The European Commission checks whether euro-area Member States exiting a macroeconomic adjustment programme remain firmly on track, in the interest of the Member States themselves and that of their lenders. The European Court of Auditors has examined the design, implementation and effectiveness of post-programme surveillance for the five Member States (Ireland, Portugal, Spain, Cyprus and Greece) that received financial support after the 2008 financial crisis. The auditors conclude that, while surveillance was an appropriate tool, its efficiency was hampered by unclear objectives and insufficient streamlining and focus on implementation. A review of the processes and of the relevant legislation, in particular to integrate surveillance activities into the European Semester, is thus recommended. 

Over the 2010-2013 period, Ireland, Portugal, Spain, Cyprus and Greece received a total of €468.2 billion in financial assistance. EU laws stipulate that Member States exiting a macroeconomic adjustment programme are subject to extra surveillance. Currently, Cyprus, Ireland, Portugal, and Spain are subject to post-programme surveillance (PPS). Greece is subject to enhanced surveillance, because it is considered particularly vulnerable to financial difficulties that are likely to have adverse spillover effects on other Member States in the euro area.

“The post-programme surveillance activities we examined were appropriate, but they need streamlining”, said Alex Brenninkmeijer, the member of the European Court of Auditors responsible for the report. “We think that our work could contribute to the ongoing review of economic governance arrangements in the Economic and Monetary Union. It could also feed into discussions on the design of a possible surveillance mechanism for the repayment of the loans to be provided under the Recovery and Resilience Facility”.

The Special report of The European Court of Auditors in its entirety