Not just spyware scandals: EU is funding the industry that spies on Europeans

It’s not just spyware scandals: EU is funding the industry that spies on Europeans – EUobserver In February 2026, Greece sentenced four people to prison over the infamous ‘Predatorgate’ espionage scandal that shook Greek democracy, and Europe in 2022. Spyware, an extremely potent technology that turns a personal device into a constant surveillance instrument, was used by the Greek secret services to target dozens of people, including journalists, politicians and business executives. The Greek case marks arguably the first time that the executives of a spyware manufacturer – Intellexa, who developed Predator – will face criminal accountability. Although it did not condemn any Greek authorities for using spyware, this victory is heartening. It also leads to a bigger question: what about the EU’s own complicity in funding the market for spyware, even when we recognise the harms it inflicts? Read more Greece’s spy scandal must shake us out of complacency For years, EU lawmakers — especially the European Commission and the member states — have been audaciously passive about doing anything to address the proliferation of spyware developed by private companies, which has been used in violation of human rights across the EU. More recently, investigations by journalists show that the EU’s role in perpetuating the growth of the spyware market might be more sinister than just passivity. Millions of euros worth of EU subsidies and taxpayer money are fuelling the very market that leads to spying on journalists, activists, politicians and people in the EU, and undermines our democracies. How exactly is this happening? Follow The Money’s investigation shows that funds from the European Defence Fund, Horizon research programmes, loans from an Italian state-owned bank and an entity belonging to Spain’s science ministry, have provided funding to companies developing commercial spyware, ranging from hundreds of thousands to millions of euros. This includes EU taxpayers’ money being used to fund Intellexa, the company behind the Predatorgate scandal in Greece. The EU Commission itself has acknowledged EU funds being granted to spyware companies. Then there are investments. The Belgian outlet Apache reported that the European Investment Fund (EIF) provided funds for the Israeli spyware company Paragon Solutions through an Israeli venture capital fund. Paragon was used by Italian authorities to spy on journalists, humanitarian workers and business executives, in what is known as the Paragon scandal. Crucially, EIF belongs to the European Investment Bank (EIB), a financial institution owned by the EU member states. Read more European Investment Fund financed Israeli spyware company Paragon At this point, the EU is beyond just complicit in the spyware scandals or inactive in reacting to this threat. Arguably, it’s an active enabler of the industry, wreaking havoc on people’s lives, our ability to communicate with each other safely, and shrinking the EU’s civic space and democratic life. Consider the systemic opacity of the EIF providing funds that eventually made their way to Paragon. ‘Followed internal rules’ When confronted with this fact, EIB, which owns EIF, was either unwilling or unable to provide more information other than confirming that the investment followed its internal rules. They did not clarify how they follow up on the investments made with their money or whether they verify what companies do while benefiting from their investments. Moreover, they refused to divulge information about what happened after the venture capital fund that used EIB’s money in Paragon divested from the company in 2020. Whatever the explanation, the outcome is clear: EU taxpayers’ money has ended up in the hands of spyware companies whose products have been used to harm Europeans. This blatant lack of transparency in bodies like the EIB makes it impossible for the European Parliament or the public to verify what is happening with public investments that are supported by taxpayer money. In fact, the issue goes beyond just the support for spyware companies. There is a democratic deficit and lack of accountability in the use of EU public funds. When it comes to grants EU’s funding instruments, such as the European Defence Fund or Horizon research programmes , the commission has stated it would “immediately take action” if presented with proven evidence of companies violating human rights or European values. What more evidence is required when a company like Intellexa has already faced a criminal conviction in a member state? It is clear that EU institutions themselves are at the heart of the problem. Instead, they need to be a part of the solution, which is quite straightforward. Read more Spyware scandals in Europe are ‘much worse than Watergate’ Start with the bare minimum: no EU funds for the spyware market. This includes no grants, no investments and no public procurement of spyware by EU member states. All of this should contribute greatly to slowing the uncontrolled expansion of the market. Secondly, EIB and related financial instruments need to strengthen their investment policies to explicitly exclude spyware companies They should also improve their due diligence, accountability and transparency rules and procedures. EU money should not be able to land in the hands of entities that intend to use it to harm us. Importantly, we are calling for a full EU-wide ban on spyware and the industry behind it. There is no form of this technology that can be compliant with fundamental rights. It will always be damaging to people, our right to live freely without fear of intrusion and to functioning democracies. At a time when digital communication is being threatened by weakening of end-to-end encryption, it’s crucial to urge lawmakers to act to stop an industry that is fueling the exploitation of vulnerabilities in our communication systems, and to keep us safe and secure. A ban on spyware and due diligence of public funds can get us there. Unlock article and share Whatever the explanation, the outcome is clear: EU taxpayers’ money has ended up in the hands of spyware companies whose products have been used to harm Europeans Topics Digital Espionage EU Politics Israel Spyware Author Bio Shubham Kaushik is a senior communications and media office at European Digital Rights (EDRi). Frank Vanaerschot is the director of the EU public finance watchdog Counter Balance.