Strasbourg, 27/11/14 (Agence Europe) - The beneficiaries of the cohesion policy need not fear that the European structural and investment funds (ESIF) will be redirected into the European strategic investment fund (under the aegis of the EIB), devised by Jean-Claude Juncker for the next three years. However, using it more systematically in the form of innovative financial instruments should maximise the reach of the investment plan. Between €20 and €35 billion could be fed into the money earmarked for the new fund, due to the leverage effect.
Innovative instruments. In his plan to get the EU back on track, the President of the European Commission recommends that the ESIF are no longer used exclusively in the form of conventional grants, but increasingly as loans, own funds and guarantees. This approach was started at the end of the previous financial programming period (2007-2013) and is expected to become increasingly prevalent over the period 2014-2020. The new legislative framework allows innovative instruments to be used in more sectors than previously (only SMEs, energy efficiency and urban development were covered in 2007-2013).
Leverage effect. During the previous period, this technique made it possible to generate €12 billion in leverage, one source explained. By rolling out the use of innovative financial instruments during this period and aiming for a leverage effect in the order of 1: 3 or 1: 4, the European Commission hopes to make an extra €20 to €35 billion available. This money will come on top of the estimated €315 billion of the European fund for strategic investments, according to the European Commission.
Moving away from traditional subsidies. When presenting the recovery strategy, the European Commissioner for Employment, Growth, Investment and Competitiveness, Jyrki Katainen, explained that if the member states make proper use of the ESIF, this will improve the fund's capacity. His counterpart for Cohesion Policy, Corina Cretu, for her part confirmed that the cohesion policy would make a major contribution to the investment package over the coming years, by no longer focusing solely on “traditional grants”. (MD)