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EU funds allocated on data that Eurostat cannot verify, auditors say

FILE PHOTO: The euro sign is photographed in front of the former head quarter of the European Central Bank in Frankfurt

BRUSSELS (Reuters) - Hundreds of billions of euros in European Union recovery funds are allocated on the basis of data supplied by EU governments that the EU's statistics office Eurostat cannot verify, the European Court of Auditors said in a report on Tuesday.

Last year, the EU set up a Recovery and Resilience Facility of 724 billion euros ($750.28 billion) split between grants and loans that it will jointly borrow and spend until 2026 to help economies rebound from the COVID-19 pandemic slump.

How much money each country gets from the EU fund was based on data on the country's population in 2019, GDP per capita in 2019 and unemployment in 2015-2019 -- all supplied by national governments without the possibility of independent verification.

"Eurostat has no rights to verify member states' data on labour and population ... and therefore cannot verify their reliability," the European Court of Auditors (ECA) said in its report.

"These statistics form the basis for various EU contributions, including pandemic recovery funding. This could lead to the allocation of EU funds based on such data being inaccurate," the report said.

The contents of the report, addressed to the European Commission which supervises Eurostat, are not legally binding, but exert political pressure on the EU executive to act on them.

To give Eurostat new powers to verify more national data would require agreement among EU governments.

($1 = 0.9650 euros)

(Reporting by Jan Strupczewski; Editing by Susan Fenton)