Financial Instruments are an important tool in territorial development. In particular, the use of financial instruments (FI) plays an increased role in the efficient implementation of Cohesion Policy within the framework of the European Structural and Investment Funds (ESIF). In fact, the legislative requirements have been extended to allow increased use of FIs and the European Commission is making efforts to further promote FIs.
This opinion looks at the practical implementation of financial instruments from a local and regional standpoint. It draws on past experiences and evaluates the use of FIs in the new programming period to identify bottlenecks and obstacles. In this respect, the CoR opinion aims to contribute to improving the implementation of FIs.
Already during the drafting process of this opinion the feedback received on this opinion was very good. Both the European Commission (DG REGIO) and the European Parliament (REGI) stressed the importance of receiving feedback from local and regional authorities on the use of financial instruments.
Key messages of the draft opinion were presented to the meetings of Director Generals (30 March 2015) by the CoR secretary-general and to Ministers responsible for Cohesion Policy (9 June 2015) by the CoR president.
On 12 June 2015 the Council adopted conclusions on the implementation challenges of the cohesion policy 2014-2020, which include a chapter on the use of financial instruments. The Council conclusion took the CoR position into consideration and all points in the Council Conclusions are in line with the draft CoR opinion.
Following the adoption of the opinion on 13 October 2015 the Council secretariat decided to register the CoR opinion and send it to all national delegations for information.
This opinion involved the European Investment Bank from an early stage. It gave a practical dimension to increased cooperation between the two institutions. The EIB participated twice in COTER commission meetings, gave detailed comments on the working document and draft opinion and expressed strong interest in increasing cooperation on this matter in future.
A joint workshop on the simplification of Cohesion policy will be organised in September 2016 in cooperation with the Slovak Presidency of the council. The workshop will look at how the implementation of FIs could be simplified.
THE EUROPEAN COMMITTEE OF THE REGIONS
- stresses that the goal of public intervention using the Structural Funds is to ensure the implementation of Article 174 of the Treaty on the Functioning of the European Union. The competent EU and national authorities should always, whenever setting out their positions or taking decisions regarding financial instruments, assess their impact on efforts to meet this objective;
- calls for a permanent dialogue to be set up between representatives of regions, the EC, EIB and associations representing businesses on the interpretation of the binding legal provisions, the effects of implementation, or emerging problems, so as to maximise the benefits of implementing instruments financed from the ESIF. The CoR calls on the European Commission to provide an institutional framework for this cooperation as a matter of urgency;
- underlines that the decision to use financial instruments must always be based on in-depth analysis and maximising public utility. The Committee of the Regions emphasises therefore that financial instruments must solve specific social, economic or environmental problems;
- stresses that the decision to introduce financial instruments should always take into account the analysis of the impact that such an instrument will have on the other available forms of support, including the possible synergies obtainable by combining different forms of assistance and possible overlapping of instruments;
- points out that it is essential to avoid using territorial development instruments to stabilise the financial system. This measure should be financed using other sources. The CoR calls on the authorities and the institutions of the European Union to ensure that development resources are used in accordance with their objective;
- advocates the simplification of the EU's financial instruments and underlines that instruments need to be simple and easy to use with the right amount of checks and balances;
- before taking a decision to use instruments, it should be examined whether the financing of investments, e.g. through a debt instrument, will over-burden consumers with the cost of servicing this debt.