Brussels, 27/03/2012 (Agence Europe) - In its special report (No. 2/2012) published on Tuesday 27 March, the European Court of Auditors (ECA) concludes that the effectiveness and efficiency of the European Regional Development Fund (ERDF) spending on financial instruments for small and medium enterprises (SMEs) were “hampered by the regulatory framework being inappropriate for the different types of financial instruments used”. The ECA highlights widespread delays in the funds reaching the recipient SMEs in the five countries audited (Germany, Hungary, Portugal, Slovakia and the United Kingdom). It says the supported actions were ineffective in leveraging in private investment. SME financing gap assessments, when prepared, suffered from significant shortcomings. In addition, some recipient SMEs (in the Land of Saxony-Anhalt, in Estonia and in England) were charged unjustified management fees by the financial intermediaries used.
The ECA audited the efficiency and effectiveness of the financial engineering measures co-financed by the ERDF during the 2000-2006 and the 2007-2013 programming periods. According to the European Commission, money from the EU budget (cohesion policy) allocated to financial engineering instruments in all member states amounts to €12 billion: €1.6 billion in the period 2000-2006 and €10.4 billion for 2007-2013.
The ECA's performance audit shows that the structural funds regulatory framework used for this SME support through financial instruments was unfit to take into account the specific characteristics of the debt and equity instruments used. There were four major weaknesses, including in the provisions for leveraging and “recycling” the funds. (LC/transl.rt)