ECR	Dick Erixon
PfE	Virginie Joron, Julien Sanchez

3	0
ESN	Arno Bausemer
PfE	Tamás Deutsch, Annamária Vicsek

Key to symbols:

+ : in favour

– : against

0 : abstention

Europe’s Rail Joint Undertaking

21	+
ECR	Bert-Jan Ruissen
NI	Fidias Panayiotou
PPE	Georgios Aftias, Caterina Chinnici, Esteban González Pons, Niclas Herbst, Monika Hohlmeier, Kinga Kollár, Jacek Protas, Tomáš Zdechovský
Renew	Olivier Chastel, Michal Wiezik
S&D	Vilija Blinkevičiūtė, Giuseppe Lupo, Marit Maij, Csaba Molnár, Carla Tavares
The Left	Gaetano Pedulla’, Jonas Sjöstedt
Verts/ALE	Damian Boeselager, Daniel Freund

4	–
ECR	Dick Erixon
ESN	Arno Bausemer
PfE	Virginie Joron, Julien Sanchez

2	0
PfE	Tamás Deutsch, Annamária Vicsek

Key to symbols:

+ : in favour

– : against

0 : abstention

European High-Performance Computing Joint Undertaking

22	+
ECR	Bert-Jan Ruissen
NI	Fidias Panayiotou
PPE	Georgios Aftias, Caterina Chinnici, Esteban González Pons, Niclas Herbst, Monika Hohlmeier, Kinga Kollár, Jacek Protas, Tomáš Zdechovský
Renew	Gilles Boyer, Olivier Chastel, Michal Wiezik
S&D	Vilija Blinkevičiūtė, Giuseppe Lupo, Marit Maij, Csaba Molnár, Carla Tavares
The Left	Gaetano Pedulla’, Jonas Sjöstedt
Verts/ALE	Damian Boeselager, Daniel Freund

3	–
ECR	Dick Erixon
PfE	Virginie Joron, Julien Sanchez

3	0
ESN	Arno Bausemer
PfE	Tamás Deutsch, Annamária Vicsek

Key to symbols:

+ : in favour

– : against

0 : abstention

European Joint Undertaking for ITER and the Development of Fusion Energy

20	+
ECR	Bert-Jan Ruissen
NI	Fidias Panayiotou
PPE	Georgios Aftias, Caterina Chinnici, Esteban González Pons, Niclas Herbst, Monika Hohlmeier, Kinga Kollár, Jacek Protas, Tomáš Zdechovský
Renew	Gilles Boyer, Olivier Chastel, Michal Wiezik
S&D	Vilija Blinkevičiūtė, Giuseppe Lupo, Marit Maij, Csaba Molnár, Carla Tavares
Verts/ALE	Damian Boeselager, Daniel Freund

5	–
ECR	Dick Erixon
PfE	Virginie Joron, Julien Sanchez
The Left	Gaetano Pedulla’, Jonas Sjöstedt

3	0
ESN	Arno Bausemer
PfE	Tamás Deutsch, Annamária Vicsek

Key to symbols:

+ : in favour

– : against

0 : abstention

Global Health EDCTP3 Joint Undertaking

22	+
ECR	Bert-Jan Ruissen
NI	Fidias Panayiotou
PPE	Georgios Aftias, Caterina Chinnici, Esteban González Pons, Niclas Herbst, Monika Hohlmeier, Kinga Kollár, Jacek Protas, Tomáš Zdechovský
Renew	Gilles Boyer, Olivier Chastel, Michal Wiezik
S&D	Vilija Blinkevičiūtė, Giuseppe Lupo, Marit Maij, Csaba Molnár, Carla Tavares
The Left	Gaetano Pedulla’, Jonas Sjöstedt
Verts/ALE	Damian Boeselager, Daniel Freund

4	–
ECR	Dick Erixon
ESN	Arno Bausemer
PfE	Virginie Joron, Julien Sanchez

2	0
PfE	Tamás Deutsch, Annamária Vicsek

Key to symbols:

+ : in favour

– : against

0 : abstention

Innovative Health Initiative Joint Undertaking

20	+
ECR	Bert-Jan Ruissen
NI	Fidias Panayiotou
PPE	Georgios Aftias, Caterina Chinnici, Esteban González Pons, Monika Hohlmeier, Kinga Kollár, Jacek Protas, Tomáš Zdechovský
Renew	Gilles Boyer, Olivier Chastel, Michal Wiezik
S&D	Vilija Blinkevičiūtė, Giuseppe Lupo, Marit Maij, Csaba Molnár, Carla Tavares
The Left	Gaetano Pedulla’, Jonas Sjöstedt
Verts/ALE	Damian Boeselager

4	–
ECR	Dick Erixon
ESN	Arno Bausemer
PfE	Virginie Joron, Julien Sanchez

2	0
PfE	Tamás Deutsch, Annamária Vicsek

Key to symbols:

+ : in favour

– : against

0 : abstention

Chips Joint Undertaking (before 21.9.2023: Key Digital Technologies Joint Undertaking)

21	+
ECR	Bert-Jan Ruissen
NI	Fidias Panayiotou
PPE	Georgios Aftias, Caterina Chinnici, Esteban González Pons, Monika Hohlmeier, Kinga Kollár, Jacek Protas, Tomáš Zdechovský
Renew	Gilles Boyer, Olivier Chastel, Michal Wiezik
S&D	Vilija Blinkevičiūtė, Giuseppe Lupo, Marit Maij, Csaba Molnár, Carla Tavares
The Left	Gaetano Pedulla’, Jonas Sjöstedt
Verts/ALE	Damian Boeselager, Daniel Freund

3	–
ECR	Dick Erixon
PfE	Virginie Joron, Julien Sanchez

3	0
ESN	Arno Bausemer
PfE	Tamás Deutsch, Annamária Vicsek

Key to symbols:

+ : in favour

– : against

0 : abstention

Single European Sky ATM Research 3 Joint Undertaking

23	+
ECR	Dick Erixon, Bert-Jan Ruissen
NI	Fidias Panayiotou
PPE	Georgios Aftias, Caterina Chinnici, Esteban González Pons, Niclas Herbst, Monika Hohlmeier, Kinga Kollár, Jacek Protas, Tomáš Zdechovský
Renew	Gilles Boyer, Olivier Chastel, Michal Wiezik
S&D	Vilija Blinkevičiūtė, Giuseppe Lupo, Marit Maij, Csaba Molnár, Carla Tavares
The Left	Gaetano Pedulla’, Jonas Sjöstedt
Verts/ALE	Damian Boeselager, Daniel Freund

3	–
ESN	Arno Bausemer
PfE	Virginie Joron, Julien Sanchez

2	0
PfE	Tamás Deutsch, Annamária Vicsek

Key to symbols:

+ : in favour

– : against

0 : abstention

Smart Networks and Services Joint Undertaking

21	+
ECR	Bert-Jan Ruissen
NI	Fidias Panayiotou
PPE	Georgios Aftias, Caterina Chinnici, Esteban González Pons, Monika Hohlmeier, Kinga Kollár, Jacek Protas, Tomáš Zdechovský
Renew	Gilles Boyer, Olivier Chastel, Michal Wiezik
S&D	Vilija Blinkevičiūtė, Giuseppe Lupo, Marit Maij, Csaba Molnár, Carla Tavares
The Left	Gaetano Pedulla’, Jonas Sjöstedt
Verts/ALE	Damian Boeselager, Daniel Freund

3	–
ESN	Arno Bausemer
PfE	Virginie Joron, Julien Sanchez

3	0
ECR	Dick Erixon
PfE	Tamás Deutsch, Annamária Vicsek

Key to symbols:

+ : in favour

– : against

0 : abstention

Final vote on motion for a resolution

20	+
ECR	Bert-Jan Ruissen
NI	Fidias Panayiotou
PPE	Georgios Aftias, Caterina Chinnici, Esteban González Pons, Niclas Herbst, Monika Hohlmeier, Kinga Kollár, Jacek Protas, Tomáš Zdechovský
Renew	Gilles Boyer, Olivier Chastel, Michal Wiezik
S&D	Vilija Blinkevičiūtė, Giuseppe Lupo, Marit Maij, Csaba Molnár, Carla Tavares
Verts/ALE	Damian Boeselager, Daniel Freund

4	–
ECR	Dick Erixon
ESN	Arno Bausemer
PfE	Virginie Joron, Julien Sanchez

2	0
PfE	Tamás Deutsch, Annamária Vicsek

Key to symbols:

+ : in favour

– : against

0 : abstention

MIL OSI Europe News –

April 24, 2025

MIL-OSI Europe: REPORT on discharge in respect of the implementation of the general budget of the European Union for the financial year 2023, Section IX – European Data Protection Supervisor – A10-0053/2025

Source: European Parliament

2. MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

with observations forming an integral part of the decision on discharge in respect of the implementation of the general budget of the European Union for the financial year 2023, Section IX – European Data Protection Supervisor

(2024/2028(DEC))

The European Parliament,

– having regard to its decision on discharge in respect of the implementation of the general budget of the European Union for the financial year 2023, Section IX – European Data Protection Supervisor,

– having regard to Rule 102 of and Annex V to its Rules of Procedure,

– having regard to the opinion of the Committee on Civil Liberties, Justice and Home Affairs,

– having regard to the report of the Committee on Budgetary Control (A10-0053/2025),

A. whereas, in the context of the discharge procedure, the discharge authority wishes to stress the particular importance of further strengthening the democratic legitimacy of the Union institutions by improving transparency and accountability, and implementing the concept of performance-based budgeting and good governance of human resources (HR);

B. whereas data protection is a fundamental right, protected by Union law and enshrined in Article 8 of the Charter of Fundamental Rights of the European Union;

C. whereas Article 16 of the Treaty on the Functioning of the European Union provides that compliance with the rules relating to the protection of individuals, with regard to the processing of personal data concerning them, is to be subject to control by an independent authority;

D. whereas Regulation (EU) 2018/1725 provides for the establishment of an independent authority, the European Data Protection Supervisor (the ‘EDPS’), responsible for protecting and guaranteeing the right to data protection and privacy, and tasked with ensuring that the institutions and bodies, offices and agencies of the Union embrace a strong data protection culture;

E. whereas the EDPS carries out its functions in close cooperation with fellow Data Protection Authorities (DPAs) as part of the European Data Protection Board (EDPB), and it serves the public interest while being guided by principles of impartiality, integrity, transparency, pragmatism and respects Union legislation;

1. Notes that the budget of the EDPS falls under MFF Heading 7 ’European public administration’, which amounted to a total of EUR 12,3 billion, i.e. 6,4 % of Union budget spending, in 2023; notes that the budget of the EDPS represented 0,18 % of MFF Heading 7 appropriations;

2. Notes that the Court of Auditors (the ‘Court’), in its Annual Report (the ‘Court’s report’) for the financial year 2023, examined a sample of 70 transactions under MFF Heading 7, of which 21 (30 %) contained errors; further notes that for five of those errors, which were quantified by the Court, the Court estimated a level of error below the materiality threshold;

3. Notes from the Court’s report its observation that administrative expenditure comprises expenditure on HR including pensions, which in 2023 accounted for about 70 % of the total administrative expenditure, and on buildings, equipment, energy, communications and information technology; welcomes the Court’s renewed opinion that, overall, administrative spending is low risk;

4. Notes from the Court’s report that in 2023 it audited a salary payment of an official who had last made a declaration concerning rights to family and child allowance in 2020; echoes the Court’s concern that delays in receiving and verifying such declarations increase the risk of ineligible payments;

Budgetary and financial management

5. Notes that the final adopted budget for the EDPS was EUR 22 711 559 in 2023, which represents an increase of 12,06 % compared to 2022; notes that the budget of the EDPS also covers the work of the independent Secretariat of the EDPB; notes from the Annual report of the EDPS for 2023 (the ‘Annual Report’) that the adopted budget of the EDPB was EUR 7,67 million in 2023, including EUR 300 000 granted by means of an amending budget which was needed due to an increase in litigation activities in 2023;

6. Acknowledges that the budget monitoring and planning efforts of the EDPS in the financial year 2023 resulted in a budget implementation rate of current year commitment appropriations of 96 % in 2023 (slightly lower than in 2022 when that rate was 98 %); further notes from the report on the EDPS annual accounts for 2023 that the current year payment appropriations execution rate was 84 % (lower than 88 % in 2022); notes in addition, from EDPS replies to the questionnaire submitted by the Committee on Budgetary Control for the 2023 budgetary discharge (the ‘Questionnaire’), that the execution rate of payment appropriations overall was 91,33 % in 2023 (lower than 94,09 % in 2022);

7. Notes further that the amount of carry-overs (C8) from 2023 to 2024 was EUR 2 517 942,67 or 11,08 % of the total budget for 2023, compared to EUR 1 827 354,23 or 9,01 % of the total budget for 2022; notes that the execution rate of the C8 budget in 2023 was 76,65 % (higher than 73,77 % in 2022);

8. Welcomes an improvement in the average time to pay from 25 days in 2022 to 19 days in 2023, with 97,50 % of payments processed on time; notes that that improvement is also due to the EDPS having solved an old bug with the electronic payment system for invoices linked to mission costs; notes further a significant increase in the number of payments from 799 in 2022 to 1335 in 2023; observes in that context that the number of transactions is still lower than pre-pandemic levels due to changes in the way of working (such as hybrid meetings or virtual events for experts);

9. Notes that the effects of illegal Russia’s war of aggression against Ukraine continued to create budgetary pressure on the EDPS in 2023, including through rising inflation and the consequent increase in energy costs, with the most affected budget lines being staff salaries, building security and rental costs, mission costs and services provided by external staff; commends in that context the EDPS for having re-adjusted its priorities and having implemented internal reallocation within budget chapters; understands that budgetary optimisation was necessary in order to successfully manage the indexation of staff salaries and rental costs, as well as an increase in the costs of external lawyer support services due to an increased number of EDPS binding decisions which led to a bigger number of cases to be defended before the Court of Justice of the European Union (CJEU) with the help of external legal assistance; regrets in that context that the EDPS had to postpone some of its activities, such as a feasibility study on artificial intelligence; calls on the EDPS to abide to the competences of its mandate with a collaborative approach with the Union institutions and agencies and to avoid initiating any legal action, especially those which are manifestly inadmissible, in order to avoid negative repercussions on the management of resources, which do not allow the EDPS to carry out its activities as an Institution;

10. Expresses concern about the significant increase in EDPS staff mission costs, from EUR 28 789 in 2021 and EUR 176 903 in 2022, to EUR 284 580 in 2023; calls on the EDPS to assess whether the resources spent on missions are being used appropriately and effectively; notes that the EDPS ceased making public the number of missions funded by organisers, as well as information on which unit or sector participated in each mission, thus reducing transparency regarding mission expenses; calls on the EDPS to reinstate this practice; encourages the EDPS to promote the use of video-conferencing tools where suitable, as this could contribute to lowering the number of missions and reducing costs; calls on the EDPS to assess whether the resources spent on missions are being used appropriately and effectively.

Internal management, performance and internal control

11. Notes that the EPDS used nine key performance indicators (KPIs) to monitor its performance in 2023, in alignment with the main objectives of the EDPS Strategy 2020-2024 which is implemented through the Annual Management Plan; notes from the Annual Report that the EDPS over-delivered in almost all areas, as indicated by the results of KPIs for 2023, except for one KPI (the number of EDPS followers on some social media accounts); notes with concern that the EDPS encountered considerable challenges due to a growing workload and intricate data protection issues arising from the rapidly evolving digital landscape, as well as due to the extension of the EDPS mandate to supervisory activities (such as audits and investigations) and replies to consultations and prior consultations, all in the context of a limited budget; notes from the EDPS’ follow-up report to Parliament’s resolution on the implementation of the EDPS’ budget for 2022 (the ‘Follow-up Report’) that several legislative developments in the last two years have impacted the work and resources of the EDPS, due to the extension of Eurojust’s mandate, new information to be received by Europol under the Digital Services Act, the roll out of the new Union’s large-scale databases and interoperability framework in the justice and home affairs field and the entry into force of the Artificial Intelligence Act (the “AI Act”); calls on the Commission and on the budgetary authority to take those matters into consideration during the annual budgetary procedure;

12. Welcomes the fact that, in 2023, the EDPS strengthened its ability to assess and prepare for emerging technological trends and their potential impact on privacy and data protection; notes that this was achieved through a foresight-based approach, with a focus on monitoring developments in areas such as large language models, digital identity wallets, the internet of behaviours, extended reality, and deep fake detection; welcomes in that context the publication by the EDPS of its third TechSonar initiative on emerging technologies; congratulates moreover the EDPS for having been awarded the GPA Global Privacy and Data Protection Awards 2023 in the category of innovation;

13. Notes that 2023 was marked by several organisational changes or updates that were needed in order to respond and adapt to the evolving data protection challenges; welcomes in this context the appointment of a Secretary-General from 1 July 2023; notes in addition the transition of two sectors into units such as ‘Information and Communication’ and ‘Governance and Internal Control’ and the creation of three new specialised sectors under the ‘Technology and Privacy’ (T&P) unit: ‘Systems Oversight and Audit’, ‘Technology Monitoring and Foresight’ and ‘Digital Transformation’;

14. Emphasises the role of the EDPS in supervising the processing of personal data by Union institutions, bodies, offices and agencies; notes with concern the length of proceedings before the EDPS, as the EDPS did not close a single investigation in 2023, but in comparison to the previous year, in 2023, the number of notifications beyond the 72 hours significantly decreased;

15. Notes that the EDPS received 420 complaints, i.e. 53 more than in 2022, out of which 73 were admissible and 347 inadmissible in 2023; notes that the EDPS issued a final decision, opinion or reply in 31 out of 73 complaint cases received in 2023 within 44 days on average and responded to all 347 inadmissible complaints received; notes that, out of all admissible complaints (ongoing and received in 2023), 55 cases were finalised in 2023, which represents an increase of 17 % compared to 2022; acknowledges the efforts made by the EDPS to reduce the high number of complaints by developing a dynamic tool on the EPDS’ website, although the volume of complaints remained challenging due to limited resources in 2023; notes with satisfaction that the EDPS developed various procedural tools and policies to enhance its investigatory processes in 2023; commends in that context the EDPS for having amended its Rules of Procedure, whereby the “review procedure” is replaced by a “preliminary assessment” in order to safeguard the right to be heard of all the involved parties, thus contributing to a fair and timely handling of complaints and investigations;

16. Underlines the important role of consultation and advice of EDPS in the legislative process; notes that, pursuant to Article 42(1) of Regulation (EU) 2018/1725, the EDPS responded to 80 formal legislative consultations and its advice took the form of 54 opinions (27 in 2022), 26 formal comments (49 in 2022) and 34 informal comments (30 in 2022) to the Commission and to the co-legislators in response to legislative consultation requests in 2023; commends the EDPS for its input with regard to the AI Act, in particular EDPS’ own-initiative opinion on the AI Act and advice on the AI liability rules, as well as for EDPS’ input to the GPA resolution on generative AI systems; acknowledges a significant increase (+93 %) of consultation requests over the last five years;

17. Notes that, in 2023, the EDPS carried out eight investigations and five pre-investigations, marking a significant increase compared to previous years; notes that in 2023 the EDPS was actively involved in a total of 13 investigations and seven pre-investigations, either launched in 2023 or carried over from prior years; notes that the EPDS continued two complex and resource-intensive formal investigations from 2021 into the use by European Union Institutions, Bodies and Agencies (EUIBAs) of cloud services from non-EU/EEA entities, including a focus on the Commission’s use of Microsoft 365; urges the finalisation of those investigations on time because of their significant impact on the working of institutions; notes further that the EDPS also launched five investigations based on complaints about EUIBAs’ websites, focusing in a broad way on privacy and data protection issues, with preliminary assessments expected in 2024;

18. Urges the EDPS to prioritise and enhance procedures for handling the personal data of minors under 15, particularly in the context of Europol’s systems, where such individuals may be marked as suspects; recognises the heightened vulnerability of that group and the need for robust safeguards;

19. Notes that the EDPS investigated the Commission’s alleged use of micro-targeting on platform X and continued two pre-investigations: one case concerning EUIBAs’ use of Trello cloud service, which was closed in 2023 and another one on EUIBAs’ use of profiling, which was carried out in 2024; notes that a total of six investigations and four pre-investigations (one pre-investigation in 2022) were launched in the Area of Freedom, Security, and Justice (FSJ), reflecting a significant increase from 2022; notes the EDPS’ concerns with regard to the challenges that may arise in the case of investigations where joint action between national authorities and EUIBA’s is needed; notes in addition that, as part of its audit plan for 2023, the EDPS audited the following bodies: the European Personnel Selection Office, the European Investment Bank, the European Central Bank, the European Centre for Disease Prevention and Control and the European Medicines Agency;

20. Recalls that in 2022 the EDPS brought an action for annulment of two provisions of the amended Europol Regulation before the General Court, which was later rejected; notes that meanwhile the EDPS decided to appeal the order of the General Court in case T-578/22 [8], believing the issues raised should be addressed at the highest level; regrets that the EDPS did not realise the manifest inadmissibility of its appeal, even if the institution did not intend to challenge an act by Europol, but a retroactive change in the legal framework aimed at neutralising the effects of the EDPS’ enforcement actions; calls on the institution to cooperate with Union institutions and agencies, before initiating legal proceedings that prevent the fulfilment of its mandate and the use of its resources for purposes for which they were intended; notes further that the EDPS also followed up on the implementation of its Order of 3 January 2022, including checks on Europol’s reporting; regrets that the final report on that matter was communicated by the EDPS only on 22 July 2024;

21. Notes that, after the pilot implementation of the new risk management framework at the EDPS in late 2022, an anonymous satisfaction survey was conducted in May 2023 to assess its effectiveness and gather additional suggestions; notes further that the survey results were positive, leading to the formal adoption of the framework on 26 June 2023;

22. Notes that the internal audit service (IAS) carried out an audit on the methodology for the planning of EDPS audits in the EDPS in 2023; notes that the audit was concluded with two recommendations for which the EDPS submitted an action plan to the IAS; calls on the EDPS to keep the discharge authority informed on a regular basis on the progress made in that matter;

23. Recalls the Treaty on the European Union that the EU and its institutions shall promote solidarity and equality between women and men;

HR, equality and staff well-being

24. Notes that, at the end of 2023, the EDPS had 129 members of staff, compared to 127 in 2022; notes that the EDPS employed 50 contract staff (CA) under Article 3(b) of the Staff Regulations of Officials and the Conditions of Employment of Other Servants (52 CA in 2022), 7 temporary agents (TA) under Article 2(b) and 2(c) (6 TA in 2022) and used the services of 12 external services providers (EXT) working intra-muros in 2023 (8 EXT in 2022); encourages the EDPS to continue its efforts towards a more balanced geographical representation among all Member States specifically at managerial level; welcomes the increased diversity of nationalities represented, but notes with regret the continued underrepresentation of women in senior management positions; calls for the adoption of a gender parity roadmap, including proactive recruitment measures and leadership training programs for female staff members;

25. Notes that the EDPS had 23 nationalities (from the Member States) represented among its staff in 2023, which is an improvement in comparison with 22 nationalities in 2022; notes with dissatisfaction the over-representation of five nationalities and an underrepresentation of other nationalities; urges the EDPS to continue its efforts to achieve a balanced geographical distribution of nationals from all Member States within its staff, by improving communication, fostering visibility, and enhancing job conditions to attract underrepresented nationalities;

26. Observes that, in 2023, the EDPS maintained a workforce comprising 65 % women and 35 % men, consistent with trends from previous years; regrets the absence of women in senior management roles, despite achieving gender parity among the six middle management positions; urges the EDPS to intensify its efforts to ensure gender-balanced representation across all staff levels, and invites the EDPS to promote the application of women also with a view to the next election of the Supervisor by Parliament;

27. Notes a high occupancy rate of the establishment plan of 95,65 % but also a high turnover rate of 13 % in 2023; notes that most of the unfilled positions were a result of candidates being unsuitable, given the EDPS’ need for highly specialised profiles and the small pool of eligible candidates; welcomes the addressing of those challenges through republication with a wider or more targeted dissemination of the vacancy or by redrafting the requirements; welcomes the steps taken by the EDPS regarding the hiring process; calls on the EDPS to continue to address the challenges in finding suitable candidates and to keep the discharge authority informed about improvements on staff recruitment and turnover;

28. Notes that, in the second half of 2023, the EDPS’ HR team launched a pilot for a new on-boarding process for newcomers, with sessions that cover, inter alia, presentations of core units’ work, ethics, procurement procedures and information security, whereas three on-boarding sessions were offered in 2023; invites the EDPS to continue offering to newcomers “on-boarding” and to all members of staff mandatory sessions that remind the importance of principles such as ethics, conflicts of interest, transparency, internal control and anti-fraud, as they have become the standard in the Union institutions; notes moreover that 12 individual sessions were offered for EDPS and EDPB staff, six sessions of group coaching in which participants (manager level) learned from each other, as well as a one-year team coaching with a designer for leadership development at the European School of Administration in 2023;

29. Notes, from the Questionnaire, that the EDPS offers flexible and hybrid working arrangements, that are well-received by members of staff who can benefit, inter alia, from parental leave, time credits, part-time work or working from abroad for a limited number of days per year; notes that, in 2023, the majority of staff made use of those working conditions, whereas 86,30 % of staff made use of teleworking arrangements in 2023; considers that the building infrastructure should be optimised to reflect that high rate of teleworking, which could contribute to reducing operational costs and ensuring more efficient use of office space; welcomes the EDPS’ continued efforts to actively improve physical and mental well-being of its staff;

30. Commends the EDPS for carrying out several awareness-raising actions during the year 2023 with information sharing on elimination of racial discrimination, International Women’s Day, EU diversity month and learning about neurodiversity; notes that currently the EDPS does not employ staff with disabilities but has an equal opportunities clause included in all EDPS vacancy notices and actively encourages applications from candidates with disabilities;

31. Notes from the Questionnaire that the EDPS considers confidential any information on burnout cases, including the number thereof; disagrees with that opinion and calls the EDPS to provide the discharge authority with the number of burnout cases on a yearly basis; notes with satisfaction that, in 2023, there were no harassment cases reported at the EDPS; welcomes the fact that, in 2023, the EDPS continued to provide an anti-harassment presentation delivered by one of the EDPS’ confidential counsellors, as part of the induction training called the ‘EDPS Welcome Day’; commends the publication of the decision on anti-harassment and the role of the confidential counsellors on the EDPS’ intranet;

Ethical framework and transparency

32. Notes that, in 2023, the EDPS focused its efforts on increasing staff awareness of the EDPS/EDPB ethical framework by organising mandatory dedicated training sessions for all staff and induction trainings for EDPS/EDPB newcomers, appointing a new ethics officer and participating in the ‘Comité Paritaire des Questions Statuaries’ working group on ethics; welcomes the establishment of a mailbox by the EPDS, where members of staff can submit their requests regarding any ethics related inquiries, as well as the use of Commission’s Ethics module in Sysper; encourages the EDPS to continue raising awareness and organising surveys to assess the level of staff awareness of the EDPS/EDPB ethical framework;

33. Welcomes the overall high level of transparency achieved by the EDPS concerning its activities, in particular as regards the publication of the agenda and the declaration of interests of the Supervisor and of the Head of EDPS Administration, in line with the Supervisor’s code of conduct of 2019; notes from the Follow-up Report that the EDPS has adopted two codes of conduct, whereas one of them applies to the Supervisor and the other one applies to the EDPS staff; understands that in cases when the Secretary-General is called to replace the Supervisor, the latter’s code of conduct also applies to the Secretary-General;

34. Notes with satisfaction that the EDPS has never been involved in any investigations by the European Anti-Fraud Office (OLAF) since its establishment;

35. Notes that, out of five inquiries opened by the Ombudsman in 2023 concerning the EDPS, four were closed without any further inquiry; notes that, for one enquiry, the decision was still pending and expected for Q4 2024; calls on the EDPS to keep the discharge authority informed as to the outcome of this enquiry;

36. Regrets that the EDPS has still not formally joined the Union’s Transparency Register (TR); nevertheless notes from the Follow-up Report that, with a view to formally joining the TR, the EDPS has launched an internal assessment on transparency measures, whereas, in 2023, exploratory meetings and exchanges of the EDPS with secretariat of the TR took place; calls on the EDPS to inform the discharge authority of the outcome of that assessment exercise; reiterates its call on the EDPS to join and use the TR, including for the proactive disclosure of meetings with any third parties, to ensure transparency in EDPS’ regulatory and advisory functions;

37. Notes with satisfaction that, in 2023, the EPDS established internal rules applicable to the hearing of persons that could be affected by an EDPS final decision adopted in own-initiative investigations and inquiries in order to ensure the proper exercise of their fundamental right to be heard in such proceedings; commends the EPDS for publishing a new factsheet on EDPS Investigations and a new EDPS Investigation Policy as well as for ensuring that all financial reports, including annual budgets, accounting and audit reports, are made publicly accessible through a Union institution website and other official channels, as the EPDS takes a leading role in enhancing the cybersecurity preparedness of the Union institutions;

38. Notes with satisfaction from the Questionnaire that no cases of conflicts of interest, whistleblowing or fraud were reported in the EDPS in 2023; notes that the EDPS has set up a framework to prevent conflicts of interest at the level of senior management and staff through codes of conduct, awareness raising and declarations of absence of conflicts of interest and confidentiality; notes that, in addition to the mandatory introduction to the ethical framework of the EDPS for all new members of staff, new members of staff are also introduced to the EDPS’ anti-fraud strategy;

39. Notes from the Questionnaire that the EDPS has internal rules on whistleblowing, which define safe routes and channels through which staff may raise concerns about fraud, corruption or any other serious wrongdoing, without prejudice to the confidentiality of the identity of the whistleblower and of the information reported; notes that, so far, there has never been a whistleblowing case reported to the EDPS;

40. Urges the EDPS to publicly disclose any recusals due to conflicts of interest in its enforcement decisions, ensuring full transparency in regulatory oversight and decision-making;

Digitalisation, cybersecurity and data protection

41. Notes from the Questionnaire that the 2023 budget for IT equipment and projects was 9,5 % lower compared to 2022; notes that that decrease was primarily because no new IT feasibility studies were being commissioned in 2023, as opposed to 2022 where such studies represented a substantial portion of the IT budget; notes further that other cost elements remain relatively stable between the two years, including general IT services and maintenance;

42. Notes from the Follow-up Report and the Questionnaire the conclusions of the IT feasibility study carried out in 2022, whereby there are gaps between what the IT tools and services provided by the Commission and Parliament can offer and the specific needs of the EDPS; notes that those gaps should be addressed by developing in-house capabilities and applications for which a minimum of five IT staff and partial outsourcing EDPS was deemed necessary; regrets that, due to budgetary constraints, implementation of the recommendations of the study remained on hold; calls on the EDPS to consider a step-by-step approach by starting with those recommendations and projects that would require fewer resources;

43. Commends the progress made in 2023 by the EDPS in digitalising its workflows and processes, with the introduction of ARES, the qualified digital signature (e-IDAS) and a collaborative platform (Nextcloud) for drafting documents and video-conferencing, as well as updates to the tool (Website Evidence Collector) that automates the collection of personal data processing on websites of data controllers and processors, the adoption of the acceptance environment of EU Send Web, a service/channel to exchange sensitive non-classified information with other EUIBAs and further progress made towards implementing services that cannot be outsourced, such as the form and the electronic workflow to manage data breach notifications; notes nevertheless issues with regard to the use and maintenance of the e-procurement system;

44. Welcomes the EDPS’s focus on ensuring that external contractors meet the necessary moral and ethical standards expected of all Union institutions, bodies, offices and agencies, particularly in light of the previous use of external companies by EDPS that, according to Yale University’s ranking, continue to operate in Russia;

45. Acknowledges that the EDPS successfully relies on many of the administrative systems used by the Commission, particularly in the field of HR and business administration processes, as well as on some of Parliament’s services, including the provision of laptops, network infrastructure and video-conferencing; commends the fact that the project to improve the quality and performance of the computers provided to EDPS staff, in collaboration with Parliament, with a view to the generalisation of hybrid work, has been completed;

46. Acknowledges the leading role of EDPS in enhancing the cybersecurity preparedness of the Union institutions, while working closely with bodies such as European Union Agency for Cybersecurity (ENISA) and cybersecurity hubs such as CERT-EU; urges it to develop a structured audit framework for cybersecurity risks within Union bodies; notes that, in 2023, the EDPS continued to improve its readiness to protect personal data and sensitive information against cyber-attacks in view of the rapidly changing cybersecurity threat landscape; commends in that context the EDPS for reviewing its security policies and methodologies in preparation for the impact of the Cybersecurity Regulation (Regulation (EU, Euratom) 2023/2841); notes from the Questionnaire that the EDPS introduced a request for two additional full-time equivalents to cover cybersecurity infrastructure in connection with EDPS’s obligations under that Regulation as well as the EDPS’ role as a member of the Interinstitutional Cybersecurity Board (IICB); notes further with appreciation that the EPDS upgraded its Information Security Policy and the EDPS Acceptable Use Policy to address specific cybersecurity threats in relation to teleworking, use of personal mobile devices and banning of dangerous applications (TikTok); notes that the EDPS did not encounter any cyber-attacks in 2023; calls for annual public reporting on detected threats, response measures, and institutional cyber resilience;

47. Commends the EDPS for updating cybersecurity training for all staff and revamping the security training model for newcomers; appreciates that the EPDS has been proactive in raising awareness about cyber security risks, for instance by preparing fact sheets, conducting surveys with EUIBAs and running awareness campaigns; encourages the EDPS to ensure that staff receives compulsory training on the safe and ethical use of AI tools to enhance their understanding and mitigate potential risks;

Buildings

48. Notes that in 2023, as in 2022, the EDPS and EDPB were the sole tenants of Parliament’s building where they were located, following the move of the Ombudsman at the end of 2021 and that by renting their premises from the Parliament rather than the private market the EDPS intends to keep the rental and maintenance costs at a reasonable level; notes that the EDPS had to request an additional EUR 81 856,84 for paying rental costs to Parliament, given that the indexation rate was 8,82 % and thus higher than the 2 % ceiling for administrative expenditures;

49. Notes that, in terms of accessibility of its building, the EDPS relies on the decisions taken and implemented by Parliament, as part of their building policy; notes from the Follow-up Report that the EDPS employs staff with physical impairments due to serious illness; welcomes the commitment of the EDPS to explore the possibilities of hiring trainees with reduced mobility or disabilities;

Environment and sustainability

50. Notes that the EDPS has not joined the Eco-Management and Audit Scheme (EMAS) but has implemented several measures to reduce its environmental footprint, such as regulating the temperature automatically and centrally, turning lights off automatically when there is no movement in the room, purchasing eco-friendly products and services and automating the workflows with the introduction of ARES; notes from the Follow-up Report that according to the information received by Parliament’s Directorate-General for Infrastructure and Logistics, responsible for the management of the building rented by the EDPS, solar panels are installed on that building; asks the EDPS to inform the discharge authority to report on the share (%) of the solar-panel produced electricity in the EDPS’ total energy consumption needs per year; calls further on the EDPS to inform the discharge authority of any new developments regarding the EMAS certification process;

51. Notes that the EPDS has not assessed its carbon footprint in 2023; welcomes, however, that the EDPS continues to apply measures that reduce the carbon footprint by reducing the travel of journey to the office through teleworking possibilities, reimbursing 50 % of staff’s monthly/annual subscriptions for the use of public transport, encouraging the staff to favour videoconferencing and train travel for short distances, managing the cycle for invoices electronically and achieving an entirely paperless selection procedure and appraisal exercise as regards HR;

52. Urges the EDPS to adopt the EMAS to systematically monitor and improve its environmental footprint, particularly in terms of energy consumption, waste reduction, and sustainable office policies;

53. Notes that the EDPS addresses sustainability-related risks (such as environmental, social and governance risks) in a comprehensive way through an annual risk assessment exercise; welcomes in that context that the EDPS adopted its new risk management process in 2023, which should help the EDPS to target and better analyse those risks and consequently better calibrate mitigating actions;

Interinstitutional cooperation

54. Welcomes the budgetary and administrative savings achieved by the EDPS through inter-institutional cooperation, particularly the conclusion of service-level agreements with Parliament for the rental of its premises and the use of IT system applications, hardware supplies and maintenance and with the Commission for HR and business administration processes, as well as through participation in large interinstitutional framework contracts in areas such as IT consultancy, interim services and office supplies; commends in addition the EDPS for maintaining a structured cooperation with the Ombudsman, the Agency for Fundamental Rights and CERT-EU through memorandums of understanding;

55. Notes that the EDPS participates in meetings of various interinstitutional bodies; welcomes in this context the participation of the EPDS in meetings of the Heads of Administration and the Interinstitutional Online Communication Committee, led by Parliament’s Directorate-General for Communication; acknowledges that interinstitutional cooperation with EDPS, in his supervisory role, is of key importance for the other Union institutions to enhance their level of compliance with the data protection legal framework;

56. Calls for closer cooperation between the EDPS, the Court of Auditors, OLAF, and the European Public Prosecutor’s Office (EPPO) to develop common protocols for fraud detection in digital data and financial transactions within EU institutions; stresses the need for joint audits on AI-based fraud risks;

57. Welcomes the pivotal role played by the EDPS in 2023 in the coordination of the Data Protection Authorities of the Member States (DPAs) to promote consistent data protection across the Union; notes that the EDPS joined 26 DPAs in a coordinated enforcement action on the role and tasks of data protection officers (DPOs), assessing their compliance with Regulation (EU) 2018/1725; notes the continued active involvement of the EPDS in the Coordinated Supervision Committee (CSC) within the area of FSJ addressing issues such as handling complaints against Europol and enhancing cooperation processes; appreciates furthermore all the other steps taken to improve cooperation between the EDPS and the DPAs such as the conduction of a joint Europol inspection with national authorities (Poland and Lithuania) and the participation in the coordinated supervisory action on processing minors’ data in Europol systems, the participation in an operational visit to the European Delegated Prosecutor’s office in Lisbon under a Working Arrangement with Portugal’s DPA and the coordination of an onsite inspection in Lesvos with Greece’s DPA to verify data collection practices during Joint Operations by Frontex; acknowledges that those interinstitutional engagements help the EDPS align with best practices of Union institutions and benefit from the exchange of information with peer departments;

Communication

58. Notes that the budget for public communication and promotional activities in 2023 amounted to EUR 468 000, which represented an increase of 54 % compared to 2022;

59. Notes with satisfaction that the EDPS organised several communication events online as well as in person in 2023, aimed at raising awareness of EDPS’ role and mission among a wider public and the importance of respecting Union data protection rules, such as Data Protection Day, the EDPS Trainees’ conference (twice a year), the EDPS Seminar on the essence of the fundamental rights to privacy and data protection, and other international events;

60. Notes that the EDPS communicates online via its website and its social media accounts on X (ex-twitter) (29 400 followers), LinkedIn (71 000 followers), YouTube (2 900 followers), EU-Voice (5 900 followers) and EU-Video (750 followers);

61. Notes that the pilot project of the platforms EU Voice and EU Video (free and open-source social media networks, privacy-oriented and based on Mastodon and PeerTube software) continued in 2023; welcomes in that context the EDPS’ contribution to the Union’s strategy on data and digital sovereignty in order to promote the Union’s independence in the digital world and compliance with the data protection legal framework.

MIL OSI Europe News –

April 24, 2025
MIL-OSI Europe: REPORT on the protection of the European Union’s financial interests – combating fraud – annual report 2023 – A10-0049/2025

Source: European Parliament

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

on the protection of the European Union’s financial interests – combating fraud – annual report 2023

(2024/2083(INI))

The European Parliament,

– having regard to Articles 310(6) and 325(5) of the Treaty on the Functioning of the European Union (TFEU),

– having regard to the Commission report of 25 July 2024 entitled ‘35th Annual Report on the protection of the European Union’s financial interests and the fight against fraud – 2023’ (COM(2024)0318) (2023 PIF Report),

– having regard to the European Anti-Fraud Office (OLAF) 2023 annual report [1] and the Activity report of the Supervisory Committee of OLAF – 2023 [2],

– having regard to the European Public Prosecutor’s Office (EPPO) 2023 Annual Report published on 1 March 2024,

– having regard to Regulation (EU, Euratom) 2020/2092 of the European Parliament and of the Council of 16 December 2020 on a general regime of conditionality for the protection of the Union budget [3] (the Conditionality Regulation),

– having regard to Directive (EU) 2019/1937 of the European Parliament and of the Council of 23 October 2019 on the protection of persons who report breaches of Union law [4] (the Whistleblower Directive) and to the Commission report of 3 July 2024 on its implementation and application (COM(2024)0269),

– having regard to the Commission communication of 5 July 2023 entitled ‘2023 Rule of Law Report – The rule of law situation in the European Union’ (COM(2023)0800), and to the European Parliament resolution of 28 February2024 entitled ‘Report on the Commission’s 2023 Rule of Law report’[5],

– having regard to the Commission’s decision of 16 December 2024 not to lift the measure imposed in application of Article 2(2) of Council Implementing Decision (EU) 2022/2506 of 15 December 2022 on measures for the protection of the Union budget against breaches of the principles of the rule of law in Hungary,

– having regard to the judgments of the Court of Justice of the European Union (CJEU) of 16 February 2022 in Cases C-156/21 [6] and C-157/21 [7] and to Council Implementing Decision (EU) 2022/2506 of 15 December 2022 on measures for the protection of the Union budget against breaches of the principles of the rule of law in Hungary, all of which refer to the Conditionality Regulation,

– having regard to Regulation (EU, Euratom) 2024/2509 of the European Parliament and of the Council of 23 September 2024 on the financial rules applicable to the general budget of the Union [8] (the Financial Regulation),

– having regard to Regulation (EU) 2024/1624 [9], Regulation (EU) 2024/1620 [10] and Directive (EU) 2024/1640 [11], all of the European Parliament and of the Council, all adopted on 31 May 2024 and all concerning the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, including through the establishment of the Authority for Anti-Money Laundering and Countering the Financing of Terrorism,

– having regard to Directive (EU) 2017/1371 of the European Parliament and of the Council of 5 July 2017 on the fight against fraud to the Union’s financial interests by means of criminal law [12] (the PIF Directive),

– having regard to the Commission report of 16 September 2022 entitled ‘Second report on the implementation of Directive (EU) 2017/1371 of the European Parliament and of the Council of 5 July 2017 on the fight against fraud to the Union’s financial interests by means of criminal law’ (COM(2022)0466),

– having regard to the Commission report of 3 July 2024 on the implementation and application of Directive (EU) 2019/1937 of the European Parliament and of the Council of 23 October 2019 on the protection of persons who report breaches of Union law (COM(2024)0269),

– having regard to Regulation (EU) 2021/1060 of the European Parliament and of the Council of 24 June 2021 laying down common provisions on the European Regional Development Fund, the European Social Fund Plus, the Cohesion Fund, the Just Transition Fund and the European Maritime, Fisheries and Aquaculture Fund and financial rules for those and for the Asylum, Migration and Integration Fund, the Internal Security Fund and the Instrument for Financial Support for Border Management and Visa Policy [13] (the Common Provisions Regulation),

– having regard to the Commission communication of 24 July 2024 entitled ‘2024 Rule of Law Report – The rule of law situation in the European Union’ (COM(2024)0800),

– having regard to the study entitled ‘Strengthening the fight against organised crime: Assessing the legislative framework’, published in December 2022 [14],

– having regard to the study entitled ‘Strengthening the fight against corruption: assessing the legislative and policy framework’, published in January 2023 [15],

– having regard to the study entitled ‘Compliance assessment of measures adopted by the Member States to adapt their systems to Council Regulation (EU) 2017/1939 of 12 October 2017 implementing enhanced cooperation on the establishment of the European Public Prosecutor’s Office (‘the EPPO’)’ and its extension, both published in December 2023 [16],

– having regard to the joint communication from the Commission and the High Representative of the Union for Foreign Affairs and Security Policy of 3 May 2023 on the fight against corruption (JOIN(2023)0012) and to the Commission proposal of 3 May 2023 for a directive of the European Parliament and of the Council on combating corruption, replacing Council Framework Decision 2003/568/JHA and the Convention on the fight against corruption involving officials of the European Communities or officials of Member States of the European Union and amending Directive (EU) 2017/1371 of the European Parliament and of the Council (COM(2023)0234),

– having regard to the joint Europol-OLAF report of 6 June 2023 entitled ‘Assessing the Threats to the NextGenerationEU (NGEU) Fund’,

– having regard to the European Ombudsman’s closing note of 12 September 2023 on the Strategic Initiative concerning the transparency and accountability of the Recovery and Resilience Facility in relation to Case SI/6/2021/PVV, opened on 24 February 2022,

– having regard to the European Court of Auditors (ECA) report entitled ‘Our activities in 2023’, published on 9 October 2024,

– having regard to ECA Review 04/2023 of 6 July 2023 entitled ‘Digitalising the management of EU funds’,

– having regard to Special Eurobarometer 534 entitled ‘Citizens’ attitudes towards corruption in the EU in 2023’[17],

– having regard to ECA special report 06/2023 of 13 March 2023 entitled ‘Conflict of interest in EU cohesion and agricultural spending – Framework in place but gaps in transparency and detection measures’,

– having regard to Regulation (EU) 2021/785 of the European Parliament and of the Council of 29 April 2021 establishing the Union Anti-Fraud Programme and repealing Regulation (EU) No 250/2014 [18],

– having regard to its resolution of 18 January 2024 on the protection of the European Union’s financial interests – combating fraud – annual report 2022 [19],

– having regard to Rule 55 of its Rules of Procedure,

– having regard to the report of the Committee on Budgetary Control (A10-0049/2025),

A. whereas, in line with the obligation laid down in Article 325(5) TFEU, each year, the Commission submits to the European Parliament and to the Council a report drafted in cooperation with the Member States on the measures taken for the implementation of this article (known as PIF reports);

B. whereas PIF reports are based mainly on information provided by the Member States, including data on irregularities and fraud detected, via the Irregularity Management System (IMS), and on data extracted from the Commission’s accounting system (ABAC);

C. whereas effective measures to protect the EU’s financial interests at EU level have to be implemented on the basis of data-based knowledge of the specific situation in each Member State, particularly in cases involving complex criminal activity;

D. whereas the number of irregularities detected and reported demonstrates the results of Member States’ efforts to counter illegal activities in this area and is not to be interpreted, by itself, as an indication of the level of mismanagement or fraud in the Member States;

E. whereas the links between irregularities’ occurrence, their detection and the reporting level require a wider overall assessment;

F. whereas sound management of public resources and protecting the EU’s financial interests across all EU policies should be key to increasing citizens’ confidence by ensuring the proper and effective use of taxpayers’ money;

G. whereas protecting the EU budget involves multiple actors at various levels who can only achieve their mandate through a structured network of relationships and coordination within the anti-fraud architecture (AFA)[20];

H. whereas the diversity of legal and administrative systems in the Member States and their varying levels of digitalisation need to be adequately addressed with the creation of more unified, interoperable and comparable administrative and reporting systems in the EU in order to effectively prevent and counter fraud, corruption, irregularities and other infringements;

I. whereas solid cooperation between authorities conducting administrative investigations and those conducting criminal investigations at both EU and Member State levels should be encouraged;

J. whereas the Early Detection and Exclusion System (EDES) and ARACHNE are effective tools to protect the EU budget from risks of insolvency, negligence, fraud or irregularity committed by private actors, in the case of the EDES, and via a data-mining and risk-scoring approach, in the case of ARACHNE;

K. whereas criminal networks operating in the EU are fully embracing the entire range of cutting-edge information technology, including artificial intelligence (AI), to facilitate their criminal activities, posing an even more complex threat to the EU budget and a new challenge for law enforcement and requiring the AFA to fast-track its exploration of AI use in the fight against fraud;

L. whereas respect for the values on which the EU is founded and for fundamental rights, as well as compliance with the Charter of Fundamental Rights of the European Union, are prerequisites for accessing EU funding;

M. whereas the rule of law conditionality mechanism applies across the entire EU budget as a prerequisite for accessing all EU funds and allows measures to be taken in cases of breaches of the rule of law principles that affect or seriously risk affecting the sound financial management of the EU budget or the EU’s financial interests;

N. whereas Article 22 of Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the Recovery and Resilience Facility [21] (the RRF Regulation) contains provisions concerning the protection of the EU’s financial interests;

General remarks on PIF reporting and on major threats

1. Welcomes the 2023 PIF Report and its analyses on the relevant findings, and endorses its recommendations;

2. Shares the view that effective protection of the Union’s financial interests requires the acceleration of the digitalisation that facilitates knowledge sharing, data accessibility and data processing and that would enhance the governance of the overall AFA; maintains that both the EU and national authorities should intensify the use of digital tools with a view to facilitating cooperation;

3. Reiterates that a more measurable and results-oriented governance of the activities of the AFA’s many components is key both to effectively protecting the Union’s financial interests and to assessing the AFA’s efficiency;

4. Recalls that solid cooperation between the administrative and judicial authorities conducting investigations at both EU and Member State levels is essential; reiterates its concerns over the still suboptimal situation, in particular as regards the detection and reporting of suspected fraud and irregularities and their follow-up, in which there are marked differences between Member States; encourages the Member States, therefore, to take a proactive approach to protecting the Union’s financial interests and to enhance the exchange of information between their national authorities and with EU bodies and agencies, including in order to identify and address emerging risks and fraud trends in a timely manner; underlines the fact that the fight against fraud requires a holistic and comprehensive approach, covering all stages of the anti-fraud cycle and reflecting the multiple, interconnected and interdependent actors and processes in place for the protection of the financial interests of the Union;

5. Notes that the overall number of cases of fraud and irregularities reported by the competent EU and national authorities increased significantly, by 9 %, in 2023 (13 563) compared to 2022 (12 455); regrets the fact that this is an all-time high and is the continuation of a growing trend over the last five years; observes, further, that the overall financing concerned in relation to these cases in 2023 (EUR 1.90 billion) was markedly higher than in 2022 (EUR 1.77 billion), having increased by 7.3 %; acknowledges that the multiannual cycle of implementation of numerous programmes makes comparisons based on a five-year average more appropriate than year-to-year comparisons for identifying real-time situations and obtaining reliable analysis of trends and patterns; appreciates, accordingly, that the 2023 PIF Report refers to the results of the 2019-2023 period; observes that the rise in the number of irregularities and in funding that achieves no positive results highlights the need to correlate budgets with the performance indicators of the competent institutions;

6. Is concerned by the overall scenario depicted by the multiannual analysis in the 2023 PIF Report; emphasises that the current situation justifies the efforts made to ensure more effective deployment of adequate resources and their more efficient use, which requires better governance and cooperation; underlines that fraud, corruption and violations of democracy, justice and the rule of law are deeply interconnected and cannot be tackled in isolation; calls on the Commissioners on budget, fraud and public administration and on democracy, justice and the rule of law to work closely and immediately on launching initiatives to make the actions and the results of the AFA measurable and more tangible and to present them to Parliament, in line with the commitment made at the confirmation hearings; suggests that stronger synergies be created between the Commission’s Directorate-General for Budget and other Commission directorates-general working on the rule of law and the protection of other EU values, particularly the Directorate-General for Justice and Consumers, the Directorate-General for Employment, Social Affairs and Inclusion and the Directorate-General for Regional and Urban Policy, to ensure that all the departments work together, rather than in silos, to address these systemic challenges more effectively;

7. Reiterates the call for a holistic approach in PIF reports, which are also considered an AFA governance tool, in order to provide a comprehensive overview of the synergies between all the relevant actors, identify best practices and address shortcomings; is aware that, as emphasised in the 2023 PIF Report, the operational protection of the Union’s financial interests from fraud, irregularities and other illicit activities is entrusted to national authorities, OLAF and the EPPO, and welcomes the integration of OLAF and EPPO findings in the 2023 PIF Report; asks for a deeper analysis of the interaction between the AFA components, and for the introduction of measures to increase the efficiency of the competent institutions with a view to reducing fraud and irregularities; calls for the further improvement of this holistic approach to provide a clearer, more complete and more concrete picture of the overall state of play of the protection of the Union’s financial interests, encompassing the entirety of anti-fraud action at both national and EU levels;

8. Welcomes OLAF’s investigative performance, in particular the increased number of recommendations issued (309 compared to 275 in 2022) and the overall amount recommended for financial recovery (EUR 1 043.8 million compared to EUR 426.8 million in 2022) against a stable number of cases opened (190 in 2023 and 192 in 2022) and concluded (265 in 2023 and 256 in 2022); points out, in particular, that over the 2019-2023 period, more than 88 % of the irregularities identified as potentially fraudulent and related to expenditure disbursed under direct management were detected following OLAF investigations; regrets that the long duration of the investigations can have a negative impact regarding the consequential late launching of remedial measures; reiterates its request to receive comprehensive and adequately detailed figures on the amounts effectively recovered by the Commission on the grounds of the financial recommendations issued by OLAF; calls on the Commission also to integrate in the next PIF reports ad hoc sections on OLAF in order to develop a more granular analysis and reporting of its activities and of the financial recoveries carried out;

9. Welcomes the way in which the EPPO, operationally active since June 2021, has developed and increased its activities, which is well-reflected in the numbers of opened investigations (1 371 compared to 865 in 2022), of overall currently active investigations (1 927 compared to 1 117 in 2022) and of indictments (139 compared to 87 in 2022); appreciates the level of detail in EPPO reporting, which offers relevant information on many trends and on the situation in the participating Member States; calls for greater EPPO efficiency, with this being reflected in the amounts recovered and not just in the number of investigations;

10. Stresses the added value that EU bodies bring to the protection of the financial interests of the Union and the fight against fraud, especially when it comes to cross-border crime, as shown by the operational results of the EPPO and OLAF in 2023 too; reiterates its call for all relevant EU actors involved in the fight against fraud to be guaranteed adequate resources and, in this regard, reminds the Commission and the Council that every euro spent on investigation and anti-fraud action returns to the EU budget;

11. Is concerned that the substantial financial loss of value added tax (VAT) fraud reported by the EPPO is having a detrimental effect on the national budgets of the Member States while simultaneously threatening fair taxation and fair competition between businesses in the single market; underlines the fact that VAT is an important resource for the Union’s budget too; deems it appropriate to take into account the complexity of the underlying provisions on the system of own resources of the Union when quantifying the financial impact of the EPPO’s activities [22]; points out the concerning number of investigations into the recovery and resilience programmes (233) and the estimated financial loss (EUR 1.86 billion); calls, therefore, for adequate measures to be taken at both national and EU levels;

12. Calls on the Commission to develop and implement solutions allowing a follow-up to OLAF recommendations and EPPO prosecutions, their analysis and the measurability of the actual impact of their actions on the protection of the Union’s budget in terms of recovery of both mismanaged funds and of uncollected resources, with a view to providing additional justification for results-oriented policymaking; calls on the Commission to notify Parliament of the outcomes of EPPO prosecutions;

13. States that communication and transparency are essential to address fraud and corruption; emphasises the importance of engaging civil society, the media and investigative journalism to enhance awareness; underlines the central role played by the media and investigative journalism in the fight against fraud, corruption, conflicts of interest and other misuse of public funds; considers that it is essential to safeguard the media from political pressure and influence to protect its independence and its role as a watchdog of democracy and the sound management of public funds;

14. Underlines that transparency plays an important role in the management of public funds; encourages the Commission and the Member States to maximise transparency in the use of funds, including with regard to information about final beneficiaries;

15. Underlines the importance of the role played by public authorities in fostering a zero-tolerance culture with regard to fraud and states that communication and transparency are essential to address fraud and corruption; emphasises the importance of engaging civil society, the private sector, the media and investigative journalism to enhance awareness; encourages the Commission to provide support to these relevant actors in the form of training programmes, funding and any other measures required to ensure their independence from external influence and from unlawful state surveillance, intimidation and attempts to undermine their legitimacy, in line with EU fundamental rights and the rule of law; invites the Commission to launch an EU-wide public awareness campaign on the risks of fake news, misinformation and deepfake content in fraud cases affecting EU-funded projects;

16. Is concerned about the EPPO’s and Europol’s clear warning on the increasing presence of groups of organised criminals behind the most relevant cases of cross-border fraud; notes that the EPPO’s annual report indicates 209 investigated offences concerning PIF-focused criminal organisations in its active investigations up to the end of 2023; understands that organised crime affects Union resources substantially and that the scale of fraud affecting the financial interests of the Union, in particular on the revenue side of the budget, can only be explained by the heavy involvement of serious organised criminal groups; is aware that the current analysis and reporting tools do not allow its quantification in a way that is satisfactory for evaluating the effectiveness or the shortcomings of the measures and policies in place; calls on the Commission to swiftly launch all necessary actions to address the analysis and reporting issue;

17. Maintains that the fact that the relevant EU legislation has not been transposed efficiently into the national legislation of many Member States and the fact that the Member States’ national laws are not harmonised give organised criminal groups opportunities to conduct a number of illegal cross-border activities in areas affecting the Union’s financial interests; reiterates, therefore, its previous calls for the revision of Council Framework Decision 2008/841/JHA on the fight against organised crime [23] and for the introduction of a new common definition of organised crime, taking into account, in particular, the use of corruption, violence, threat or intimidation to obtain control of economic activities or procurement;

18. Points out the results of the 2023 Eurobarometer survey on ‘Citizens’ attitudes towards corruption in the EU in 2023’, showing that corruption is a serious concern for EU citizens and businesses in the EU; maintains that high-level corruption, including in EU institutions, not only affects the Union’s financial interests and the EU economy as a whole, but also undermines citizens’ trust in democratic institutions, both in the EU and in the Member States; underlines that organised criminal groups are increasingly using corruption to infiltrate public administrations and gain economic advantages;

19. Points out that, in relation to corruption cases, the EPPO reported 131 investigated offences up to the end of 2023 (there were 87 cases in 2022) and that, over the years 2019-2023, 65 cases were reported to the Commission via IMS [24] by 11 countries, and that the reported irregular amounts linked to such cases come to about EUR 50.5 million; calls on the Commission to request that the EPPO inform Parliament of how much of that EUR 50.5 million has been recovered;

20. Acknowledges that anti-corruption strategies are in place in the Member States; calls for an evaluation and a periodical revision of these strategies; emphasises the importance of taking into account and fully addressing country-specific recommendations relating to the fight against corruption;

21. Acknowledges the Commission’s efforts to prevent and address cases of conflict of interest in the management of the Union’s financial resources; observes that, in the 2019-2023 period, 419 cases were reported via the IMS related to conflict of interest (there were 375 in 2018-2022), involving in total about EUR 112 million; stresses that the ECA has indicated in its audit work [25] that the main source of information on conflict of interest is the IMS and that the quantity and quality of the data recorded in the IMS varies between Member States; underlines that where Member States consider a conflict of interest to be a minor component in a wider fraud case, they do not report such cases as relating to conflicts of interest; calls on the Commission to adopt initiatives necessary to ensure consistent and adequately detailed reporting in the IMS of the above situations; calls for the provisions on conflicts of interest to be applied in a way that ensures legal certainty, be based on a clear and proportionate assessment of the risks and allow practical application by the competent authorities;

Revenue

22. Observes that, in 2023, the overall number of fraudulent and non-fraudulent irregularities related to traditional own resources (TOR) (5 118 compared to 4 661 in 2022) was 10 % higher than the five-year average (2019-2023), but that the amount involved decreased by 12 % to EUR 478 million (compared to EUR 783 million bat the end of2022); regrets that while the data show improved recovery for non-fraudulent cases (82 %), the recovery rate for fraudulent cases remains unchanged at 25 %, which is still low and is distributed unevenly across the Member States;

23. Points out that, in 2023, the Commission considered that in only five of the new write-off reports submitted to it by the Member States had it been satisfactorily demonstrated that TOR had been lost for reasons not imputable to the Member States in question and that the latter were not financially responsible for the loss; notes, by contrast, that in 81 cases, amounting to almost EUR 69 million, the Commission considered that the Member States had not satisfactorily demonstrated that TOR had been lost for reasons not imputable to them and that they were therefore financially responsible for the loss; concludes, therefore, that there is actionable room for improvement in the collection of TOR by the Member States;

24 Underlines that it is essential for Member States to live up to their responsibility to collect TOR in order to ensure that the burden of financing EU expenditure is shared fairly among the Member States and maintain a level playing field for economic actors in the single market; calls on the Member States to step up their efforts to improve the effectiveness of their national administrations’ activity in the field of recovery, following the detection of irregularities and fraud relating to VAT, in order to increase the amount of TOR made available to the EU budget; acknowledges that the VAT compliance gap relates to more than just fraud and evasion, but also covers VAT lost as a result of insolvencies, bankruptcies, administrative errors and legal tax optimisation; believes, however, that VAT fraud, such as missing trader intra-Community fraud, contributes meaningfully to VAT non-compliance and reiterates its call for the issue to be addressed through digital means, the fraud-proofing of VAT rules and stronger cooperation between national tax authorities and the competent EU investigative bodies;

25. Acknowledges the current legal framework relating to cooperation with OLAF, the EPPO and Eurofisc; calls on the Commission to speed up the process of revising the current legal framework to provide a clear legal basis for direct cooperation between Eurofisc and the EPPO; encourages OLAF to maximise the possibilities offered by mutual administrative assistance practices to detect and identify customs fraud and related VAT fraud, as well as to report such cases to the EPPO without delay; stresses that, in 2023, the EPPO identified VAT fraud in about 20 % of its active cases (873 cases), making this the second most frequent type of crime after non-procurement expenditure fraud (1 586 cases); is concerned by the increasing participation of groups of organised criminals in VAT fraud operations and by the identified connections between this kind of fraud and other kinds of very serious crimes, such as money laundering;

26. Reiterates its call on the Commission to reconsider the threshold of EUR 10 million set in the PIF Directive, which has a major impact on the EPPO’s activities in VAT fraud cases; maintains that different interpretations of the methodologies for calculating this threshold make the situation unclear; emphasises that the current threshold limits deterrence and allows perpetrators to seek out the weakest jurisdiction to elude the EPPO’s intervention; believes that the revision of the PIF Directive should either remove the threshold or substantially lower it; calls on the Commission, in the meantime, to provide adequate guidance on the calculation method for cases prior to the amendment of the PIF Directive;

27. Stresses the importance of effective and efficient cooperation between OLAF and the EPPO in this specific revenue sector and maintains that adequate detection and data transmission by OLAF to the EPPO could increase the collection of VAT and customs revenue for the EU budget, and would help avoid any overlap between the activities of the two offices;

Expenditure

28. Is concerned by the high levels of fraud and irregularities detected, both in 2023 and in 2022, under the common agricultural policy, both in rural development and in support for agriculture; remarks that the data confirm patterns and risks identified in previous years; observes that, during the 2019-2023 period, fraudulent irregularities reported for rural development increased, mainly owing to a rising number of irregularities detected for the 2014-2020 programming period; notes that during the 2019-2023 period, the number of non-fraudulent rural development irregularities continuously increased in line with the implementation of the programmes;

29. Observes that in cohesion policy the number and financial amounts of non-fraudulent irregularities reported for the 2014-2020 programming period are much lower than those reported during the first 10 years of implementation of the 2007-2013 programming period; points out that the fraud detection rate [26] (0.53 %) for the 2014-2020 programming period is similar to the rate for the 2007-2013 programming period, while the irregularity detection rate (0.67 %) is much lower than the rate recorded for the 2007-2013 programming period (2.5 %); notes that individual irregularities involving large financial amounts have a substantial impact on the fraud detection rate; calls for further clarification of the correlation between the fraud detection rate and the occurrence of fraud;

30. Welcomes OLAF’s analytical report entitled ‘Fraud and irregularities by areas of the cohesion policy – comparing risks’, which refers to information from Member States for the 2014-2020 programming period up until December 2023 and identifies areas particularly exposed to fraud risk (such as investments for the environment, climate change and the transition to a low carbon economy, research, development and innovation); remarks that the largest financial amounts in fraud cases were in environmental protection and research, technology development and innovation;

31. Reiterates its concern over the lengthy administrative procedures for dealing with the fraudulent cases reported; points out that, on average, during the 2019-2023 period, under the common agricultural policy, nearly four years were required from the start of an irregularity to arrive at a suspicion of fraudulent activity, and nearly three more years to close the case after its being reported to the Commission; highlights that, for cohesion, on average and during the 2014-2020 period, it took about a year and a half to arrive at a suspicion that a fraudulent irregularity had been committed and more than two years to close the case after its being reported to the Commission; asks the Commission to intensify dialogue with, and provide advice to, the Member State authorities to reduce the length of administrative procedures;

32. Observes that, for direct management between 2019 and 2023, OLAF was mentioned as the source of detection of fraudulent irregularities for 88.4 % of recovery items, corresponding to 92.1 % of total recovery amounts; asks the Commission to provide clear information on the data and on the actions taken to enhance swift recovery, including data on overall recovery levels for fraudulent and non-fraudulent irregularities;

33. Emphasises that when, despite preventive measures, fraudulent or non-fraudulent irregularities are detected, recovery is the measure that protects the Union’s financial interests, allowing for the correct implementation of EU policies and for the refunding of disbursed expenditure that is non-compliant with the funding requirements; stresses the findings of ECA special report 7/2024 [27] when referring to the 2014-2020 period, for which the reported irregular expenditure was EUR 14 billion, which is to be refunded via recovery; stresses the need to speed up the recovery process by establishing clear deadlines and imposing penalties for delays, so that funds are returned to the EU budget as quickly as possible; calls on the Commission to propose adequate measures to provide complete information on irregular expenditure and the associated corrective measures taken;

34. Stresses the importance of follow-up measures after the necessary corrective actions have been taken, with a view to learning from cases of fraud and improving procedures to prevent similar cases from occurring in the future; considers it important, in this regard, that the Member States thoroughly follow up on cases by analysing the enabling factors behind fraud and assessing the need to revise their management and control systems accordingly;

35. Understands that, following a lack of support in the Council for its initiatives in 2004 and 2014, the Commission is not willing to put forward another legislative proposal for mutual administrative assistance in the areas of EU spending that do not currently provide for this practice; encourages the Commission to take advantage of the revision of the OLAF Regulation [28], which already provides OLAF with an enhanced mandate for the coordination of Member States’ actions in order to further develop the current provisions with a view to filling this gap;

36. Notes that civil society organisations are an essential component of a vibrant democratic society, ensuring the broad coverage of diverse views in public debates; recognises that these organisations may receive Union funds to support their work in contributing to democratic dialogue and public engagement; emphasises that transparency in stakeholder meetings is fundamental to democratic integrity and should apply equally to all entities engaging with EU institutions; stresses that clear documentation and disclosure of such interactions strengthens public trust and democratic accountability; stresses that lobbying should be transparent, with full disclosure of all parties involved; takes notes of the allegations that the Commission subsidises NGOs to influence Members of the European Parliament; stresses that, if their existence is confirmed, such practices could distort policy discussions and contravene the principle of separation of powers and should therefore be ended; calls on the ECA to audit the programmes concerned and give its recommendations; expects the future ECA report to bring clarity on these issues; recalls that the ECA asked, in special report 05/2024 [29], for more efforts to be made to improve checks on the ground; notes with concern the ECA’s observation that lobbyists can choose to which category they belong, regardless of their legal form, to avoid disclosing financial information; notes that the EU is one of the largest global funders of civil society organisations; underlines the need for the EU Transparency Register Secretariat to enhance its systematic checks of the self-declarations of entities declaring themselves to be ‘NGOs, platforms, networks and similar’; observes that such systematic checks could be based on a set of criteria, including non-profit status, objectives relating to public benefit, and independence, to strengthen the trust in all entities registered in the EU Transparency Register, and should be supported by robust requirements for accountability and transparency;

37. Considers that when assessing delivery models for EU expenditure, the susceptibility of the various options to fraud and other misuse should be taken into account; calls on the Commission to ensure that the lessons learnt from the design and implementation of the RRF, including the recommendations addressed to it by the ECA and Parliament, are taken into account in future EU funding instruments, notably the post-2027 multiannual financial framework (MFF); underlines that the shortcomings identified in the implementation of the RRF, including risks of fraud, double funding, and lack of transparency, must serve as a lesson for future EU financial frameworks; opposes any replication of the RRF model in its current form and stresses that any future performance-based funding must be accompanied by significantly stronger safeguards, transparency requirements and fraud prevention mechanisms to ensure the sound management of EU funds;

NextGenerationEU (NGEU) and the Recovery and Resilience Facility (RRF)

38. Appreciates the efforts made by the Commission in the revision of the 27 recovery and resilience plans (RRPs) to adjust to the energy market disruptions following Russia’s full-scale invasion of Ukraine; notes that the integration into the RRPs of REPowerEU is expected to contribute to reducing dependence on Russian fossil fuels and increasing European self-sufficiency;

39. Recalls, nevertheless, that delays can be observed in the implementation of the RRF and calls on the Commission to remain vigilant, in particular towards the end of the RRF life cycle, in order to ensure that Member States adequately protect the financial interests of the EU and that EU taxpayers’ money is spent appropriately;

40. Underlines the importance of robust management and control systems in preventing fraud as they have the effect of deterring criminals from attempting to defraud public authorities; expresses concerns about the ECA’s repeated observations pointing to persistent weaknesses in the implementation of Member State control systems, as this poses risks to the availability of complete and accurate data underlying payment requests, access to those requests for control purposes, and the effective functioning of Member State control systems to protect the EU’s financial interests; regrets that in several Member States, the control systems were not fully functional when the national RRPs started to be implemented, and underlines that such issues pose risks to the regularity of RRF payments and to the protection of the EU’s financial interests; calls on the Commission to ensure that the Member States remedy the inadequacies identified in their control frameworks without delay, including by implementing the recommendations addressed to it by the ECA;

41. Observes that the Commission’s control framework for the RRF relies primarily on the responsibility of the Member States to protect the EU’s financial interests; calls on the Commission to maintain a high level of attention to the fulfilment by the Member States of the specific audit and control milestones added to those RRPs which had lacked robustness and to continue efforts to close accountability gaps; takes notes of the actions launched by the Commission following the ECA’s recommendations on the identifiable weaknesses of some Member States’ control and reporting systems; urges the Commission to take decisive and swift action whenever necessary and to make full use of the provisions of the RRF Regulation if deficiencies persist in the control systems of Member States;

42. Notes with grave concern that ECA special report 14/2024 found that the climate impact of green spending under the RRF could have been overestimated by up to EUR 34.5 billion, with some projects having minimal impact on the energy transition or even causing environmental harm while also increasing the risk of fraud;

43. Calls for the establishment of clear, measurable criteria for green investments under the EU budget and the RRF to ensure that only projects with significant and proven environmental and economic benefits receive funding, thereby enhancing accountability and long-term sustainability while reducing the risk of fraud;

44. Observes that, for the RRF in 2023, the 2023 PIF Report indicates the number of cases of suspected fraud reported by the Commission (15) and the number of audits (13, compared with 16 carried out in 2022), but it does not include the concerningly high number of EPPO investigations (233 investigations referred to recovery and resilience programmes, with an estimated financial loss of EUR 1.86 billion); is concerned by a possible increase in the number of cases of fraud, corruption, double funding and conflicts of interest in the coming years and urges the Commission and the Member States to act swiftly in order to ensure the sound management and fair distribution of RRF funds;

45. Calls on the Commission to introduce mandatory fraud reporting via the IMS for all RRF-related cases, ensuring that irregularities and fraud affecting RRF funds are systematically recorded and monitored; notes with concern the lack of transparency in reporting fraud linked to RRF funds and insists that all Member States comply with standardised reporting obligations;

46. Asks OLAF to continue its risk analysis, which, in 2023, was made available to Member States along with an updated version of the ‘RRF risk framework’, and with the training and seminars for Member State authorities; endorses the use of the IMS for reporting RRF irregularities; reiterates its call on the Commission, on the specialised EU agencies and bodies, as well as on Member States, to actively cooperate and interact to ensure the protection of the EU’s financial interests when implementing the NGEU;

47. Observes that, as part of the Guidance on RRPs, the Commission has adopted [30] Annex IV on the framework for reduction and recoveries under the RRF; understands that the reduction of a payment is feasible when there are still payments to be effected; recalls that the RRF ends in 2026; points out that recovery is only to be launched whenever no further instalments remain; is concerned by the fact that this recovery procedure, borrowed from the model for implementing cohesion funds, has proved to be extremely ineffective and was abandoned in the current MFF; strongly regrets the fact that by the end of 2023 there were no recovery orders in ABAC concerning the RRF, and that there is still no obligation for Member States to report irregularities related to the RRF via the IMS;

48. Reiterates that transparency plays a vital role in exposing fraudulent schemes and discouraging fraudsters; reiterates its dissatisfaction with the interpretation endorsed by the Commission of the concept of ‘final recipient’ under the RRF; rejects the Commission’s incomplete and misleading interpretation [31]; remarks that, even according to the Commission guidelines [32], the ‘final recipient’ is the ‘last entity’ that receives funds for an RRF measure, and that any initial or intermediary recipient of funding, such as ministries or agencies operating merely as distributors of the funds, should not be considered to be the ‘last entity’; asks the Commission again to request that the Member States provide information on the ‘final recipient’ or ‘last entity’ and not to accept from Member States any information on ‘second-level recipients’ that is not in line with the agreement between the co-legislators; calls on the Commission to review its guidance by providing cases and examples that can clarify the provision and be a solid term of reference for the national authorities, in such a way as to endorse an adequate transparency level and a homogeneous interpretation across all the Member States; stresses that, should the Commission continue to refuse to ensure full transparency, Parliament must consider all available measures to enforce compliance;

49. Is concerned by the ECA’s opinion [33] on the increasing risk of EU funds being spent twice on the same measure and handed out twice for the same action; understands that corresponding measures in similar areas, such as transport and energy infrastructure, are financed from both the EU budget and the RRF, because the EU’s pandemic recovery fund finances actions similar to those covered by standard EU programmes; acknowledges that complementarity between the RRF and other EU instruments is allowed, but observes that this could result in delivering milestones that are fully financed by funds other than the RRF, because the RRF is not linked to the reimbursement of costs effectively incurred, but rather rewards the fulfilment of milestones and targets; emphasises that the several layers of governance, the fragmented IT landscape and the limited exchanges of data or use of data-mining tools such as ARACHNE, prevent the detection of double funding, and therefore the control mechanisms in place may be insufficient to properly mitigate this increased risk; maintains that the absence of direct access to the full list of RRF final recipients limits the Commission’s capacity to detect potential cases of double funding; believes that the precaution adopted by some Member States of avoiding combining the RRF with other EU instruments contributes to mitigating the risk of double funding; calls on the Commission to increase its controls in this regard;

50. Observes that Member States may include measures in their RRPs with no estimated costs or estimated costs of zero [34]; points out also that these ‘cost-free’ milestones are the main term of reference for assessing the correct use of RRF resources for their intended purposes; understands that the payments for these ‘cost-free’ or ‘zero-cost’ milestones are released following the milestones’ achievement, irrespective of the cost sustained, in line with the ‘financing not linked to cost’ approach under the RRF; observes, however, that such milestones make it impossible to verify the sound management of paid RRF resources, because such resources are disbursed in connection with a milestone for which they have not been deployed; calls on the Commission to reconsider its assumption that a ‘zero-cost’ measure cannot induce double funding, irrespective of whether other EU funds are used to implement it; strongly calls on the Commission to strengthen controls on ‘zero-cost’ measures and to give guidance to the Member States on how to address the financial design of the measures concerned in order to prevent such risk;

51. Reiterates its calls on the Commission to maintain adequate ex post audit procedures and to pay close attention to the risk of reversal after payment for the achievement of targets previously audited and assessed as satisfactorily fulfilled;

52. Follows up on the Ombudsman’s strategic initiative, launched in February 2022 and closed in September 2023, conducted on the transparency and accountability of the RRF, whose results it fully endorses; welcomes the ongoing dialogue between the Commission and the Ombudsman to address the suboptimal situations detected, in particular concerning the scoreboard and the proactive publication of documents related to the RRF;

Digitalisation and transparency to enhance the fight against fraud

53. Welcomes the political agreement reached on the proposed recast text of the Financial Regulation; believes that extending the scope of EDES to include shared management, and the adoption of a legal basis to use ARACHNE as a model for an EU-wide data-mining and risk-scoring tool, will strengthen the protection of the EU’s financial interests; recalls the calls made in previous reports to ensure that all Member States make use of data-mining tools, especially ARACHNE, to ensure timely and diligent reporting standards;

54. Shares the view that the IMS, the system through which Member States report to the Commission on irregularities and fraud affecting the EU budget, has potential for greater interoperability with other corporate tools of the Commission, such as ARACHNE and EDES, and with digital tools in Member States; asks to be informed, following the recast of the Financial Regulation, on the progress of the EDES-IMS interface and about the possible use of IMS data within the data-mining and risk-scoring tool (ARACHNE);

55. Reiterates its call for increased interoperability between data systems and for the harmonisation of reporting, monitoring and auditing in the Union; is aware of the crosscutting nature of interoperability and appreciates the adoption of the Interoperable Europe Act [35];

56. Underlines the findings of ECA Review 4/2023 of 6 July 2023 on digitalising the management of EU funds; recalls the positive effects of digitalisation on prevention and detection of fraud and irregularities, as well as on the management, control and auditing of EU funds, by allowing easier and quicker access to data and remote cross-checks, thereby limiting costs by reducing the need for controls and on-the-spot checks;

57. Recognises that taking advantage of a real-time and data-driven economy has significant benefits for the protection of the Union’s financial interests, while reducing the administrative burden on public authorities and businesses operating and trading across borders within the EU; calls for the EU and the Member States to improve the effectiveness of data sharing by creating a digital ecosystem allowing for the seamless, real-time and secure movement of standardised, structured and machine-readable data between businesses and public authorities, in particular national tax administrations, with a view to limiting possibilities for committing fraud and tax evasion;

58. Shares the view that digitalisation should be at the core of every anti-fraud strategy, and in particular that it should be integrated into national anti-fraud strategies to allow coordination between its constituent parts and for the threats posed by new technologies to be factored in;

59. Believes that digitalisation offers opportunities for tangible improvements to the governance of the anti-fraud network and that by facilitating communication and accessibility it helps to improve reporting, thereby allowing for a better understanding of the obstacles that persist and a more timely and comprehensive response by decision-makers and co-legislators; welcomes the fact that over half of the Member States have taken steps to identify and address skills gaps in digitalisation, in particular a lack of information and access to data on digitalisation; encourages the Member States and actors in the AFA to continue addressing skills gaps through measures involving, inter alia, knowledge sharing, training and the broadening of know-how and skills in the field of digitalisation;

60. Welcomes the efforts of many components of the AFA in assessing and further developing the options offered by AI and machine learning in identifying and detecting irregularities and pursuing efficiency gains in both analysis and classic administrative tasks; reiterates that human assessment must remain the pivotal characteristic of every process; adds that AI has the potential to be a game changer in the fight against fraud, allowing the rapid analysis of large data sets, as well as enhancing fraud detection and identification of fraud patterns; recalls that the successful use of AI relies on effective collaboration between all stakeholders and on the availability of high quality data, underpinned by the effective use of ARACHNE; urges the Commission to work towards developing AI in Europe so as to uphold data sovereignty and ensure robust data protection, aligning with the principles outlined in the AI Act [36] and the General Data Protection Regulation [37] (GDPR); calls on all anti-fraud actors to strengthen their cooperation to leverage the use of AI effectively and responsibly in the fight against fraud;

61. Recognises the growing risk of AI-generated content being used to manipulate procurement processes, financial transactions and evidence in fraud investigations; calls on the Commission to prioritise research and policy measures to combat fraudulent activities enabled by artificial intelligence, including deepfake technology and AI-driven disinformation campaigns that could compromise financial and anti-fraud mechanisms; calls on the Commission to propose stricter legal provisions and penalties for entities found to be using AI to commit or facilitate financial fraud, including AI-driven money laundering schemes, falsification of contracts, and digital identity theft in procurement processes;

62. Acknowledges the importance of the use of AI to make improvements in the quality and completeness of data exchanged with Member States; welcomes, in this regard, OLAF’s actions, including recommendations in the annual PIF reports, structured bilateral dialogues with Member States, the revision of the Commission Anti-Fraud Strategy action plan, and interinstitutional exchanges focusing on these matters;

63. Further calls for a dedicated EU-wide initiative to develop AI-driven fraud detection mechanisms within OLAF, the EPPO, and Europol, to increase efficiency in tracking and preventing financial crimes against the EU budget; recommends the establishment of an EU-wide task force composed of representatives from OLAF, the EPPO, Europol and national anti-fraud units, with a dedicated focus on digital fraud threats, including deepfake technology, AI-generated fake documents and synthetic identity fraud; underlines that this task force should develop and share best practices with the Member States;

64. Stresses the need for increased cross-border cooperation and data-sharing mechanisms between Member States to combat AI-enabled fraud, particularly in high-risk areas such as VAT, customs and financial aid distribution; encourages the creation of a joint EU intelligence hub to track fraudulent AI activity in real time; calls on the Commission and the Member States to integrate AI and data analytics into fraud detection systems, ensuring interoperability between national and EU-level databases while maintaining strong data protection safeguards;

65. Calls on the Commission and the Member States to implement strict transparency and audit measures in AI-based fraud detection tools to prevent bias, algorithmic manipulation and misuse in financial oversight systems; urges the development of AI ethics guidelines for anti-fraud institutions to ensure accountability;

66. Calls for a mandatory forensic verification process for all digital evidence submitted in financial fraud cases, ensuring the authenticity of documents and audio and video material used in investigations;

The internal layer of the EU’s AFA – 2023 key measures at EU level

67. Underlines the fact that the EU’s AFA is a composite institutional architecture designed to detect, prevent and combat fraud and other forms of misconduct affecting the EU’s financial interests, built on a multi-layered network of cooperation in which the first layer (OLAF, the EPPO, Europol, Eurojust, AMLA, the Commission, the ECA and the European Investment Bank (EIB)) is grounded on horizontal cooperation between the EU institutions, bodies, offices and agencies, while the other layers are based on vertical relationships between EU and national authorities, and between EU authorities and international organisations; points out that the AFA has evolved over the years through a series of separate decisions that have led to an innovative network of entities; underlines that their coordinated activities in recent years have generated valuable experience that should be considered in the future revision of the relevant regulations; stresses that with the creation of the EPPO, the first European prosecutorial authority was established, enabling prompt and direct criminal law investigations and prosecutions, and that the lessons learnt in the first years of its operational activity need to be adequately integrated in the legislative framework to be able to take full advantage of the available tools and resources; stresses the importance of clear mandates between the various EU institutions, bodies, offices and agencies in order to minimise the risk of overlaps and duplication and thereby ensure the efficiency of the functioning of the AFA;

68. Appreciates the integration in the 2023 PIF Report of the main administrative and judicial results achieved by OLAF and the EPPO, respectively, which follows the many calls from Parliament for more comprehensive reporting of the actions carried out by the components of the AFA; considers, however, that the differences in nature, scope and granularity between the two reports should be addressed and that the areas of cooperation should be indicated clearly; deems the differences in the figures provided by OLAF, the EPPO and the 2023 PIF Report to be justified in the current circumstances; highlights that reporting bodies in the Member States may report on criminal investigations only when the relevant judicial authorities grant the authorisation for them to do so, and this implies that while the EPPO and OLAF report data on active investigations, the reporting bodies are often unable to enter these details in the IMS database because of the need to protect confidentiality and ensure the proper conduct of investigations; understands that these cases result in a divergence in the data (‘delta’) that can only be eliminated when the investigations are completed and the relevant data are included in the reporting to the Commission so they can be included in a future PIF Report;

69. Welcomes the adoption by the Commission, in May 2023, of a package of anti-corruption measures which encompasses a proposal for a directive on combating corruption; believes that prevention and prosecution of corruption need to be stepped up and calls on the Commission to intensify the monitoring of the enforcement of measures in the Member States;

70. Welcomes the establishment of a network against corruption, which met for the first time on 20 September 2023, believes that the mapping of areas at a high-risk of corruption could contribute effectively to the further development of the EU anti-corruption strategy;

71. Underlines the importance of the rule of law as one of the fundamental values of the Union and stresses that the rule of law conditionality mechanism is crucial in order to ensure that Member States continue to respect rule of law principles; reiterates its deep concern regarding the situation concerning the rule of law in certain Member States, which is deeply worrying in its own right and can lead to serious losses for the Union budget; calls on the Commission to ensure the strict and fast implementation of all elements of the mechanism when Member States breach rule of law principles and when this affects, or risks affecting, EU financial interests; further insists on the need for coherence across various instruments when assessing the rule of law situation in Member States;

72. Notes that the fourth Commission Report 2023 on the rule of law, adopted in February 2024, provides a follow-up to the recommendations issued in the previous year’s Rule of Law Report; acknowledges that, in the fight against corruption, various Member States have updated or launched a revision of their national strategies and/or action plans, while others have reformed criminal law to strengthen the fight against corruption; observes that for many Member States the main obstacle to the fight against corruption is the limited resources of prosecution services; calls on the Commission to continue encouraging and supporting the efforts of Member States to reform and improve the efficacy of criminal proceedings and addressing the other challenges identified in the report; reminds the Commission of the effective tools at its disposal to safeguard the rule of law, such as infringement procedures, funding conditionality and the Article 7 TEU procedures, and expects it to make full use of them all; highlights, in this regard, that the new Financial Regulation introduces conditionality linked to the values enshrined in Article 2 TEU and calls on the Commission to start applying it, particularly in cases where infringement procedures have already been launched against a Member State for violations of the values enshrined in Article 2 TEU, as this constitutes a clear recognition of an ongoing breach that could also impact the sound financial management of the Union budget;

73. Takes note of the Commission’s decision not to lift the measure under Article 2(2) of Council Implementing Decision (EU) 2022/2506 of 15 December 2022 on measures for the protection of the Union budget against breaches of the principles of the rule of law in Hungary [38]; expects the Commission and the Council to lift the adopted measures only where evidence is collected that the remedial measures adopted by the Hungarian Government have proven effective in practice and, in particular, that no regression has been detected on already adopted measures; condemns the threats, such as espionage, to which EU institution staff are exposed, such as OLAF staff during their investigative missions in Hungary; stresses that such actions gravely undermine the rule of law and the integrity of the EU institutions; calls for the swift establishment of robust protection measures to safeguard EU institution staff on missions; calls on the Hungarian authorities to take immediate and concrete steps to safeguard judicial independence, uphold media freedom and fully implement the recommendations of the Commission’s Rule of Law Report to restore democratic checks and balances; urges the Council to continue the Article 7 TEU procedure against the Hungarian Government;

74. Emphasises that respect for the rule of law, including the fight against corruption, is a key determinant of the single market environment that fosters investment, growth, jobs and innovation, and protects small and medium-sized enterprises (SMEs) and economic operators operating across borders; stresses that the Commission is accountable for rigorous verification, as a condition for disbursing funding, of the fulfilment of the rule of law-related milestones integrated in the various Member State RRPs; recalls that the Commissioner for democracy, justice and rule of law, working in close coordination with the recently appointed Commissioner on budget, anti-fraud and public administration, holds primary responsibility for the full application of the general regime of conditionality; calls on the Commission not to use ‘dialogue’ with Member States or the ‘pilot’ procedure as an open-ended means to avoid launching actual infringement procedures; calls, furthermore, on the Commission to prioritise horizontally infringements affecting the EU’s financial interests, in particular regarding the PIF Directive and the EPPO Regulation [39]; welcomes the statement in the Commission Political Guidelines on the importance of the rule of law for EU funds and the commitment by the Commissioner for budget, anti-fraud and public administration to introduce strong safeguards on the rule of law in the next MFF;

75. Considers that the protection of the common EU values enshrined in Article 2 TEU currently included in the Common Provisions Regulation needs to be further strengthened; calls on the Commission to explore how a mechanism equivalent to the horizontal enabling conditions could be developed as a general feature in all areas of the EU budget, with a view to linking a wider range of policies to all the values set out in Article 2 TEU; calls on the Commission to explore means of linking funding to rule of law conditions and the completion of necessary reforms in order to ensure a comprehensive approach, applied horizontally to all EU funds; calls on the Commission to pursue a comprehensive approach and to put forward proposals for further strengthening the Union’s rule of law toolbox as a priority, including strengthened rule of law conditionality for funds deployed in the current programming period;

76. Maintains that corruption is intrinsically linked to money laundering, and that money laundering is one of the most important enablers of illegal activities by organised criminals, as it allows them to transfer the proceeds of their crime into the legal economy; recognises that the heterogeneous national legal systems and fragmented application of the Union’s anti-money laundering framework have made it difficult to prevent, detect and counter money laundering; welcomes, in this regard, the adoption of the ambitious legislative package on anti-money laundering and countering the financing of terrorism, which will unify national rules and thus enhance the collective fight against money laundering across the Union; welcomes the establishment of the new Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA); considers that the new agency will play a central role in the new anti-money laundering framework through its coordinating and supervisory responsibilities; recalls that money laundering and terrorist financing are intrinsically linked and calls for the EPPO, OLAF and the ECA to have a stronger role in countering these phenomena;

77. Shares the view that the protection of the EU’s financial interests has been strengthened by the recast Financial Regulation; points out that the scope of EDES has been extended to encompass shared and direct management and provide new grounds for exclusion; welcomes the introduction of a legal basis for a risk-scoring and data-mining tool to be used by all Member States and in all management modes; regrets that both these measures will enter into force only in 2028 and only from the next MFF, resulting in several more years without comprehensive transparency regarding the final recipients of EU funds and missing a crucial opportunity to use these data to strengthen safeguards against corruption and fraud;

78. Appreciates the adoption of an updated action plan [40] for the 2019 Commission Anti-Fraud Strategy; notes that it includes 44 actions distributed over seven themes covering, in particular, digitalisation, cooperation, the RRF, customs fraud, and awareness-raising in ethical and anti-fraud culture matters;

79. Points out that the EU’s anti-fraud programme (UAFP) is the only spending programme specifically dedicated to fighting fraud affecting the EU’s financial interests and that it provides relevant support to all Member States’ authorities as components of the external layer of the AFA, in order to strengthen the fight against fraud; observes that the UAFP has the flexibility needed to adapt to the constantly changing anti-fraud landscape and is aligned with the seven-year period (2021-2027) of the current MFF; notes that, so far, 55 % of the total implementation of the UAFP has contributed to the digital transition;

80. Calls on the Commission to build on the success of the UAFP and encourages the Commissioner on budget and anti-fraud to consider the UAFP as a model to be extended in the next MFF, in line with the task, indicated in the mission letter, of securing support for Member States’ efforts to protect the Union’s financial interests;

81. Welcomes the first UAFP association request received in 2023 from a non-EU country, namely Ukraine, with which an association agreement covering its participation in the programme has been negotiated and was adopted in March 2024;

82. Expresses concern that the Commission’s latest interim evaluation of Hercule III found aspects that may have hampered the programme’s effectiveness, notably that certain Member States’ administrations lacked the resources to enable them to cope with the programme’s administrative requirements;

83. Takes note of the reiterated calls from the EPPO to bolster the detection capacity of the relevant components of the AFA, and recalls that, in line with the Commission Anti-Fraud Strategy, emphasis is to be given to data analysis as a tool for detecting fraud; highlights, in this regard, the importance of harmonising definitions in order to obtain comparable data across the EU; encourages the Commission to strengthen the use of the IMS as a tool to support auditors’ risk analysis when preparing audit activities; invites OLAF to increase its training offer to Commission staff, including auditors and relevant actors in the financial flow circuit;

84. Is aware that the decentralised structure of the EPPO entails an interplay between national law and EU law and between national authorities and the EPPO; understands that the EPPO operates based on the directly applicable EU regulations but that it also requires adequate implementing measures to be adopted via national legislation transposing the PIF Directive and other relevant Union acts; calls on the Commission to ensure that national legislation is fully in line with the EPPO Regulation and the PIF Directive, launch infringement proceedings and propose the revision of these legal acts in order to make the EPPO more effective in the exercise of its mandate;

85. Notes the results of the Compliance assessment of measures adopted by the Member States to adapt their systems to the EPPO Regulation [41], which was presented in September 2023; regrets that many situations are still suboptimal and need to be addressed because they weaken the effectiveness of the protection of the Union’s financial interests by means of criminal investigations; refers, in particular, to the attribution of competence between national prosecution services and the EPPO; stresses also that the EPPO Regulation stipulates the reporting of possible EPPO cases directly and without undue delay; calls on the Commission to verify and monitor Member States’ full compliance with the EPPO Regulation and their prompt reporting of suspicions of fraud in areas within the EPPO’s competence directly to it;

86. Is concerned that in many Member States the designated national authority deciding on disagreements between the EPPO and national authorities on the competence for prosecuting a case is not a ‘court’ or a ‘tribunal’; calls on the Commission to verify and monitor whether Member States are fully complying with Article 25(6) and Article 42(2)(c) of the EPPO Regulation, which requires the possibility of an appeal to the Court of Justice of the European Union (CJEU) against a decision by a national authority on the attribution of competence;

87. Stresses that the current control by national authorities over the ‘necessary’ resources and equipment of the European Delegated Prosecutors (EDPs) and the need to refer to the national authorities’ provisions for ‘adequate arrangements’ on social security, pensions and insurance coverage could constrain the autonomy and independence of the EPPO’s actions; calls on the Commission to propose adequate solutions in the forthcoming revision of the EPPO Regulation;

88. Points out that the transposition of the PIF Directive differs between Member States, which, in some cases, affects the cross-border exercise of EPPO competences; calls on the Commission to ensure proper implementation of the PIF Directive and to propose its revision, based on the experience gathered;

89. Underlines that Article 25(3) of the EPPO Regulation, which elaborates on the exercise of the EPPO’s competence in the event of non-PIF offences inextricably linked to PIF offences, raises legal and practical questions and requires further streamlining in order to make effective use of the EPPO’s legal framework; calls on the Commission to propose suitable solutions in the forthcoming revision of the EPPO Regulation in order to reinforce the EPPO’s ability to investigate cross-border organised crime;

90. Reiterates [42] that the EPPO has an important role in safeguarding the rule of law and in combating corruption in the Union, and encourages the Commission to closely monitor Member States’ level of cooperation with the EPPO in the rule of law reports; welcomes the accession of Poland and Sweden to the EPPO; notes with approval Ireland’s recent announcement of its intention to participate; calls on the Government of Hungary, the sole remaining Member State that has not yet joined the EPPO, despite the absence of any legal or constitutional impediment, to join the EPPO without further delay; recalls that broad public support for Hungary’s accession has been demonstrated by the collection of 680 000 signatures in favour of joining the EPPO, underscoring a strong societal demand for enhanced legal safeguards against fraud and corruption affecting the Union’s financial interests;

91. Reiterates its call for the launch of an exchange of views on the possible clarification of the competence of the EPPO within its mandate, as defined in the Treaty, as regards protecting the financial interests of the Union;

92. Notes that in 2023, cooperation between the relevant actors increased, with the EPPO and Eurojust cooperating on 26 ongoing cases at the end of 2023; observes that also in 2023 the EPPO and Europol cooperated efficiently on various operational matters, and understands that this cooperation almost doubled in 2023, with Europol providing support on 47 cases upon the EPPO’s request; calls on the Commission to request that the EPPO and Eurojust specify the efficiency criteria on the basis of which they conduct their activities;

93. Welcomes the efforts by OLAF and the EPPO to strengthen their cooperation; understands that information is being exchanged between the two offices in order to avoid parallel investigations into the same matters, and that, in 2023, 22 complementary investigations were opened by OLAF and four supporting investigations were requested by the EPPO; is aware that the synergies resulting from the use of complementary investigations (ex Article 12(f) of the OLAF Regulation) and investigations in support (ex Article 12(e) of the OLAF Regulation) are suboptimal; calls on the Commission to address the legal and operational causes of this when reviewing its regulations;

94. Is concerned about the lack of analysis and accurate information on the recoveries to the benefit of the Union’s budget that should follow both OLAF and EPPO investigations; is aware that the impact of the AFA on the security of citizens and on the enforcement of the rule of law in the Union goes beyond the quantification of financial recoveries alone; stresses, however, that the results of the efforts made to create the AFA should tend towards measurability and be tangible at least as regards the budgetary aspects; emphasises that the impact of the activities implemented for the protection of the Union’s financial interests should be assessed and taken into consideration in the allocation of resources and definition of mandates;

95. Understands that the Commission has yet to provide data on the recoveries to the benefit of the Union budget following the EPPO activities reported to the Commission, as provided by Article 103(2) of the EPPO Regulation, and that this matter is included in the mission letter of the Commissioner for budget, anti-fraud and public administration; observes that the freezing of assets is essential to combat crime affecting the EU budget and that a certain amount of time is needed for freezing to be converted into actual confiscations and recoveries; highlights that the amount confiscated is not expected to return by default to the Union’s budget; notes that, in line with Article 38 of the EPPO Regulation, the potential revenue resulting from seizure and confiscation measures taken by EDPs in Member States should flow back into the EU budget and could be accounted for in the EU budget as non-assigned revenue; calls on the Commission to make the necessary arrangements with the relevant national authorities to allow these sums to enter the EU budget;

96. Points out that data on effective recoveries following OLAF financial recommendations are not published in the OLAF Annual Report or in any other official report from the Commission; regrets that only aggregated data are made available and they refer to 2 299 financial recommendations issued by OLAF between 2012 and 2023 for an overall amount of about EUR 9 billion; remarks that the analysis of the available figures suggests considerable room for improvement; observes that a large gap exists between the amounts recommended for recovery by OLAF, the amount established as recoverable by the Commission’s services and the amount eventually effectively recovered; is concerned by the low recovery rates for undue expenditure (for activities implemented under shared and indirect management modes the rate is 34 % and 11 %, respectively, and for recovery under direct management only 22 %); calls on the Commission to provide data with adequate granularity on recovery and to assess the reasons behind the recovery gap; stresses the need for OLAF and the Commission to agree upon, and apply consistently, common evaluation criteria that ensure greater convergence and clarity, thereby improving the efficiency and effectiveness of financial recovery assessment; emphasises that recovery following an OLAF recommendation and the EPPO’s investigations is an important measurement of the efficiency of the AFA and calls for more transparency in this regard;

The external layer of the EU’s AFA – key measures at national level in 2023

97. Understands that the overall level of implementation by the Member States of the Commission’s recommendations issued in the 2022 PIF Report is considered satisfactory; highlights, however, that significant differences between Member States persist; is concerned, in particular, by the cases of inadequate reporting of irregularities by some Member States via the IMS; recalls that reporting is mandatory under the current regulations and encourages OLAF to strengthen its oversight and monitoring actions with a view to achieving uniform reporting across the Union;

98. Calls on the Commission to monitor the comprehensiveness of the reporting in IMS by countries benefiting from pre-accession assistance and welcomes the initiatives of the Directorate-General for Neighbourhood and Enlargement Negotiations to enforce candidate countries’ obligations to report irregularities in the IMS on a regular basis;

99. Encourages the Member States to report in the IMS the irregularities related to the RRF, in line with the ECA recommendations; calls on the Commission to facilitate such use of the IMS by the Member States by providing support in the form of training, seminars and exchange of best practices;

100. Welcomes the participation of Sweden and Poland in the EPPO, decided on in 2024, as well as the objective of the new Irish Government to join the EPPO; insists that Member States that are not yet participating must do so without delay and calls on the Commission to incentivise participation in the EPPO through positive measures;

101. Reiterates that Member States’ ineffective, untimely or lack of cooperation with the EPPO and OLAF constitute grounds for action under the Conditionality Regulation; calls on the Commission to take into due consideration all information from the EPPO and OLAF on situations where Member States fail to comply with their obligations;

102. Maintains that National Anti-Fraud Strategies (NAFS) are the most effective tool for coordination between the various national, regional and sectoral authorities and the many local entities entrusted with the tasks into which the anti-fraud cycle is organised; notes that, in 2023, 21 out of 27 Member States reported having an anti-fraud strategy; observes that out of 21, only 10 Member States had a full national anti-fraud strategy [43] while 11 Member States had only sectoral rather than national anti-fraud strategies in place; recognises that the approach taken by Member States in their anti-fraud strategies today varies widely; regrets that six Member States do not have any anti-fraud strategy at all; strongly regrets this highly unsatisfactory situation, which compromises the integrity of EU spending and undermines citizens’ trust in EU institutions;

103. Maintains that Member States would benefit from a periodic evaluation of their anti-fraud frameworks; calls on the Commission to encourage Member States to run independent or peer reviews of their anti-fraud frameworks to enhance consistency and pursue high standards;

104. Encourages the Commission to propose enforceable initiatives to clarify the relationship and consider establishing a link between the adoption of NAFS by the Member States and the level of financial support they receive;

105. Asks the Commission to launch, in preparation for the revision of the OLAF Regulation, a monitoring exercise on the state of play of the Anti-Fraud Coordination Services (AFCOS) established in the Member States; encourages the Commission to plan for the update and redesign of their structure, role, responsibilities and mandate; regrets the suboptimal staffing level across the majority of the AFCOS in the Member States; underlines the need to ensure sufficient levels of expertise among staff in national anti-fraud coordinating structures; calls on the Commission to encourage and support Member States in addressing these issues as a matter of priority, including in the context of the European Semester cycle;

106. Underlines the role played by public authorities in fostering a zero-tolerance culture against fraud and stresses, in particular, the importance of fraud prevention to ensure that fraud, corruption, conflicts of interest and other misuse of funds do not occur in the first place; recalls that the correct transposition of the PIF Directive, adopted on 5 July 2017, is crucial for the protection of the Union budget, for the implementation of all the EU policies for which EU money is used, including in the context of RRF deployment, and for establishing the scope of investigations and prosecutions by the EPPO, whose competence is established by reference to the PIF Directive, as implemented by national law; expects national authorities, including governments, in all Member States unequivocally to condemn fraud, corruption, conflicts of interest and any other misuse of public funds, taking a proactive approach in protecting the financial interests of the Union through effective measures in areas including risk assessment, communication and information sharing, and training of staff; calls on the Commission to intervene in a timely manner through infringement procedures to ensure the consistent transposition of the PIF Directive and the effective liability of – and sanctions for – legal and natural persons;

107. Reiterates that whistleblowers play a key role in boosting fraud detection, investigation and prosecution; understands that, by the end of 2023, 24 Member States had adopted national legislation to transpose the Whistleblower Directive and declared their transposition complete; regrets, however, that in March 2023, after analysis of the national measures adopted, the Commission was obliged to refer six Member States to the CJEU for their failure to transpose the Directive and failure to notify transposition measures, asking the Court to impose financial sanctions; is concerned by the further infringement proceedings [44] ongoing against six other Member States; calls on the Commission to intensify the monitoring of national transposition measures and report to Parliament accordingly; stresses that Parliament itself must also urgently ensure the proper transposition of the Directive, as confirmed by the CJEU ruling of 11 September 2024, which found that Parliament’s current framework fails to provide balanced and effective protection against retaliation; calls for Parliament to immediately adopt robust rules in line with the Directive to safeguard its own whistleblowers;

108. Notes that the Investigative Division of the European Investment Bank (EIB IG/IN) had made 10 referrals to the EPPO and 17 to OLAF by the end of 2023; is aware that entities which have been found by EIB IG/IN to engage in prohibited practices may be excluded, in other words declared ineligible, for a stated period, from being awarded any contracts or entering into any relationship with the EIB; observes that, in 2023, these exclusion proceedings resulted in the exclusion of five economic operators for a minimum duration of three years, while five other companies reached settlement agreements applying conditionality to their eligibility;

External dimension of the protection of the EU’s financial interests

109. Welcomes the Commission’s reaction to its call to increase the monitoring of, and control over, the funds under the Global Europe, Neighbourhood, Development and International Cooperation Instrument for assistance to non-EU countries, as well as via the joint communication with the High Representative of the Union for Foreign Affairs and Security Policy [45]; appreciates the Commission’s continuous efforts to ensure that anti-corruption measures are mainstreamed into EU external action instruments; reiterates its recommendation to suspend budgetary support and de-commit funds to non-EU countries, including candidate countries, where the authorities clearly fail to take genuine action against widespread corruption, without compromising support for the civil population; emphasises that respect for and commitment to promoting EU values is an essential precondition for all partners aspiring to join the Union; reiterates that accession to the EU is a merit-based process whereby each applicant is assessed on its own merits and its fulfilment of the Copenhagen criteria; considers that when applying the revised enlargement methodology there should be a particular focus on fundamental reforms, and that fair and rigorous conditionality should be applied as well as reversibility where setbacks occur; considers that appropriate tools must be used to ensure that candidate countries show concrete and sustainable compliance with the rule of law, democratic principles and fundamental rights, both before and after joining the Union;

110. Observes that in the context of the Russian war of aggression against Ukraine, Ukraine will continue to require substantial support in the current and next MFF and, in the perspective of a fair and sustainable peace agreement, Ukraine will need support for post-war reconstruction, including for central government services and reforms;

111. Considers that the three pillars of the Ukraine Facility could be reshaped accordingly and that reconstruction should align with pre-accession requirements; emphasises the importance of close coordination and cooperation with the Ukraine coordination mechanism established by the G7; calls for the EU and all Member States to increase their support for Ukraine, while putting appropriate measures in place to protect the financial interests of the EU through the prevention, detection and correction of fraud, corruption, conflicts of interest and irregularities in the use of Union funds, including by performing more thorough checks, in order to ensure that EU funds sent to Ukraine and to its neighbouring countries are adequately monitored and controlled and end up benefiting those most in need;

112. Stresses that the unprecedented volume of financial support received by Ukraine from the EU in recent years, and deployed in the extremely adverse conditions imposed by the ongoing war, imply the adoption of appropriate measures to ensure that such resources are employed as intended, in particular where they are aimed at benefiting infrastructure and people in need;

113. Appreciates the work carried out by OLAF and the EPPO in protecting the financial interests of the Union by providing training to increase administrative capacity and autonomy, carrying out investigations in Ukraine and agreeing on the working arrangement with the National Anti-Corruption Bureau of Ukraine to facilitate cooperation in the investigation of corruption; invites the competent EU offices to continue their cooperation with and support for the Ukrainian authorities;

114. Acknowledges, in this regard, the progress made by Ukraine in advancing reforms related to judicial independence, accountability, anti-corruption and anti-money laundering, despite the difficult conditions caused by Russia’s ongoing war of aggression; encourages Ukraine to continue on the path of reform, including with regard to the influence of oligarchs in politics;

115. Welcomes the enhanced sanctions adopted by the EU against Russia so far, encompassing the banning of Russian nationals and entities from participating in public procurement contracts in the EU and restrictions on EU funding for Russian publicly owned or controlled entities; recognises, however, that despite the current measures, individuals and entities subject to the sanctions against Russia can still find ways to circumvent the sanctions and calls, therefore, for the EU and the Member States to maintain, reinforce and extend the scope and effectiveness of the sanctions policy against Russia and Belarus;

116. Recognises that the Member States and their relevant competent authorities are responsible for the effective implementation and enforcement of EU sanctions, as well as for identifying breaches and imposing appropriate penalties; underlines the role played by customs authorities and the importance of their close cooperation in strengthening the uniform enforcement of sanctions; welcomes, in this regard, the Baltic Customs Initiative;

117. Underlines that the EU is the biggest provider of external assistance to Palestinian refugees; stresses that the Union budget must continue to provide support to build peace and stability in the Middle East region, combat terrorism, hate, fundamentalism and disinformation, as well as promote human rights, fight impunity and strengthen adherence to the rule of law; emphasises, accordingly, that EU budgets must not support, under any circumstances, activities that go against these objectives; notes that, following the heinous terror attacks of 7 October 2023 by Hamas and allegations of misuse of EU funds for terrorism, a funding review has been conducted by the Commission, which, although concluding that no evidence has been found, to date, that money had been diverted for unintended purposes (including for support for incarcerated terrorists) and reporting that the safeguards in place worked well, still called for certain additional measures that were deemed necessary; recalls that all hostages taken by Hamas have to be released; emphasises the importance of ensuring that EU funds are effectively allocated and managed in order to achieve their intended goals, even via scrutiny by the EPPO, OLAF and the ECA where appropriate; recalls the ongoing issue of the destruction of EU-funded projects in Gaza and the West Bank and calls for greater accountability and safeguards in this context;

118. Stresses that suspension of budgetary support in non-EU countries, including candidate countries, is an appropriate measure in the event of failure to take genuine action against widespread corruption; expects priority to be given to the fight against corruption in pre-accession negotiations, with capacity building via the establishment of specialised anti-corruption bodies; asks the Commission to ensure, also in cases where funding is suspended, assistance for civil populations, where possible through alternative channels;

119. Underlines the importance of cooperation with international organisations in combating fraud; regrets the lack of cooperation by some international organisations in providing the ECA with complete, unlimited and timely access to the documents necessary to carry out its tasks; notes that the Commission has stepped up communication with international organisations and calls on it to further intensify efforts to ensure access to all requested documentation;

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120. Instructs its President to forward this resolution to the Council and the Commission.

MIL OSI Europe News –

April 24, 2025
MIL-OSI Europe: REPORT on the ninth report on economic and social cohesion – A10-0066/2025

Source: European Parliament

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

on the ninth report on economic and social cohesion

(2024/2107(INI))

The European Parliament,

– having regard to Articles 2 and 3 of the Treaty on European Union,

– having regard to Articles 4, 162, 174 to 178, and 349 of the Treaty on the Functioning of the European Union (TFEU),

– having regard to Regulation (EU) 2021/1060 of the European Parliament and of the Council of 24 June 2021 laying down common provisions on the European Regional Development Fund, the European Social Fund Plus, the Cohesion Fund, the Just Transition Fund and the European Maritime, Fisheries and Aquaculture Fund and financial rules for those and for the Asylum, Migration and Integration Fund, the Internal Security Fund and the Instrument for Financial Support for Border Management and Visa Policy [1] (Common Provisions Regulation),

– having regard to Regulation (EU) 2021/1058 of the European Parliament and of the Council of 24 June 2021 on the European Regional Development Fund and on the Cohesion Fund [2],

– having regard to Regulation (EU) 2021/1059 of the European Parliament and of the Council of 24 June 2021 on specific provisions for the European territorial cooperation goal (Interreg) supported by the European Regional Development Fund and external financing instruments [3],

– having regard to Regulation (EU) 2021/1057 of the European Parliament and of the Council of 24 June 2021 establishing the European Social Fund Plus (ESF+) and repealing Regulation (EU) No 1296/2013 [4],

– having regard to Regulation (EU) 2021/1056 of the European Parliament and of the Council of 24 June 2021 establishing the Just Transition Fund [5],

– having regard to Regulation (EU) 2021/2115 of the European Parliament and of the Council of 2 December 2021 establishing rules on support for strategic plans to be drawn up by Member States under the common agricultural policy (CAP Strategic Plans) and financed by the European Agricultural Guarantee Fund (EAGF) and by the European Agricultural Fund for Rural Development (EAFRD) and repealing Regulations (EU) No 1305/2013 and (EU) No 1307/2013 [6],

– having regard to Regulation (EU) 2020/460 of the European Parliament and of the Council of 30 March 2020 amending Regulations (EU) No 1301/2013, (EU) No 1303/2013 and (EU) No 508/2014 as regards specific measures to mobilise investments in the healthcare systems of Member States and in other sectors of their economies in response to the COVID-19 outbreak (Coronavirus Response Investment Initiative)[7],

– having regard to Regulation (EU) 2020/558 of the European Parliament and of the Council of 23 April 2020 amending Regulations (EU) No 1301/2013 and (EU) No 1303/2013 as regards specific measures to provide exceptional flexibility for the use of the European Structural and Investments Funds in response to the COVID-19 outbreak [8],

– having regard to Regulation (EU) 2020/461 of the European Parliament and of the Council of 30 March 2020 amending Council Regulation (EC) No 2012/2002 in order to provide financial assistance to Member States and to countries negotiating their accession to the Union that are seriously affected by a major public health emergency [9],

– having regard to Regulation (EU) 2020/2221 of the European Parliament and of the Council of 23 December 2020 amending Regulation (EU) No 1303/2013 as regards additional resources and implementing arrangements to provide assistance for fostering crisis repair in the context of the COVID-19 pandemic and its social consequences and for preparing a green, digital and resilient recovery of the economy (REACT-EU)[10],

– having regard to Regulation (EU) 2022/562 of the European Parliament and of the Council of 6 April 2022 amending Regulations (EU) No 1303/2013 and (EU) No 223/2014 as regards Cohesion’s Action for Refugees in Europe (CARE)[11],

– having regard to Regulation (EU) 2022/2039 of the European Parliament and of the Council of 19 October 2022 amending Regulations (EU) No 1303/2013 and (EU) 2021/1060 as regards additional flexibility to address the consequences of the military aggression of the Russian Federation FAST (Flexible Assistance for Territories) – CARE [12],

– having regard to the URBACT programme for sustainable urban cooperation, established in 2002,

– having regard to the Urban Agenda for the EU of 30 May 2016,

– having regard to the Territorial Agenda 2030 of 1 December 2020,

– having regard to the 9th Cohesion Report, published by the Commission on 27 March 2024 [13], and the Commission communication of 27 March 2024 on the 9th Cohesion Report (COM(2024)0149),

– having regard to the study entitled ‘The future of EU cohesion: Scenarios and their impacts on regional inequalities’, published by the European Parliamentary Research Service in December 2024,

– having regard to the Commission report of February 2024 entitled ‘Forging a sustainable future together – Cohesion for a competitive and inclusive Europe’[14],

– having regard to the opinion of the European Economic and Social Committee of 31 May 2024 on the 9th Cohesion Report [15],

– having regard to the opinion of the Committee of the Regions of 21 November 2024 entitled ‘A renewed Cohesion Policy post 2027 that leaves no one behind – CoR responses to the 9th Cohesion Report and the Report of the Group of High-Level Specialists on the Future of Cohesion Policy’,

– having regard to the report entitled ‘The future of European competitiveness – A competitiveness strategy for Europe’, published by the Commission on 9 September 2024,

– having regard to the agreement adopted at the 21st Conference of the Parties to the UN Framework Convention on Climate Change (COP21) in Paris on 12 December 2015 (the Paris Agreement),

– having regard to the study entitled ‘Streamlining EU Cohesion Funds: addressing administrative burdens and redundancy’, published by its Directorate-General for Internal Policies of the Union in November 2024 [16],

– having regard to Regulation (EU) 2025/XXXX of the European Parliament and of the Council of [INSERT DATE] on the Border Regions’ Instrument for Development and Growth in the EU (BRIDGEforEU) [INSERT FOOTNOTE ONCE PUBLISHED IN OJ],

– having regard to the Commission communication of 3 May 2022 entitled ‘Putting people first, securing sustainable and inclusive growth, unlocking the potential of the EU’s outermost regions’ (COM(2022)0198),

– having regard to the opinion in the form of a letter from the Committee on Agriculture and Rural Development (XXX),

– having regard to its resolution of 25 March 2021 on cohesion policy and regional environment strategies in the fight against climate change [17],

– having regard to its resolution of 20 May 2021 on reversing demographic trends in EU regions using cohesion policy instruments [18],

– having regard to its resolution of 14 September 2021 entitled ‘Towards a stronger partnership with the EU outermost regions [19],

– having regard to its resolution of 15 September 2022 on economic, social and territorial cohesion in the EU: the 8th Cohesion Report [20],

– having regard to its resolution of 20 October 2023 on possibilities to increase the reliability of audits and controls by national authorities in shared management [21],

– having regard to its resolution of 23 November 2023 on harnessing talent in Europe’s regions [22],

– having regard to its resolution of 14 March 2024 entitled ‘Cohesion policy 2014-2020 – implementation and outcomes in the Member States [23],

– having regard to Rule 55 of its Rules of Procedure,

– having regard to the report of the Committee on Regional Development (A10-0066/2025),

A. whereas cohesion policy is at the heart of EU policies and is the EU’s main tool for investments in sustainable economic, social and territorial development, and contributing to the Green Deal objectives, across the EU under its multiannual financial frameworks for the periods of 2014-2020 and 2021-2027; whereas cohesion policy, as mandated by the Treaties, is fundamental for a well-functioning and thriving internal market by promoting the development of all regions in the EU, and especially the less developed ones;

B. whereas cohesion policy has fostered economic, social and territorial convergence in the EU, notably by increasing the gross domestic products, for example, of central and eastern EU Member States, which went from 43 % of the EU average in 1995 to around 80 % in 2023; whereas the 9th Cohesion Report highlights that, by the end of 2022, cohesion policy supported over 4.4 million businesses, creating more than 370 000 jobs in these companies; whereas it also underlines that cohesion policy generates a significant return on investment, and that each euro invested in the 2014–2020 and 2021–2027 programmes will have generated 1.3 euros of additional GDP in the Union by 2030; whereas cohesion policy constituted, on average, around 13 % of total public investment in the EU [24];

C. whereas the Commission report entitled ‘The long-term vision for the EU’s rural areas: key achievements and ways forward’, presented alongside the ninth Cohesion Report, underlines that EUR 24.6 billion, or 8 % of the rural development pillar of the common agricultural policy, is directed towards investments in rural areas beyond farming investments, setting the scene for a debate on the future of rural areas;

D. whereas between 2021 and 2027, cohesion policy will have invested over EUR 140 billion in the green and digital transitions [25], to help improve networks and infrastructure, support nature conservation, improve green and digital skills and foster job creation and services for the public;

E. whereas despite the widely acknowledged and proven positive impact of cohesion policy on social, economic and territorial convergence, significant challenges remain, marked notably by development disparities at sub-national level, within regions and in regions caught in a development trap, and by the impact of climate change, in terms of demography, the digital and green transitions, and connectivity, but also in terms of sustainable economic development, in particular in least developed regions and rural and remote areas;

F. whereas cohesion policy and sectoral programmes of the EU have repeatedly and efficiently helped regions to respond effectively to emergencies and asymmetric shocks such as the COVID-19 crisis, Brexit, the energy crisis and the refugee crisis caused by Russia’s invasion of Ukraine, as well as natural disasters, even though it is a long-term, structural policy and not a crisis management instrument or the ‘go-to’ emergency response funding mechanism; whereas such crises have delayed the implementation of the European Structural and Investment Funds and whereas a considerable number of projects financed with Recovery and Resilience Facility (RRF) funds have been taken for the most part from projects that had been slated for investment under cohesion policy;

G. whereas despite measures already taken for the 2014-2020 and 2021-2027 periods, the regulatory framework governing the use and administration of cohesion policy instruments and funds should be further simplified and interoperable digital tools better used and developed, including the establishment of one-stop digitalised service centres, with the objective of streamlining procedures, enhancing stakeholder trust, reducing the administrative burden, increasing flexibility in fund management and speeding up payments, not only for the relevant authorities but also for the final beneficiaries; whereas it is necessary to increase the scope for using funds more flexibly, including the possibility of financing the development of dual-use products; whereas it is of utmost importance to formulate any future cohesion policy with a strategic impetus throughout the funding period, which could, however, be reassessed at midterm;

H. whereas the low absorption rate of the 2021-2027 cohesion policy funds, currently at just 6 %, is not because of a lack of need from Member States or regions, but rather stems from delays in the approval of operational programmes, the transition period between financial frameworks, the prioritisation of NextGenerationEU by national managing authorities, limited administrative capacity and complex bureaucratic procedures; whereas Member States and regions may not rush to absorb all available funds as they anticipate a possible extension under the N+2 or N+3 rules;

I. whereas radical modifications to the cohesion regulatory framework, from one programming period to the next, contribute to generating insecurity among the authorities responsible and beneficiaries, gold-plating legislation, increasing error rates (and the accompanying negative reputational and financial consequences), delays in implementation and, ultimately, disaffection among beneficiaries and the general population;

J. whereas there is sometimes competition between cohesion funds, emergency funds and sectoral policies;

K. whereas demographic changes vary significantly across EU regions, with the populations of some Member States facing a projected decline in the coming years and others projected to grow; whereas demographic changes also take place between regions, including movement away from outermost regions, but are generally observed as movement from rural to urban areas within Member States, wherein women are leaving rural areas in greater numbers than men, but also to metropolitan areas, where villages around big cities encounter difficulties in investing in basic infrastructure; whereas the provision of essential services such as healthcare, education and transportation must be reinforced in all regions, with a particular focus on rural and remote areas; whereas a stronger focus is needed on areas suffering from depopulation and inadequate services, requiring targeted measures to encourage young people to remain through entrepreneurship projects, high-quality agriculture and sustainable tourism;

L. whereas taking account of the ageing population is crucial in order to ensure justice among the generations and thereby to strengthen participation, especially among young people;

M. whereas urban areas are burdened by new challenges resulting from the population influx to cities, as well as rising housing and energy prices, requiring the necessary housing development, new environmental protection and energy-saving measures, such as accelerated deep renovation to combat energy poverty and promote energy efficiency; whereas the EU cohesion policy should help to contribute to an affordable and accessible housing market for all people in the EU, especially for low- and middle-income households, urban residents, families with children, women and young people;

N. whereas effective implementation of the Urban Agenda for the EU can enhance the capacity of cities to contribute to cohesion objectives, thereby improving the quality of life of citizens and guaranteeing a more efficient use of the EU’s financial resources;

O. whereas particular attention needs to be paid to rural areas, as well as areas affected by industrial transition and EU regions that suffer from severe and permanent natural or demographic handicaps, brain drain, climate-related risks and water scarcity, such as the outermost regions, and in particular islands located at their peripheries or at the periphery of the EU, sparsely populated regions, islands, mountainous areas and cross-border regions, as well as coastal and maritime regions;

P. whereas Russia’s war of aggression against Ukraine has created a new geopolitical reality that has had a strong impact on the employment, economic development and opportunities, and general well-being of the population living in regions bordering Ukraine, Belarus and Russia, as well as candidate countries such as Ukraine and Moldova, which therefore require special attention and support, including by accordingly adapting cohesion policy; whereas this war has led to an unprecedented number of people seeking shelter in the EU, placing an additional burden on local communities and services; whereas the collective security of the EU is strongly dependent on the vitality and well-being of regions situated at the EU’s external borders;

Q. whereas the unique situation of Northern Ireland requires a bespoke approach building on the benefits of PEACE programmes examining how wider cohesion policy can benefit the process of reconciliation;

R. whereas 79 % of citizens who are aware of EU-funded projects under cohesion policy believe that EU-funded projects have a positive impact on the regions [26], which contributes to a pro-EU attitude;

S. whereas overall awareness of EU-funded projects under cohesion policy has decreased by 2 percentage points since 2021 [27], meaning that greater decentralisation should be pursued to bring cohesion policy even closer to the citizen;

1. Insists that the regional and local focus, place-based approach and strategic planning of cohesion policy, as well as its decentralised programming and implementation model based on the partnership principle with strengthened implementation of the European code of conduct, the involvement of economic and civil society actors, and multi-level governance, are key and positive elements of the policy, and determine its effectiveness; is firmly convinced that this model of cohesion policy should be continued in all regions and deepened where possible as the EU’s main long-term investment instrument for reducing disparities, ensuring economic, social and territorial cohesion, and stimulating regional and local sustainable growth in line with EU strategies, protecting the environment, and as a key contributor to EU competitiveness and just transition, as well as helping to cope with new challenges ahead;

2. Calls for a clear demarcation between cohesion policy and other instruments, in order to avoid overlaps and competition between EU instruments, ensure complementarity of the various interventions and increase visibility and readability of EU support; in this context, notes that the RRF funds are committed to economic development and growth, without specifically focusing on economic, social and territorial cohesion between regions; is concerned about the Commission’s plans to apply a performance-based approach to the European Structural and Investment Funds (ESIF); acknowledges that performance-based mechanisms can be instrumental in making the policy more efficient and results-orientated, but cautions against a one-size-fits-all imposition of the model and expresses serious doubt about ideas to link the disbursement of ESIF to the fulfilment of centrally defined reform goals, even more so if the reform goals do not fall within the scope of competence of the regional level;

3. Is opposed to any form of top-down centralisation reform of EU funding programmes, including those under shared management, such as the cohesion policy and the common agricultural policy, and advocates for greater decentralisation of decision-making to the local and regional levels; calls for enhanced involvement of local and regional authorities and economic and civil society actors at every stage of EU shared management programmes, from preparation and programming to implementation, delivery and evaluation, keeping in mind that the economic and social development of, and territorial cohesion between, regions can only be accomplished on the basis of good cooperation between all actors;

4. Emphasises that the European Agricultural Fund for Rural Development (EAFRD) plays a key role, alongside cohesion policy funds, in supporting rural areas; stresses that the EAFRD’s design must align with the rules of cohesion policy funds to boost synergies and facilitate multi-funded rural development projects;

5. Is convinced that cohesion policy can only continue to play its role if it has solid funding; underlines that this implies that future cohesion policy must be provided with robust funding for the post-2027 financial period; stresses that it is necessary to provide funding that is ambitious enough and easily accessible to allow cohesion policy to continue to fulfil its role as the EU’s main investment policy, while retaining the flexibility to meet potential new challenges, including the possibility of financing the development of dual-use products, and to enable local authorities, stakeholders and beneficiaries to effectively foster local development; is of the firm opinion that the capacity to offer flexible responses to unpredictable challenges should not come at the expense of the clear long-term strategic focus and objectives of cohesion policy;

6. Underlines the importance of the next EU multiannual financial framework (MFF) and the mid-term review of cohesion policy programmes 2021-2027 in shaping the future of cohesion policy; reiterates the need for a more ambitious post-2027 cohesion policy in the next MFF 2028-2034; calls, therefore, for the upcoming MFF to ensure that cohesion policy continues to receive at least the same level of funding as in the current period in real terms; furthermore calls for cohesion policy to remain a separate heading in the new MFF; stresses that cohesion policy should be protected from statistical effects that may alter the eligibility of regions by changing the average EU GDP; reiterates the need for new EU own resources;

7. Proposes, therefore, that next MFF be more responsive to unforeseen needs, including with sufficient margins and flexibilities from the outset; emphasises in this regard, however, that cohesion policy is not a crisis instrument and that it should not deviate from its main objectives, namely from its long-term investment nature; calls for the European Union Solidarity Fund to be strengthened, including in its pre-financing, making it less bureaucratic and more easily accessible, in order to develop an appropriate instrument capable of responding adequately to the economic, social and territorial consequences of future natural disasters or health emergencies; emphasises the need for Parliament to have adequate control over any emergency funds and instruments;

8. Recognises the need to also use nomenclature of territorial units for statistics (NUTS) 3 classification for specific cases, in a manner that recognises that inequalities in development exist within all NUTS 2 regions; is of the opinion that regional GDP per capita must remain the main criterion for determining Member States’ allocations under cohesion policy; welcomes the fact that, following Parliament’s persistent calls, the Commission has begun considering additional criteria [28] such as greenhouse gas emissions, population density, education levels and unemployment rates, in order to provide a better socio-economic overview of the regions;

9. Stresses that the rule of law conditionality is an overarching conditionality, recognising and enforcing respect for the rule of law, also as an enabling condition for cohesion policy funding, to ensure that Union resources are used in a transparent, fair and responsible manner with sound financial management; considers it necessary to reinforce respect for the rule of law and fundamental rights, and to ensure that all actions are consistent with supporting democratic principles, gender equality and human rights, including workers’ rights, the rights of disabled people and children’s rights, in the implementation of cohesion policy; highlights the important role of the European Anti-Fraud Office and the European Public Prosecutor’s Office in protecting the financial interests of the Union;

10. Calls for further efforts to simplify, make more flexible, strengthen synergies and streamline the rules and administrative procedures governing cohesion policy funds at EU, national and regional level, taking full advantage of the technologies available to increase accessibility and efficiency, building on the existing and well-established shared management framework, in order to strengthen confidence among users, thus encouraging the participation of a broader range of economic and civil society actors in projects supported and maximising the funds’ impact; calls for further initiatives enabling better absorption of cohesion funds, including increased co-financing levels, higher pre-financing and faster investment reimbursements; calls for local administration, in particular representing smaller communities, to be technically trained for better administrative management of the funds; stresses, therefore, the importance of strengthening the single audit principle, further expanding simplified cost options and reducing duplicating controls and audits that overlap with national and regional oversight for the same project and beneficiary, with a view to eliminating the possibility of repeating errors in subsequent years of implementation;

11. Calls on the Commission and the Member States to give regions greater flexibility already at the programming stage, in order to cater for their particular needs and specificities, emphasising the need to involve the economic and civil society actors; underlines that thematic concentration was a key element in aligning cohesion policy with Europe 2020 objectives; asks the Commission, therefore, to present all findings related to the implementation of thematic concentration and to draw lessons for future legislative proposals;

12. Acknowledges that the green, digital and demographic transitions present significant challenges but, at the same time, opportunities to achieve the objective of economic, social and territorial cohesion; recognises that, statistically, high-income areas can hide the economic problems within a region; is aware of the risk of a widening of regional disparities, a deepening of social inequalities and a rising ‘geography of discontent’ related to the transition process; underlines the need to reach the EU’s sustainability and climate objectives, and to maintain shared economic growth by strengthening the Union’s competitiveness; calls, therefore, for a European strategy that guarantees harmonious growth within the Union, meeting the respective regions’ specific needs; reaffirms its commitment to pursuing the green and digital transitions, as this will create opportunities to improve the EU’s competitiveness; underlines the need to invest in infrastructure projects that enhance connectivity, particularly in sustainable, intelligent transport, and in energy and digital networks, ensuring that all regions, including remote and less-developed ones, are fully integrated into the single market and benefit equitably from the opportunities it provides; emphasises, in this context, the need to support the development of green industries, fostering local specificities and traditions to increase the resilience of the economic environment and civil society to future challenges;

13. Urges that the cohesion policy remain consistent with a push towards increasing innovation and completing the EU single market, in line with the conclusions of the Draghi report on European competitiveness; underlines, in the context of regional disparities, the problem of the persisting innovation divide and advocates for a tailored, place-based approach to fostering innovation and economic convergence across regions and reducing the innovation gap; calls for a stronger role for local and regional innovation in building competitive research and innovation ecosystems and promoting territorial cohesion; points to new EU initiatives, such as regional innovation valleys and partnerships for regional innovation, that aim to connect territories with different levels of innovation performance and tackle the innovation gap; considers that this approach will reinforce regional autonomy, allowing local and regional authorities to shape EU policies and objectives in line with their specific needs, characteristics and capacities, while safeguarding the partnership principle;

14. Is convinced that cohesion policy needs to continue to foster the principle of just transition, addressing the specific needs of regions, while leaving no territory and no one behind; calls for continued financing of the just transition process, with the Just Transition Fund being fully integrated into the Common Provisions Regulation and endowed with reinforced financial means for the post-2027 programming period; emphasises, nonetheless, the need to assess the impact of the Just Transition Fund on the transformation of eligible regions and, while ensuring it remains part of cohesion policy, refine its approach in the new MFF on the basis of the findings and concrete measures to ensure the economic and social well-being of affected communities;

15. Underlines the need to improve the relationship between cohesion policy and EU economic governance, while avoiding a punitive approach; stresses that the European Semester should comply with cohesion policy objectives under Articles 174 and 175 TFEU; calls for the participation of the regions in the fulfilment of these objectives and for a stronger territorial approach; calls for a process of reflection on the concept of macroeconomic conditionality and for the possibility to be explored of replacing this concept with new forms of conditionality to better reflect the new challenges ahead;

16. Is concerned about the growing number of regions in a development trap, which are stagnating economically and are suffering from sharp demographic decline and limited access to essential services; calls, therefore, for an upward adjustment in co-financing for projects aimed at strengthening essential services; stresses the role of cohesion policy instruments in supporting different regions and local areas that are coping with demographic evolution affecting people’s effective right to stay, including, among others, challenges related to depopulation, ageing, gender imbalances, brain drain, skills shortages and workforce imbalances across regions; recognises the need for targeted economic incentives and structural interventions to counteract these phenomena; in this context, calls for the implementation of targeted programmes to attract, develop and retain talent, particularly in regions experiencing significant outflows of skilled workers, by fostering education, culture, entrepreneurship and innovation ecosystems that align with local and regional economic needs and opportunities;

17. Recognises the importance of supporting and financing specific solutions for regions with long-standing and serious economic difficulties or severe permanent natural and demographic handicaps; reiterates the need for maintaining and improving the provision of quality essential services (such as education and healthcare), transport and digital connectivity of these regions, fostering their economic diversification and job creation, and helping them respond to challenges such as rural desertification, population ageing, poverty, depopulation, loneliness and isolation, as well as the lack of opportunities for vulnerable people such as persons with disabilities; underlines the need to prioritise the development and adequate funding of strategic sectors, such as renewable energy, sustainable tourism, digital innovation and infrastructure, in a manner that is tailored to the economic potential and resources of each region, in order to create broader conditions for endogenous growth and balanced development across all regions, especially rural, remote and less-developed areas, border regions, islands and outermost regions; recalls the importance of strong rural-urban linkages and particular support for women in rural areas;

18. Emphasises the need for a tailored approach for the outermost regions, as defined under Article 349 TFEU, which face unique and cumulative structural challenges due to their remoteness, small market size, vulnerability to climate change and economic dependencies; underlines that these permanent constraints, including the small size of the domestic economy, great distance from the European continent, location near third countries, double insularity for most of them, and limited diversification of the productive sector, result in additional costs and reduced competitiveness, making their adaptation to the green and digital transition particularly complex and costly; underlines their great potential to further develop, inter alia through improved regional connectivity, key sectors such as blue economy, sustainable agriculture, renewable energies, space activities, research or eco-tourism; reiterates its long-standing call on the Commission to duly consider the impact of all newly proposed legislation on the outermost regions, with a view to avoiding disproportionate regulatory burdens and adverse effects on these regions’ economies;

19. Underlines the fact that towns, cities and metropolitan areas have challenges of their own, such as considerable pockets of poverty, housing problems, traffic congestion and poor air quality, generating challenges for social and economic cohesion created by inharmonious territorial development; emphasises the need for a specific agenda for cities and calls for deepening their links with functional urban areas, encompassing smaller cities and towns, to ensure that economic and social benefits are spread more evenly across the entire territory; highlights the need to strengthen coordination between the initiatives of the Urban Agenda for the EU and the instruments of cohesion policy, favouring an integrated approach that takes into account territorial specificities and emerging challenges; calls, furthermore, for more direct access to EU funding for regional and local authorities, as well as cities and urban authorities, by inter alia widening the use of integrated territorial investments (ITI);

20. Stresses the need to continue and strengthen investments in affordable housing within the cohesion policy framework, recognising its significance for both regions and cities; highlights the need to foster its changes relevant to investing in housing beyond the two current possibilities (energy efficiency and social housing); emphasises the important role that cohesion policy plays in the roll-out and coordination of these initiatives; believes, furthermore, that it is important to include housing affordability in the URBACT initiative;

21. Stresses the strategic importance of strong external border regions for the security and resilience of the EU; calls on the Commission to support the Member States and regions affected by Russia’s war of aggression against Ukraine, in particular the regions on the EU’s eastern border, by revising the Guidelines on regional State aid [29], through tailor-made tools and investments under the cohesion policy, as well as supporting them to make the most of the possibilities offered by the cohesion policy funds, including Interreg, in a flexible way, to help cope with the detrimental socio-economic impact of the war on their populations and territories; calls, furthermore, for support to be given to regions bordering candidate countries such as Ukraine and Moldova to strengthen connections and promote their EU integration;

22. Highlights the added value of territorial cooperation in general and cross-border cooperation in particular; underlines the importance of Interreg for cross-border regions, including outermost regions; emphasises its important role in contributing to their development and overcoming cross-border obstacles, including building trust across borders, developing transport links, identifying and reducing legal and administrative obstacles and increasing the provision and use of cross-border public services, among others; considers Interreg as the main EU instrument for tackling the persistent cross-border obstacles faced by emergency services, and proposes that there be a more prominent focus on these services; underlines the fact that cross-border areas, including areas at the EU’s external borders, bordering aggressor countries often face specific challenges; believes that EU border regions, facing multiple challenges, must be supported and is of the opinion that they must be provided with increased means; welcomes the new regulation on BRIDGEforEU; emphasises the importance of small-scale and cross-border projects and stresses the need for effective implementation on the ground; calls on the Commission to encourage Member States to actively support awareness-raising campaigns in bordering regions to maximise the impact of cross-border cooperation;

23. Recalls the need to ‘support cohesion’, rather than just rely on the ‘do no harm to cohesion’ principle, which means that no action should hamper the convergence process or contribute to regional disparities; calls for a stronger integration of these principles as cross-cutting in all EU policies, to ensure that they support the objectives of social, economic and territorial cohesion, as set out in Articles 3 and 174 TFEU; calls, furthermore, on the Commission to issue specific guidelines on how to implement and enforce these principles across EU policies, paying particular attention to the impact of EU laws on the competitiveness of less developed regions; reiterates that new legislative proposals need to take due account of local and regional realities; suggests that the Commission draw on innovative tools such as RegHUB (the network of regional hubs) to collect data on the impact of EU policies on the regions; to this end, underlines the need to strengthen the territorial impact assessment of EU legislation, with a simultaneous strengthening of the territorial aspects of other relevant policies; insists that promoting cohesion should also be seen as a way of fostering solidarity and mutual support among Member States and their regions; calls on the Commission and the Member States to continue their efforts regarding communication and visibility of the benefits of cohesion policy, demonstrating to citizens the EU’s tangible impact and serving as a key tool in addressing Euroscepticism; welcomes the launch of the multilingual version of the Kohesio platform;

24. Notes with concern the severe decline in recent years of adequate levels of national funding by Member States towards their poorer regions; recalls the importance of respecting the EU rule on additionality; calls on the Commission to ensure that national authorities take due account of internal cohesion in drafting and implementing structural and investment fund projects;

25. Insists that, in addition to adjusting to regional needs, cohesion policy must be adapted to the smallest scale, i.e. funds must be accessible to the smallest projects and project bearers; points out that their initiatives are often the most innovative and have a significant impact on rural development; reiterates that these funds should be accessible to all, regardless of their size or scope; approves of the Cohesion Alliance’s call for ‘a post-2027 Cohesion Policy that leaves no one behind’;

26. Stresses that delays in the MFF negotiations, together with the fact that Member States have placed a greater focus on the programming of the RRF funds, led to considerable delays in the programming period 2021-2027; stresses the importance of a timely agreement in the next framework, and therefore calls for the Common Provisions Regulation (CPR) and the budget negotiations to be finalised at least one year before the start of the new funding period so that Member States can develop their national and regional funding strategies in good time to ensure a successful transition to the next funding period and the continuation of existing ESIF projects;

27. Instructs its President to forward this resolution to the Council, the Commission, the European Economic and Social Committee, the European Committee of the Regions and the national and regional parliaments of the Member States.

MIL OSI Europe News –

April 24, 2025
MIL-OSI USA: Commencement Student Speaker Spotlight: Kristina Dubois

Source: US State of Connecticut

Meet Kristina Dubois. She is from Mendon, Massachusetts, where her creativity and love for art and music began at an early age. Always captivated by people’s smiles and guided by a deep sense of empathy and a passion for helping others, she naturally gravitated toward a career in healthcare. She worked full-time as a dental assistant, gaining invaluable hands-on experience at the height of the COVID-19 pandemic. This time solidified her decision to pursue dentistry and provided her with critical insights that helped prepare her for dental school.

Tell us more about your path to dental school.

From a young age, I was always captivated by people’s smiles, and I found myself drawn to the way a smile could transform someone’s appearance and confidence. By middle school, I knew that I wanted to pursue a career in dentistry. Dentistry excites me as it combines healthcare, the opportunity to improve people’s lives by enhancing their self-esteem, and the integration of my love for art and creativity. Dentistry has always felt like the perfect path for me, and I have been committed to pursuing it ever since.

Why did you choose the UConn School of Dental Medicine?

I chose UConn School of Dental Medicine because of its unique integration of medical and dental curricula, which enables us to understand the interdependence between oral health and overall health. This approach aligns with my goal of becoming a well-rounded and knowledgeable healthcare provider, allowing me to educate patients on how underlying medical conditions can impact oral health—and vice versa. Furthermore, the small class size fosters meaningful interactions with faculty, enabling students to form personal connections with the providers who play a pivotal role in shaping our education. In addition, the pass/fail grading system encourages collaboration over competition, cultivating a strong, family-like atmosphere that enhances both our personal and professional growth.

What activities were you involved with as a dental student?

Two invaluable opportunities that I had as a student were to volunteer with the Connecticut Mission of Mercy and at the South Park Dental Clinic. Both of these programs allow dental professionals to volunteer our time and provide exams and emergency care to individuals who cannot afford dental services. These experiences were incredibly rewarding, as they allowed me to meet people from all walks of life who were deeply appreciative to receive long overdue dental care. Witnessing the gratitude and relief from patients who had often gone without care for years highlighted the profound impact dentistry can have on people’s lives, reinforcing my passion for pursuing this profession.

What’s one thing that surprised you about UConn?

One aspect of UConn that truly surprised me was the strength of the bonds formed among peers. I feel incredibly fortunate to have found my core group of friends, and I know I couldn’t have navigated this journey without their support. We were always there for each other, offering encouragement and lifting one another up during challenging times. Regardless of where our careers take us, I will always deeply value the friendships we’ve built.

What’s one thing every student should do during their time at UConn?

Every student should attend a ‘Why I Teach’ event for a faculty member they admire, or inquire about their journey into dental education. At UConn, we’re incredibly fortunate to have close-knit relationships with passionate, highly educated faculty who make a lasting impact on the students they teach.

Who was your favorite mentor here and why?

My favorite mentor at UConn was Dr. Dhingra. He was not only dedicated to helping his students grow professionally, but he also invested time and care into our personal lives. It was incredibly meaningful to work with someone who genuinely cared about our success and well-being outside of school. Finding that balance is rare, and I’m truly grateful for his support and friendship.

What are your plans after graduation?

In addition to receiving an exceptional education, I have UConn to thank for introducing me to my fiancé, Ronak, a UConn medical student. As Ronak continues his journey in Orthopedic Surgery, I plan to pursue a career in private practice wherever his profession leads us. I’m incredibly excited for the endless opportunities that await us after graduation, and I’m fortunate to have an amazing partner and our three cats to share this next chapter of life with.

What’s one thing that will always make you think of UConn?

During the spring, geese flock to UConn from far and wide to have their baby goslings. If there is traffic going up the hill, you can be confident that 3 or 4 families are crossing the road (and they will surely take their time). With that being said, geese will always make me think of UConn.

What does being a part of UConn mean to you?

Being a part of UConn means more to me than just the education I’ve received; it has shaped me into the person and professional I am today. As a fourth-year dental student preparing to graduate, I am filled with a deep sense of gratitude for the opportunities UConn has provided. From the strong academic foundation to the close-knit community of supportive peers and faculty, UConn has been a place where I have grown both personally and professionally. It has given me the tools to not only be a skilled dentist but also a compassionate and empathetic healthcare provider. The friendships I’ve formed and the lessons I’ve learned here will stay with me throughout my career, and I feel incredibly fortunate to have been a part of such a remarkable institution.

What’s it going to be like to walk across the Commencement stage and get your degree?

The thought of walking across the stage at commencement is truly indescribable. It’s a unique experience that reflects the culmination of years of commitment and hard work, and a moment to realize how far we’ve come. The thought of walking across the stage and getting my degree takes me back to the morning I received my acceptance to UConn, a time when I was overwhelmed with happiness. This will be such a full-circle moment, and one I will cherish forever.

Any final words of wisdom for incoming students?

The most important advice for incoming students is to prioritize your mental health, your loved ones, and the activities that bring you joy. The best way to show up for your patients is by first showing up for yourself. Remember to take breaks when you need them, say yes to spending time with friends, and never hesitate to ask for help when you need it. Maintaining balance is key to being your best, both personally and professionally.

Watch the livestream of UConn Health’s 54^th Commencement on May 12, 2025, at 1:00 p.m.

MIL OSI USA News –

April 24, 2025
MIL-OSI: Farmers of Salem Proudly Spotlights Employee Tammy Stell for Her Generous Charitable Giving Work
Source: GlobeNewswire (MIL-OSI)

WILMINGTON, Del., April 23, 2025 (GLOBE NEWSWIRE) — Property and Casualty insurer, Farmers of Salem, is proud to support employee involvement in community activities that improve the quality of life in those communities where our employees live. Today, we spotlight Tammy Stell, Claims Customer Service Supervisor, who will be celebrating her 6-year career with Farmers later this year.

We all felt the helpless and scary effects of the COVID Pandemic. But some of us recognized the needs of others and did something about it. It all started with a visit to the dollar store. While at the cash register, Tammy’s husband, Al Stell, noticed an older woman at the register. Without enough money, she had to put back some food items for herself in order that she could afford food for her precious pet cat. Al stepped in and paid for the woman’s whole grocery bill. As he was driving home, his wheels started turning. Tammy and Al put their extra time and energy into a new mission: “To help people feed their animals when they are financially distressed.”

Bo Lends a PAW Pet Pantry held its first event on June 6, 2020, in Salem County, NJ. The pantry is named after the Stell family dog, Bo, who was adopted from a shelter in 2019. The pantry is a non-profit organization that helps people feed their fur babies. Says Tammy, “We want to help people with their animals, so there will be less animals on the streets and less animals being “surrendered” to animal shelters. It helps relieve the financial burden on people, allowing them to focus on paying for other essential items they need”

Al Stell has a long history of community service volunteering as a firefighter since he was 16. Tammy loves animals and says, “We are at a point in our lives that we can help the community and make a difference. We are big animal lovers, and we want to help people take care of them. When someone thanks me it means the world to me. People are eternally grateful. It makes me feel warm and fuzzy.”

The organization has big party plans to celebrate their 5-year anniversary, on June 7, 2025, at the Engine House in Pennsville, NJ. Recently, on March 13^th, Tammy and Al went to a local school for a meet-n-greet with Bo. The students held a donation drive, and the winning class got a Pizza Party and an in-person meeting with the famous Bo Stell. Bo Lends a PAW has been featured by multiple media outlets and just this month was awarded the Best Community Strengthening Non-Profit in the 2025 Best in Salem County contest.

Regarding Tammy’s career at Farmers, she stated: “I love my job!” Tammy is a Customer Service Rep II and has enjoyed working at Farmers for 5+ years.

For more information about Bo Lends a PAW Pet Pantry, visit www.BoLendsAPaw.org or, visit their Facebook page www.facebook.com/bolendsapawpetpantry.

About Farmers of Salem
Founded in 1851, Farmers of Salem provides insurance coverage to homeowners and businesses in New Jersey, Pennsylvania, Delaware, and Maryland through a network of independent agents. Rated A- Excellent by A.M. Best Company and has received a Financial Stability Rating of A Exceptional by Demotech, Inc. We pride ourselves in providing Superior Service with Personal Attention.

Farmers of Salem provides compensated Volunteer Time Off (VTO) to full-time employees for use during their regular workday. Farmers’ recognizes volunteering provides employees with a valuable opportunity to meaningfully support their chosen charitable missions and is very proud of their employee’s service to others.

For more information about Farmers of Salem, visit farmersofsalem.com

As a mutual corporation, fundamentally rooted in serving our community, we engage in corporate philanthropy, giving annually to an array of organizations and causes. Through our giving, in local markets where we have a presence, Farmers of Salem has supported educational development, physical education, and health and wellness programs that provide communities in most need with essential services, opportunities to improve the quality of their lives and provide them with assets to create a better future.

A partial list of events and organizations that Farmers of Salem supports annually:
- Autism Delaware
- Serviam Girls Academy
- Vehicles for Veterans
- Salem County Humane Society
- Habitat for Humanity
- VFW Post #253
- Operation Legacy
- Keeping Hope Alive, Inc.
- Temple University
- Girl Scouts and Boy Scouts
- Holiday Service Project – Thanksgiving Food Baskets – Salvation Army
- Make A Wish
- American Red Cross
- American Cancer Society
- Longwood Gardens
- Bo Lends a Paw Pet Pantry
Contact:
Kim Lorenzini
856-628-0150
klorenzini@fosnj.com

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/d857c142-941d-46ad-97eb-4f0372670258

The MIL Network –
April 24, 2025
MIL-OSI Security: Vault Agrees to Pay $8 Million to Settle Allegations of Billing False Claims to the COVID-19 Uninsured Program for Patients with Health Insurance

Source: Office of United States Attorneys

NEWARK, N.J. – Vault Medical Services, P.A. and Vault Medical Services of New Jersey, P.C. (collectively “Vault”), have agreed to pay the United States $8 million to resolve allegations that Vault violated the False Claims Act by knowingly submitting or causing the submission of false claims to the Health Resources & Services Administration COVID-19 Claims Reimbursement to Health Care Providers and Facilities for Testing, Treatment, and Vaccine Administration for the Uninsured Program (the “Uninsured Program”) for patients who had health insurance, U.S. Attorney Alina Habba announced.

Between approximately May 2020 and April 2022, the Uninsured Program reimbursed eligible providers for COVID-19 tests, testing-related items and services, treatment, and vaccines performed on uninsured individuals. During the public health emergency, Vault provided various COVID-19 related services to patients across the country, including specimen collection services and vaccine administration. Vault provided these services via telehealth and at in-person testing sites, and specimens were sent to laboratories for processing. The settlement announced resolves allegations that Vault knowingly submitted or caused the submission of claims for these services to the Uninsured Program for patients who had active health insurance.

Specifically, the United States alleges Vault was aware of data integrity issues with patient information collected at the point of service but failed to substantively address those issues, and did not ensure the collection of complete patient information, including demographic and insurance information. The United States further alleges that Vault failed to properly confirm whether certain patients had health insurance coverage, and disregarded insurance information for individuals for whom Vault had valid insurance information on file, including confirmation through an insurance verification process, before submitting claims to the Uninsured Program.

“The Uninsured Program provided critical support for testing and treatment for uninsured Americans during the height of the pandemic. Our office will not tolerate the alleged fraud, abuse, and waste of these funds.”

– U.S. Attorney Alina Habba

“Individuals and entities that participate in the federal healthcare system are required by law to preserve the integrity of program funds,” stated Special Agent in Charge Naomi Gruchacz with the U.S. Department of Health and Human Services Office of Inspector General. “The settlement in this case involves a provider that knowingly sought reimbursement for federal funds to which they were not entitled, and by doing so jeopardized the provision of services for the uninsured.”

The resolution obtained in this matter was the result of a coordinated effort between the U.S. Attorney’s Office for the District of New Jersey and the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, with assistance from HHS-OIG.

The government is represented by Assistant U.S. Attorney Kruti Dharia of the Opioid Abuse Prevention and Enforcement Unit and Trial Attorneys Lindsay DeFrancesco, Elizabeth J. Kappakas, and James Nealon in the Civil Division’s Commercial Litigation Branch (Fraud Section).

The government’s pursuit of these matters illustrates the government’s emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 1-800-HHS-TIPS (800-447-8477).

The claims resolved by the settlement are allegations only, and there has been no determination of liability.

###

MIL Security OSI –

April 24, 2025
MIL-OSI Global: IMF World Economic Outlook: economic uncertainty is now higher than it ever was during COVID

Source: The Conversation – Global Perspectives – By Sergi Basco, Profesor Agregado de Economia, Universitat de Barcelona

Skorzewiak/Shutterstock

The International Monetary Fund (IMF) has just published its World Economic Outlook, and it does not take an expert to deduce that, even among some of the world’s top economic minds, confident predictions are currently hard to come by.

Every spring the IMF and World Bank hold their Spring Meetings in Washington DC: a week of seminars, briefings and press conferences focusing on the global economy, international development and world financial markets. At both the Spring Meetings and the Annual Meeting, held each autumn, the IMF publishes its global economic growth forecasts.

For its 2025 Spring Meeting the IMF has published a baseline forecast, as well as an addendum analysing the tariff events that took place between 9 and 14 April. According to the Fund’s report, world GDP will grow by 2.8% in 2025 and 3.0% in 2026. For the euro area, growth will be 0.8% and 1.2% for 2025 and 2026 respectively.

These forecasts represent a substantial downward revision from IMF figures published just three months ago. Globally, growth in 2025 is down by 0.5% compared to the Fund’s January update, with a reduction of 0.2% for the euro area.

One major shift is key to understanding the most recent IMF report and its pessimistic predictions: we live in a much more uncertain world than we did three months ago.

Trump, tariffs and uncertainty

If one had to sum up the new US tariff policy in a word, “unpredictable” would suffice, as the so-called “Liberation Day” of 2 April 2025 represented the largest tariff increase in modern history.

Just one week later, the US president then made two further announcements. First, a 90-day freeze on tariff hikes, apparently in search of bilateral agreements with the countries to which he had applied tariffs above 10%. Second, that China would be excluded from this exception, with tariffs on its products being raised to 145%.

This freeze means that until July EU goods being sold to the US will have a 10% tariff instead of the 20% that was announced on 2 April. However, the 10% applied by the new US administration is still much higher than the average tariff of 1.34% that was in force before 5 April.

But what will the tariff be after these 90 days? What about in December? What about in 2 years’ time? What goods will be exempted? How far will the trade war between China and the US go? The answer to all of these questions is: nobody knows. This uncertainty is evident in of the IMF’s spring forecast.

Uncertainty is off the charts

The IMF’s world trade uncertainty index is currently 7 times higher than it was in October 2024, much higher than in the pandemic.

As far as the economy is concerned, this uncertainty is far worse than a high but definitive tariff. With a tariff, companies can at least reorganise their production chain, and consumers can look for alternative products. There is a cost, but at least businesses and consumers can plan for it.

However, nobody can calculate these costs today because nobody knows how tariffs will evolve. An American company may decide today to buy a particular product from the EU thinking that the tariff will be 10%, but upon the product’s arrival in the US it turns out the tariff has risen to 100% because a presidential advisor said it would be good for the US economy to raise tariffs on that product.

Unbelievable though it may sound, this appears to be how the tariffs are being decided and enacted. According to one account, the US Treasury and Commerce Secretaries were only able to persuade Trump to freeze recent tariff hikes because Peter Navarro – the president’s economic advisor and tariff ideologue – was in another room at the time.

The end result of this unpredictability is that the best course of action, for consumers and businesses alike, is inaction.

Leer más:
Trump tariff chaos: radical uncertainty will likely make companies delay investments

Fear and volatility

It is no surprise that these constant changes of plans are causing great instability in financial markets. Although Trump may have triumphantly celebrated rising stock prices immediately after the tariff freeze was announced, financial markets are now subject to levels of uncertainty and fear similar to those seen during COVID-19.

Five years ago, volatility was associated with increased demand for US government debt due to the “flight to safety” effect: investors selling higher risk investments and buying safer assets, such as gold and government bonds, in times of uncertainty.

Now we are seeing the exact opposite. The price of US bonds has fallen since “Liberation Day”, and this means that investors are selling them. In other words, markets no longer believe that US government debt is a safe asset. Given the role of the dollar and US debt in international markets, this paradigm shift may generate even more financial instability down the line.

Supply chains are breaking (again)

COVID-19, the last major global economic crisis, has one thing in common with the current situation: disruption of global supply chains. During the pandemic it was confinement that forced production to stop. Today, it is the imposition of tariffs.

However, there is another major difference. During COVID people knew it was a matter of time before vaccines became available and normality returned. Today, instability in financial markets comes not from any virus, but from President Trump’s own advisors selling him all manner of plans to protect US economic interests.

Sergi Basco no recibe salario, ni ejerce labores de consultoría, ni posee acciones, ni recibe financiación de ninguna compañía u organización que pueda obtener beneficio de este artículo, y ha declarado carecer de vínculos relevantes más allá del cargo académico citado.

– ref. IMF World Economic Outlook: economic uncertainty is now higher than it ever was during COVID – https://theconversation.com/imf-world-economic-outlook-economic-uncertainty-is-now-higher-than-it-ever-was-during-covid-255055

MIL OSI – Global Reports –

April 24, 2025
MIL-OSI USA: Revitalizing Historic Landmarks in Western New York

Source: US State of New York

overnor Kathy Hochul today announced the completion of the Historic Post Office at One East Avenue in the City of Lockport after a comprehensive historic rehabilitation and renovation as part of the Downtown Revitalization Initiative. The $9.7 million project included a rehabilitation of the interior and exterior historic fabric of the building together with renovations to improve the facility for modern use. Before and after photos of the project are available here.

“I’m working to revitalize historic landmarks and the communities that they define, and the revitalization of the Historic Post Office will allow Lockport’s rich history to live on through generations to come,” Governor Hochul said. “As the first Governor from Western New York in over 100 years, I’m committed to providing resources and investment so that all of our extraordinary communities can live up to their full potential.”

The One East Avenue Historic Post Office was opened in 1902. The building was listed on the National Register of Historic Places in 1989. The three-story, red brick and terra cotta building combines Beaux Arts massing with sculptural detail inspired by classical and Renaissance design. The historic rehabilitation and renovation undertaken by Iskalo Development Corp. included meticulous restoration of the building’s historic features and modernization improvements including new electrical, plumbing, mechanical and sprinkler systems and elevator installation. Iskalo purchased the building in 2015 and served as the Architect and Construction Manager for the project.

The 31,600-square-foot building offers “move-in ready” boutique retail and office suites for lease and is anchored by Big Ditch Brewing which recently opened a Tap Room and Innovation Brewery. The Grigg Lewis Foundation was the first tenant to occupy space in the building.

New York State Secretary of State Walter T. Mosley said, “As a round three winner of the Downtown Revitalization Initiative, Lockport is really harnessing its Canal history and heritage as a catalyst for future growth and rejuvenation. The completion of the renovated Historic Post Office continues the City’s momentum toward becoming a world-class destination for residents to live, work and play, and for visitors from all over to enjoy.”

Empire State Development President, CEO & Commissioner Hope Knight said, “Governor Hochul’s Downtown Revitalization Initiative projects are strengthening city centers throughout the state. Seeing new life breathed into the century-old Historic Post Office as part of Lockport’s reenergization is a testament to investing in our downtowns.”

New York State Canal Corporation Director Brian U. Stratton said, “As we reflect on 200 years of the Erie Canal, we continue to contemplate ways to elevate the communities that have risen along its banks over these last two centuries. The completion of the Lockport post office, made possible in large measure by Governor Hochul’s Downtown Revitalization Initiative, is the perfect illustration of how this program works to bring positive change to downtown centers throughout the state. It is just one of many examples of how the DRI program is bringing positive change to communities from across the Erie Canal.”

City of Lockport Mayor John Lombardi III said, “What an exciting time for the City of Lockport. I sincerely thank the New York Department of State for being in our great city today and for creating a much-needed initiative for the Revitalization of our Downtown Corridor. The Historic rehabilitation and renovation of the ‘Historic Post Office,’ the former Niagara County Courthouse, and the establishment of the anchor tenant ‘Big Ditch Brewing,’ has created a much-needed catalyst for our city. And has provided a destination point for many new visitors, hopefully generating some interest in the gifts Lockport has to offer. What better place for the Big Ditch than within a hundred yards of The Big Ditch? Thank you, Paul Iskalo and Matt Kahn, for creating another reason to love Lockport.”

Founder and President of Iskalo Development Paul B. Iskalo said, “The historic rehabilitation and renovation of the Historic Post Office is a great accomplishment for Iskalo Development and downtown Lockport. And its completion would not have been possible without assistance from the State of New York, City of Lockport, Five Star Bank and Niagara County Industrial Development Agency.”

The City of Lockport was named the Western New York Downtown Revitalization Initiative (DRI) Round 3 winner in October 2018. The Historic Post Office received $1.795 million from the DRI, as well as state and federal historic preservation tax credits. In addition to the Historic Post Office, other projects awarded DRI funding include $2.2 million to create rooftop and outdoor event space at the Spalding Mill; $1.35 million to redevelop the F&M Building to house a mix of residential and commercial uses; $955,000 to support the development of commercial space as part of the Harrison Lofts project; $865,000 to enhance connectivity on Pine Street; $800,000 for the renovation of the Tuscarora Club including a boutique hotel; $600,00 for the renovation of the Historic Palace Theatre; $275,000 for additional sculptures as part of the Lock Tenders Tribute; $230,000 for reconstruction of South Street; and $630,000 for a Small Project Grant Fund to support smaller, commercial and mixed-use projects.

The City of Lockport has been chosen as a featured field visit during the World Canals Conference in Buffalo in September. The Department of State will be presenting a panel at the Conference on the ways that the Downtown Revitalization Initiative has helped spark a renaissance in downtown revitalization in over 20 Canal corridor communities. In advance of the conference, DOS produced a case study on the subject entitled, “Downtown Revitalization Along the Erie Canal.”

Downtown Revitalization Initiative
The Downtown Revitalization Initiative was created in 2016 to accelerate and expand the revitalization of downtowns and neighborhoods in all ten regions of the state to serve as centers of activity and catalysts for investment. Led by the Department of State with assistance from Empire State Development, Homes and Community Renewal and NYSERDA, the DRI represents an unprecedented and innovative “plan-then-act” strategy that couples strategic planning with immediate implementation and results in compact, walkable downtowns that are a key ingredient to helping New York State rebuild its economy from the effects of the COVID-19 pandemic, as well as to achieving the State’s bold climate goals by promoting the use of public transit and reducing dependence on private vehicles. Through eight rounds, the DRI has awarded a total of $900 million to 89 communities across every region of the State.

MIL OSI USA News –

April 24, 2025
MIL-OSI Global: Why Hollywood is finally taking horror films seriously

Source: The Conversation – UK – By Reece Goodall, Director of Student Experience and Progression for the Faculty of Arts, University of Warwick

Horror films have always held an interesting place in cultural and cinematic circles. Despite proving consistently profitable and boasting a considerable fanbase, the genre has also been the target in several moments of cultural crisis. Think the video nasties of the 1970s and 80s, or the implied conservatism of the violence in torture porn films of the 2000s.

Though the genre has been one of the industry’s most profitable genres since the 1930s, due to its perceived low status, horror has largely been unrecognised by award bodies, mainstream critics and the gatekeepers of more “legitimate” cinema. There’s an implied sense that the genre is somewhat different from respectable film-making – that it is low status, trashy and in some cases outright nasty.

Only seven horror films have been nominated for best picture at the Oscars since the first ceremony in 1929. Two of those nominations were in the last decade, and there was widespread conversation about the bias against the genre after Toni Collette failed to receive an Oscar nomination for her performance in the 2018 film Hereditary.

Even then, Collette’s excellent performance was in an auteur film released by indie studio A24. Far from the more conventional forms of horror that tend to be overlooked year on year by bodies recognising the year’s achievements in film-making. However, if we leap ahead to 2025 and look at the horror films that took the past year by storm – The Substance, Nosferatu, Terrifier 3 – all forms of the genre are represented.

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The Substance and Nosferatu could both be described as “elevated horror”, a sub-genre that focuses on negative moods rather than explicit gore (although both films certainly get bloody, especially in The Substance’s monstrous climax).

On the other end of the scale, Terrifier 3 is particularly brutal, aligning itself more with grindhouse and slasher films and celebrating the practical effects that bring violence to the big screen. In another era, there is no doubt that Terrifier 3 would have been a target of censors and the cultural critics over its depictions of violence, with brutal deaths and the murder of several children. But in 2025, it is celebrated by genre fans and an object of serious academic interest.

The films were all successes. Both The Substance and Nosferatu received multiple nominations at the 2025 Academy Awards. Along with Alien: Romulus, the horror genre picked up ten nominations, its best performance since 1974.

Nosferatu was nominated for several Academy Awards.

Elsewhere, Terrifier 3 broke records as the highest-grossing unrated film (a movie not given a rating by film censors, normally because of offensive content) of all time. Terrifier 3 never seemed likely to receive an Oscar nomination, even despite its success and a sustained and entertaining marketing campaign. Nonetheless, both fans and industry figures alike have suggested that its practical make-up effects warranted recognition.

So why is horror becoming more widely appreciated in the 21st century? The “elevated horror” dimension is certainly one factor, presenting works that align more with the conventions of art cinema, which is essentially easier to sell as legitimate.

Alongside this, we have the political dimension. Horror films have always been political, representing the fears and marginal identities of a particular country and time period. But in an era characterised by increased instability, pandemics, wars and all manner of social crises, the need for the genre might be more prevalent than ever.

The terrifying trailer for Terrifier 3.

In light of the industry’s continuing struggle with declining cinema attendance numbers, horror remains one of the rare genres that consistently draws audiences to theatr. Although films like Terrifier 3 might be looked down on by the cinema establishment, it was event cinema and widely discussed in a way that few films in the past five years have managed to be.

Audiences have always loved horror, and in a tough period for the cinema industry, the genre continues to prove financially stable and appealing to film-goers. That the gatekeepers of the industry are tentatively starting to recognise the genre is a new development, and although it remains to be seen whether this recognition will be sustained in future years, we’re in a moment when horror of all varieties is being praised like never before.

Reece Goodall does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

– ref. Why Hollywood is finally taking horror films seriously – https://theconversation.com/why-hollywood-is-finally-taking-horror-films-seriously-253687

MIL OSI – Global Reports –

April 24, 2025
MIL-OSI USA: Distillate and jet fuel contribute to record U.S. petroleum product exports in 2024

Source: US Energy Information Administration

In-brief analysis

April 23, 2025

In 2024, U.S. exports of total petroleum products increased to a record 6.6 million barrels per day (b/d) annual average. Annual U.S. petroleum product exports increased by 495,000 b/d as U.S. exports of distillate fuel oil, typically sold as diesel, and jet fuel increased compared with 2023, while exports of total motor gasoline decreased. Imports of major petroleum products, including gasoline, distillate fuel oil, and jet fuel, decreased by 210,000 b/d in 2024 compared with 2023.

Distillate fuel oil accounts for the largest share of U.S. transportation fuel exports and is the second-largest petroleum export by volume, after propane. Distillate exports increased 182,000 b/d to about 1.30 million b/d in 2024, still less than the annual record of 1.38 million b/d in 2017.

The largest destination for U.S. distillate exports is Mexico, which accounted for 272,000 b/d (21%) in 2024. Other major destinations included Chile (110,000 b/d), the Netherlands (103,000 b/d), the UK (81,000 b/d), and Peru (74,000 b/d).

Brazil was the second-largest destination for U.S. distillate exports over the previous 10 years (2014–23), but it only received 41,000 b/d of U.S. exports in 2024. This decrease indirectly reflects sanctions by European countries on Russia’s distillate imports. Brazil increased imports of discounted and displaced distillate from Russia last year, reducing its own imports from the United States. At the same time, major European hubs in the Netherlands and the UK imported significantly more distillate from the United States. The Netherlands imported 103,000 b/d of distillate from the United States in 2024, and UK distillate imports averaged 81,000 b/d. In 2021, the Netherlands imported just 12,000 b/d of U.S. distillate, and the UK imported only 23,000 b/d.

In 2024, exports of U.S. motor gasoline, including both finished motor gasoline and motor gasoline blending components, totaled 877,000 b/d, or 24,000 b/d less than in 2023. Mexico is the largest destination for U.S. gasoline exports, accounting for more than half of 2024 exports at 495,000 b/d. Other destinations for U.S. gasoline exports are generally concentrated in the Western Hemisphere, such as Guatemala, Colombia, Canada, and Panama—the next-largest destinations by volume in 2024.

Data source: U.S. Energy Information Administration, Petroleum Supply Monthly
Note: Total motor gasoline exports are calculated as the sum of exports of finished motor gasoline and exports of motor gasoline blending components.

Jet fuel exports in 2024 increased relative to 2023, rising to a total of 209,000 b/d but remaining below pre-pandemic levels. Major destinations for jet fuel exports are elsewhere in the Americas, and as with the other fuels, Mexico has historically been the largest single destination, constituting 63,000 b/d (30%) of 2024 exports. U.S. annual exports of jet fuel to Mexico were their highest on record last year.

Principal contributor: Kevin Hack

MIL OSI USA News –

April 24, 2025
MIL-OSI: Willis Lease Finance Corporation Fuels Teesside’s Economic Takeoff with Bold Expansion Investment Starting with Construction of a State of the Art Two-Bay Narrowbody Maintenance Hangar

Source: GlobeNewswire (MIL-OSI)

COCONUT CREEK, Fla., April 23, 2025 (GLOBE NEWSWIRE) — Willis Lease Finance Corporation (NASDAQ: WLFC) the leading lessor of commercial aircraft engines and global provider of aviation services, is pleased to announce its subsidiary, Willis Aviation Services Limited (“WASL”), a leading aircraft maintenance, repair and overhaul (“MRO”) provider, has commenced construction of an additional two-bay narrowbody hangar at its growing operations at Teesside International Airport (“Teesside”) in Northeastern England. The new hangar will be equipped for 737 and A320 family aircraft, including new-generation models.

Demand for aircraft heavy maintenance is exceptionally high, with global and European capacity falling short. Airlines must plan ahead to secure maintenance slots, as most MROs are at full capacity, making last-minute bookings difficult. The Company’s expansion plans add capacity to the UK’s MRO sector, addressing this industry gap. The new facility is expected to create a significant number of new highly-skilled jobs at Teesside. In partnership with local universities and colleges, WASL has laid the groundwork to launch training programs for new mechanics and apprentices, creating a sustainable pipeline of talent that supports both immediate operational needs and long-term skill development in the region.

“We made a promise to create several hundred jobs in Northeast England, and we are proud to be delivering on that commitment. We are following through on our pledge to establish and expand our services in this region and beyond. Our integrated services businesses support third-party customers, as well as the Company’s owned and managed assets, driving meaningful growth and opportunity in the communities we serve,” said Austin C. Willis, Chief Executive Officer of WLFC.

Willis Lease Finance Corporation
Willis Lease Finance Corporation (“WLFC”) leases large and regional spare commercial aircraft engines, auxiliary power units and aircraft to airlines, aircraft engine manufacturers and maintenance, repair, and overhaul providers worldwide. These leasing activities are integrated with engine and aircraft trading, engine lease pools and asset management services through Willis Asset Management Limited, as well as various end-of-life solutions for engines and aviation materials provided through Willis Aeronautical Services, Inc. Through Willis Engine Repair Center®, Jet Centre by Willis, and Willis Aviation Services Limited, the Company’s service offerings include Part 145 engine maintenance, aircraft line and base maintenance, aircraft disassembly, parking and storage, airport FBO and ground and cargo handling services. Willis Sustainable Fuels intends to develop, build and operate projects to help decarbonize aviation.

Except for historical information, the matters discussed in this press release contain forward-looking statements that involve risks and uncertainties. Do not unduly rely on forward-looking statements, which give only expectations about the future and are not guarantees. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update them to reflect any change in the Company’s expectations or any change in events, conditions or circumstances on which the forward-looking statement is based, except as required by law. Our actual results may differ materially from the results discussed in forward-looking statements. Factors that might cause such a difference include, but are not limited to: the effects on the airline industry and the global economy of events such as war, terrorist activity and the COVID-19 pandemic; changes in oil prices, rising inflation and other disruptions to world markets; trends in the airline industry and our ability to capitalize on those trends, including growth rates of markets and other economic factors; risks associated with owning and leasing jet engines and aircraft; our ability to successfully negotiate equipment purchases, sales and leases, to collect outstanding amounts due and to control costs and expenses; changes in interest rates and availability of capital, both to us and our customers; our ability to continue to meet changing customer demands; regulatory changes affecting airline operations, aircraft maintenance, accounting standards and taxes; the market value of engines and other assets in our portfolio; and risks detailed in the Company’s Annual Report on Form 10-K and other continuing and current reports filed with the Securities and Exchange Commission. It is advisable, however, to consult any further disclosures the Company makes on related subjects in such filings. These statements constitute the Company’s cautionary statements under the Private Securities Litigation Reform Act of 1995.

CONTACT: Lynn Mailliard Kohler

Director, Global Corporate Communications

(415) 328-4798

The MIL Network –

April 24, 2025
MIL-OSI: Usio to Host First Quarter 2025 Conference Call to Discuss Results and Provide Company Update on May 14, 2025

Source: GlobeNewswire (MIL-OSI)

SAN ANTONIO, April 23, 2025 (GLOBE NEWSWIRE) — Usio, Inc. (Nasdaq:USIO), a leading provider of integrated, cloud-based electronic payment and embedded financial solutions, today announced it will release first quarter 2025 financial results for the period ended March 31, 2025, after the market closes on Wednesday, May 14, 2025.

Usio’s management will host a conference call the same day, May 14, 2025, beginning at 4:30 p.m. Eastern time to review financial results and provide a business update. Following management’s formal remarks, there will be a question-and-answer session.

To listen to the conference call, interested parties within the U.S. should call 1-844-883-3890. International callers should call 1-412-317-9246. All callers should ask for the Usio conference call. The conference call will also be available through a live webcast, which can be accessed via the company’s website at usio.com/events/.

A replay of the call will be available approximately one hour after the end of the call through May 28, 2025. The replay can be accessed via the Company’s website or by dialing 1-877-344-7529 (U.S.) or 1-412-317-0088 (international). The replay conference playback code is: 3107685.

About Usio, Inc.
Usio, Inc. (Nasdaq: USIO), a leading, cloud-based, integrated FinTech electronic payment solutions provider, offers a wide range of payment solutions to merchants, billers, banks, service bureaus, integrated software vendors and card issuers. The Company operates credit, debit/prepaid, and ACH payment processing platforms to deliver convenient, world-class payment solutions and services clients through its unique payment facilitation platform as a service. The company, through its Usio Output Solutions division, offers services relating to electronic bill presentment, document composition, document decomposition and printing and mailing services. The strength of the Company lies in its ability to provide tailored solutions for card issuance, payment acceptance, and bill payments as well as its unique technology in the card issuing sector. Usio is headquartered in San Antonio, Texas, and has offices in Austin, Texas.

Websites: www.usio.com and www.akimbocard.com.
Find us on LinkedIn, Facebook® and Twitter.

FORWARD-LOOKING STATEMENTS DISCLAIMER

Except for the historical information contained herein, the matters discussed in this release include forward-looking statements which are covered by safe harbors. Those statements include, but may not be limited to, all statements regarding management’s intent, belief, and expectations, such as statements concerning our future and our operating and growth strategy. These forward-looking statements are identified by the use of words such as “believe,” “intend,” “look forward,” “anticipate,” “schedule,” and “expect” among others. Forward-looking statements in this press release are subject to certain risks and uncertainties inherent in the Company’s business that could cause actual results to vary, including such risks related to an economic downturn as a result of the COVID-19 pandemic, the realization of opportunities from the IMS acquisition, the management of the Company’s growth, the loss of key resellers, the relationships with the Automated Clearinghouse network, bank sponsors, third-party card processing providers and merchants, the security of our software, hardware and information, the volatility of the stock price, the need to obtain additional financing, risks associated with new tax legislation, and compliance with complex federal, state and local laws and regulations, and other risks detailed from time to time in the Company’s filings with the Securities and Exchange Commission including its annual report on Form 10-K for the fiscal year ended December 31, 2024. One or more of these factors have affected, and in the future, could affect the Company’s businesses and financial results in the future and could cause actual results to differ materially from plans and projections. The Company believes that the assumptions underlying the forward-looking statements included in this release will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the objectives and plans will be achieved. All forward-looking statements made in this release are based on information presently available to management. The Company assumes no obligation to update any forward-looking statements, except as required by law.

Contact
Paul Manley
Senior Vice President, Investor Relations
paul.manley@usio.com
612-834-1804

The MIL Network –

April 24, 2025
MIL-OSI: ACNB Corporation Announces Second Quarter Cash Dividend

Source: GlobeNewswire (MIL-OSI)

GETTYSBURG, Pa., April 23, 2025 (GLOBE NEWSWIRE) — ACNB Corporation (NASDAQ: ACNB), financial holding company for ACNB Bank and ACNB Insurance Services, Inc., announced today that the Board of Directors approved and declared a regular quarterly cash dividend of $0.34 per share of ACNB Corporation common stock payable on June 13, 2025, to shareholders of record as of May 30, 2025. This per share amount reflects a 6.25% increase over the $0.32 per share paid in the first quarter of 2025.

“The ACNB Board of Directors’ dividend declaration of $0.34 per share furthers our commitment to delivering shareholder value, and continues ACNB’s longstanding history of rewarding its shareholders with quarterly cash dividends for decades,” said James P. Helt, ACNB Corporation President & Chief Executive Officer. “The Board’s decision to increase the quarterly dividend represents our confidence in ACNB’s financial strength and long-term growth and profitability prospects. Notably, this is the fifth consecutive calendar year in which ACNB has increased the quarterly cash dividend amount. Since 2017, we have increased our quarterly cash dividend by 70%, from $0.20 to $0.34 per share.”
ACNB Corporation, headquartered in Gettysburg, PA, is the independent $3.26 billion financial holding company for the wholly-owned subsidiaries of ACNB Bank, Gettysburg, PA, and ACNB Insurance Services, Inc., Westminster, MD. Originally founded in 1857, ACNB Bank serves its marketplace with banking and wealth management services, including trust and retail brokerage, via a network of 33 community banking offices and one loan office located in the Pennsylvania counties of Adams, Cumberland, Franklin, Lancaster and York and the Maryland counties of Baltimore, Carroll and Frederick. ACNB Insurance Services, Inc. is a full-service insurance agency with licenses in 46 states. The agency offers a broad range of property, casualty, health, life and disability insurance serving personal and commercial clients through office locations in Westminster, MD and Gettysburg, PA. For more information regarding ACNB Corporation and its subsidiaries, please visit investor.acnb.com.

FORWARD-LOOKING STATEMENTS – In addition to historical information, this press release may contain forward-looking statements. Examples of forward-looking statements include, but are not limited to, (a) projections or statements regarding future earnings, expenses, net interest income, other income, earnings or loss per share, asset mix and quality, growth prospects, capital structure, and other financial terms, (b) statements of plans and objectives of Management or the Board of Directors, and (c) statements of assumptions, such as economic conditions in the Corporation’s market areas. Such forward-looking statements can be identified by the use of forward-looking terminology such as “believes”, “expects”, “may”, “intends”, “will”, “should”, “anticipates”, or the negative of any of the foregoing or other variations thereon or comparable terminology, or by discussion of strategy. Forward-looking statements are subject to certain risks and uncertainties such as national, regional and local economic conditions, competitive factors, and regulatory limitations. Actual results may differ materially from those projected in the forward-looking statements. Such risks, uncertainties, and other factors that could cause actual results and experience to differ from those projected include, but are not limited to, the following: short-term and long-term effects of inflation and rising costs on the Corporation, customers and economy; effects of governmental and fiscal policies, as well as legislative and regulatory changes; effects of new laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) and their application with which the Corporation and its subsidiaries must comply; impacts of the capital and liquidity requirements of the Basel III standards; effects of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Financial Accounting Standards Board and other accounting standard setters; ineffectiveness of the business strategy due to changes in current or future market conditions; future actions or inactions of the United States government, including the effects of short-term and long-term federal budget and tax negotiations and a failure to increase the government debt limit or a prolonged shutdown of the federal government; effects of economic conditions particularly with regard to the negative impact of any pandemic, epidemic or health-related crisis and the responses thereto on the operations of the Corporation and current customers, specifically the effect of the economy on loan customers’ ability to repay loans; effects of competition, and of changes in laws and regulations on competition, including industry consolidation and development of competing financial products and services; inflation, securities market and monetary fluctuations; risks of changes in interest rates on the level and composition of deposits, loan demand, and the values of loan collateral, securities, and interest rate protection agreements, as well as interest rate risks; difficulties in acquisitions and integrating and operating acquired business operations, including information technology difficulties; challenges in establishing and maintaining operations in new markets; effects of technology changes; effects of general economic conditions and more specifically in the Corporation’s market areas; failure of assumptions underlying the establishment of reserves for loan losses and estimations of values of collateral and various financial assets and liabilities; acts of war or terrorism or geopolitical instability; disruption of credit and equity markets; ability to manage current levels of impaired assets; loss of certain key officers; ability to maintain the value and image of the Corporation’s brand and protect the Corporation’s intellectual property rights; continued relationships with major customers; and, potential impacts to the Corporation from continually evolving cybersecurity and other technological risks and attacks, including additional costs, reputational damage, regulatory penalties, and financial losses. We caution readers not to place undue reliance on these forward-looking statements. They only reflect Management’s analysis as of this date. The Corporation does not revise or update these forward-looking statements to reflect events or changed circumstances. Please carefully review the risk factors described in other documents the Corporation files from time to time with the SEC, including the Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. Please also carefully review any Current Reports on Form 8-K filed by the Corporation with the SEC.

ACNB #2025-9
April 23, 2025

Contact: Kevin J. Hayes

SVP/General Counsel,

Secretary & Chief

Governance Officer

717.339.5161

khayes@acnb.com

The MIL Network –

April 24, 2025

MIL-OSI: Fidelity D & D Bancorp, Inc. Reports First Quarter 2025 Financial Results

Source: GlobeNewswire (MIL-OSI)

DUNMORE, Pa., April 23, 2025 (GLOBE NEWSWIRE) — Fidelity D & D Bancorp, Inc. (NASDAQ: FDBC) and its banking subsidiary, The Fidelity Deposit and Discount Bank, announced its unaudited, consolidated financial results for the three-month period ended March 31, 2025.

Unaudited Financial Information

Net income for the quarter ended March 31, 2025 was $6.0 million, or $1.03 diluted earnings per share, compared to $5.1 million, or $0.88 diluted earnings per share, for the quarter ended March 31, 2024. The $0.9 million, or 18%, increase in net income resulted primarily from a $2.1 million increase in net interest income coupled with a $0.4 million increase in non-interest income. This was partially offset by a $0.9 million increase in non-interest expense, a $0.4 million increase in the provision for income tax, and a $0.3 million increase in the provision for credit losses on loans.

“Highlights of our first quarter results include achieving total assets of $2.7 billion, along with strong net income primarily driven by accelerated loan and deposit growth and improvement in net interest margin,” said Dan Santaniello, President and CEO. “While we continue to closely monitor the external environment, our outlook for the year is positive, reflecting rigorous expense management, healthy credit metrics and ongoing successful execution of our strategic plan. I want to thank our bankers for their commitment and service. Their contributions are essential to our achievements, enabling us to serve our clients, shareholders, and community with exceptional experiences.”

Consolidated First Quarter Operating Results Overview

Net interest income was $17.0 million for the first quarter of 2025, a 14% increase over the $14.9 million earned for the first quarter of 2024. The $2.1 million increase in net interest income resulted from the increase of $2.7 million in interest income primarily due to a $148.0 million increase in the average balance of interest-earning assets and a 21 basis point increase in fully-taxable equivalent (“FTE”) yield. The loan portfolio had the most significant impact, producing a $2.5 million increase in FTE interest income from $116.4 million in higher quarterly average balances and an increase of 26 basis points in FTE loan yield. Slightly offsetting the higher interest income, there was a $0.6 million increase in interest expense due to a $124.3 million quarter-over-quarter increase in average interest-bearing liability balances. The increase was due to growth of $179.3 million in average interest-bearing deposit balances and a 6 basis point increase in the rates paid on interest-bearing deposits. This was partially offset by a decrease in interest expense on borrowings due to $53.9 million less in average short-term borrowings.

The FTE yield on interest-earning assets was 4.73% for the first quarter of 2025, an increase of 21 basis points from the 4.52% for the first quarter of 2024. The overall cost of interest-bearing liabilities was 2.49% for the first quarter of 2025, a decrease of 2 basis points from the 2.51% for the first quarter of 2024. The cost of funds remained flat at 1.93% for both the first quarters of 2025 and 2024. The Company’s FTE (non-GAAP measurement) net interest spread was 2.24% for the first quarter of 2025, an increase of 23 basis points from the 2.01% recorded for the first quarter of 2024. FTE net interest margin increased to 2.89% for the three months ended March 31, 2025 from 2.69% for the same period of 2024 due to the increase in the loan and lease portfolio coupled with the continued re-investment of cash flow into more effective interest-earning assets.

For the three months ended March 31, 2025, the provision for credit losses on loans was $455 thousand partially offset by a $85 thousand net benefit in the provision for unfunded commitments, compared to a $125 thousand provision for credit losses on loans and a $50 thousand net benefit in the provision for credit losses on unfunded loan commitments for the three months ended March 31, 2024. For the three months ended March 31, 2025, the increase in the provision for credit losses on loans compared to the prior year period was due to higher loan growth and higher net charge-offs. For the three months ended March 31, 2025, the higher net benefit for credit losses on unfunded commitments was due to a larger reduction in unfunded commitments during the quarter compared to the same period in 2024.

Total non-interest income increased $0.4 million, or 9%, to $5.0 million for the first quarter of 2025 compared to $4.6 million for the first quarter of 2024. The increase in non-interest income was primarily attributed to $0.2 million in wealth management fees and $0.1 million in interchange fees. During the first quarter of 2025, gains of $0.5 million on the sale of a commercial loan and $0.3 million from the sale of a property were offset by $0.8 million in losses recognized on the sale of securities.

Non-interest expenses increased $0.9 million, or 6%, for the first quarter of 2025 to $14.6 million from $13.7 million for the same quarter of 2024. Salaries and benefits expense increased $0.6 million due to an increase in bankers, group insurance costs, and banker incentives in the first quarter of 2025. Additionally, the Company saw an increase of $0.3 million in advertising and marketing expenses primarily due to an increase in Neighborhood Assistance Program donations from which the Company recognized $0.2 million in additional tax credits causing a corresponding decrease in PA shares tax expense.

The provision for income taxes increased $0.4 million during the three months ended March 31, 2025 compared to the same period in 2024 primarily due to a $1.3 million increase in income before taxes and $0.1 million less in tax credits.

Consolidated Balance Sheet & Asset Quality Overview

The Company’s total assets had a balance of $2.7 billion as of March 31, 2025, an increase of $126.7 million from December 31, 2024. The increase resulted from $127.8 million in growth in cash and cash equivalents during the three months ended March 31, 2025. The loans and leases portfolio increased $16.3 million during the same period of 2025. Asset growth was offset by a decrease of $16.7 million in the investment portfolio primarily due to the sale of $17.5 million in available-for-sale securities and $5.2 million in paydowns partially offset by $4.6 million in purchases of securities.

During the same time period, total liabilities increased $119.0 million, or 5%. Deposit growth of $116.6 million was utilized to fund loan growth and increase interest-bearing cash balances. For interest-bearing deposit accounts, the Company experienced increases of $54.1 million in money market deposits, $27.6 million in interest-bearing checking accounts, $7.9 million in time deposits, and $5.3 million in savings and clubs. The deposit growth is primarily driven by growth in existing account balances from the relationship strategy along with targeted direct marketing driving new client acquisitions and active management of promotional and retention rates. Additionally, the Company experienced an increase of $21.7 million in non-interest-bearing checking accounts. Also as of March 31, 2025, checking deposit balances remained at more than half of total deposits. As of March 31, 2025, the ratio of insured and collateralized deposits to total deposits was approximately 75%.

Shareholders’ equity increased $7.7 million, or 4%, to $211.7 million at March 31, 2025 from $204.0 million at December 31, 2024. The increase was caused by $3.7 million higher retained earnings from net income of $6.0 million plus a $3.6 million, after tax, improvement in accumulated other comprehensive income from lower net unrealized losses recorded on available-for-sale securities, partially offset by $2.3 million in cash dividends paid to shareholders. An additional $0.6 million was recorded from the issuance of common stock under the Company’s stock plans and stock-based compensation expense. At March 31, 2025, there were no credit losses on available-for-sale and held-to-maturity debt securities. Accumulated other comprehensive income (loss) is excluded from regulatory capital ratios. The Company remains well capitalized with Tier 1 capital at 9.22% of total average assets as of March 31, 2025. Total risk-based capital was 14.74% of risk-weighted assets and Tier 1 risk-based capital was 13.57% of risk-weighted assets as of March 31, 2025. Tangible book value per share was $33.16 at March 31, 2025 compared to $31.98 at December 31, 2024. Tangible common equity was 7.11% of total assets at March 31, 2025 compared to 7.16% at December 31, 2024.

Asset Quality

Total non-performing assets were $6.1 million, or 0.23% of total assets, at March 31, 2025, compared to $7.8 million, or 0.30% of total assets, at December 31, 2024. Past due and non-accrual loans to total loans were 0.66% at March 31, 2025 compared to 0.71% at December 31, 2024. Net charge-offs to average total loans were 0.02% at March 31, 2025 compared to 0.03% at December 31, 2024.

About Fidelity D & D Bancorp, Inc. and The Fidelity Deposit and Discount Bank

Fidelity D & D Bancorp, Inc. has built a strong history as trusted financial advisor to the clients served by The Fidelity Deposit and Discount Bank (“Fidelity Bank”). Fidelity Bank continues its mission of exceeding client expectations through a unique banking experience. It operates 21 full-service offices throughout Lackawanna, Luzerne, Lehigh and Northampton Counties and a Fidelity Bank Wealth Management Office in Schuylkill County. Fidelity Bank provides a digital banking experience online at www.bankatfidelity.com, through the Fidelity Mobile Banking app, and in the Client Care Center at 1-800-388-4380. Additionally, the Bank offers full-service Wealth Management & Brokerage Services, a Mortgage Center, and a full suite of personal and commercial banking products and services. Part of the Company’s vision is to serve as the best bank for the community, which was accomplished by having provided over 5,960 hours of volunteer time and over $1.3 million in donations to non-profit organizations directly within the markets served throughout 2024. Fidelity Bank’s deposits are insured by the Federal Deposit Insurance Corporation up to the full extent permitted by law.

Non-GAAP Financial Measures

The Company uses non-GAAP financial measures to provide information useful to the reader in understanding its operating performance and trends, and to facilitate comparisons with the performance of other financial institutions. Management uses these measures internally to assess and better understand our underlying business performance and trends related to core business activities. The Company’s non-GAAP financial measures and key performance indicators may differ from the non-GAAP financial measures and key performance indicators other financial institutions use to measure their performance and trends. Non-GAAP financial measures should be supplemental to GAAP used to prepare the Company’s operating results and should not be read in isolation or relied upon as a substitute for GAAP measures. Reconciliations of non-GAAP financial measures to GAAP are presented in the tables below.

Interest income was adjusted to recognize the income from tax exempt interest-earning assets as if the interest was taxable, fully-taxable equivalent (“FTE”), in order to calculate certain ratios within this document. This treatment allows a uniform comparison among yields on interest-earning assets. Interest income was FTE adjusted, using the corporate federal tax rate of 21% for 2025 and 2024.

Forward-looking statements

Certain of the matters discussed in this press release constitute forward-looking statements for purposes of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, and as such may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. The words “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” and similar expressions are intended to identify such forward-looking statements.

The Company’s actual results may differ materially from the results anticipated in these forward-looking statements due to a variety of factors, including, without limitation:

	■	local, regional and national economic conditions and changes thereto;
	■	the short-term and long-term effects of inflation, and rising costs to the Company, its customers and on the economy;
	■	the risks of changes and volatility of interest rates on the level and composition of deposits, loan demand, and the values of loan collateral, securities and interest rate protection agreements, as well as interest rate risks;
	■	securities markets and monetary fluctuations and volatility;
	■	disruption of credit and equity markets;
	■	impacts of the capital and liquidity requirements of the Basel III standards and other regulatory pronouncements, regulations and rules;
	■	governmental monetary and fiscal policies, as well as legislative and regulatory changes;
	■	effects of short- and long-term federal budget and tax negotiations and their effect on economic and business conditions;
	■	the costs and effects of litigation and of unexpected or adverse outcomes in such litigation;
	■	the impact of new or changes in existing laws and regulations, including laws and regulations concerning taxes, banking, securities and insurance and their application with which the Company and its subsidiaries must comply;
	■	the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Financial Accounting Standards Board and other accounting standard setters;
	■	the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual funds and other financial institutions operating in our market area and elsewhere, including institutions operating locally, regionally, nationally and internationally, together with such competitors offering banking products and services by mail, telephone, computer and the internet;
	■	the effects of economic conditions of any other pandemic, epidemic or other health-related crisis such as COVID-19 and responses thereto on current customers and the operations of the Company, specifically the effect of the economy on loan customers’ ability to repay loans;
	■	the effects of bank failures, banking system instability, deposit fluctuations, loan and securities value changes;
	■	technological changes;
	■	the interruption or breach in security of our information systems, continually evolving cybersecurity and other technological risks and attacks resulting in failures or disruptions in customer account management, general ledger processing and loan or deposit updates and potential impacts resulting therefrom including additional costs, reputational damage, regulatory penalties, and financial losses;
	■	acquisitions and integration of acquired businesses;
	■	the failure of assumptions underlying the establishment of reserves for loan losses and estimations of values of collateral and various financial assets and liabilities;
	■	acts of war or terrorism; and
	■	the risk that our analyses of these risks and forces could be incorrect and/or that the strategies developed to address them could be unsuccessful.

The Company cautions readers not to place undue reliance on forward-looking statements, which reflect analyses only as of the date of this release. The Company has no obligation to update any forward-looking statements to reflect events or circumstances after the date of this release.

For more information please visit our investor relations web site located through www.bankatfidelity.com.


FIDELITY D & D BANCORP, INC.
Unaudited Condensed Consolidated Balance Sheets
(dollars in thousands)

At Period End:	March 31, 2025			December 31, 2024
Assets
Cash and cash equivalents	$	211,195		$	83,353
Investment securities		540,960			557,221
Restricted investments in bank stock		4,021			3,961
Loans and leases		1,817,509			1,800,856
Allowance for credit losses on loans		(20,017	)		(19,666	)
Premises and equipment, net		34,995			35,914
Life insurance cash surrender value		58,458			58,069
Goodwill and core deposit intangible		20,431			20,504
Other assets		43,758			44,404

Total assets	$	2,711,310		$	2,584,616

Liabilities
Non-interest-bearing deposits	$	555,684		$	533,935
Interest-bearing deposits		1,901,775			1,806,885
Total deposits		2,457,459			2,340,820
Short-term borrowings		10			–
Secured borrowings		6,190			6,266
Other liabilities		35,977			33,561
Total liabilities		2,499,636			2,380,647

Shareholders’ equity		211,674			203,969

Total liabilities and shareholders’ equity	$	2,711,310		$	2,584,616

Average Year-To-Date Balances:	March 31, 2025			December 31, 2024
Assets
Cash and cash equivalents	$	97,384		$	55,773
Investment securities		557,726			557,537
Restricted investments in bank stock		3,973			3,960
Loans and leases		1,813,040			1,741,349
Allowance for credit losses on loans		(20,019	)		(19,391	)
Premises and equipment, net		35,722			35,580
Life insurance cash surrender value		58,307			56,455
Goodwill and core deposit intangible		20,459			20,641
Other assets		43,177			41,755

Total assets	$	2,609,769		$	2,493,659

Liabilities
Non-interest-bearing deposits	$	533,286		$	527,825
Interest-bearing deposits		1,826,957			1,697,529
Total deposits		2,360,243			2,225,354
Short-term borrowings		22			32,446
Secured borrowings		6,226			6,830
Other liabilities		34,937			32,471
Total liabilities		2,401,428			2,297,101

Shareholders’ equity		208,341			196,558

Total liabilities and shareholders’ equity	$	2,609,769		$	2,493,659

FIDELITY D & D BANCORP, INC.
Unaudited Condensed Consolidated Statements of Income
(dollars in thousands)

	Three Months Ended
	Mar. 31, 2025			Mar. 31, 2024
Interest income
Loans and leases	$	24,596		$	22,133
Securities and other		3,712			3,492

Total interest income		28,308			25,625

Interest expense
Deposits		(11,187	)		(9,941	)
Borrowings and debt		(88	)		(741	)

Total interest expense		(11,275	)		(10,682	)

Net interest income		17,033			14,943

Provision for credit losses on loans		(455	)		(125	)
Net benefit for credit losses on unfunded loan commitments		85			50
Non-interest income		4,973			4,572
Non-interest expense		(14,554	)		(13,689	)

Income before income taxes		7,082			5,751

Provision for income taxes		(1,091	)		(694	)
Net income	$	5,991		$	5,057

	Three Months Ended
	Mar. 31, 2025			Dec. 31, 2024			Sep. 30, 2024			Jun. 30, 2024			Mar. 31, 2024
Interest income
Loans and leases	$	24,596		$	24,584		$	24,036		$	22,516		$	22,133
Securities and other		3,712			3,475			3,263			3,523			3,492

Total interest income		28,308			28,059			27,299			26,039			25,625

Interest expense
Deposits		(11,187	)		(11,468	)		(11,297	)		(10,459	)		(9,941	)
Borrowings and debt		(88	)		(217	)		(571	)		(463	)		(741	)

Total interest expense		(11,275	)		(11,685	)		(11,868	)		(10,922	)		(10,682	)

Net interest income		17,033			16,374			15,431			15,117			14,943

Provision for credit losses on loans		(455	)		(250	)		(675	)		(275	)		(125	)
Net benefit (provision) for credit losses on unfunded loan commitments		85			85			(135	)		(140	)		50
Non-interest income		4,973			4,847			4,979			4,615			4,572
Non-interest expense		(14,554	)		(14,395	)		(13,840	)		(13,616	)		(13,689	)

Income before income taxes		7,082			6,661			5,760			5,701			5,751

Provision for income taxes		(1,091	)		(826	)		(793	)		(766	)		(694	)
Net income	$	5,991		$	5,835		$	4,967		$	4,935		$	5,057

FIDELITY D & D BANCORP, INC.
Unaudited Condensed Consolidated Balance Sheets
(dollars in thousands)

At Period End:	Mar. 31, 2025			Dec. 31, 2024			Sep. 30, 2024			Jun. 30, 2024			Mar. 31, 2024
Assets
Cash and cash equivalents	$	211,195		$	83,353		$	120,169		$	78,085		$	72,733
Investment securities		540,960			557,221			559,819			552,495			559,016
Restricted investments in bank stock		4,021			3,961			3,944			3,968			3,959
Loans and leases		1,817,509			1,800,856			1,795,548			1,728,509			1,697,299
Allowance for credit losses on loans		(20,017	)		(19,666	)		(19,630	)		(18,975	)		(18,886	)
Premises and equipment, net		34,995			35,914			36,057			35,808			34,899
Life insurance cash surrender value		58,458			58,069			57,672			57,278			54,921
Goodwill and core deposit intangible		20,431			20,504			20,576			20,649			20,728
Other assets		43,758			44,404			41,778			42,828			44,227

Total assets	$	2,711,310		$	2,584,616		$	2,615,933		$	2,500,645		$	2,468,896

Liabilities
Non-interest-bearing deposits	$	555,684		$	533,935		$	549,710		$	527,572		$	537,824
Interest-bearing deposits		1,901,775			1,806,885			1,792,796			1,641,558			1,678,172
Total deposits		2,457,459			2,340,820			2,342,506			2,169,130			2,215,996
Short-term borrowings		10			–			25,000			98,120			25,000
Secured borrowings		6,190			6,266			6,323			7,237			7,299
Other liabilities		35,977			33,561			34,843			30,466			28,966
Total liabilities		2,499,636			2,380,647			2,408,672			2,304,953			2,277,261

Shareholders’ equity		211,674			203,969			207,261			195,692			191,635

Total liabilities and shareholders’ equity	$	2,711,310		$	2,584,616		$	2,615,933		$	2,500,645		$	2,468,896

Average Quarterly Balances:	Mar. 31, 2025			Dec. 31, 2024			Sep. 30, 2024			Jun. 30, 2024			Mar. 31, 2024
Assets
Cash and cash equivalents	$	97,384		$	67,882		$	41,991		$	58,351		$	54,887
Investment securities		557,726			560,453			554,578			551,445			563,674
Restricted investments in bank stock		3,973			3,957			3,965			3,983			3,934
Loans and leases		1,813,040			1,797,023			1,763,254			1,707,598			1,696,669
Allowance for credit losses on loans		(20,019	)		(20,050	)		(19,323	)		(19,171	)		(19,013	)
Premises and equipment, net		35,722			36,065			36,219			35,433			34,591
Life insurance cash surrender value		58,307			57,919			57,525			55,552			54,796
Goodwill and core deposit intangible		20,459			20,529			20,602			20,677			20,759
Other assets		43,177			41,454			41,734			42,960			40,871

Total assets	$	2,609,769		$	2,565,232		$	2,500,545		$	2,456,828		$	2,451,168

Liabilities
Non-interest-bearing deposits	$	533,286		$	538,506		$	522,827		$	530,048		$	519,856
Interest-bearing deposits		1,826,957			1,769,265			1,702,187			1,670,211			1,647,615
Total deposits		2,360,243			2,307,771			2,225,014			2,200,259			2,167,471
Short-term borrowings		22			10,326			37,220			28,477			53,952
Secured borrowings		6,226			6,297			6,429			7,269			7,335
Other liabilities		34,937			34,695			31,999			30,734			32,434
Total liabilities		2,401,428			2,359,089			2,300,662			2,266,739			2,261,192

Shareholders’ equity		208,341			206,143			199,883			190,089			189,976

Total liabilities and shareholders’ equity	$	2,609,769		$	2,565,232		$	2,500,545		$	2,456,828		$	2,451,168

FIDELITY D & D BANCORP, INC.
Selected Financial Ratios and Other Financial Data

	Three Months Ended
	Mar. 31, 2025			Dec. 31, 2024			Sep. 30, 2024			Jun. 30, 2024			Mar. 31, 2024
Selected returns and financial ratios
Basic earnings per share	$	1.04		$	1.02		$	0.87		$	0.86		$	0.88
Diluted earnings per share	$	1.03		$	1.01		$	0.86		$	0.86		$	0.88
Dividends per share	$	0.40		$	0.40		$	0.38		$	0.38		$	0.38
Yield on interest-earning assets (FTE)*		4.73	%		4.68	%		4.68	%		4.58	%		4.52	%
Cost of interest-bearing liabilities		2.49	%		2.60	%		2.70	%		2.58	%		2.51	%
Cost of funds		1.93	%		2.00	%		2.08	%		1.96	%		1.93	%
Net interest spread (FTE)*		2.24	%		2.08	%		1.98	%		2.00	%		2.01	%
Net interest margin (FTE)*		2.89	%		2.78	%		2.70	%		2.71	%		2.69	%
Return on average assets		0.93	%		0.90	%		0.79	%		0.81	%		0.83	%
Pre-provision net revenue to average assets*		1.16	%		1.06	%		1.05	%		1.00	%		0.96	%
Return on average equity		11.66	%		11.26	%		9.89	%		10.44	%		10.71	%
Return on average tangible equity*		12.93	%		12.50	%		11.02	%		11.72	%		12.02	%
Efficiency ratio (FTE)*		61.67	%		65.48	%		65.33	%		66.47	%		67.56	%
Expense ratio		1.37	%		1.48	%		1.41	%		1.47	%		1.50	%

Other financial data	At period end:
(dollars in thousands except per share data)	Mar. 31, 2025			Dec. 31, 2024			Sep. 30, 2024			Jun. 30, 2024			Mar. 31, 2024
Assets under management	$	955,647		$	921,994		$	942,190		$	906,861		$	900,964
Book value per share	$	36.70		$	35.56		$	36.13		$	34.12		$	33.41
Tangible book value per share*	$	33.16		$	31.98		$	32.55		$	30.52		$	29.80
Equity to assets		7.81	%		7.89	%		7.92	%		7.83	%		7.76	%
Tangible common equity ratio*		7.11	%		7.16	%		7.19	%		7.06	%		6.98	%
Allowance for credit losses on loans to:
Total loans		1.10	%		1.09	%		1.09	%		1.10	%		1.11	%
Non-accrual loans	3.36x			2.68x			2.77x			2.75x			5.31x
Non-accrual loans to total loans		0.33	%		0.41	%		0.39	%		0.40	%		0.21	%
Non-performing assets to total assets		0.23	%		0.30	%		0.29	%		0.28	%		0.15	%
Net charge-offs to average total loans		0.02	%		0.03	%		0.02	%		0.03	%		0.01	%

Capital Adequacy Ratios
Total risk-based capital ratio		14.74	%		14.78	%		14.56	%		14.69	%		14.68	%
Common equity tier 1 risk-based capital ratio		13.57	%		13.60	%		13.38	%		13.52	%		13.47	%
Tier 1 risk-based capital ratio		13.57	%		13.60	%		13.38	%		13.52	%		13.47	%
Leverage ratio		9.22	%		9.22	%		9.30	%		9.30	%		9.15	%
^{* Non-GAAP Financial Measures – see reconciliations below}

FIDELITY D & D BANCORP, INC.
Reconciliations of Non-GAAP Financial Measures to GAAP

Reconciliations of Non-GAAP Measures to GAAP	Three Months Ended
(dollars in thousands)	Mar. 31, 2025			Dec. 31, 2024			Sep. 30, 2024			Jun. 30, 2024			Mar. 31, 2024
FTE net interest income (non-GAAP)
Interest income (GAAP)	$	28,308		$	28,059		$	27,299		$	26,039		$	25,625
Adjustment to FTE		771			764			775			751			747
Interest income adjusted to FTE (non-GAAP)		29,079			28,823			28,074			26,790			26,372
Interest expense (GAAP)		11,275			11,685			11,868			10,922			10,682
Net interest income adjusted to FTE (non-GAAP)	$	17,804			17,138			16,206		$	15,868			15,690

Efficiency Ratio (non-GAAP)
Non-interest expenses (GAAP)	$	14,554		$	14,395		$	13,840		$	13,616		$	13,689

Net interest income (GAAP)		17,033			16,374			15,431			15,117			14,943
Plus: taxable equivalent adjustment		771			764			775			751			747
Non-interest income (GAAP)		4,973			4,847			4,979			4,615			4,572
(Loss) gain on sales of securities		(822	)		–			–			–			–
Net interest income (FTE) plus adjusted non-interest income (non-GAAP)	$	23,599		$	21,985		$	21,185		$	20,483		$	20,262
Efficiency ratio (non-GAAP) (1)		61.67	%		65.47	%		65.33	%		66.48	%		67.56	%
^{(1) The reported efficiency ratio is a non-GAAP measure calculated by dividing non-interest expense by the sum of net interest income, on an FTE basis, and adjusted non-interest income.}

Tangible Book Value per Share/Tangible Common Equity Ratio (non-GAAP)
Total assets (GAAP)	$	2,711,310		$	2,584,616		$	2,615,933		$	2,500,645		$	2,468,896
Less: Intangible assets, primarily goodwill		(20,431	)		(20,504	)		(20,576	)		(20,649	)		(20,728	)
Tangible assets		2,690,879			2,564,112			2,595,357			2,479,996			2,448,168
Total shareholders’ equity (GAAP)		211,674			203,969			207,261			195,692			191,635
Less: Intangible assets, primarily goodwill		(20,431	)		(20,504	)		(20,576	)		(20,649	)		(20,728	)
Tangible common equity		191,243			183,465			186,685			175,043			170,907

Common shares outstanding, end of period		5,767,500			5,736,252			5,736,025			5,735,728			5,735,732
Tangible Common Book Value per Share	$	33.16		$	31.98		$	32.55		$	30.52		$	29.80
Tangible Common Equity Ratio		7.11	%		7.16	%		7.19	%		7.06	%		6.98	%

Pre-Provision Net Revenue to Average Assets
Income before taxes (GAAP)	$	7,082		$	6,661		$	5,760		$	5,701		$	5,751
Plus: Provision for credit losses		370			165			810			415			75
Total pre-provision net revenue (non-GAAP)		7,452			6,826			6,570			6,116			5,826
Total (annualized) (non-GAAP)	$	30,220		$	27,157		$	26,423		$	24,600		$	23,432

Average assets	$	2,609,769		$	2,565,232		$	2,500,545		$	2,456,828		$	2,451,168
Pre-Provision Net Revenue to Average Assets (non-GAAP)		1.16	%		1.06	%		1.05	%		1.00	%		0.96	%

Contacts:

Daniel J. Santaniello	Salvatore R. DeFrancesco, Jr.
President and Chief Executive Officer	Treasurer and Chief Financial Officer
570-504-8035	570-504-8000

The MIL Network –

April 23, 2025

MIL-OSI Global: Brown rice contains more arsenic than white rice – but here’s why you shouldn’t worry

Source: The Conversation – UK – By Iain Brownlee, Associate Professor, Nutrition, Northumbria University, Newcastle

nesavinov/Shutterstock

Brown rice contains more arsenic than white rice, according to a recent study from the US. Understandably, that might sound alarming. After all, arsenic is a well-known toxin. But the levels found in brown rice are not a health risk. And brown rice, like other whole grains, is still an important part of a healthy diet.

To understand the issue, it helps to remember an old principle from toxicology: the dose makes the poison. In other words, harmful substances can be harmless – or even beneficial – at low enough doses.

Arsenic, while dangerous in high amounts, is naturally found in soil and water and can show up in many foods, including rice.

The new study makes this very clear: the amount of arsenic in brown rice is far below any level considered risky for human health. What matters is both how much is present and how often it is consumed.

For most people, the exposure from eating brown rice is minimal and not something to worry about.

Despite the study’s reassuring conclusion, some news outlets ran with scary headlines. Such as: Toxic metal linked to cancer, autism found in brown rice as scientists say it’s time to rethink healthy option. And: Think brown rice is healthier than white rice? Study finds high level of carcinogen in brown rice in the US.

Pesticides, preservatives, trace metals – all can sound scary out of context. But for most people, the health risks don’t come from what’s in our food in tiny amounts – they come from our everyday choices.

What we should be worried about

In countries like the UK, less than one in 1,000 people follow all aspects of national dietary guidelines. That means most people aren’t eating enough fruit, vegetables and whole grains – and that’s a much bigger problem.

In fact, poor diet is a bigger cause of illness and early death worldwide than smoking or alcohol. Two of the top dietary risk factors? Eating too much salt and not enough whole grains.

Cardiovascular disease, the world’s leading cause of death for decades, kills around 20 million people each year. During the COVID pandemic, it remained deadlier than the virus itself. One of the simplest ways to reduce your risk of cardiovascular disease is to eat more whole grains.

A poor diet kills more people than smoking or alcohol.
Rimma Bondarenko/Shutterstock

So while it’s true that brown rice has more arsenic than white rice, not eating brown rice (or other whole grains) may pose a greater health risk. (Other whole grains options to choose from include: oats, quinoa, barley and whole wheat pasta and bread.)

If you’re fortunate enough to have choices about what to eat, take a moment to reflect on how your habits align with national dietary guidelines. If you’re already eating well, great – keep it up. If not, start small: swap in a few whole grains and reduce your salt intake.

And if you’re still not convinced about brown rice, that’s OK. Choose another whole grain that works for you. Just don’t let a misunderstood detail about arsenic scare you away from one of the most positive foods choices you can make.

Iain Brownlee currently receives funding from the European Research Agency/Medical Research Council and the National Institute of National Institute of Health and Care Research. He has previously received funding from multiple government organisations in the UK, Singapore and Australia, as well as multiple industry funders including Nestlé/Cereal Partners Worldwide.

– ref. Brown rice contains more arsenic than white rice – but here’s why you shouldn’t worry – https://theconversation.com/brown-rice-contains-more-arsenic-than-white-rice-but-heres-why-you-shouldnt-worry-254668

MIL OSI – Global Reports –

April 23, 2025
MIL-OSI Asia-Pac: President Lai pays respects to Pope Francis

Source: Republic of China Taiwan

Details
2025-04-23
President Lai meets US CNAS NextGen fellows
On the morning of April 23, President Lai Ching-te met with fellows from the Shawn Brimley Next Generation National Security Leaders Program (NextGen) run by the Center for a New American Security (CNAS). In remarks, President Lai thanked the government of the United States for continuing its arms sales to Taiwan over the years, supporting Taiwan’s efforts to enhance its national defense capabilities and jointly maintaining peace and stability in the Indo-Pacific region. The president pointed out that we will promote our “Taiwan plus one” policy, that is, new arrangements for Taiwan plus the US, and form a “Taiwan investment in the US team” to expand investment and bring about even closer Taiwan-US trade cooperation, allowing us to reduce the trade deficit and generate development that benefits both sides. A translation of President Lai’s remarks follows: Ms. Michèle Flournoy, chair of the CNAS Board of Directors, is a good friend of Taiwan, and she has made major contributions to Taiwan-US relations through her long-time efforts on various aspects of our cooperation. I am happy to welcome Chair Flournoy, who is once again leading a NextGen Fellowship delegation to Taiwan. CNAS is a prominent think tank focusing on US national security and defense policy based in Washington, DC. Its NextGen Fellowship has fostered talented individuals in the fields of national security and foreign affairs. This year’s delegation is significantly larger than those of the past, demonstrating the increased importance that the next generation of US leaders attach to Taiwan. On behalf of the people of Taiwan, I extend my sincerest welcome to you all. The Taiwan Strait, an issue of importance for our guests, has become a global issue. There is a high degree of international consensus that peace and stability across the Taiwan Strait are indispensable elements in global security and prosperity. Facing military threats from China, Taiwan proposed the Four Pillars of Peace action plan. First, we are actively implementing military reforms, enhancing whole-of-society defense resilience, and working to increase our defense budget to more than 3 percent of GDP. Second, we are strengthening our economic resilience. As Taiwan’s economy must keep advancing, we can no longer put all our eggs in one basket. We are taking action to remain firmly rooted in Taiwan while expanding our global presence and marketing worldwide. In these efforts, we are already seeing results. Third, we are standing side-by-side with other democratic countries to demonstrate the strength of deterrence and achieve our goal of peace through strength. And fourth, Taiwan is willing, under the principles of parity and dignity, to conduct exchanges and cooperate with China towards achieving peace and stability in the Taiwan Strait. This April 10 marked the 46th anniversary of the enactment of the Taiwan Relations Act. We thank the US government for continuing its arms sales to Taiwan over the years, supporting Taiwan’s efforts to enhance its national defense capabilities and jointly maintaining peace and stability in the Indo-Pacific region. We look forward to Taiwan and the US continuing to strengthen collaboration on the development of both our defense industries as well as the building of non-red supply chains. This will yield even more results and further deepen our economic and trade partnership. The US is now the main destination for outbound investment from Taiwan. Moving forward, we will promote our “Taiwan plus one” policy, that is, new arrangements for Taiwan plus the US. And our government will form a “Taiwan investment in the US team” to expand investment. We hope this will bring Taiwan-US economic and trade cooperation even closer and, through mutually beneficial assistance, allow us to generate development that benefits both our sides while reducing our trade deficit. In closing, thank you once again for visiting Taiwan. We hope your trip is fruitful and leaves you with a deep impression of Taiwan. We also hope that going forward you continue supporting Taiwan and advancing even greater development for Taiwan-US ties. Chair Flournoy then delivered remarks, first thanking President Lai for making time to receive their delegation. Referring to President Lai’s earlier remarks, she said that it is quite an impressive group, as past members of this program have gone on to become members of the US Congress, leading government experts, and leaders in the think-tank world and in the private sector. She remarked that investing in this group is a wonderful privilege for her and that they appreciate President Lai’s agreeing to take the time to engage in exchange with them. Chair Flournoy emphasized that they are visiting Taiwan at a critical moment, when there is so much change and volatility in the geostrategic environment, a lot of uncertainty, and a lot of unpredictability. She stated that given our shared values, our shared passion for democracy and human rights, and our shared interests in peace and stability in the Indo-Pacific region, this is an important time for dialogue, collaboration, and looking for additional opportunities where we can work together towards regional peace and stability.

Details
2025-04-18
President Lai meets US delegation from Senate Foreign Relations Subcommittee on East Asia and the Pacific
On the afternoon of April 18, President Lai Ching-te met with a delegation led by Senator Pete Ricketts, chairman of the United States Senate Foreign Relations Subcommittee on East Asia, the Pacific, and International Cybersecurity Policy. In remarks, President Lai said we hope to promote our Taiwan plus one policy, that is, new industrial arrangements for Taiwan plus the US, to leverage the strengths of both sides and reinforce our links in such areas as the economy, trade, and technological innovation. The president said that by deepening cooperation, Taiwan and the US will be better positioned to work together on building non-red supply chains. He said a more secure and sustainable economic and trade partnership will allow us to address the challenges posed by geopolitics, climate change, and the restructuring of global supply chains. A translation of President Lai’s remarks follows: I warmly welcome you all to Taiwan. I want to take this opportunity to especially thank Chairman Pete Ricketts and Ranking Member Chris Coons for their high regard and support for Taiwan. Chairman Ricketts has elected to visit Taiwan on his first overseas trip since taking up his new position in January. Ranking Member Coons made a dedicated trip to Taiwan in 2021 to announce a donation of COVID-19 vaccines on behalf of the US government. He also visited last May, soon after my inauguration, continuing to deepen Taiwan-US exchanges. Thanks to support from Chairman Ricketts and Ranking Member Coons, the US Congress has continued to introduce many concrete initiatives and resources to assist Taiwan through the National Defense Authorization Act and Consolidated Appropriations Act, bringing the Taiwan-US partnership even closer. For this, I want to again express my gratitude. There has long been bipartisan support in the US Congress for maintaining security in the Taiwan Strait. Faced with China’s persistent political and military intimidation, Taiwan will endeavor to reform national defense and enhance whole-of-society defense resilience. We will also make special budget allocations to ensure that our defense budget exceeds 3 percent of GDP, up from the current 2.5 percent, so as to enhance Taiwan’s self-defense capabilities. We look forward to Taiwan and the US continuing to work together to maintain peace and stability in the region. We will also promote our Taiwan plus one policy, that is, new industrial arrangements for Taiwan plus the US. We hope to leverage the strengths of both sides and reinforce our links in such areas as the economy, trade, and technological innovation, jointly promoting prosperity and development. We believe that by deepening cooperation through the Taiwan plus one policy, Taiwan and the US will be better positioned to work together on building non-red supply chains. A more secure and sustainable economic and trade partnership will allow us to address the challenges posed by geopolitics, climate change, and the restructuring of global supply chains. In closing, I wish Chairman Ricketts and Ranking Member Coons a smooth and successful visit. Chairman Ricketts then delivered remarks, first thanking President Lai for his hospitality. He said that he and his delegation have had a wonderful time meeting with government officials, industry representatives, and the team at the American Institute in Taiwan. Highlighting that Taiwan has long been a friend and partner of the US, he said their bipartisan delegation to Taiwan emphasizes long-time bipartisan support in the US Congress for Taiwan, and though administrations change, that bipartisan support remains. Chairman Ricketts stated that the US is committed to peace and stability in the Indo-Pacific and that they want to see peace across the Taiwan Strait. He also stated that the US opposes any unilateral change in the status of Taiwan and that they expect any differences between Taiwan and China to be resolved peacefully without coercion or the threat of force. To that end, he said, the US will continue to assist Taiwan in its self-defense and will also step up by bolstering its own defense capabilities, noting that there is broad consensus on this in the US Congress. Chairman Ricketts stated that they want to see Taiwan participate in international organizations and memberships where appropriate, and encourage Taiwan to reach out to current and past diplomatic allies to strengthen those bilateral relationships. He pointed out that the long economic relationship between the US and Taiwan is important for our as well as the entire world’s security and prosperity. He also noted that there are many opportunities for us to continue to grow the economic relationship that will help create more prosperity for our respective peoples and ensure that we are more secure in the world. Chairman Ricketts emphasized that they made this trip early on in the new US administration to work with Taiwan to develop three points: security, diplomatic relations, and the economy. He stated that in the face of rising aggression from communist China, the US will provide commensurate help to Taiwan in self-defense and that they will continue to provide the services and tools needed. In closing, Chairman Ricketts once again thanked President Lai for the hospitality and said he looks forward to dialogue on how we can continue these relationships. Ranking Member Coons then delivered remarks. Mentioning that their delegation also visited the Philippines on this trip, he said that there and in Taiwan, they have been focused on peace, stability, and security, and the ways for deepening and strengthening economic and security relations. He noted that 46 years ago, the US Senate passed the Taiwan Relations Act, adding that it was strongly bipartisan when enacted and that support for it is still strongly bipartisan today. Its core commitment, he said, is that the US will be engaged and will be a partner in ensuring that any dispute or challenge across the strait will be resolved peacefully, and that Taiwan will have the resources it needs for its self-defense. Ranking Member Coons said that between people, friendships are deepest and most enduring when they are based not just on interests but on values, and that the same is true between the US and Taiwan. Free press, free enterprise, free societies, democracy – these core shared values, he said, anchor our friendship and partnership, making them deeper. He remarked that they are grateful for the significant investment in the US being made by companies from Taiwan, but what anchors our partnership, in addition to these important investments and investments being made by Taiwan in its own security, are the values that mobilize our free-enterprise spirit and our commitment to free societies. In Europe in recent years, Ranking Member Coons said, an aggressive nation has tried to change boundaries and change history by force. He said that the US and dozens of countries committed to freedom have come to the aid of Ukraine to defend it, help it stabilize, and secure its future. So too in this region of the world, he added, the US and a bipartisan group in the US Senate are committed to stable, secure, peaceful relations and to deterring any unilateral effort to change the status quo by force. In closing, he said he is grateful for a chance to return to Taiwan after the pandemic and that he looks forward to our conversation, our partnership, and the important work we have in front of us. The delegation was accompanied to the Presidential Office by American Institute in Taiwan Taipei Office Director Raymond Greene.

Details
2025-04-17
President Lai meets New Zealand delegation from All-Party Parliamentary Group on Taiwan
On the morning of April 17, President Lai Ching-te met with a delegation from New Zealand’s All-Party Parliamentary Group on Taiwan. In remarks, President Lai thanked the government of New Zealand for reiterating the importance of peace and stability across the Taiwan Strait on multiple occasions since last year. He also stated that this year, the Taiwan-New Zealand economic cooperation agreement (ANZTEC) is being implemented in its complete form. The president expressed hope that deeper collaboration in such fields as smart agriculture, food manufacturing, biomedicine, the digital economy, and clean energy, as well as exchanges among our indigenous peoples, will allow our economies and industries to continue evolving as they adapt to the challenges arising from global changes. A translation of President Lai’s remarks follows: I extend a warm welcome to all of our guests. New Zealand’s All-Party Parliamentary Group on Taiwan was established in 2023, marking a significant milestone in the deepening of Taiwan-New Zealand relations. I would like to thank Members of Parliament Stuart Smith and Tangi Utikere for leading this delegation, and thank all our guests for demonstrating support for Taiwan through action. We currently face a rapidly changing international landscape. Authoritarian regimes continue to converge and expand. Democracies must actively cooperate and jointly safeguard peace, stability, and the prosperous development of the Indo-Pacific region. Since last year, the government of New Zealand has on multiple occasions reiterated the importance of peace and stability across the Taiwan Strait. On behalf of the people of Taiwan, I would like to express our sincere gratitude for these statements and demonstrations of support. This year, ANZTEC is being implemented in its complete form. We look forward to exploring even more diverse markets with New Zealand. Deeper collaboration in such fields as smart agriculture, food manufacturing, biomedicine, the digital economy, and clean energy, as well as exchanges among indigenous peoples, will allow our economies and industries to continue evolving as they adapt to the challenges arising from global changes. Taiwan and New Zealand share the universal values of democracy, freedom, and respect for human rights, and parliamentary diplomacy is a tradition practiced by democracies around the world. Looking ahead, our parliamentary exchanges and mutual visits are bound to become more frequent. This will enable us to explore even more opportunities for cooperation and further deepen and solidify the democratic partnership between Taiwan and New Zealand. Thank you once again for making the long journey to visit us. I wish you a fruitful and successful trip. I also hope that everyone can take time to see more of Taiwan, try our local cuisine, and learn more about our culture. I hope our guests will fall in love with Taiwan. MP Smith then delivered remarks, saying that it is a great pleasure and an honor to be received by President Lai. The MP, noting that President Lai already covered many of the points he planned to make, went on to say that New Zealand and Taiwan share many values. He indicated that both are trading nations that rely on easy access for imports and exports, and that is why freedom of navigation is so important. That is why New Zealand had a naval vessel sail through the Taiwan Strait, he said, to underline the importance of freedom of navigation and our mutual security. MP Smith said that they look forward to building stronger relationships and enhancing the trade between our two nations. He added that New Zealand has much to offer in the field of geothermal energy to assist Taiwan, and mentioned that New Zealand is third largest in terms of the number of rocket launchers for satellites, which could assist Taiwan with communications in the future. New Zealand has other products as well, he said, but looks for assistance from Taiwan’s technology and technological sector. Lastly, MP Smith stated that he looks forward to a long and prosperous relationship between Taiwan and New Zealand. MP Utikere then delivered remarks, indicating that like Taiwan, New Zealand is a nation that is surrounded by ocean, which means that they rely on strong partnerships with communities of interest all around the globe. He said that the all-party parliamentary friendship group that was established and that they are a part of goes a long way in ensuring that a secure relationship between our two parliaments can continue to prosper. The MP also thanked Taiwan’s Representative to New Zealand Joanne Ou (歐江安) and her team for their work, which has ensured the success of the delegation’s visit. He said that the delegation experienced meetings with ministers in Taiwan’s government, members of the legislature, and those from the non-government organization sector as well. He also said that they enjoyed the opportunity to visit Wulai, and that the strength of the connections between the indigenous peoples of Taiwan and the indigenous peoples of Aotearoa New Zealand is something that certainly landed with members of the delegation. MP Utikere noted that he will take up President Lai’s offer on experiencing more of Taiwan, and will spend a few extra days in Tainan, which he understands has a very special place in the president’s heart, adding that he looks forward to his time and experiences there. The MP concluded his remarks by saying that this will be a relationship that continues to go from strength to strength. After their remarks, the New Zealand delegation sang the Māori song “Tutira Mai Nga Iwi” to extend best wishes to Taiwan. Also in attendance at the meeting were New Zealand Members of Parliament Jamie Arbuckle, Greg Fleming, Hamish Campbell, Cameron Luxton, and Helen White.

Details
2025-04-15
President Lai meets delegation led by Tuvalu Deputy Prime Minister Panapasi Nelesone
On the afternoon of April 15, President Lai Ching-te met with a delegation led by Tuvalu Deputy Prime Minister and Minister of Finance and Economic Development Panapasi Nelesone and his wife. In remarks, President Lai thanked Tuvalu for its staunch and long-term backing of Taiwan’s international participation. The president said he looks forward to our nations deepening bilateral ties in such areas as agriculture, medicine, education, and information and communications technology and working together toward greater peace, prosperity, and development in the Pacific region. A translation of President Lai’s remarks follows: I extend a very warm welcome to Deputy Prime Minister Nelesone and Madame Corinna Ituaso Laafai as they lead this delegation to Taiwan. Our distinguished guests are the first delegation from Tuvalu that I have received at the Presidential Office this year. During my visit to Tuvalu last year, I met and exchanged views with Deputy Prime Minister Nelesone and the ministers present. I am delighted to meet you again today and thank you once again for the hospitality you accorded my delegation. The culture of Tuvalu and the warmth of its people are not easily forgotten. Tuvalu’s support for Taiwan has also touched us deeply. I want to take this opportunity to thank Tuvalu for staunchly backing Taiwan’s international participation over the past several decades. Our two countries have supported each other like family and have together made contributions in the international arena. Last Tuesday, I received the credentials of Ambassador Lily Tangisia Faavae and expressed my hope for Taiwan and Tuvalu continuing to deepen bilateral relations. This visit by Deputy Prime Minister Nelesone is an important step in that regard. Our two countries will be signing a labor cooperation agreement and an agreement concerning the recognition of training and certification of seafarers. This will expand bilateral cooperation at multiple levels and bring our relations even closer. Taiwan and Tuvalu are maritime nations and share the values of democracy and freedom. Our two countries have stood shoulder to shoulder to protect marine resources and address the challenges posed by climate change and authoritarianism, and we aspire to work toward greater peace, prosperity, and development in the Pacific region. Our nations have produced fruitful results in such areas as agriculture, medicine, education, and information and communications technology. I anticipate that, with the support of Deputy Prime Minister Nelesone and our distinguished guests, we can continue to employ a more diverse range of strategies to begin a new chapter in our diplomatic partnership. Together, we can make even greater and more concrete contributions to regional development. Deputy Prime Minister Nelesone then delivered remarks, first thanking President Lai for his kind words of welcome and the warm hospitality extended to his delegation. On behalf of the government and people of Tuvalu, he conveyed their gratitude to the president and the people of Taiwan for the generous support, as well as for the enduring friendship we share. He said that Taiwan’s steadfast commitment to our bilateral relationship has been instrumental in advancing our shared values of democracy, resilience, and sustainable development. From vital development assistance to cooperation in health, education, and climate change resilience, he added, Taiwan’s contributions have made a significant impact on the lives of the people of Tuvalu. For Taiwan’s recent generous donation of shoes for Tuvaluan primary school students, Deputy Prime Minister Nelesone expressed thanks to President Lai. He commented that these gifts, which underscore a deep commitment to the welfare of their youth, transcend mere material support; they are symbols of care, friendship, and hope for the future generations. Noting that our bilateral relationship is built on mutual respect, shared values, and a common vision for sustainable development in the Pacific, he expressed confidence that this partnership will continue to flourish and will serve as a beacon of cooperation and solidarity within our region. The delegation also included Tuvalu Minister of Foreign Affairs, Labour, and Trade Paulson Panapa; Minister of Public Works, Infrastructure Development and Water Ampelosa Tehulu, and was accompanied to the Presidential Office by Tuvalu Ambassador Faavae.

Details
2025-04-10
President Lai pens Bloomberg News article on Taiwan’s response to US reciprocal tariffs
On April 10, an article penned by President Lai Ching-te entitled “Taiwan Has a Roadmap for Deeper US Trade Ties” was published by Bloomberg News, explaining to a global audience Taiwan’s strategy on trade with the United States, as well as how Taiwan will engage in dialogue with the aim of removing bilateral trade barriers, increasing investment between Taiwan and the US, and reducing tariffs to zero. The following is the full text of President Lai’s article: Last month, the first of Taiwan’s 66 new F-16Vs rolled off the assembly line in Greenville, South Carolina. Signed during President Donald Trump’s first term, the $8 billion deal stands as a testament to American ingenuity and leadership in advanced manufacturing. Beyond its economic impact – creating thousands of well-paying jobs across the US – it strengthens the foundations of peace and stability in the Indo-Pacific. This deal is emblematic of the close interests shared between Taiwan and the US. Our bond is forged by an unwavering belief in freedom and liberty. For decades, our two countries have stood shoulder-to-shoulder in deterring communist expansionism. Even as Beijing intensifies its air force and naval exercises in our vicinity, we remain resolute. Taiwan will always be a bastion of democracy and peace in the region. This partnership extends well beyond the security realm. Though home to just 23 million people, Taiwan has in recent years become a significant investor in America. TSMC recently announced it will raise its total investment in the US to $165 billion – an initiative that will create 40,000 construction jobs and tens of thousands more in advanced chip manufacturing and R&D. This investment will bolster the emergence of a new high-tech cluster in Arizona. Taiwan is committed to strengthening bilateral cooperation in manufacturing and innovation. As a trade-dependent economy, our long-term success is built on trade relationships that are fair, reciprocal and mutually beneficial. Encouraging Taiwanese businesses to expand their global footprint, particularly in the US, is a vital part of this strategy. Deepening commercial ties between Taiwanese and American firms is another. These core principles will guide our response to President Trump’s reciprocal tariffs. First, we will seek to restart trade negotiations with a common objective of reducing all tariffs between Taiwan and the US. While Taiwan already maintains low tariffs, with an average nominal rate of 6%, we are willing to further cut this rate to zero on the basis of reciprocity with the US. By removing the last vestiges to free and fair trade, we seek to encourage greater trade and investment flows between our two countries. Second, Taiwan will rapidly expand procurement of American goods. Over the past five years, rising demand for semiconductors and AI-related components has increased our trade surplus. In response to these market trends, Taiwan will seek to narrow the trade imbalance through the procurement of energy, agriculture and other industrial goods from the US. These efforts will create thousands of new jobs across multiple sectors. We’ll also pursue additional arms procurements that are vital to our self-defense and contribute to peace and stability over the Taiwan Strait. During President Trump’s first term, we secured $18 billion in arms deals, including advanced fighter jets, tanks and anti-ship missiles. Future purchases, which are not reflected in trade balances, build on our economic and security partnership while being essential to Taiwan’s “Peace Through Strength” approach. Third, new investments will be made across the US. Already, Taiwanese firms support 400,000 jobs throughout all 50 states. Beyond TSMC, we also see emerging opportunities in electronics, ICT, energy and petrochemicals. We will establish a cross-agency “US Investment Team” to support bilateral trade and investment – and we hope that efforts will be reciprocated by the Trump administration. Fourth, we are committed to removing non-tariff trade barriers. Taiwan will take concrete steps to resolve persistent issues that have long impeded trade negotiations. And finally, we will strongly address US concerns over export controls and improper transshipment of low-cost goods through Taiwan. These steps form the basis of a comprehensive roadmap for how Taiwan will navigate the shifting trade landscape, transforming challenges in the Taiwan-US economic relationship into new opportunities for growth, resilience and strategic alignment. At a time of growing global uncertainty, underpinned by growing Chinese assertiveness, closer trade ties are more than sound economics; they are a critical pillar of regional security. Our approach is long-term and principled, grounded in a lasting commitment to our friendship with the US, a firm belief in the benefits of fair and reciprocal trade, and an unwavering dedication to peace and stability across the Taiwan Strait. We are confident that our shared economic and security interests will not only overcome turbulence in the international trade environment – they will define the future of a free and open Indo-Pacific.

Details
2025-04-06
President Lai delivers remarks on US tariff policy response
On April 6, President Lai Ching-te delivered recorded remarks regarding the impact of the 32 percent tariff that the United States government recently imposed on imports from Taiwan in the name of reciprocity. In his remarks, President Lai explained that the government will adopt five response strategies, including making every effort to improve reciprocal tariff rates through negotiations, adopting a support plan for affected domestic industries, adopting medium- and long-term economic development plans, forming new “Taiwan plus the US” arrangements, and launching industry listening tours. The president emphasized that as we face this latest challenge, the government and civil society will work hand in hand, and expressed hope that all parties, both ruling and opposition, will support the measures that the Executive Yuan will take to open up a broader path for Taiwan’s economy. A translation of President Lai’s remarks follows: My fellow citizens, good evening. The US government recently announced higher tariffs on countries around the world in the name of reciprocity, including imposing a 32 percent tariff on imports from Taiwan. This is bound to have a major impact on our nation. Various countries have already responded, and some have even adopted retaliatory measures. Tremendous changes in the global economy are expected. Taiwan is an export-led economy, and in facing future challenges there will inevitably be difficulties, so we must proceed carefully to turn danger into safety. During this time, I want to express gratitude to all sectors of society for providing valuable opinions, which the government regards highly, and will use as a reference to make policy decisions. However, if we calmly and carefully analyze Taiwan’s trade with the US, we find that last year Taiwan’s exports to the US were valued at US$111.4 billion, accounting for 23.4 percent of total export value, with the other 75-plus percent of products sold worldwide to countries other than the US. Of products sold to the US, competitive ICT products and electronic components accounted for 65.4 percent. This shows that Taiwan’s economy does still have considerable resilience. As long as our response strategies are appropriate, and the public and private sectors join forces, we can reduce impacts. Please do not panic. To address the reciprocal tariffs by the US, Taiwan has no plans to adopt retaliatory tariffs. There will be no change in corporate investment commitments to the US, as long as they are consistent with national interests. But we must ensure the US clearly understands Taiwan’s contributions to US economic development. More importantly, we must actively seek to understand changes in the global economic situation, strengthen Taiwan-US industry cooperation, elevate the status of Taiwan industries in global supply chains, and with safeguarding the continued development of Taiwan’s economy as our goal, adopt the following five strategies to respond. Strategy one: Make every effort to improve reciprocal tariff rates through negotiations using the following five methods: 1. Taiwan has already formed a negotiation team led by Vice Premier Cheng Li-chiun (鄭麗君). The team includes members from the National Security Council, the Office of Trade Negotiations, and relevant Executive Yuan ministries and agencies, as well as academia and industry. Like the US-Mexico-Canada free trade agreement, negotiations on tariffs can start from Taiwan-US bilateral zero-tariff treatment. 2. To expand purchases from the US and thereby reduce the trade deficit, the Executive Yuan has already completed an inventory regarding large-scale procurement plans for agricultural, industrial, petroleum, and natural gas products, and the Ministry of National Defense has also proposed a military procurement list. All procurement plans will be actively pursued. 3. Expand investments in the US. Taiwan’s cumulative investment in the US already exceeds US$100 billion, creating approximately 400,000 jobs. In the future, in addition to increased investment in the US by Taiwan Semiconductor Manufacturing Company, other industries such as electronics, ICT, petrochemicals, and natural gas can all increase their US investments, deepening Taiwan-US industry cooperation. Taiwan’s government has helped form a “Taiwan investment in the US” team, and hopes that the US will reciprocate by forming a “US investment in Taiwan” team to bring about closer Taiwan-US trade cooperation, jointly creating a future economic golden age. 4. We must eliminate non-tariff barriers to trade. Non-tariff barriers are an indicator by which the US assesses whether a trading partner is trading fairly with the US. Therefore, we will proactively resolve longstanding non-tariff barriers so that negotiations can proceed more smoothly. 5. We must resolve two issues that have been matters of longstanding concern to the US. One regards high-tech export controls, and the other regards illegal transshipment of dumped goods, otherwise referred to as “origin washing.” Strategy two: We must adopt a plan for supporting our industries. For industries that will be affected by the tariffs, and especially traditional industries as well as micro-, small-, and medium-sized enterprises, we will provide timely and needed support and assistance. Premier Cho Jung-tai (卓榮泰) and his administrative team recently announced a package of 20 specific measures designed to address nine areas. Moving forward, the support we provide to different industries will depend on how they are affected by the tariffs, will take into account the particular features of each industry, and will help each industry innovate, upgrade, and transform. Strategy three: We must adopt medium- and long-term economic development plans. At this point in time, our government must simultaneously adopt new strategies for economic and industrial development. This is also the fundamental path to solutions for future economic challenges. The government will proactively cooperate with friends and allies, develop a diverse range of markets, and achieve closer integration of entities in the upper, middle, and lower reaches of industrial supply chains. This course of action will make Taiwan’s industrial ecosystem more complete, and will help Taiwanese industries upgrade and transform. We must also make good use of the competitive advantages we possess in such areas as semiconductor manufacturing, integrated chip design, ICT, and smart manufacturing to build Taiwan into an AI island, and promote relevant applications for food, clothing, housing, and transportation, as well as military, security and surveillance, next-generation communications, and the medical and health and wellness industries as we advance toward a smarter, more sustainable, and more prosperous new Taiwan. Strategy four: “Taiwan plus one,” i.e., new “Taiwan plus the US” arrangements: While staying firmly rooted in Taiwan, our enterprises are expanding their global presence and marketing worldwide. This has been our national economic development strategy, and the most important aspect is maintaining a solid base here in Taiwan. We absolutely must maintain a solid footing, and cannot allow the present strife to cause us to waver. Therefore, our government will incentivize investments, carry out deregulation, and continue to improve Taiwan’s investment climate by actively resolving problems involving access to water, electricity, land, human resources, and professional talent. This will enable corporations to stay in Taiwan and continue investing here. In addition, we must also help the overseas manufacturing facilities of offshore Taiwanese businesses to make necessary adjustments to support our “Taiwan plus one” policy, in that our national economic development strategy will be adjusted as follows: to stay firmly rooted in Taiwan while expanding our global presence, strengthening US ties, and marketing worldwide. We intend to make use of the new state of supply chains to strengthen cooperation between Taiwanese and US industries, and gain further access to US markets. Strategy five: Launch industry listening tours: All industrial firms, regardless of sector or size, will be affected to some degree once the US reciprocal tariffs go into effect. The administrative teams led by myself and Premier Cho will hear out industry concerns so that we can quickly resolve problems and make sure policies meet actual needs. My fellow citizens, over the past half-century and more, Taiwan has been through two energy crises, the Asian financial crisis, the global financial crisis, and pandemics. We have been able to not only withstand one test after another, but even turn crises into opportunities. The Taiwanese economy has emerged from these crises stronger and more resilient than ever. As we face this latest challenge, the government and civil society will work hand in hand, and I hope that all parties in the legislature, both ruling and opposition, will support the measures that the Executive Yuan will take to open up a broader path for Taiwan’s economy. Let us join together and give it our all. Thank you.

MIL OSI Asia Pacific News –

April 23, 2025
MIL-OSI United Kingdom: Transport Secretary acts to make thousands of extra driving tests available each month
Source: United Kingdom – Government Statements

Press release

Transport Secretary acts to make thousands of extra driving tests available each month

Further action to reduce waiting times will see thousands of additional tests made available every month.
new measures unveiled to crack down on test-buying bots and deliver at least 10,000 extra tests a month

training capacity to be doubled to drive-up availability of driving examiners

government action to help ready learners pass, unlock opportunities, and drive economic growth — delivering on our Plan for Change

Learner drivers are set to benefit from reduced waiting times as the Transport Secretary announced new measures today (23 April 2025) to combat test-buying bots and provide thousands of additional tests every month.

The Transport Secretary, Heidi Alexander, has instructed the DVSA to intensify its efforts to reduce waiting times and improve access to driving tests which will break down barriers to opportunity as part of the government’s Plan for Change.

To open up more tests and break down barriers to opportunity, she has announced:

those in other DVSA roles who are qualified to examine will be asked to return to the frontline to provide practical driving tests

doubling the number of permanent trainers to skill up new driving examiners quickly

accelerated consultation to investigate the potential abuse of the driving test booking system and prevent bots from accessing tests

reintroduction of overtime pay incentives for everyone delivering driving tests

Taken together, the government aims for these measures to reduce driving test waiting times to 7-weeks by summer next year.

Significant progress has already been made as part of the DVSA’s 7-point plan to reduce waiting times, with 1.95 million tests delivered last year. However, further action is required to help learners pass quickly and ensure young people can access vital training and job opportunities to help them get on in life.

Transport Secretary, Heidi Alexander said:

We inherited an enormous backlog of learners ready to ditch their L-Plates but being forced to endure record waiting time for their tests.

We simply cannot deliver on our Plan for Change if thousands remain held back, with their aspirations on pause.

I am instructing DVSA to take further action immediately to reduce waiting times which will see thousands of additional tests made available every month. We’re acting fast to get Britain’s drivers moving.

The DVSA’s Additional Testing Award scheme will reopen for up to 18 months, allowing more examiners to deliver additional tests.

Examiner training capacity will be doubled to ensure newly recruited driving examiners can qualify as quickly as possible. An accelerated consultation will also launch in May to improve the booking system and block bots from accessing tests. This comes on top of the work DVSA is already undertaking with leading IT specialists to enhance resilience against resellers.

Additionally, the government will temporarily ask eligible staff to deploy into examining roles, increasing test availability and providing coverage for examiner sickness or leave.

These measures come following the launch of a 7-point plan to drive down the waiting times to 7 weeks.

Progress has been made in recruiting more than 100 new examiners, increasing the short notice cancellation period for candidates, and introducing tougher terms and conditions for driving instructors booking driving tests for their pupils.

DVSA Driver Services Director, Pauline Reeves said:

Since December 2024, we’ve made significant progress on implementing our plan to reduce waiting times. But we know that many learner drivers are not seeing the immediate effects of the measures.

The further action which the Secretary of State has announced today will help us to accelerate those measures, including expanding training capacity for newly recruited driving examiners so more of them can start carrying out driving tests sooner.

Rhydian Jones, motoring expert at Confused.com car insurance said:

A long wait for driving test availability has held back many learner drivers from getting their licence. That’s why it’s positive to see that the Transport Secretary, Heidi Alexander, is enforcing more measures to improve waiting times for learners. This will bring hope to those starting to learn, or still waiting to take their test. And ultimately, it should help make what is meant to be an exciting time for them something they can look forward to without the thought of a long wait.

Emma Bush, Managing Director of AA Driving School, said:

Learner drivers have been dealing with frustratingly long waiting times to book a driving test since the easing of pandemic related restrictions several years ago. As we have highlighted, there is an urgent need for effective action to bring waiting times down to an acceptable level and, as such, we welcome today’s announcement giving further details of how the DVSA will meet its target waiting time of 7 weeks by the end of the year.

Many people, particularly young people, need to pass their driving test for their job or to access education. Unblocking the system by creating extra tests will help ensure people are not being held back due to a lack of a driving licence.

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Published 23 April 2025
MIL OSI United Kingdom –
April 23, 2025
MIL-OSI China: National Health Commission Firmly Opposes White House Website Rehashing of the “Lab Leak” Allegation

Source: People’s Republic of China Ministry of Health

In responding to a recent article on the White House website titled “Lab Leak: The True Origins of COVID-19,” the spokesperson of the National Health Commission stated that like previous U.S. allegations of “Wuhan lab leak,” the so-called rationale of the article completely lacks scientific basis, and the “evidence” is entirely fabricated. The U.S.’s repeated attempts to blame and smear China on the issue of the origins of SARS-CoV-2 only expose its malicious intent to politicize scientific issues, a practice long dismissed by the international scientific community. Its agenda to use the pandemic as a tool to contain China is doomed to fail. As growing information and evidence show that SARS-CoV-2 emerged in the U.S. at an even earlier date, the next phase of origin-tracing should be conducted in the U.S. We urge the U.S. to immediately cease its baseless accusations and smear campaign against China, be accountable for its own problem, and provide a credible, responsible explanation to the international community and people worldwide.

MIL OSI China News –

April 23, 2025
MIL-OSI USA: MATSUI AND BLUMENTHAL SLAM TERMINATION OF CRITICAL CRUISE LINE SANITATION PROGRAM AMID GROWING REPORTS OF ILLNESS OUTBREAKS
Source: United States House of Representatives – Congresswoman Doris Matsui (D-CA)

WASHINGTON, D.C. – Today, Congresswoman Doris Matsui (D-CA) and U.S. Senator Richard Blumenthal (D-CT) wrote to Acting Director of the Center for Disease Control and Prevention (CDC) Susan Monarez criticizing the elimination of all full-time staff at the CDC’s Vessel Sanitation Program (VSP), a vital program that works to prevent and control public health incidents and disease outbreaks aboard cruise ships. In their letter, Matsui and Blumenthal cite recent reports of illnesses spreading on cruise ships, including norovirus. The decimation of the VSP comes at a time of cuts, freezes, and firings at the CDC from the Trump Administration’s Department of Government Efficiency.

“Through routine inspections, training of cruise ship personnel, and responses to and documentation of outbreaks aboard cruise ships, the VSP protects and promotes public health for cruisegoers everywhere. This critical information helps the traveling public make informed decisions before they sail,” wrote the lawmakers. “It is therefore confounding that the VSP has been swept up in the indiscriminate cuts that were initiated recently at the CDC.”

“As we saw with the rampant spread of COVID-19 aboard cruise ships in the early days of the pandemic, these environments provide a prime opportunity for the transmission of disease. That is why it is absolutely critical that the CDC maintains the office and staff responsible for dealing with outbreaks on cruise ships. Severely reducing or eliminating the program that holds CDC’s subject matter expertise on this issue is short-sighted, and will ultimately lead to more illnesses,” continued Matsui and Blumenthal.

The full text of the letter can be found below.

Dear Acting Director Monarez,

We are extremely alarmed by reports that all full-time employees of the Center for Disease Control’s (CDC) Vessel Sanitation Program (VSP) have been terminated.^[1] As news of the worst outbreak aboard a cruise ship this year is making headlines, it is incomprehensible that the officials responsible for protecting the health of the cruise-going public would be abruptly terminated.^[2]

The VSP is a vital program that works to prevent, control, and publicize public health incidents aboard cruise ships.^[3] Through routine inspections, training of cruise ship personnel, and responses to and documentation of outbreaks aboard cruise ships, the VSP protects and promotes public health for cruisegoers everywhere.^[4] Among its most important functions are VSP’s maintenance of databases of outbreaks in its jurisdiction and inspection scores for cruise ships.^[5] This critical information helps the traveling public make informed decisions before they sail. It is therefore confounding that the VSP has been swept up in the indiscriminate cuts that were initiated recently at the CDC. According to reports, the CDC’s Division of Environmental Health Science and Practice, which housed the VSP, was decimated by staff losses.^[6]

Elimination of the VSP is especially concerning now, when just last month a massive norovirus outbreak was reported on a luxury cruise liner travelling from England to the Caribbean.^[7] This outbreak aboard the Queen Mary 2 sickened 224 passengers and 17 crew members.^[8] And indeed, while this is the most widespread cruise ship outbreak so far this year, it is far from the first. According to the database maintained by the VSP, there have already been thirteen confirmed outbreaks aboard cruise ships in the first three months of 2025, sickening almost 1,400 people this year alone.^[9^]

As we saw with the rampant spread of COVID-19 aboard cruise ships in the early days of the pandemic, these environments provide a prime opportunity for the transmission of disease. That is why it is absolutely critical that the CDC maintains the office and staff responsible for dealing with outbreaks on cruise ships. Severely reducing or eliminating the program that holds CDC’s subject matter expertise on this issue is short-sighted, and will ultimately lead to more illnesses.

It is therefore critical to understand CDC’s plan to continue its vital cruise ship monitoring efforts, in the absence of the VSP. To that end, we request answers to the following questions by May 6, 2025:
1. Please describe what plans, if any, the CDC has for eliminating the VSP.
  1. Please describe what metrics, if any, were used when evaluating the potential elimination of the VSP.
2. Please describe how the CDC intends to fulfill its statutory obligations to protect public health aboard cruise ships in the absence of the VSP.
3. How many employees working for the VSP have left since January 20, 2025? Please include employees who accepted a deferred resignation offer, had their employment terminated, or were placed on administrative leave.
4. Will CDC continue to update its inspection scores database so the travelling public can make informed decisions when planning a cruise?
5. Will CDC continue to update its database of outbreaks to ensure the public has access to critical public health information about illnesses on cruise ships?
We appreciate your attention to this matter and look forward to your timely response.

# # #

MIL OSI USA News –
April 23, 2025
MIL-OSI Asia-Pac: President Lai meets US CNAS NextGen fellows

Source: Republic of China Taiwan

Details
2025-04-18
President Lai meets US delegation from Senate Foreign Relations Subcommittee on East Asia and the Pacific
On the afternoon of April 18, President Lai Ching-te met with a delegation led by Senator Pete Ricketts, chairman of the United States Senate Foreign Relations Subcommittee on East Asia, the Pacific, and International Cybersecurity Policy. In remarks, President Lai said we hope to promote our Taiwan plus one policy, that is, new industrial arrangements for Taiwan plus the US, to leverage the strengths of both sides and reinforce our links in such areas as the economy, trade, and technological innovation. The president said that by deepening cooperation, Taiwan and the US will be better positioned to work together on building non-red supply chains. He said a more secure and sustainable economic and trade partnership will allow us to address the challenges posed by geopolitics, climate change, and the restructuring of global supply chains. A translation of President Lai’s remarks follows: I warmly welcome you all to Taiwan. I want to take this opportunity to especially thank Chairman Pete Ricketts and Ranking Member Chris Coons for their high regard and support for Taiwan. Chairman Ricketts has elected to visit Taiwan on his first overseas trip since taking up his new position in January. Ranking Member Coons made a dedicated trip to Taiwan in 2021 to announce a donation of COVID-19 vaccines on behalf of the US government. He also visited last May, soon after my inauguration, continuing to deepen Taiwan-US exchanges. Thanks to support from Chairman Ricketts and Ranking Member Coons, the US Congress has continued to introduce many concrete initiatives and resources to assist Taiwan through the National Defense Authorization Act and Consolidated Appropriations Act, bringing the Taiwan-US partnership even closer. For this, I want to again express my gratitude. There has long been bipartisan support in the US Congress for maintaining security in the Taiwan Strait. Faced with China’s persistent political and military intimidation, Taiwan will endeavor to reform national defense and enhance whole-of-society defense resilience. We will also make special budget allocations to ensure that our defense budget exceeds 3 percent of GDP, up from the current 2.5 percent, so as to enhance Taiwan’s self-defense capabilities. We look forward to Taiwan and the US continuing to work together to maintain peace and stability in the region. We will also promote our Taiwan plus one policy, that is, new industrial arrangements for Taiwan plus the US. We hope to leverage the strengths of both sides and reinforce our links in such areas as the economy, trade, and technological innovation, jointly promoting prosperity and development. We believe that by deepening cooperation through the Taiwan plus one policy, Taiwan and the US will be better positioned to work together on building non-red supply chains. A more secure and sustainable economic and trade partnership will allow us to address the challenges posed by geopolitics, climate change, and the restructuring of global supply chains. In closing, I wish Chairman Ricketts and Ranking Member Coons a smooth and successful visit. Chairman Ricketts then delivered remarks, first thanking President Lai for his hospitality. He said that he and his delegation have had a wonderful time meeting with government officials, industry representatives, and the team at the American Institute in Taiwan. Highlighting that Taiwan has long been a friend and partner of the US, he said their bipartisan delegation to Taiwan emphasizes long-time bipartisan support in the US Congress for Taiwan, and though administrations change, that bipartisan support remains. Chairman Ricketts stated that the US is committed to peace and stability in the Indo-Pacific and that they want to see peace across the Taiwan Strait. He also stated that the US opposes any unilateral change in the status of Taiwan and that they expect any differences between Taiwan and China to be resolved peacefully without coercion or the threat of force. To that end, he said, the US will continue to assist Taiwan in its self-defense and will also step up by bolstering its own defense capabilities, noting that there is broad consensus on this in the US Congress. Chairman Ricketts stated that they want to see Taiwan participate in international organizations and memberships where appropriate, and encourage Taiwan to reach out to current and past diplomatic allies to strengthen those bilateral relationships. He pointed out that the long economic relationship between the US and Taiwan is important for our as well as the entire world’s security and prosperity. He also noted that there are many opportunities for us to continue to grow the economic relationship that will help create more prosperity for our respective peoples and ensure that we are more secure in the world. Chairman Ricketts emphasized that they made this trip early on in the new US administration to work with Taiwan to develop three points: security, diplomatic relations, and the economy. He stated that in the face of rising aggression from communist China, the US will provide commensurate help to Taiwan in self-defense and that they will continue to provide the services and tools needed. In closing, Chairman Ricketts once again thanked President Lai for the hospitality and said he looks forward to dialogue on how we can continue these relationships. Ranking Member Coons then delivered remarks. Mentioning that their delegation also visited the Philippines on this trip, he said that there and in Taiwan, they have been focused on peace, stability, and security, and the ways for deepening and strengthening economic and security relations. He noted that 46 years ago, the US Senate passed the Taiwan Relations Act, adding that it was strongly bipartisan when enacted and that support for it is still strongly bipartisan today. Its core commitment, he said, is that the US will be engaged and will be a partner in ensuring that any dispute or challenge across the strait will be resolved peacefully, and that Taiwan will have the resources it needs for its self-defense. Ranking Member Coons said that between people, friendships are deepest and most enduring when they are based not just on interests but on values, and that the same is true between the US and Taiwan. Free press, free enterprise, free societies, democracy – these core shared values, he said, anchor our friendship and partnership, making them deeper. He remarked that they are grateful for the significant investment in the US being made by companies from Taiwan, but what anchors our partnership, in addition to these important investments and investments being made by Taiwan in its own security, are the values that mobilize our free-enterprise spirit and our commitment to free societies. In Europe in recent years, Ranking Member Coons said, an aggressive nation has tried to change boundaries and change history by force. He said that the US and dozens of countries committed to freedom have come to the aid of Ukraine to defend it, help it stabilize, and secure its future. So too in this region of the world, he added, the US and a bipartisan group in the US Senate are committed to stable, secure, peaceful relations and to deterring any unilateral effort to change the status quo by force. In closing, he said he is grateful for a chance to return to Taiwan after the pandemic and that he looks forward to our conversation, our partnership, and the important work we have in front of us. The delegation was accompanied to the Presidential Office by American Institute in Taiwan Taipei Office Director Raymond Greene.

Details
2025-04-17
President Lai meets New Zealand delegation from All-Party Parliamentary Group on Taiwan
On the morning of April 17, President Lai Ching-te met with a delegation from New Zealand’s All-Party Parliamentary Group on Taiwan. In remarks, President Lai thanked the government of New Zealand for reiterating the importance of peace and stability across the Taiwan Strait on multiple occasions since last year. He also stated that this year, the Taiwan-New Zealand economic cooperation agreement (ANZTEC) is being implemented in its complete form. The president expressed hope that deeper collaboration in such fields as smart agriculture, food manufacturing, biomedicine, the digital economy, and clean energy, as well as exchanges among our indigenous peoples, will allow our economies and industries to continue evolving as they adapt to the challenges arising from global changes. A translation of President Lai’s remarks follows: I extend a warm welcome to all of our guests. New Zealand’s All-Party Parliamentary Group on Taiwan was established in 2023, marking a significant milestone in the deepening of Taiwan-New Zealand relations. I would like to thank Members of Parliament Stuart Smith and Tangi Utikere for leading this delegation, and thank all our guests for demonstrating support for Taiwan through action. We currently face a rapidly changing international landscape. Authoritarian regimes continue to converge and expand. Democracies must actively cooperate and jointly safeguard peace, stability, and the prosperous development of the Indo-Pacific region. Since last year, the government of New Zealand has on multiple occasions reiterated the importance of peace and stability across the Taiwan Strait. On behalf of the people of Taiwan, I would like to express our sincere gratitude for these statements and demonstrations of support. This year, ANZTEC is being implemented in its complete form. We look forward to exploring even more diverse markets with New Zealand. Deeper collaboration in such fields as smart agriculture, food manufacturing, biomedicine, the digital economy, and clean energy, as well as exchanges among indigenous peoples, will allow our economies and industries to continue evolving as they adapt to the challenges arising from global changes. Taiwan and New Zealand share the universal values of democracy, freedom, and respect for human rights, and parliamentary diplomacy is a tradition practiced by democracies around the world. Looking ahead, our parliamentary exchanges and mutual visits are bound to become more frequent. This will enable us to explore even more opportunities for cooperation and further deepen and solidify the democratic partnership between Taiwan and New Zealand. Thank you once again for making the long journey to visit us. I wish you a fruitful and successful trip. I also hope that everyone can take time to see more of Taiwan, try our local cuisine, and learn more about our culture. I hope our guests will fall in love with Taiwan. MP Smith then delivered remarks, saying that it is a great pleasure and an honor to be received by President Lai. The MP, noting that President Lai already covered many of the points he planned to make, went on to say that New Zealand and Taiwan share many values. He indicated that both are trading nations that rely on easy access for imports and exports, and that is why freedom of navigation is so important. That is why New Zealand had a naval vessel sail through the Taiwan Strait, he said, to underline the importance of freedom of navigation and our mutual security. MP Smith said that they look forward to building stronger relationships and enhancing the trade between our two nations. He added that New Zealand has much to offer in the field of geothermal energy to assist Taiwan, and mentioned that New Zealand is third largest in terms of the number of rocket launchers for satellites, which could assist Taiwan with communications in the future. New Zealand has other products as well, he said, but looks for assistance from Taiwan’s technology and technological sector. Lastly, MP Smith stated that he looks forward to a long and prosperous relationship between Taiwan and New Zealand. MP Utikere then delivered remarks, indicating that like Taiwan, New Zealand is a nation that is surrounded by ocean, which means that they rely on strong partnerships with communities of interest all around the globe. He said that the all-party parliamentary friendship group that was established and that they are a part of goes a long way in ensuring that a secure relationship between our two parliaments can continue to prosper. The MP also thanked Taiwan’s Representative to New Zealand Joanne Ou (歐江安) and her team for their work, which has ensured the success of the delegation’s visit. He said that the delegation experienced meetings with ministers in Taiwan’s government, members of the legislature, and those from the non-government organization sector as well. He also said that they enjoyed the opportunity to visit Wulai, and that the strength of the connections between the indigenous peoples of Taiwan and the indigenous peoples of Aotearoa New Zealand is something that certainly landed with members of the delegation. MP Utikere noted that he will take up President Lai’s offer on experiencing more of Taiwan, and will spend a few extra days in Tainan, which he understands has a very special place in the president’s heart, adding that he looks forward to his time and experiences there. The MP concluded his remarks by saying that this will be a relationship that continues to go from strength to strength. After their remarks, the New Zealand delegation sang the Māori song “Tutira Mai Nga Iwi” to extend best wishes to Taiwan. Also in attendance at the meeting were New Zealand Members of Parliament Jamie Arbuckle, Greg Fleming, Hamish Campbell, Cameron Luxton, and Helen White.

Details
2025-04-15
President Lai meets delegation led by Tuvalu Deputy Prime Minister Panapasi Nelesone
On the afternoon of April 15, President Lai Ching-te met with a delegation led by Tuvalu Deputy Prime Minister and Minister of Finance and Economic Development Panapasi Nelesone and his wife. In remarks, President Lai thanked Tuvalu for its staunch and long-term backing of Taiwan’s international participation. The president said he looks forward to our nations deepening bilateral ties in such areas as agriculture, medicine, education, and information and communications technology and working together toward greater peace, prosperity, and development in the Pacific region. A translation of President Lai’s remarks follows: I extend a very warm welcome to Deputy Prime Minister Nelesone and Madame Corinna Ituaso Laafai as they lead this delegation to Taiwan. Our distinguished guests are the first delegation from Tuvalu that I have received at the Presidential Office this year. During my visit to Tuvalu last year, I met and exchanged views with Deputy Prime Minister Nelesone and the ministers present. I am delighted to meet you again today and thank you once again for the hospitality you accorded my delegation. The culture of Tuvalu and the warmth of its people are not easily forgotten. Tuvalu’s support for Taiwan has also touched us deeply. I want to take this opportunity to thank Tuvalu for staunchly backing Taiwan’s international participation over the past several decades. Our two countries have supported each other like family and have together made contributions in the international arena. Last Tuesday, I received the credentials of Ambassador Lily Tangisia Faavae and expressed my hope for Taiwan and Tuvalu continuing to deepen bilateral relations. This visit by Deputy Prime Minister Nelesone is an important step in that regard. Our two countries will be signing a labor cooperation agreement and an agreement concerning the recognition of training and certification of seafarers. This will expand bilateral cooperation at multiple levels and bring our relations even closer. Taiwan and Tuvalu are maritime nations and share the values of democracy and freedom. Our two countries have stood shoulder to shoulder to protect marine resources and address the challenges posed by climate change and authoritarianism, and we aspire to work toward greater peace, prosperity, and development in the Pacific region. Our nations have produced fruitful results in such areas as agriculture, medicine, education, and information and communications technology. I anticipate that, with the support of Deputy Prime Minister Nelesone and our distinguished guests, we can continue to employ a more diverse range of strategies to begin a new chapter in our diplomatic partnership. Together, we can make even greater and more concrete contributions to regional development. Deputy Prime Minister Nelesone then delivered remarks, first thanking President Lai for his kind words of welcome and the warm hospitality extended to his delegation. On behalf of the government and people of Tuvalu, he conveyed their gratitude to the president and the people of Taiwan for the generous support, as well as for the enduring friendship we share. He said that Taiwan’s steadfast commitment to our bilateral relationship has been instrumental in advancing our shared values of democracy, resilience, and sustainable development. From vital development assistance to cooperation in health, education, and climate change resilience, he added, Taiwan’s contributions have made a significant impact on the lives of the people of Tuvalu. For Taiwan’s recent generous donation of shoes for Tuvaluan primary school students, Deputy Prime Minister Nelesone expressed thanks to President Lai. He commented that these gifts, which underscore a deep commitment to the welfare of their youth, transcend mere material support; they are symbols of care, friendship, and hope for the future generations. Noting that our bilateral relationship is built on mutual respect, shared values, and a common vision for sustainable development in the Pacific, he expressed confidence that this partnership will continue to flourish and will serve as a beacon of cooperation and solidarity within our region. The delegation also included Tuvalu Minister of Foreign Affairs, Labour, and Trade Paulson Panapa; Minister of Public Works, Infrastructure Development and Water Ampelosa Tehulu, and was accompanied to the Presidential Office by Tuvalu Ambassador Faavae.

Details
2025-04-10
President Lai pens Bloomberg News article on Taiwan’s response to US reciprocal tariffs
On April 10, an article penned by President Lai Ching-te entitled “Taiwan Has a Roadmap for Deeper US Trade Ties” was published by Bloomberg News, explaining to a global audience Taiwan’s strategy on trade with the United States, as well as how Taiwan will engage in dialogue with the aim of removing bilateral trade barriers, increasing investment between Taiwan and the US, and reducing tariffs to zero. The following is the full text of President Lai’s article: Last month, the first of Taiwan’s 66 new F-16Vs rolled off the assembly line in Greenville, South Carolina. Signed during President Donald Trump’s first term, the $8 billion deal stands as a testament to American ingenuity and leadership in advanced manufacturing. Beyond its economic impact – creating thousands of well-paying jobs across the US – it strengthens the foundations of peace and stability in the Indo-Pacific. This deal is emblematic of the close interests shared between Taiwan and the US. Our bond is forged by an unwavering belief in freedom and liberty. For decades, our two countries have stood shoulder-to-shoulder in deterring communist expansionism. Even as Beijing intensifies its air force and naval exercises in our vicinity, we remain resolute. Taiwan will always be a bastion of democracy and peace in the region. This partnership extends well beyond the security realm. Though home to just 23 million people, Taiwan has in recent years become a significant investor in America. TSMC recently announced it will raise its total investment in the US to $165 billion – an initiative that will create 40,000 construction jobs and tens of thousands more in advanced chip manufacturing and R&D. This investment will bolster the emergence of a new high-tech cluster in Arizona. Taiwan is committed to strengthening bilateral cooperation in manufacturing and innovation. As a trade-dependent economy, our long-term success is built on trade relationships that are fair, reciprocal and mutually beneficial. Encouraging Taiwanese businesses to expand their global footprint, particularly in the US, is a vital part of this strategy. Deepening commercial ties between Taiwanese and American firms is another. These core principles will guide our response to President Trump’s reciprocal tariffs. First, we will seek to restart trade negotiations with a common objective of reducing all tariffs between Taiwan and the US. While Taiwan already maintains low tariffs, with an average nominal rate of 6%, we are willing to further cut this rate to zero on the basis of reciprocity with the US. By removing the last vestiges to free and fair trade, we seek to encourage greater trade and investment flows between our two countries. Second, Taiwan will rapidly expand procurement of American goods. Over the past five years, rising demand for semiconductors and AI-related components has increased our trade surplus. In response to these market trends, Taiwan will seek to narrow the trade imbalance through the procurement of energy, agriculture and other industrial goods from the US. These efforts will create thousands of new jobs across multiple sectors. We’ll also pursue additional arms procurements that are vital to our self-defense and contribute to peace and stability over the Taiwan Strait. During President Trump’s first term, we secured $18 billion in arms deals, including advanced fighter jets, tanks and anti-ship missiles. Future purchases, which are not reflected in trade balances, build on our economic and security partnership while being essential to Taiwan’s “Peace Through Strength” approach. Third, new investments will be made across the US. Already, Taiwanese firms support 400,000 jobs throughout all 50 states. Beyond TSMC, we also see emerging opportunities in electronics, ICT, energy and petrochemicals. We will establish a cross-agency “US Investment Team” to support bilateral trade and investment – and we hope that efforts will be reciprocated by the Trump administration. Fourth, we are committed to removing non-tariff trade barriers. Taiwan will take concrete steps to resolve persistent issues that have long impeded trade negotiations. And finally, we will strongly address US concerns over export controls and improper transshipment of low-cost goods through Taiwan. These steps form the basis of a comprehensive roadmap for how Taiwan will navigate the shifting trade landscape, transforming challenges in the Taiwan-US economic relationship into new opportunities for growth, resilience and strategic alignment. At a time of growing global uncertainty, underpinned by growing Chinese assertiveness, closer trade ties are more than sound economics; they are a critical pillar of regional security. Our approach is long-term and principled, grounded in a lasting commitment to our friendship with the US, a firm belief in the benefits of fair and reciprocal trade, and an unwavering dedication to peace and stability across the Taiwan Strait. We are confident that our shared economic and security interests will not only overcome turbulence in the international trade environment – they will define the future of a free and open Indo-Pacific.

Details
2025-04-08
President Lai receives credentials from new Tuvalu Ambassador Lily Tangisia Faavae
On the morning of April 8, President Lai Ching-te received the credentials of new Ambassador Extraordinary and Plenipotentiary of Tuvalu to the Republic of China (Taiwan) Lily Tangisia Faavae. In remarks, President Lai welcomed the ambassador to her new post and thanked Tuvalu for its long-term support for Taiwan’s international participation. The president also noted that joint efforts between our two countries have produced fruitful results in such areas as medicine and public health, agricultural and fisheries technology, and information and communications technology. He expressed his hope that we will continue to deepen our bilateral relations so as to generate even greater well-being for our peoples and promote peace, stability, and prosperity in the Pacific region. A translation of President Lai’s remarks follows: It is a great pleasure today to receive the credentials of Ambassador Extraordinary and Plenipotentiary of Tuvalu Lily Tangisia Faavae. On behalf of the Republic of China (Taiwan), I extend my warmest welcome to you. Last year, the Republic of China (Taiwan) and Tuvalu celebrated 45 years of diplomatic relations. Prime Minister Feleti Teo visited Taiwan in May last year for the inauguration of myself and Vice President Bi-khim Hsiao and again in October for our National Day celebrations. When I visited Tuvalu last December, I was warmly received by the government and people of Tuvalu, and I deeply felt that our two countries were like family. Ambassador Faavae’s posting to Taiwan demonstrates the importance Prime Minister Teo places on our ties. Widely recognized for her exceptional talent, Ambassador Faavae is an outstanding official with extensive experience in public service. Moreover, during her term as Permanent Secretary of the Ministry of Health and Social Welfare, she voiced support for Taiwan at the World Health Assembly. I believe that with her assistance, our two nations will further advance cooperation and exchanges. I want to thank the government of Tuvalu for long supporting Taiwan’s international participation. Furthermore, joint efforts between our two countries have produced fruitful results in such areas as medicine and public health, agricultural and fisheries technology, and information and communications technology. Last year, Prime Minister Teo and I signed a joint communiqué on advancing the comprehensive partnership between Taiwan and Tuvalu. Going forward, we will stand together in tackling the challenges we face, including climate change and expanding authoritarianism. And we will continue to deepen our bilateral relations so as to generate even greater well-being for our peoples and promote peace, stability, and prosperity in the Pacific region. Once again, I warmly welcome Ambassador Faavae to her new post in Taiwan. Please convey warmest regards from Taiwan to Prime Minister Teo and all of our friends in Tuvalu. I wish you all the best in work and life during your term in Taiwan. Ambassador Faavae then delivered remarks, saying that it is a great honor and privilege to meet with President Lai today as the new Ambassador Extraordinary and Plenipotentiary of Tuvalu to Taiwan, and to present to him her letter of credence. She then extended, on behalf of the government and people of Tuvalu, her warmest greetings and deep respect to the president and people of Taiwan. The letter of credence, she noted, signifies the trust and confidence that her government and governor-general have placed in her to represent their nation and to foster and strengthen the bonds of friendship and cooperation between our countries. Ambassador Faavae said that our two countries have enjoyed a longstanding relationship of 45 years based on mutual respect, cooperation, and shared values. She added that we have collaborated, and continue to do so, in such fields as education, health, climate change adaptation and sea level rise mitigation, agriculture, clean energy, and internet connectivity. Ambassador Faavae pointed out that Tuvalu remains committed to deepening ties with Taiwan and that it values people-to-people connections and our shared Austronesian heritage. She noted that the people of Tuvalu, a small developing nation, have greatly benefited from Taiwan’s advanced technical expertise and diverse financial assistance. She said she believes Tuvalu and Taiwan share a common interest and are united in our efforts and commitment to upholding democracy, peace, stability, and prosperity for our people and making the world better and safer. Ambassador Faavae stated that as ambassador of Tuvalu to Taiwan, she pledges to work diligently and respectfully to enhance our bilateral relations, promote mutual understanding, and facilitate collaboration in areas of shared concern. The ambassador said she looks forward to collaborating closely with the Taiwan government and other stakeholders to achieve our common objectives and to continue building a more prosperous and harmonious future for our nations. In closing, she thanked President Lai for the opportunity to serve and to further the enduring friendship between our two countries.

Details
2025-04-06
President Lai delivers remarks on US tariff policy response
On April 6, President Lai Ching-te delivered recorded remarks regarding the impact of the 32 percent tariff that the United States government recently imposed on imports from Taiwan in the name of reciprocity. In his remarks, President Lai explained that the government will adopt five response strategies, including making every effort to improve reciprocal tariff rates through negotiations, adopting a support plan for affected domestic industries, adopting medium- and long-term economic development plans, forming new “Taiwan plus the US” arrangements, and launching industry listening tours. The president emphasized that as we face this latest challenge, the government and civil society will work hand in hand, and expressed hope that all parties, both ruling and opposition, will support the measures that the Executive Yuan will take to open up a broader path for Taiwan’s economy. A translation of President Lai’s remarks follows: My fellow citizens, good evening. The US government recently announced higher tariffs on countries around the world in the name of reciprocity, including imposing a 32 percent tariff on imports from Taiwan. This is bound to have a major impact on our nation. Various countries have already responded, and some have even adopted retaliatory measures. Tremendous changes in the global economy are expected. Taiwan is an export-led economy, and in facing future challenges there will inevitably be difficulties, so we must proceed carefully to turn danger into safety. During this time, I want to express gratitude to all sectors of society for providing valuable opinions, which the government regards highly, and will use as a reference to make policy decisions. However, if we calmly and carefully analyze Taiwan’s trade with the US, we find that last year Taiwan’s exports to the US were valued at US$111.4 billion, accounting for 23.4 percent of total export value, with the other 75-plus percent of products sold worldwide to countries other than the US. Of products sold to the US, competitive ICT products and electronic components accounted for 65.4 percent. This shows that Taiwan’s economy does still have considerable resilience. As long as our response strategies are appropriate, and the public and private sectors join forces, we can reduce impacts. Please do not panic. To address the reciprocal tariffs by the US, Taiwan has no plans to adopt retaliatory tariffs. There will be no change in corporate investment commitments to the US, as long as they are consistent with national interests. But we must ensure the US clearly understands Taiwan’s contributions to US economic development. More importantly, we must actively seek to understand changes in the global economic situation, strengthen Taiwan-US industry cooperation, elevate the status of Taiwan industries in global supply chains, and with safeguarding the continued development of Taiwan’s economy as our goal, adopt the following five strategies to respond. Strategy one: Make every effort to improve reciprocal tariff rates through negotiations using the following five methods: 1. Taiwan has already formed a negotiation team led by Vice Premier Cheng Li-chiun (鄭麗君). The team includes members from the National Security Council, the Office of Trade Negotiations, and relevant Executive Yuan ministries and agencies, as well as academia and industry. Like the US-Mexico-Canada free trade agreement, negotiations on tariffs can start from Taiwan-US bilateral zero-tariff treatment. 2. To expand purchases from the US and thereby reduce the trade deficit, the Executive Yuan has already completed an inventory regarding large-scale procurement plans for agricultural, industrial, petroleum, and natural gas products, and the Ministry of National Defense has also proposed a military procurement list. All procurement plans will be actively pursued. 3. Expand investments in the US. Taiwan’s cumulative investment in the US already exceeds US$100 billion, creating approximately 400,000 jobs. In the future, in addition to increased investment in the US by Taiwan Semiconductor Manufacturing Company, other industries such as electronics, ICT, petrochemicals, and natural gas can all increase their US investments, deepening Taiwan-US industry cooperation. Taiwan’s government has helped form a “Taiwan investment in the US” team, and hopes that the US will reciprocate by forming a “US investment in Taiwan” team to bring about closer Taiwan-US trade cooperation, jointly creating a future economic golden age. 4. We must eliminate non-tariff barriers to trade. Non-tariff barriers are an indicator by which the US assesses whether a trading partner is trading fairly with the US. Therefore, we will proactively resolve longstanding non-tariff barriers so that negotiations can proceed more smoothly. 5. We must resolve two issues that have been matters of longstanding concern to the US. One regards high-tech export controls, and the other regards illegal transshipment of dumped goods, otherwise referred to as “origin washing.” Strategy two: We must adopt a plan for supporting our industries. For industries that will be affected by the tariffs, and especially traditional industries as well as micro-, small-, and medium-sized enterprises, we will provide timely and needed support and assistance. Premier Cho Jung-tai (卓榮泰) and his administrative team recently announced a package of 20 specific measures designed to address nine areas. Moving forward, the support we provide to different industries will depend on how they are affected by the tariffs, will take into account the particular features of each industry, and will help each industry innovate, upgrade, and transform. Strategy three: We must adopt medium- and long-term economic development plans. At this point in time, our government must simultaneously adopt new strategies for economic and industrial development. This is also the fundamental path to solutions for future economic challenges. The government will proactively cooperate with friends and allies, develop a diverse range of markets, and achieve closer integration of entities in the upper, middle, and lower reaches of industrial supply chains. This course of action will make Taiwan’s industrial ecosystem more complete, and will help Taiwanese industries upgrade and transform. We must also make good use of the competitive advantages we possess in such areas as semiconductor manufacturing, integrated chip design, ICT, and smart manufacturing to build Taiwan into an AI island, and promote relevant applications for food, clothing, housing, and transportation, as well as military, security and surveillance, next-generation communications, and the medical and health and wellness industries as we advance toward a smarter, more sustainable, and more prosperous new Taiwan. Strategy four: “Taiwan plus one,” i.e., new “Taiwan plus the US” arrangements: While staying firmly rooted in Taiwan, our enterprises are expanding their global presence and marketing worldwide. This has been our national economic development strategy, and the most important aspect is maintaining a solid base here in Taiwan. We absolutely must maintain a solid footing, and cannot allow the present strife to cause us to waver. Therefore, our government will incentivize investments, carry out deregulation, and continue to improve Taiwan’s investment climate by actively resolving problems involving access to water, electricity, land, human resources, and professional talent. This will enable corporations to stay in Taiwan and continue investing here. In addition, we must also help the overseas manufacturing facilities of offshore Taiwanese businesses to make necessary adjustments to support our “Taiwan plus one” policy, in that our national economic development strategy will be adjusted as follows: to stay firmly rooted in Taiwan while expanding our global presence, strengthening US ties, and marketing worldwide. We intend to make use of the new state of supply chains to strengthen cooperation between Taiwanese and US industries, and gain further access to US markets. Strategy five: Launch industry listening tours: All industrial firms, regardless of sector or size, will be affected to some degree once the US reciprocal tariffs go into effect. The administrative teams led by myself and Premier Cho will hear out industry concerns so that we can quickly resolve problems and make sure policies meet actual needs. My fellow citizens, over the past half-century and more, Taiwan has been through two energy crises, the Asian financial crisis, the global financial crisis, and pandemics. We have been able to not only withstand one test after another, but even turn crises into opportunities. The Taiwanese economy has emerged from these crises stronger and more resilient than ever. As we face this latest challenge, the government and civil society will work hand in hand, and I hope that all parties in the legislature, both ruling and opposition, will support the measures that the Executive Yuan will take to open up a broader path for Taiwan’s economy. Let us join together and give it our all. Thank you.

MIL OSI Asia Pacific News –

April 23, 2025
MIL-OSI: First Quarter Report 2025
Source: GlobeNewswire (MIL-OSI)

SERSTECH GROUP, 1 JANUARY – 31 MARCH
- Net sales amounted to KSEK 19 892 (14 174), an increase of 40%.
- EBITDA amounted to KSEK 669 (1 368), corresponding to an EBITDA margin of 3%.
- EBIT amounted to KSEK -1 339 (-522), corresponding to an EBIT margin of -7%.
- Cash flow from operating activities amounted to KSEK -3 140 (1 627).
- Earnings per share amounted to SEK -0.01 (-0.00).
- Earnings per average number of shares amounted to SEK -0.01 (-0.00)
Message from the CEO

Sales in the first quarter were in line with expectations, amounting to approximately 20 MSEK, resulting in an EBITDA of 0.7 MSEK. During the quarter, we received two orders from our partner Kaiser in Singapore, totaling approximately 4 MSEK in consumables. The end customer has purchased instruments through four separate orders. The continued orders of consumables indicate that the instruments are in frequent use. The customer operates within law enforcement, and the SERS consumables are used to identify narcotics in very low concentrations and mixtures that are typically difficult or impossible to detect with handheld Raman devices that lack the patented SERS capability.

During the quarter, we launched three new accessories that address challenges previously unsolvable with handheld Raman technology. These new accessories were demonstrated for partners and customers, and the feedback has been very positive. Combined with SERS and the Serstech Arx mkII, these additions enable the identification of narcotics and other hazardous substances down to 30 micrograms, as well as liquid traces as small as a few microliters. No other handheld Raman-based systems currently on the market offer this capability, which we refer to as trace identification. Competing technologies are limited to either trace detection (i.e., detecting the presence of a threat without identifying it – similar to what a dog can do) or bulk identification (i.e., identifying larger volumes of a chemical). Serstech now provides a complete solution encompassing bulk identification, trace sampling and collection, and trace identification. With our software and integration capabilities, we offer the most comprehensive solution on the market for identifying narcotics, hazardous substances, and chemical warfare agents.

In March, we began the liquidation of our Romanian subsidiary, Serstech Development SRL, and we expect the process to be completed by the end of the second quarter. As of the end of March, we had nine software developers working at the Romanian office. Following the pandemic, staff costs in Romania have increased significantly. By relocating these positions to our Lund office, we can reduce costs while also improving output. Most replacements have already been recruited, and we expect the team to be fully staffed before the end of summer.

We are observing promising trends in the market that are likely to positively impact our sales in the coming years. The threat of tariffs is making U.S.-based product pricing increasingly unpredictable. As a result, some customers are seeking non-U.S. suppliers – of which there are very few in our industry. All our major competitors are based in the U.S., while Serstech remains the only EU-based manufacturer of handheld Raman solutions. This trend is most prominent in Europe but is also emerging in other regions.

However, the threat of U.S. tariffs could negatively affect our U.S. sales in 2025, and we are closely monitoring the situation. While it is too early to draw definitive conclusions, a potential worst-case scenario is that our products could become too expensive for the U.S. market. We are currently evaluating and preparing potential solutions, such as establishing local production in the U.S. and/or building inventory in the U.S. before any higher tariffs are implemented.

The year has started positively, with a strengthened product portfolio, high demand, and the possibility of a trade conflict that could ultimately benefit Serstech in the medium to long term. As always, we should expect quarterly variations due to the nature of the industry, and given the current geopolitical volatility, these fluctuations may be more pronounced than usual. Nonetheless, we remain confident in our long-term growth and profitability. The investments we are making this year in sales, product development, and production will significantly contribute to our results for many years to come.

Stefan Sandor, CEO
April 2025

For further information, please contact:
Stefan Sandor,
CEO, Serstech AB Phone: +46 739 606 067
Email: ss@serstech.com

or

Thomas Pileby,
Chairman of the Board, Serstech AB Phone: +46 702 072 643
Email: tp@serstech.com
or visit: www.serstech.com

This is information that Serstech AB (publ.) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above at 11:30 CET on April 23, 2025.

Certified advisor to Serstech is Svensk Kapitalmarknadsgranskning AB (SKMG).

About Serstech
Serstech delivers solutions for chemical identification and has customers around the world, mainly in the safety and security industry. Typical customers are customs, police authorities, security organizations and first responders. The solutions and technology are however not limited to security applications and potentially any industry using chemicals of some kind could be addressed by Serstech’s solution. Serstech’s head office is in Sweden and all production is done in Sweden.
Serstech is traded at Nasdaq First North Growth Market and more information about the company can be found at www.serstech.com

Attachment
- Serstech Group – Q1 Report 2025
The MIL Network –
April 23, 2025

MIL-OSI: BE Semiconductor Industries N.V. Announces Q1-25 Results

Source: GlobeNewswire (MIL-OSI)

Q1-25 Revenue of € 144.1 Million and Net Income of € 31.5 Million
Orders of € 131.9 Million Up 8.2% vs. Q4-24

DUIVEN, The Netherlands, April 23, 2025 (GLOBE NEWSWIRE) — BE Semiconductor Industries N.V. (the “Company” or “Besi”) (Euronext Amsterdam: BESI; OTC markets: BESIY), a leading manufacturer of assembly equipment for the semiconductor industry, today announced its results for the first quarter ended March 31, 2025.

Key Highlights

Revenue of € 144.1 million, down 6.1% vs. Q4-24 due primarily to lower shipments for high-end mobile applications. Vs. Q1-24, down 1.5% due to lower shipments for mobile and automotive applications partially offset by strong growth in hybrid bonding and other AI related computing applications
Orders of € 131.9 million up 8.2% vs. Q4-24 primarily due to increased bookings by Asian subcontractors for AI related data center applications. Up 3.3% vs. Q1-24 due to higher bookings for hybrid bonding and other advanced computing applications
Gross margin of 63.6% decreased by 0.4 points vs. Q4-24 and 3.6 points vs. Q1-24 due primarily to a less favorable product mix and, to a lesser extent, adverse net forex influences
Net income of € 31.5 million decreased 46.9% vs. Q4-24 primarily due to the absence of an € 18.2 million net tax benefit recognized in Q4-24, lower revenue and higher consulting costs. Down 7.4% vs. Q1-24 primarily due to lower revenue and gross margins partially offset by an 8.9% decrease in operating expenses. Similarly, Besi’s net margin declined to 21.9% vs. 38.6% in Q4-24 and 23.2% in Q1-24
Ex share-based incentive compensation and tax benefits, Besi’s adjusted net income (net margin) was € 35.9 million (24.9%) in Q1-25 vs. € 43.2 million (28.2%) in Q4-24 and € 49.5 million (33.8%) in Q1-24
Net cash of € 159.4 million increased € 15.6 million, or 10.8%, vs. Q4-24

Outlook

Revenue expected to be flat (plus or minus 10%) vs. € 144.1 million reported in Q1-25
Gross margin expected to range between 62-64% vs. 63.6% realized in Q1-25
Operating expenses expected to decrease 0-10% vs. € 52.5 million in Q1-25

(€ millions, except EPS)	Q1-2025	Q4-2024	Δ	Q1-2024	Δ
Revenue	144.1	153.4	-6.1%	146.3	-1.5%
Orders	131.9	121.9	+8.2%	127.7	+3.3%
Gross Margin	63.6%	64.0%	-0.4	67.2%	-3.6
Operating Income	39.3	50.6	-22.3%	40.7	-3.4%
EBITDA	46.6	58.0	-19.7%	47.5	-1.9%
Net Income*	31.5	59.3	-46.9%	34.0	-7.4%
Net Margin*	21.9	38.6%	-16.7	23.2%	-1.3
EPS (basic)	0.40	0.75	-46.7%	0.44	-9.1%
EPS (diluted)	0.40	0.74	-45.9%	0.44	-9.1%
Net Cash and Deposits	159.4	143.8	+10.8%	180.9	-11.9%

* Excluding share-based compensation expense and an € 18.2 million net tax benefit recognized in Q4-24, Besi’s adjusted net income (net margin) would have been € 35.9 million (24.9%), € 43.2 million (28.2%) and € 49.5 million (33.8%) in Q1-25, Q4-24 and Q1-24, respectively.

Richard W. Blickman, President and Chief Executive Officer of Besi, commented:
“Besi reported solid first quarter results and important new advanced packaging orders in a challenging market environment. Revenue of € 144.1 million was down 1.5% versus Q1-24 due to ongoing weakness in mobile and automotive end user markets partially offset by strong revenue growth from hybrid bonding and other AI related computing applications. In contrast, orders increased 3.3% versus Q1-24 and 8.2% versus Q4-24 due primarily to increased bookings by Asian subcontractors for AI related data center applications which more than offset weakness in mobile, automotive and Chinese end user markets.

Of note, significant progress was made on Besi’s wafer level assembly agenda this quarter as we received hybrid bonding orders from two leading memory producers for HBM 4 applications as well as follow-on orders from a leading Asian foundry for logic applications. Further, important announcements were made by two leading semiconductor producers with respect to future hybrid bonding applications such as ASICs and co packaged optics. In addition, a leading US logic manufacturer successfully began production of AI related logic devices utilizing Besi’s hybrid bonders in integrated production lines.

Besi’s profitability in Q1-25 remained at attractive levels despite ongoing weakness in mainstream assembly markets and expanded R&D investment in next generation assembly solutions for AI applications. Net income of € 31.5 million decreased 7.4% vs. Q1-24 primarily due to lower revenue and gross margins realized partially offset by an 8.9% decrease in operating expenses. Our gross margin has trended toward the lower end of our target range over the past three quarters due primarily to a less favorable product mix, particularly with respect to high-end smartphones, and net forex headwinds beginning in the second half of 2024 from adverse movements in some of our principal transaction currencies versus the euro. In addition, cash flow generation remains very positive with net cash at quarter end increasing 10.8% vs. Q4-24 to reach € 159.4 million.

On April 14, Applied Materials announced a 9% ownership position in Besi. Besi and Applied Materials have been successfully collaborating since 2020 to co-develop the industry’s first fully integrated equipment solution for die-based hybrid bonding. The collaboration brings together Applied’s expertise in front-end wafer and chip processing with Besi’s leadership position in bonding accuracy and speed. We view their shareholding as a strategic, long-term investment and a further validation of our wafer level assembly technology and strategy.

Our business development this year reflects the contrasting growth trends seen in the assembly equipment market between AI and mainstream applications. The timing and trajectory of a mainstream assembly upturn is more difficult to predict now given new tariff uncertainties. However, demand for advanced packaging for AI applications remains strong given upcoming new device introductions and use cases planned in the 2026-2028 time period. We continue to assess the potential impact of tariffs on Besi’s customers, supply chain and end user markets. For Q2-25, we forecast that revenue will be flat plus or minus 10% versus Q1-25 with gross margins in a range of 62%-64%. In addition, aggregate operating expenses are forecast to decrease 0-10% versus Q1-25 primarily due to a reduction in strategic consulting costs.”

Share Repurchase Activity
During the quarter, Besi repurchased approximately 187,000 of its ordinary shares at an average price of € 117.95 per share for a total of € 22.1 million. Cumulatively, as of March 31, 2025, a total of € 51.4 million has been purchased under the current € 100 million share repurchase plan at an average price of € 114.64 per share. As of March 31, 2025, Besi held approximately 2.0 million shares in treasury equal to 2.5% of its shares outstanding.

Investor and media conference call
A conference call and webcast for investors and media will be held today at 4:00 pm CET (10:00 am EDT). To register for the conference call and/or to access the audio webcast and webinar slides, please visit www.besi.com.

Important Dates
• Annual General Meeting of Shareholders	April 23, 2025
• Investor Day/Amsterdam	June 12, 2025
• Publication Q2/semi-annual results	July 24, 2025
• Publication Q3/nine-month results	October 23, 2025
• Publication Q4/full year results	February 2026

Dividend Information*
• Proposed ex-dividend date	April 25, 2025
• Proposed record date	April 28, 2025
• Proposed payment of 2024 dividend	Starting May 2, 2025

* Subject to approval at Besi’s AGM on April 23, 2025

Basis of Presentation
The accompanying Consolidated Financial Statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as adopted by the European Union. Reference is made to the Summary of Significant Accounting Policies to the Notes to the Consolidated Financial Statements as included in our 2024 Annual Report, which is available on www.besi.com.

Contacts:
Richard W. Blickman, President & CEO
Andrea Kopp-Battaglia, Senior Vice President Finance
Claudia Vissers, Executive Secretary/IR coordinator
Edmond Franco, VP Corporate Development/US IR coordinator
Michael Sullivan, Investor Relations
Tel. (31) 26 319 4500
investor.relations@besi.com

About Besi
Besi is a leading manufacturer of assembly equipment supplying a broad portfolio of advanced packaging solutions to the semiconductor and electronics industries. We offer customers high levels of accuracy, reliability and throughput at a lower cost of ownership with a principal focus on wafer level and substrate assembly solutions. Customers are primarily leading semiconductor manufacturers, foundries, assembly subcontractors and electronics and industrial companies. Besi’s ordinary shares are listed on Euronext Amsterdam (symbol: BESI). Its Level 1 ADRs are listed on the OTC markets (symbol: BESIY) and its headquarters are located in Duiven, the Netherlands. For more information, please visit our website at www.besi.com.

Caution Concerning Forward Looking Statements
This press release contains statements about management’s future expectations, plans and prospects of our business that constitute forward-looking statements, which are found in various places throughout the press release, including, but not limited to, statements relating to expectations of orders, net sales, product shipments, expenses, timing of purchases of assembly equipment by customers, gross margins, operating results and capital expenditures. The use of words such as “anticipate”, “estimate”, “expect”, “can”, “intend”, “believes”, “may”, “plan”, “predict”, “project”, “forecast”, “will”, “would”, and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. The financial guidance set forth under the heading “Outlook” contains such forward-looking statements. While these forward-looking statements represent our judgments and expectations concerning the development of our business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from those contained in forward-looking statements, including any inability to maintain continued demand for our products; failure of anticipated orders to materialize or postponement or cancellation of orders, generally without charges; the volatility in the demand for semiconductors and our products and services; the extent and duration of the COVID-19 and other global pandemics and the associated adverse impacts on the global economy, financial markets, global supply chains and our operations as well as those of our customers and suppliers; failure to develop new and enhanced products and introduce them at competitive price levels; failure to adequately decrease costs and expenses as revenues decline; loss of significant customers, including through industry consolidation or the emergence of industry alliances; lengthening of the sales cycle; acts of terrorism and violence; disruption or failure of our information technology systems; consolidation activity and industry alliances in the semiconductor industry that may result in further increased customer concentration, inability to forecast demand and inventory levels for our products; the integrity of product pricing and protection of our intellectual property in foreign jurisdictions; risks, such as changes in trade regulations, conflict minerals regulations, currency fluctuations, political instability and war, associated with substantial foreign customers, suppliers and foreign manufacturing operations, particularly to the extent occurring in the Asia Pacific region where we have a substantial portion of our production facilities; potential instability in foreign capital markets; the risk of failure to successfully manage our diverse operations; any inability to attract and retain skilled personnel, including as a result of restrictions on immigration, travel or the availability of visas for skilled technology workers.

In addition, the United States and other countries have recently levied tariffs and taxes on certain goods and could significantly increase or impose new tariffs on a broad array of goods. They have imposed, and may continue to impose, new trade restrictions and export regulations. Increased or new tariffs and additional taxes, including any retaliatory measures, trade restrictions and export regulations, could negatively impact end-user demand and customer investment in semiconductor equipment, increase Besi’s supply chain complexity and manufacturing costs, decrease margins, reduce the competitiveness of our products or restrict our ability to sell products, provide services or purchase necessary equipment and supplies. Any or all of the foregoing factor could have a material and adverse effect on our business, results of operations or financial condition. In addition, investors should consider those additional risk factors set forth in Besi’s annual report for the year ended December 31, 2024 and other key factors that could adversely affect our businesses and financial performance contained in our filings and reports, including our statutory consolidated statements. We expressly disclaim any obligation to update or alter our forward-looking statements whether as a result of new information, future events or otherwise.

Consolidated Statements of Operations

(€ thousands, except share and per share data)	Three Months Ended March 31, (unaudited)
	2025	2024

Revenue	144,145	146,314
Cost of sales	52,423	48,043

Gross profit	91,722	98,271

Selling, general and administrative expenses	32,958	39,641
Research and development expenses	19,502	17,919

Total operating expenses	52,460	57,560

Operating income	39,262	40,711

Financial expense, net	2,959	589

Income before taxes	36,303	40,122

Income tax expense	4,797	6,143

Net income	31,506	33,979

Net income per share – basic	0.40	0.44
Net income per share – diluted	0.40	0.44

Number of shares used in computing per share amounts:
– basic	79,228,071	77,181,326
– diluted ¹	81,522,177	82,106,146

_____________________________
¹⁾ The calculation of diluted income per share assumes the exercise of equity settled share based payments and the conversion of all Convertible Notes outstanding

Consolidated Balance Sheets

(€ thousands)	March 31, 2025 (unaudited)	December 31, 2024 (audited)
ASSETS

Cash and cash equivalents	405,736	342,319
Deposits	280,000	330,000
Trade receivables	170,440	181,862
Inventories	103,836	103,285
Other current assets	46,099	40,927

Total current assets	1,006,111	998,393

Property, plant and equipment	42,868	44,773
Right of use assets	15,161	15,726
Goodwill	45,610	46,010
Other intangible assets	98,622	96,677
Deferred tax assets	29,240	31,567
Other non-current assets	1,347	1,330

Total non-current assets	232,848	236,083

Total assets	1,238,959	1,234,476



Bank overdraft	840	776
Current portion of long-term debt	–	2,042
Trade payables	46,598	52,630
Other current liabilities	111,170	111,531

Total current liabilities	158,608	166,979

Long-term debt	525,493	525,653
Lease liabilities	11,770	12,350
Deferred tax liabilities	10,416	10,320
Other non-current liabilities	19,328	17,910

Total non-current liabilities	567,007	566,233

Total equity	513,344	501,264

Total liabilities and equity	1,238,959	1,234,476

Consolidated Cash Flow Statements

(€ thousands)	Three Months Ended March 31, (unaudited)
	2025		2024

Cash flows from operating activities:

Income before income tax	36,303		40,122

Depreciation and amortization	7,307		6,813
Share based payment expense	4,441		16,900
Financial expense, net	2,959		589

Changes in working capital	(2,113	)	(3,251	)
Interest (paid) received	(2,887	)	1,169
Income tax (paid) received	(1,575	)	(2,089	)

Net cash provided by operating activities	44,435		60,253

Cash flows from investing activities:
Capital expenditures	(1,733	)	(5,650	)
Capitalized development expenses	(6,737	)	(4,663	)
Repayments of (investments in) deposits	50,000		10,000

Net cash provided by (used in) investing activities	41,530		(313	)

Cash flows from financing activities:
Proceeds from bank lines of credit	64		–
Payments of lease liabilities	(1,114	)	(1,043	)
Purchase of treasury shares	(22,064	)	(14,779	)

Net cash provided by (used in) financing activities	(23,114	)	(15,822	)

Net increase (decrease) in cash and cash equivalents	62,851		44,118
Effect of changes in exchange rates on cash and cash equivalents	566		(542	)
Cash and cash equivalents at beginning of the period	342,319		188,477

Cash and cash equivalents at end of the period	405,736		232,053

Supplemental Information (unaudited)
(€ millions, unless stated otherwise)

REVENUE	Q1-2025				Q4-2024				Q3-2024				Q2-2024				Q1-2024

Per geography:
China	40.5		28	%	42.8		28	%	45.5		29	%	57.5		38	%	58.5		40	%
Asia Pacific (excl. China)	56.3		39	%	53.5		35	%	51.6		33	%	54.1		36	%	43.6		30	%
EU / USA / Other	47.3		33	%	57.1		37	%	59.5		38	%	39.6		26	%	44.2		30	%

Total	144.1		100	%	153.4		100	%	156.6		100	%	151.2		100	%	146.3		100	%

ORDERS	Q1-2025				Q4-2024				Q3-2024				Q2-2024				Q1-2024

Per geography:
China	39.7		30	%	40.4		33	%	45.4		30	%	43.3		23	%	51.1		40	%
Asia Pacific (excl. China)	51.7		39	%	38.8		32	%	69.3		46	%	72.0		39	%	45.0		35	%
EU / USA / Other	40.5		31	%	42.7		35	%	37.1		24	%	69.9		38	%	31.6		25	%

Total	131.9		100	%	121.9		100	%	151.8		100	%	185.2		100	%	127.7		100	%

Per customer type:
IDM	48.1		36	%	61.2		50	%	84.5		56	%	122.4		66	%	53.5		42	%
Foundries/Subcontractors	83.8		64	%	60.7		50	%	67.3		44	%	62.8		34	%	74.2		58	%

Total	131.9		100	%	121.9		100	%	151.8		100	%	185.2		100	%	127.7		100	%

HEADCOUNT	Mar 31, 2025				Dec 31, 2024				Sep 30, 2024				Jun 30, 2024				Mar 31, 2024

Fixed staff (FTE)	1,820		88	%	1,812		93	%	1,807		87	%	1,783		86	%	1,760		88	%
Temporary staff (FTE)	251		12	%	134		7	%	271		13	%	279		14	%	236		12	%

Total	2,071		100	%	1,946		100	%	2,078		100	%	2,062		100	%	1,996		100	%

OTHER FINANCIAL DATA	Q1-2025				Q4-2024				Q3-2024				Q2-2024				Q1-2024

Gross profit	91.7		63.6	%	98.2		64.0	%	101.2		64.7	%	98.3		65.0	%	98.3		67.2	%


Selling, general and admin expenses:
As reported	33.0		22.9	%	28.6		18.6	%	27.3		17.4	%	30.5		20.2	%	39.6		27.1	%
Share-based compensation expense	(4.4	)	-3.1	%	(2.9	)	-1.8	%	(3.4	)	-2.1	%	(6.9	)	-4.6	%	(16.9	)	-11.6	%

SG&A expenses as adjusted	28.6		19.8	%	25.7		16.8	%	23.9		15.3	%	23.6		15.6	%	22.7		15.5	%


Research and development expenses:
As reported	19.5		13.5	%	19.0		12.4	%	18.9		12.1	%	18.5		12.2	%	17.9		12.2	%
Capitalization of R&D charges	6.7		4.6	%	5.4		3.5	%	4.4		2.8	%	4.9		3.2	%	4.7		3.2	%
Amortization of intangibles	(3.7	)	-2.5	%	(3.9	)	-2.5	%	(3.9	)	-2.5	%	(3.6	)	-2.3	%	(3.6	)	-2.4	%

R&D expenses as adjusted	22.5		15.6	%	20.5		13.4	%	19.4		12.4	%	19.8		13.1	%	19.0		13.0	%


Financial expense (income), net:
Interest income	(5.0	)			(5.1	)			(5.2	)			(3.0	)			(4.0	)
Interest expense	6.3				6.1				5.7				2.1				2.8
Net cost of hedging	1.8				2.0				1.9				1.4				1.6
Foreign exchange effects, net	(0.1	)			0.9				(0.8	)			0.5				0.2

Total	3.0				3.9				1.6				1.0				0.6


Operating income (as % of net sales)	39.3		27.2	%	50.6		33.0	%	55.1		35.2	%	49.3		32.6	%	40.7		27.8	%

EBITDA (as % of net sales)	46.6		32.3	%	58.0		37.8	%	62.4		39.8	%	56.2		37.2	%	47.5		32.5	%

Net income (as % of net sales)	31.5		21.9	%	59.3		38.6	%	46.8		29.9	%	41.9		27.7	%	34.0		23.2	%

Effective tax rate	13.2	%			-27.0	%			12.6	%			13.0	%			15.3	%


Income per share
Basic	0.40				0.75				0.59				0.53				0.44
Diluted	0.40				0.74				0.59				0.53				0.44

Average shares outstanding (basic)	79,228,071				79,402,192				79,630,787				79,281,533				77,181,326

Shares repurchased
Amount	22.1				22.4				27.8				14.8				14.8
Number of shares	186,869				198,450				230,807				105,042				101,049


Gross cash	685.7				672.3				637.4				257.2				447.1

Net cash	159.4				143.8				110.7				74.4				180.9

The MIL Network –

April 23, 2025

MIL-OSI Russia: Global Financial Stability Report Press Briefing

Source: IMF – News in Russian

April 22, 2025

GFSR PRESS BRIEFING

Speakers:

Tobias Adrian, Financial Counsellor and Director, Monetary and Capital Markets Department, IMF
Jason Wu, Assistant Director, Monetary and Capital Markets Department, IMF
Caio Ferreira, Deputy Division Chief, Monetary and Capital Markets Department, IMF

Moderator: Meera Louis, Communications Officer, IMF

Ms. LOUIS: Good morning, everyone, and welcome to the GFSR press conference. And thank you for joining us today. I am Meera Louis with the Communications Department at the IMF.

Joining us here today is Tobias Adrian, Financial Counsellor of the Monetary and Capital Markets Department. Also with us is Jason Wu, Assistant Director, and Caio Ferreira, Deputy Division Chief of the Monetary and Capital Markets Department.

So, Tobias, before we turn the floor over for questions, I wanted to start by asking you, what were some of the challenges you and your team faced in preparing for this report? We are in uncharted territory now. So how did you come up with a strategy to shape this report?

Mr. ADRIAN: Thank you so much, Meera. And welcome, everybody, to the International Monetary Fund.

We are launching the Global Financial Stability Report, and let me give you a couple of headline messages from the report.

Our baseline assessment for global financial stability is that risks have been increasing, and there are really two main factors here: One is that the overall level of policy uncertainty has increased; and the second factor is that the forecast of economic activity going forward is slightly lower, as Pierre‑Olivier presented at the World Economic Outlook press conference just now. So, it’s a combination of a lower baseline and larger downside risks. Having said that, we do see both downside and upside risks, and we will certainly explain more about the two sides of uncertainty throughout the press conference.

So let me highlight three vulnerabilities that are driving our assessment.

The first one is the level of risky asset values. We have certainly seen some adjustment in risky asset values. It’s important to see that in the broader context of where we are coming from. And, in recent years, we saw quite a bit of appreciation—particularly in equity markets and in some sectors, such as technology. So valuations were quite stretched and credit spreads were very tight by historical standards. And we have certainly seen some decline in valuations; but by historical standards, price-earnings ratios in equity markets, for example, continue to be fairly elevated and credit spreads and sovereign spreads have widened to some degree, but they are still fairly contained by historical standards. The stretching of asset valuations continues to be a vulnerability we are watching closely.

The second vulnerability is about leverage and maturity transformation in the financial system, particularly in the nonbank sector, where we are looking closely at how leverage is evolving. As market volatility has increased, we have seen some degree of deleveraging, but market functioning has been sound so far. With higher volatility, we would expect asset prices to come down, but the functioning of how those asset prices adjusted has been very orderly to date.

The third vulnerability that we are watching is the overall level of debt globally. In the past decade, and particularly since the pandemic in 2020, sovereign debt levels have been increasing around the world. It’s the backdrop of higher debt that can interact with financial stability and that’s particularly true for emerging markets and frontier economies, where we have certainly seen some widening of sovereign spreads. Issuance year to date has been strong, but, of course, the tightening of financial conditions that we observed in the past three weeks has an outsized impact on those more vulnerable countries.

Ms. LOUIS: Thank you. Thank you, Tobias.

And now I will open up the floor to questions. If you could please identify yourself and your outlet. You also have the report online, if need be. And you can also join us online via the Webex link. Thank you.

So, the lady here in the front.

QUESTION: Hi. My name is Ray. I am with 21st Century Business Herald, Guangdong, China.

So, my question is that, you’ve highlighted a series of vulnerabilities and risks. So how does the IMF assess the risk of these tensions triggering broader macro‑financial instability, especially in emerging markets with weaker buffers?

My second question is that during times of global uncertainty, safe haven assets, such as gold and US treasuries, have been very volatile recently. So how does the IMF assess the volatility affecting currency stability? Thank you so much.

Ms. LOUIS: Thank you. Tobias?

Mr. ADRIAN: Thanks so much.

So, starting with the second part of your question. We have seen a strong rally in gold prices, which is the sort of usual relationship we see in safe haven flows. When there is a high level of uncertainty, risky assets are selling off, oftentimes gold is viewed as a hedge asset and it has been appreciating.

Of course, US treasuries remain the baseline reserve asset globally. It’s the largest and most liquid sovereign market. And we have seen yields move. They have been increasing in the past two weeks, which is somewhat similar to the episode in 2020, when longer‑duration assets had yields increasing, as well. What is somewhat unusual is that the dollar has been falling, to some degree, but it’s important to keep that in the context of the strong dollar rally previously.

Concerning the emerging markets and frontier economies, yes, the tightening of global financial conditions has an outsized the impact on weaker economies. We have seen a number of weaker emerging markets and frontier economies with high levels of debt. We have seen issuance throughout last year and earlier this year, but tighter financial conditions certainly adversely impact the financing conditions for those countries.

Mr. WU: Maybe just to quickly add on emerging markets.

I think it’s important to distinguish the major larger emerging markets versus the frontiers, as Tobias has mentioned. I think so far, we have seen currencies and capital flows being relatively muted in this episode. And I think this speaks to the ongoing theme that we have mentioned for several rounds now, that there’s resilienc among the emerging market economies for a whole host of reasons.

However, as Tobias has pointed out, the external environment is not favorable and financial conditions are tightening globally. At this time, we need to worry about, countries where they are seeing sovereign spreads increasing, with large debt maturities forthcoming. Policy can be proactive to head off these risks by, for example, making sure that fiscal sustainability is being sent the right message.

Ms. LOUIS: Thank you, Jason. The gentleman in the first row, at that end.

QUESTION: Thank you. Rotus Oddiri with Arise News.

So theoretically, if the dollar is weakening, isn’t that, to some degree, relatively good for countries with dollar debts?

And secondly, how are you seeing fund flows to cash? If there’s a lot of volatility, are you seeing more movements to cash? And are there implications there in terms of [M&A] activity and so on and so forth?

Mr. ADRIAN: So let me take this in three parts.

The first question is about sort of like the strength of the dollar and the impact for emerging markets. When we look at exchange rates relative to emerging markets, there’s some heterogeneity. The dollar has appreciated against some emerging markets and depreciated against others. But it’s not the only impact on those financing conditions. We certainly have seen a notable widening of financing spreads. And that is probably the more important determinant for external financing conditions in emerging markets.

Now, having said that, in some of the larger emerging markets with developed local government bond markets, we have seen some inflows into those local markets, but it’s very country‑specific.

Turning to the question of investment decisions. We think that the first‑order impact here is the overall level of uncertainty. So, generally, investment decisions are easier in an environment with certainty. Given that some uncertainty remains about how policies are going to play out going forward, that can be a temporary headwind to investments or merger activity.

Mr. WU: Just to quickly respond to your question about cash. I think during periods where markets are volatile, it’s reasonable that market participants and investors demand more liquidity, thereby moving in cash. We have not seen this happening en masse so far during this episode. So, we have seen bank deposits increase a little bit in the United States, but I think the magnitude is significantly smaller compared to previous episodes of stress.

Ms. LOUIS: Thank you. Thank you, Jason. So, the lady here in the second row, with the glasses.

QUESTION: Hi. Szu Chan from the Telegraph.

Do you see any parallels between recent moves in the bond market, particularly in US treasuries, with what happened in the wake of the Liz Truss mini budget? And do you think any lasting damage has been done?

Mr. ADRIAN:

Just for everybody’s recollection, in October 2022, there was some turbulence in UK gilt markets when the budget announcements were larger than expected and the Bank of England intervened to stabilize markets at that time. Clearly, we haven’t seen interventions by central banks, and the market conditions have been very orderly in recent weeks. There’s a repricing relative to the higher level of uncertainty but as I said at the beginning, there is both upside and downside risk. And we could certainly see upside risk if uncertainty is reduced going forward.

And market conditions have been quite orderly. The moves are notable in treasuries, in equities, in exchange rates, but they are within movements we have seen in recent years and really reflect the higher level of volatility.

Mr. Ferreira: I don’t think I have much to add to this, Tobias.

I think that what we are seeing is some moves that have not been historically deserved in this kind of situation. But these mostly respond to these higher uncertainties and a repricing to the new macro scenario.

Ms. LOUIS: So, before I go back to the floor, we do have a question on Webex, Pedro da Costa from Market News International. Pedro?

QUESTION: Thank you so much, Meera. Thank you, guys, for doing this.

My question is, given the market concerns about the threat to central bank independence, if the threat were exercised in a greater way, what would be the financial stability implications of a potential firing of either the Fed Chair or Fed Governors?

Ms. LOUIS: Thank you, Pedro. Are there any other questions on central bank independence? I don’t see any in the room. So over to you, Tobias

Mr. ADRIAN: Thanks so much.

So, the International Monetary Fund has been advising central banks for many decades. Helping central banks in terms of governance and monetary policy frameworks is really one of the core missions of the IMF. And we have seen time and time again that central bank independence is an important foundation for central banks to achieve their goals, which are primarily price stability and financial stability. We do advise our membership to, have a degree of independence that is aimed at achieving those overarching goals for monetary policy and financial stability policies.

Ms. LOUIS: Thank you. Thank you, Tobias. The gentleman in the first row.

QUESTION: Thank you so much. My name is Simon Ateba. I am with Today News Africa in Washington, DC.

I want to ask you about AI. It seems that is the big thing now. First, are you worried about AI? And what type of safeguards is the IMF putting in place to make sure that advanced countries—that AI doesn’t increase risk?

And maybe, finally, on tariffs. We know that President Trump is imposing tariffs today, removing them tomorrow. China is retaliating. How much will that affect the financial stability of the world? Thank you.

Mr. ADRIAN: Thanks so much. Let me start with the question on artificial intelligence, and Jason can complement me.

We have done quite a bit of work on that. In October, we actually had a chapter specifically focused on the impact of artificial intelligence on capital market activity, but, of course, the impact of AI is broader. And in our view, there are both risks and opportunities. I think the main opportunity is that it’s actually potentially quite inclusive, right?

Everybody that has access to the internet via a smartphone or a computer or a tablet, in principle, can use those very powerful artificial intelligence tools. And we have seen examples in emerging markets and lower‑income economies where entrepreneurs are actually using these new tools to innovate. That can boost productivity around the world.

In financial markets, we do quite a bit of outreach to market participants. And financial institutions—including banks and capital market institutions—are very actively exploring avenues to use artificial intelligence productively. There’s a lot of innovation going on. At the moment, we see a lot of that concentrated in back‑office kind of applications, so keeping your house in order in terms of getting processes done. But in trading and in credit decisions, these are also quite promising.

In terms of risks, our primary concerns are cybersecurity risks. Many financial institutions are already under cyber attack., AI can be used to make defenses more efficient, but it can also be used for malicious purposes and making attacks more powerful. So, there’s really a bit of a power game on both sides. And we certainly advise many of our members to help them get to a more resilient financial system, relative to those cyber threats.

Mr. WU: Maybe just quickly, to complement.

I would encourage everybody to read Chapter 3 of the October 2024 GFSR, which addresses the issue of artificial intelligence in financial markets. Tobias is right, that there are benefits and risks on both sides.

In addition to cybersecurity, I just wanted to highlight a couple more things, which is that, many of the financial institutions that we spoke to are still at their infancy in terms of deploying AI to make decisions—meaning, for trading or for investment allocation, they are at very early stages. But suppose that this trend rapidly gains? What would happen to risks?

I think I will highlight two. One is concentration. Will it be a situation where the largest firms with the best models tend to win out and, therefore, dominate the marketplace? And then what are the implications for this? The second is that the speed of adjustment in financial markets might be much quicker if everything is based on high‑powered, artificial intelligence-type algorithms.

With regard to these two risks, I think there’s great scope for supervisors to gather more information and understand who the key players are and what they are doing. International collaboration obviously is a crucial aspect of this. Market conduct needs to be taken into account, the future possibility that markets will be very much faster and more volatile, perhaps.

Ms. LOUIS: Thank you. The gentleman in the second row, please, in the middle here. Thank you.

QUESTION: Good morning. I am [Fabrice Nodé‑Langlois] from the French newspaper Le Figaro.

I have a question on the US public debt. There is a widespread opinion that whatever the level of the public debt—because of the significant role of the dollar, because of the might of the American military and economic power—it’s not a big concern. But under what circumstances, under what financial conditions would the US public debt become a concern for you?

Mr. ADRIAN: Thanks so much for the question. We are certainly watching sovereign debt around the world, including in the US. I do want to point out that there will be a briefing for the Western Hemisphere region that will specifically focus on the Americas, including the United States.

When you look at our last Article IV for the United States, we certainly find that the debt situation is sustainable. You know, The U.S. has many ways to adjust its expenditures and revenues. And we think that this makes the debt levels manageable.

Having said that, as I explained at the beginning, we have seen broadly around the world an increase in debt‑to‑GDP levels, particularly since the start of the pandemic in 2020. And it is an important backdrop in terms of pricing and financial stability. So, we are watching the nexus between sovereign debt and financial intermediaries very carefully.

Mr. Ferreira: Maybe one issue related with that— I think that we flagged it in the GFSR—is that I think there is an anticipation that—not only in the US but in several countries—there will be a lot of issuance of new debt going forward. Particularly in a moment where several central banks are doing some quantitative tightening, this might bring some challenges in terms of the function of the financial sector.

Everything that we are seeing now seems to be working very well, even when we have this kind of shock. This is not a major concern. But going forward, we feel that it’s important to continue monitoring market liquidity. There are some flags that have been raised, particularly in terms of broker‑dealers’ capacity to continue intermediating and providing liquidity to public debt. It’s important to keep monitoring this, as central banks keep going in the direction of quantitative tightening.

Ms. LOUIS: Thank you. Thank you, Caio.

And just to add to Tobias’s point, we will have a lot of regional pressers this week. And the Western Hemisphere presser will be on Friday if you have any US‑specific questions. Thank you.

The lady here in the front row.

QUESTION: Thank you. Thank you for taking my question. My name is Nume Ekeghe from This Day newspaper, Nigeria.

The report mentions Nigeria’s return to Eurobond markets. And we know it was received positively by investors. So how does Nigeria’s return to Eurobond markets signal renewed investor confidence? And what specific macroeconomic reforms or improvements contributed to the shift in sentiments? Thank you.

Mr. WU: Thank you for that question. Let me make some remarks about Nigeria and then sub‑Saharan Africa, in general.

In the case of Nigeria, macroeconomic performance has held up, GDP growth has been fairly consistent, and inflation has been coming down. Earlier this year, we have seen Nigeria’s sovereign credit spreads lowering. I think the reforms that the authorities have done, including the liberalization of exchange rates, has helped in that regard.

That said, I think I want to go back to the theme that Tobias has mentioned, which is that during a time where global financial markets are volatile and risk appetite, in particular, is wavering, this is when we might see increases in sovereign spreads that will challenge the external picture for Nigeria, as well as other frontier economies. So, for example, Nigeria’s sovereign spread has increased in recent weeks, as stock markets globally have declined.

The other challenge, of course, is for large commodity exporters, like Nigeria. If trade tensions are going to lead to lower global demand for commodities, this will obviously weigh on the revenue that they will receive. So, I think both of those developments would counsel that authorities remain quite vigilant to these developments and take appropriate policies to counter them.

Ms. LOUIS: Thank you. Thank you, Jason.

And just before I come back to the floor, we have another question online, from Lu Kang, Sina Finance. The question is, in light of the IMF’s recent GFSR warning about rising debt, volatile capital flows, and diverging monetary policy paths, how should countries, especially emerging markets, balance financial stability with the imperative to finance climate transitions and digital infrastructure?

Mr. ADRIAN: Thanks so much.

We do a lot of work on debt management with countries. We are providing technical assistance and we are doing a lot of policy work on debt market developments. I think the two main takeaways are, No. 1, the plumbing matters. Putting into place mechanisms such as primary dealers and clearing systems, and pricing mechanisms in government bond markets. It is important all over the world. That includes the most advanced economies, as well as emerging markets. And we have seen tremendous progress in many countries, particularly the major emerging markets in terms of developing those bond markets.

The second key aspect, of course, is fiscal sustainability. Here again, we engage very actively with our membership to make sure that fiscal frameworks are in place that keep debt trajectories on a path that is commensurate with the economic prospects of the countries.

Ms. LOUIS: Thank you. Thank you, Tobias. A question here in the front row, please.

QUESTION: Thank you. Kemi Osukoya with The Africa Bazaar magazine.

I wanted to follow up on the question that my colleague from Nigeria mentioned, regarding sovereign debts. As you know, African nations, after a period of pause, are just right now returning back to the Eurobond. But at the same time, there is unsustainable high borrowing costs that many of these countries face. So, in your recommendation, what can governments do regarding their bond to use it strategically, as well as to make it sustainable?

Mr. ADRIAN: Thanks so much for this question. And you know, we are working very closely with many sub‑Saharan African countries to support the countries either via programs or via policy advice and technical assistance to have a macro environment that is conducive for growth. So let me mention three things.

I think the first one is to recognize that we have been through a period of extraordinarily adverse shocks. Particularly in sub‑Saharan Africa, the pandemic had an outsized impact on many countries. The inflation that ensued was very costly for many countries, particularly for those that are importing commodities. So, the adverse economic shocks have been extraordinary. And I would just note that we have engaged more actively in programs with sub‑Saharan Africa in the past five years than we ever did previously.

The second point is about the financing costs. And, of course, there are two main components. One is the overall level of financial conditions globally. All countries in the world are part of the global capital markets. And that really depends on overall financing conditions. But more specifically, of course, there are country‑specific conditions—the macroeconomic performance of each country, the buffers in the countries—and the mandate of the Fund is very much focused on macro‑financial stability. So, getting back to a place with buffers, which then can lead to lower financing costs is the main goal. Our work with those countries is very much focused on the kind of catalytic role of the Fund, where we are trying to get growth back and stability back. Let me stop here.

Ms. LOUIS: Thank you. Thank you, Tobias. And a question here in the front row, please. And then I will come back to the middle.

QUESTION: Thank you very much. My name is [Shuichiro Takaoka]. I am working for Jiji Press.

Just I would like to make clear the risk of a depreciation of the US dollar. And what are the implications of the recent depreciation of US dollar, especially regarding the global financial stability viewpoint?

Mr. ADRIAN: As I mentioned earlier, we had seen quite a bit of an appreciation of the dollar earlier in the year and late [next] year. And now we have seen a depreciation that is roughly of commensurate magnitude. The volatility in the exchange rates is reflecting the broader volatility. There are some indications that the exchange rate movements are related to flows to investor reallocations, but the magnitudes of those flows are relatively small, relative to the run‑up of inflows into US assets in recent years. The cumulative inflows into bonds and stocks from around the world have been quite pronounced. So, to what extent these movements in the exchange rate and the associated flows are just a temporary or a more permanent impact remains to be seen. It really depends on how the current uncertainty is going to be resolved. As I said at the beginning, there are various scenarios. For the moment, it’s highly uncertain. As I said earlier, it is notable that the dollar declined, but I would not jump to conclusions in terms of how permanent that move may be.

Mr. WU: Just to complement. I think when exchange rates are very volatile, one of the key channels for financial stability could be pressures in various funding markets. And this includes in cross currency markets, as well as in repo markets and other secure financing markets. I think this is something that we will be watching very closely. So far, we have not seen any major disruptions in those markets, despite the very volatile exchange rates.

Mr. ADRIAN: So as a comparison, you can think of last August when there was a risk‑off moment. That was very short, but that did lead to dislocations in those cross‑currency funding markets. And we haven’t really seen that in recent weeks.

Ms. LOUIS: So just on that line, I think you may have captured it, but I just wanted to get in this question that came in online from Greg Robb from MarketWatch. And it’s, have treasuries and the dollar lost their safe haven status? If not, what accounts for their recent performance?

Mr. ADRIAN: So, again, it is somewhat unusual to see the dollar decline in the recent two weeks, really, when equity prices traded down with a negative tone and when longer‑term yields increased. But how lasting that is, is really too early to tell.

US capital markets remain the largest and most liquid capital markets in the world. When you look at US dollars as a reserve asset, that remains over 60 percent among reserve managers. Global stock market capitalizations increased to 55 percent most recently, up from 30 percent in 2010. So, we have seen price movements that are notable; but in the big picture, the depth and size of the markets remain where they have been.

Ms. LOUIS: And just on the same line, of capital markets. We have another question that came in online, [Anthony Rowley] from the South China Morning Post. And he says, both the EU and ASEAN are seeking more actively to promote capital market integration. Do you see this as reducing global dependence on US capital markets to any significant extent in the short to the medium term?

Mr. ADRIAN: We are generally of the view that deep capital markets are beneficial everywhere. So, we are helping countries around the world to get to solid regulations and market mechanisms in sovereign bond markets but also, more broadly, in capital markets. And, for emerging markets and advanced economies, deepening capital markets has been a key priority.

We have seen many firms from around the world come to US markets to issue stocks and bonds. And we think that’s related to the depth of the market and the sophistication of the financial sector in the US markets. So, it does provide a service to corporations and financial institutions around the world. But there are certainly many other markets that are deep, that are developing, and that are providing opportunities for both corporations and governments to issue. So, we have seen that trend continue.

Ms. LOUIS: Thank you. Caio?

Mr. Ferreira: Maybe just more broadly on the development of capital markets, as Tobias was saying, I think that it’s an important goal. And this has come hand‑in‑hand with the growth of non‑banking financial institutions that we are seeing across the globe. We see this as a potential positive development. You diversify the sources of funding and the credit to the real economy, diversify the risks across a broader set of institutions, this is good for the economy and financial stability.

There are risks that need to be mitigated. We discuss some of them in the GFSR—leverage, interconnectedness between different kinds of institutions. But overall, there are policies created by the standard setters that, if implemented, can mitigate these risks.

Ms. LOUIS: Thank you, Caio and Tobias.

Going back to the room. There’s a lady in the second row.

QUESTION: Hi. Riley Callanan from GZERO Media.

The IMF downgraded the US, the most of all advanced economies. And I was wondering, is this a short‑term hit that in a year could lead to greater growth and investment in the US? Or is this a long‑term downgrade? Or is it too soon to tell, as you said, with capital markets?

Mr. ADRIAN: We are really looking more at the financial stability aspects. And I would just note that there has been a readjustment in expectations. Where the US and other economies are going to end up remains to be seen. But I think what is notable is that with the sharp adjustment in asset prices, the increase in uncertainty has been absorbed well in capital markets. And as Caio alluded to, it is the policy framework around the banking system and the non‑banks that is so important to create resilient and deep financial markets that are then facilitating adjustments, relative to new policy developments. And from that vantage point, I think even though we have seen the level of uncertainty increase, markets have been very orderly. And we think that the regulatory and policy framework is key for that achievement.

Ms. LOUIS: Thank you. Thank you, Tobias.

And if you would like to flesh out any more details on the growth ramifications, we have a conference on Friday. And I can send you the details.

Another question here, in the second row. I will come back to you.

QUESTION: Hi. Gabriela Viana from Galapagos Capital in Brazil.

So, in Brazil, commodities prices play an important role for currency [and] international capital inflows, especially in the stock market. Do you see commodities prices as a main important constraint for markets or the economic policy’s uncertainties or maybe the monetary tightening? Thank you.

Mr. WU: All these factors are related to each other, obviously. So, I think the commodity prices, if the WEO forecast were to play out, the global economy is going to be slowing. It’s certainly an impact on the revenue side.

I think for many emerging markets, the silver lining here is that they do have policy room. Many of them do have monetary policy room. Some of them have fiscal room, although only a few of them. So, it seems like this is going to be a challenging period, and uncertainty [and] commodity channels are both going to weigh on economies for emerging markets.

We have seen broad‑based resilience among emerging markets over the last few years compared to, let’s say, five years before the pandemic. So, I think this speaks to the institutional quality having improved in emerging markets. And hopefully this would continue to buffer emerging markets from these external shocks.

Ms. LOUIS: Thank you. Thank you, Jason.

And the lady in the middle. And then I will come back to Agence France‑Presse.

QUESTION: Hi. Thank you for taking my question. I am Stephanie Stacey from the Financial Times.

I wanted to expand on the previous questions about the dollar and treasuries. And I know you mentioned it’s hard to assess at this point how lasting the impact will be. But I wanted to ask what risks and future factors you think could drive a real shift in their safe haven status.

Ms. LOUIS: Before we continue, are there any other questions on the dollar and the safe haven status? Yes. There is a question here.

QUESTION: Hi. Mehreen Khan from The Times. I’m sorry. I will stand up.

You mentioned the importance of swap lines and central banks cooperating at times of market stress. I mean, how much are we taking this type of cooperation for granted? And how much is the idea of the Fed providing swap lines to other central banks now in question, given the nature of the scrutiny that the institution is under from the Trump administration?

Mr. ADRIAN: Let me start with the swap lines.

In previous episodes of distress, such as the COVID-19 shock in 2020 or the global financial crisis in 2008, we have seen that swap lines from the major central banks—including Bank of England, ECB, Bank of Japan, and the Federal Reserve—have played an important role in terms of stabilizing market liquidity. The way to think about that is that the central banks are providing funding to partner central banks in the currency of the foreign assets that those institutions own. So, it’s an important underpinning to provide market functioning and resilience to your own assets in the hands of foreign financial institutions.

As we mentioned earlier central banks have not intervened for liquidity purposes in recent weeks. And, despite a heightened market volatility, the VIX, for example, went from below 20 to between 40 and 50, which is fairly elevated. We have seen a very, very smooth market functioning across the board.

Concerning the role of treasuries we are looking at the pricing of longer duration treasuries very carefully. We particularly look at supply factors, demand factors, and technical factors. We have seen volatility in the price moves, but we think that those are within reasonable historical norms.

Mr. WU: Just to complement, I think in the treasury market, we have seen market functioning held up—meaning that buyers can find sellers and transactions are going through. I think that’s a very important sign.

One thing that I wanted to mention also is that a year ago in our report, we pointed out that there are leveraged trades in the treasury market. These are trades that have not very much to do with economic fundamentals in the US or elsewhere but, rather, are using leverage to capture arbitrage opportunities in markets. When these trades are unwound, there will be impact in the treasury market. And this is something that we have pointed out before. These include the so‑called treasury cash‑futures basis trade, as well as a swap spread trade, which we have documented before. And I think during this episode, given the very heightened volatility, we have seen evidence of some of these positions being unwound, potentially having an impact on treasury yields as well. So, I just wanted to put this into context. This is not about capital outflows, but it’s about unwinding these trades having amplified the recent price movements in treasury markets.

Mr. ADRIAN: We are seeing some indication that there’s some lowering in terms of the leverage in these trades, but we haven’t heard of disorderly deleveraging at this point. So, of course, with market volatility increasing, financial institutions naturally reduce their leverage. But we haven’t seen the kind of adverse feedback loop that was common, say, in 2008 or even as recent as the COVID-19 shock initially.

Ms. LOUIS: Thank you. Thank you, Tobias.

And there’s a question from Agence France‑Presse, in the middle. And then I will come back to you, and you. We are running out of time. So, we will take very, very few questions left.

QUESTION: Thanks for taking my question. Just a quick question. In your report, you talk about geopolitical risk, including the risk of military conflicts. I just wonder how seriously you think people should take that and where you rate that when it comes to the global financial stability risks you have discussed already.

Ms. LOUIS: Thank you. And I have just been told we are running out of time. So, we will just clump those questions, if you could be very quick. The gentleman over there and the lady there. And then we will wrap it up. Thank you.

QUESTION: Hi. [Rafia] from Nigeria. I work on [Arise TV].

The IMF keeps talking about building resilience to face the global challenge of the state of the economy of the world. How do you build resilience in a world economic climate when one man’s decision can tip the scale? Just one man. He could wake up tomorrow and all our projections falter. One man.

Ms. LOUIS: Thank you. And then the last question.

QUESTION: Laura Noonan, Bloomberg News. Thanks for taking the question. It’s actually a related question.

You spoke in the report about the need for policymakers to try to do what they can to guard against these future financial shocks. Do you have any practical suggestions on what those measures could be? And also, are you expecting people to take measures to make the financial system safer when the overall political mood, as you have seen, has very much been about trying to liberalize things, trying to deregulate, and trying to simplify? Thank you.

Ms. LOUIS: Thank you. Tobias?

Mr. ADRIAN: Let me address the three sets of questions and then turn to my colleagues as well.

On geopolitical risk, we do have a chapter that was released last week that is looking at capital market performance relative to geopolitical risks. And the good news is that, generally, when adverse risks realize, there is an asset price adjustment. But on average, relative to recent decades, those risks are absorbed well by the financial system in general. Now, of course, when conflicts directly impact countries, that can have a pronounced impact on their financial systems, and it’s something that we are discussing in more detail in the chapter.

Secondly, in terms of the exposure of countries to physical risk, we have certainly seen in some countries around the world, a heightened incidence of drought and floods, even those can be macro‑critical. To the extent that these developments impact macro stability, we are certainly there to support countries and help them, either via programs or policy frameworks.

Thirdly, in terms of the regulation of financial institutions and financial markets. You know, I think the last couple of weeks are very good illustrations for the importance of resilience of financial institutions. I mean, we have seen a tremendous increase in the level of volatility, which reflects the higher level of uncertainty. Last October, our overarching message in the GFSR was that there was this wedge between policy uncertainty and financial market volatility, which at the time was very low. And we have seen financial market volatility catch up with the high level of policy uncertainty. But that has been orderly, and financial institutions have been resilient. That is really the main objective of financial sector regulation—to get to a place where the financial system can do its job in terms of adjusting to unexpected developments. And when you have resilience in banks and in non‑banks, these adjustments are smooth. And that is the point of finance, right? It’s a kind of an insurance mechanism for the global economy and for individual country macro economies. Good regulation leads to good stability. And we have a lot of detail on that in the GFSR.

Mr. Ferreira: Maybe I could add a little bit on this about how to build resilience.

I think that as Tobias was saying, trying to anticipate shocks is very hard. And it is very hard to do it. So, I think the way to build the resilience is focusing on vulnerabilities. In the GFSR, we have mentioned some vulnerabilities that we feel are important at this time. So, the valuations issues that makes the risk of repricing more likely, leveraging in some segments of the financial sector and in the interconnectedness with the banks, and also, of course, rising and high debt in several countries.

How do you build the resilience in the face of these vulnerabilities? We do feel that banks in most countries are actually the cornerstone of the financial sector and so ensuring that they have appropriate levels of capital and liquidity is key. And the international standards do provide the basis for doing that. To address some of the other vulnerabilities, like leveraging an interconnection between different types of institutions, excessive [transformations], maybe.

Finally, I think that on the issue of rising debt, one common theme that we have been talking about is about the need to credibly rebuild fiscal buffers.

Ms. LOUIS: Thank you. Thank you very much. I know we have covered a lot of ground, and I apologize that we could not get to everybody. If you do have any follow‑ups or any questions, please feel free to reach out to me. You can find the report online, and we can also send it to you bilaterally.

Again, thank you very much for coming and thank you for your time. Take care.

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April 23, 2025

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Category: Pandemic

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