‘ACCOUNTABILITY IS ESSENTIAL IN A SYSTEM BASED ON THE RULE OF LAW’
Interview with Didier Reynders, EU Commissioner for Justice By Gaston Moonen
To keep citizens engaged with the European Union, the Von der Leyen Commission has made ‘values and transparency’ one of the six key priorities for its mandate. Whether it concerns the rule of law, public finances or economic regulation, accountability is meant to be a baseline used by those responsible for policy making and execution. Didier Reynders is the EU Commissioner for Justice. He also chairs the Commission’s Audit Progress Committee and is responsible for its Internal Audit Service. In this interview, he explains what his various roles entail, and how the Commission addresses accountability and the related governance concerns.
Accountability building blocks to ensure oversight, reporting and action
In your work as EU Commissioner for Justice, how do you include key elements of accountability in your work and responsibilities?
Didier Reynders: Transparency, integrity and accountability are the essential prerequisites of a democracy based on the rule of law. They promote good governance and build trust in the policymaking process, thereby enhancing the legitimacy and credibility of public institutions. They are also extremely important political tools in preventing corruption and bad governance practices.
One example where we put this principle of accountability into practice is the Commission’s work on the rule of law, which is an important element of my work as Justice Commissioner. All instruments in our ‘rule of law toolbox’ aim at ensuring that national authorities are ultimately accountable for their actions in a system based on the rule of law — be it in front of their national parliaments or their national justice systems. Of course, the European Union, and the Commission specifically, has a role to play in this respect as ‘Guardian of Treaties’ — it is our task to make sure the rule of law is upheld and promoted in all member states.
Since 2020, through the annual rule of law report, we have continuously monitored the situation as regards four key pillars in all member states — national justice systems, the anti-corruption framework, media pluralism and media freedom, and institutional checks and balances. Since 2022, this report has also included concrete recommendations to all member states. Many of these recommendations directly aim at improving systems of accountability — whether they concern integrity rules for high-ranking officials, the independent operation of the prosecution service, or the transparency and inclusiveness of the legislative process.
Another example is the General Conditionality Regulation, which allows the EU to take measures (for example, suspension of payments or financial corrections) to protect the budget in cases where breaches of the rule of law principles affect or risk affecting EU financial interests. This approach reflects the principle of accountability, as respect for the rule of law is key for the sound financial management of the EU budget and the effective use of EU funding.
At the Commission, you are both responsible for the Internal Audit Service and chair the Audit Progress Committee. What are your responsibilities at the IAS, and what is the main role of the APC?
Didier Reynders: The Internal Audit Service of the Commission is key in supporting our institution in delivering on our objectives. I oversee administrative matters, such as its management plan and annual activity report, while the IAS itself remains independent by virtue of the Financial Regulation for the conduct of audits and the performance of the internal audit function. I also receive advice from the Director-General, who remains accountable to me and to the College for the implementation of the audit plan and sound management of resources.
The APC is at the heart of the Commission’s governance (…) it enhances public trust that the Commission is well managed and strengthens the independence and value of the internal audit activity.
I am also the Chair of the Audit Progress Committee. The APC is at the heart of the Commission’s governance, and its main role is assisting the College of Commissioners in fulfilling its regulatory obligations by ensuring the independence of the IAS; monitoring the quality of the internal audit work; and ensuring that internal and external audit recommendations are properly taken into account by the Commission departments and followed up appropriately.
In this way, the APC contributes to the overall further improvement of the Commission’s effectiveness and efficiency in achieving its goals, and facilitates the College’s oversight of the Commission’s governance, risk management and internal control practices. Although the APC has no management powers, it enhances public trust that the Commission is well managed and strengthens the independence and value of the internal audit activity.
The results of the work of the Internal Auditor and the conclusions of the APC are two building blocks of the ‘annual management and performance report’, a key accountability reporting instrument for the Commission. Through this report, the Commission publicly guarantees that budgetary spending represents value for taxpayers and that it follows the principles of sound financial management.
How does the ECA contribute to the activities of the Audit Progress Committee? And to what extent does the IAS build on the work of other auditors, and where do you see potential for the ECA to use more IAS assessments from an accountability point of view?
Didier Reynders: The work of the ECA is an important input that provides the APC with a complementary, external view of the internal control system of the Commission to ensure that observations are fully addressed at the appropriate time. In this respect, both the results of the ECA special reports and the ECA audit recommendations relating to the reliability of the EU consolidated accounts are very important.
The APC invites the ECA to its meetings where the members of the committee are able to exchange with ECA representatives on the various topics that the ECA will touch upon in the next years. Through the ECA presentations of its multiannual strategy and annual work programmes at the committee meetings, along with those of the Internal Auditor, the committee receives a better view on how the two audit functions can complement each other.
The IAS coordinates its work with the ECA, both at senior management level as well as operational level to ensure alignment and exchange best practices. While overlaps are sometimes inevitable, the aim is to ensure they are limited and do not create an unnecessary audit burden for auditees. Many services are confronted with a very high workload, and the IAS identified mutually beneficial solutions to ensure the delivery of its objectives, while respecting the difficult environment faced by its auditees.
As APC Chair, I support the suggestion for the ECA to use the work of internal auditors more. Throughout the years, the internal auditors have acquired valuable input which can be useful. Similarly, when external auditors look at the same processes they can provide internal auditors with results on which to build their work.
Later this year, we will be part of a big democratic exercise which will set Europe on its path for the next five years and beyond. Internal and external audit are key to ensuring a well-functioning organisation which retains the trust of those it is accountable to, and they will continue to strengthen our internal management systems and the performance of our departments. These audits will ultimately support the achievement of our Union objectives of freedom, prosperity and peace.
Rule of law and accountability and transparency are indispensable
In the Recovery and Resilience Facility (RRF) the rule of law has taken on an extra dimension in relation to EU spending. What do you expect from the ECA when it comes to accountability regarding rule of law issues in the EU?
Didier Reynders: The rule of law stands alongside democracy and fundamental rights as one of the founding values of the Union. It is common to all member states and a bedrock of the Union’s identity. It is a core factor in Europe’s political stability and economic prosperity. During the current mandate, the Commission has further developed its rule of law toolbox I referred to earlier. One way in which we have been supporting rule of law related reforms in the member states is through national recovery and resilience plans.
Let me take a step back to explain the context of this. A number of rule-of-law issues — notably in relation to the effectiveness of justice systems, the fight against corruption, access to information and the quality and inclusiveness of the law-making process — are also monitored under the European Semester, where they have macroeconomic relevance and an impact on the business environment, investment, growth and jobs. To address a number of relevant, country-specific rule of law recommendations made under the European Semester by means of concrete reforms and investment measures, the Commission has agreed with several member states to include concrete milestones and targets in their recovery and resilience plans. These were subsequently formally approved by the Council and are now being gradually implemented.
Accountability is essential in a system based on the rule of law. The European Court of Auditors can play its role in independently assessing the economy, effectiveness, efficiency, legality and regularity of EU action in order to improve accountability, transparency and financial management. This can also contribute to enhancing citizens’ trust and responding effectively to current and future challenges facing the EU. I am aware there are two important ECA reports relating to the rule of law — the special report on the rule of law in the EU, concerning the framework for the protection of the EU’s financial interests, and a review on the Commission’s rule of law reporting. This attention paid from the side of the ECA reflects the central importance of issues relating to the rule of law, and the Commission will of course pay due attention to the findings and recommendations of these reports.
This attention paid from the side of the ECA reflects the central importance of issues relating to the rule of law…
Accountability and transparency are mutually reinforcing concepts. What does transparency mean for the Commission in relation to its objectives regarding accountability?
Didier Reynders: The Commission is committed to transparency and accountability as essential principles for maintaining the trust of citizens in the legitimacy of the political, legislative and administrative processes of the EU. Transparency can be understood as openness to external stakeholders, combined with accessibility of information. Accountability refers to the responsibility the Commission carries for its decisions and actions, including the commitment to meeting our objectives. Transparency thus plays a crucial role in making sure that the Commission remains accountable for its actions and its performance.
Transparency thus plays a crucial role in making sure that the Commission remains accountable
Transparency concerning interest representation is especially important to allow citizens to follow the activities and be aware of the potential influence of interest representatives, including influence exercised through financial support and sponsorship. The Commission uses the EU Transparency Register — a public website displaying up-to-date information about lobbying activities — as the key tool for lobbying transparency and for increasing the openness and visibility of stakeholders’ and civil society’s participation in the EU’s democratic decision-making process. Since 2021 it has been a common tool used by the European Parliament, the Council and the Commission to foster a common transparency culture across the EU institutions. The Register showcases the common commitment of the EU institutions to promoting transparent and ethical interest representation.
The Commission applies strict internal transparency measures in relation to the Transparency Register. It requires all its senior decision-makers at political level (Commissioners and members of their cabinets) and administrative level (directors-general and heads of service) to meet only registered interest representatives and publish information on all such meetings. It also applies a range of other measures in relation to the participation of lobbyists in Commission expert groups and Commission initiatives such as public consultations and roadmaps.
Overall, the Commission provides information to the public through various reporting streams, most notably annual activity reports and the annual management and performance report. Moreover, the Commission periodically translates its general objectives into more specific and concrete actions via its work programme and the management plans published by the DGs. This allows interested parties to understand what the Commission’s objectives are, and follow up on whether the Commission is achieving them or not. Transparency thus enables citizens to hold the Commission accountable for its actions.
Citizens may request and obtain access to Commission documents through the public portal EASE (Electronic Access to Commission Documents). The Commission displays a high degree of transparency. In 2022 access was fully or partially granted in 77 % of cases, while 12 % of requests were refused at an early stage. Wider or even full access was granted in more than 51 % of cases at the confirmatory stage. Furthermore, the Commission proactively publishes costs of missions undertaken by Commissioners.
As far as the issue of legislative transparency is concerned, the European Parliament, the Council and the Commission have agreed on the next steps towards the creation of a joint legislative portal. This database will be an important step forward in making the legislative process more understandable and transparent to the public. The portal will show the stages and detailed steps in the law-making process in files falling under the ordinary legislative procedure. Each procedure will be shown as a timeline, displaying all events in a chronological order, including past and future events planned by the institutions and bodies. The portal will include search functions and will eventually show a tracker displaying an overview of the legislative priorities of the EU that were agreed upon in the Joint Declaration of the three institutions. The first version of the portal should be available to the public in the course of 2024.
(…)the European Parliament, the Council and the Commission have agreed on the next steps towards the creation of a joint legislative portal (…) an important step forward in making the legislative process more understandable and transparent…
In the end, transparency and accountability are both essential to maintain EU taxpayers’ trust that money from the EU budget is spent in their best interest.
Accountability embedded in EU’s future actions
As the EU takes on more responsibilities on issues of the economy, energy, security or migration, policy integration is also becoming more evident, and more in demand. What is the Commission doing to address and align the increasing number of cross-policy issues with knock-on effects for governance arrangements?
Didier Reynders: The Commission actively promotes close cooperation and effective coordination for any initiative of a cross-cutting policy nature, and has dedicated governance arrangements in place to ensure this. At service level, for instance, an interservice consultation must be carried out with all departments involved on all initiatives that require a decision by the College of Commissioners. When preparing policy proposals, stakeholders are consulted in a transparent manner and their inputs taken into account. Economic, social and environmental policy aspects are also systematically considered, as well as the role of small and medium-sized enterprises and key issues such as administrative burden, competitiveness, innovation, digital readiness and futureproofing. The Secretariat-General plays an important role in this coordination.
(…)we have a ‘whole-of government approach (…) to ensure that our proposals are coherent and take into account all possible policy implications.
At political level, we have a ‘whole-of-government approach ’, and as a member of the College I have the role to ensure that our proposals are coherent and take into account all possible policy implications. The College of Commissioners deliberates and decides collectively; policy integration and coherence are always considered when we take decisions at the weekly College meetings. My own justice portfolio includes several policy strands of cross-cutting significance and impact. To ensure synergies and consistency I work closely with other members of the College whose areas of responsibility are relevant to mine — and so do our respective teams.
Finally, good interinstitutional cooperation is crucial to overall coherence and the final effect for citizens. The European Council provides political steer on strategic challenges. Close cooperation with the European Parliament and the Council on a daily basis is fundamental to delivering joint EU solutions to strategic challenges and managing crises.
The EU has significantly increased its borrowing activities in response to recent crises. For example, NGEU borrowing is close to €100 billion, and the EU budget is increasingly being exposed by the need to provide financial assistance to Ukraine — all of which raises questions about the EU’s future financial state. What assurances are there of accountability in these new areas of EU action?
Didier Reynders: Under the RRF, the legality and regularity of payments is solely linked to the satisfactory fulfilment of milestones and targets. The Commission builds its assurance about the controls implemented by the member states on the implementation of their measures. For this purpose, each member state submits a management declaration with each payment request, indicating any issues found as well as a summary of audits and relevant audit findings, which the Commission closely analyses.
However, our assurance is not just based on the member states’ actions and declarations. The Commission carries out an extensive ex-ante assessment of the milestones and targets, including of all available primary evidence, to ensure compliance with the requirements. In February 2023, we publicly shared how we assess the satisfactory fulfilment of milestones and targets in an annex to our Communication on the first two years of the RRF. In addition, we carry out risk-based ex-post audits on milestones and targets on the spot.
Furthermore, Article 22 of the RRF Regulation imposes on member states the principal obligation to take all appropriate measures to protect the financial interests of the Union and ensure that the use of funds complies with Union and national law, and the Commission checks that they discharge that obligation properly. This is done via system audits of national control systems. To date [beginning February 2024], the Commission has audited the control systems of all member states, covering 154 entities. Some of them have been or will also be subject to additional audits when and where weaknesses are found. This also entails compliance audits of national audit bodies, to review their audit work and assess whether that work is reliable, provides assurance to the member state and adds to the assurance of the Commission.
In response specifically to an ECA recommendation to identify measures required to address the assurance gap at EU level regarding RRF-funded investment projects’ compliance with EU and national rules, the Commission has extended the scope of its audit work. We now systematically include a requirement in all our audit checks that member states regularly and effectively verify compliance with public procurement and state aid rules for RRF measures.
The ECA’s statement of assurance work (published in October 2023) was based on your risk-driven audit of 281 out of the overall total of 311 milestones and targets for which payments were made for non-repayable support in 2022 (meaning that the ECA audited 90 % of all milestones and targets assessed by the Commission in 2022). The ECA identified regularity issues with just 15. We disagree with the ECA findings for those 15, for which in any case the ECA considers the minimum financial impact to be close to the its materiality threshold. Nevertheless, the Commission acknowledges that further improvements can be made to its process for the assessment of milestones and targets in the future and is putting changes in place to address these findings. The Commission therefore broadly accepts the recommendations in the ECA’s annual report, as well as various recommendations from performance audits aimed at improving the Commission’s accountability efforts. We are working to implement these recommendations.
The Commission also counts on the valuable work of our Internal Audit Service, both as part of the various audit engagements and in the context of the overall opinion which is published every year in the annual management and performance report. This work is used to further improve the internal control systems at the Commission.
Concerning Ukraine, the EU stands united in its unwavering support for Ukraine against Russia’s war of aggression. We made good on this commitment of solidarity by mobilising significant financial support. The bulk of this support was provided through macro-financial assistance (MFA) in the form of highly concessional loans, of which €7.2 billion was disbursed in 2022 and a total of €18 billion in 2023.
Concerning Ukraine, the EU stands united (…) We made good on this commitment of solidarity by mobilising significant financial support.
The MFA is first and foremost an exceptional financial instrument that provides ‘untied’ and ‘undesignated’ balance-of-payments support to third countries, i.e. there is no precise condition tying the use of funds to specific sectors or regions, for example. However, given the unprecedented scale of support, increased emphasis was put on ensuring its efficiency, transparency and accountability. While staying within the logic of untied and undesignated support, the Ukrainian authorities reported regularly on execution under the main budget headings and areas of expenditure, and gave information on the administrative and financial measures in place to ensure the transparent and efficient use of these public funds.
The Commission has also conducted an operational assessment of financial circuits in Ukraine through an independent consultant. The objective of this exercise is to obtain reasonable assurances on the functioning of administrative procedures and financial circuits in the recipient country before disbursing EU funds in the form of MFA.
…it is remarkable how, even under the harsh circumstances of war, reforms have been implemented…
Even more important is the strengthening of Ukraine’s public institutions. This has been reflected in the focus of the reform conditions attached to the disbursement of aid, which comprised several actions in the areas of good governance, the fight against corruption, and the strengthening of judicial and law enforcement institutions. It is remarkable how, even under the harsh circumstances of war, reforms have been implemented within a short space of time. For example, the specialised anti-corruption prosecutor’s office and the selection procedures of judges have been strengthened.
As much as uncovered cases of corruption are deplorable in terms of the crime behind them, it is worth emphasising that the judicial institutions now seem to be more effective in detecting and prosecuting irregularities. The push towards stronger institutions is due in no small part to the success of reforms induced by our support.
This article was first published on the 01/2024 issue of the ECA Journal. The contents of the interviews and the articles are the sole responsibility of the interviewees and authors and do not necessarily reflect the opinion of the European Court of Auditors.
