BRUSSELS, 8th October, 2026 (WAM) -- The European Court of Auditors (ECA) has warned of rising EU borrowing costs and persistent irregularities in expenditure, estimating that interest payments on borrowing used to finance grants under the COVID-19 recovery plan could reach approximately €93 billion between 2028 and 2034.
According to the Court's annual report, published on 8th October 2026, the figure represents estimated interest costs on borrowing used to finance non-repayable support under the NextGenerationEU programme. It excludes the principal amounts that must be repaid.
The Court expects total EU borrowing to reach approximately €1 trillion by 2027, driven primarily by financing for the bloc's recovery plan.
The report found that member states had yet to draw down a substantial proportion of their allocated grants. By the end of 2025, they had received €237.5 billion of the €359.9 billion allocated under the Recovery and Resilience Facility (RRF), leaving €122.4 billion to be disbursed in the programme's final year.
Only three of the EU's 27 member states had used at least 80 percent of their allocated grants.
The auditors identified irregularities in nine of the 37 grant payments made in 2025, including cases in which certain milestones and targets had not been satisfactorily fulfilled, as well as breaches of public procurement and state aid rules.
The findings extended beyond the recovery programme. The estimated level of error in spending under the EU's regular budget rose to 3.8 percent in 2025, compared with 3.6 percent in 2024.
Spending on cohesion policy, which primarily supports regional development and employment, recorded an estimated error rate of 6.6 percent, up from 5.7 percent a year earlier. The error rate for agricultural and environmental expenditure also increased, from 2.6 percent to 3.9 percent.
The main irregularities involved expenditure ineligible for EU funding and failures to comply with public procurement rules. The Court stressed that such errors do not necessarily indicate fraud or misappropriation, but rather that certain expenditure did not meet the requirements for financing from the EU budget.
The warnings come as the EU prepares its budget for 2028–2034, with the European Commission exploring options to finance emerging needs, including financial assistance to Ukraine.
According to the Court, loans allocated or agreed for Ukraine since 2014 totalled approximately €170.1 billion, including a €90 billion loan approved in early 2026.
As debt-servicing costs rise, member states will need to agree on how to finance principal and interest repayments. Without new sources of EU revenue, governments may have to increase their contributions to the EU budget or reduce some planned expenditure.
For member states, the final cost of these commitments will depend on the outcome of negotiations over the EU's next long-term budget.