Flagship EU investment plan failing to ignite growth
The European Union investment plan, its flagship project to relaunch the bloc's sluggish economy, may have produced no added value, because private investment made through the plan might have been made anyway, EU auditors said yesterday.
A European Fund for Strategic Investments (EFSI) was set up last year in a bid to boost funding for riskier companies and projects, in particular for infrastructure, education and research, that are most affected by low levels of investment in the EU.
The EFSI intends to use €21bn of EU guarantees and cash to attract private investment of at least €315bn by mid-2018. The Commission said in September it plans to double the funding target of the program and to extend it to 2022, after data showed the plan has generated more than €100bn of investment, in line with targets.
But the European Court of Auditors, the body assessing the regularity and performance of EU spending, said the investment plan may have no added value, as it is not clear whether it is attracting funds that would have been invested in any case.
"There is a risk" that EFSI may have no added value, ECA President Klaus-Heiner Lehne told reporters.
In a report released yesterday, EU auditors said the launch of EFSI has delayed and reduced spending in other EU programmes which were meant to fund infrastructure and research projects, the very operational fields of EFSI.
The Commission, in a written reply included in the report, said that EFSI "did not affect the overall objectives" of the EU programme for infrastructure funding.
An official for the European Investment Bank, the EU's financial arm and the main player in EFSI, said around three out of four clients benefiting from EFSI are new to the EIB, a sign it is hitting projects that wouldn't be funded otherwise.
In its annual report, ECA also signed off the EU accounts for last year, saying that EU funds were broadly spent according to the rules. (Reuters)