A research paper published by the Conference of Peripheral Maritime Regions (CPMR) on Thursday 15 June states that the geographical distribution of investment under the European Fund for Strategic Investment (EFSI) – in comparison with the European Structural and Investment Funds (ESI funds) – is extremely inequitable between the different economic sectors and regions.
To reach this conclusion, the organisation conducted a comparative study between the distribution of funding under the EFSI and that within the framework of cohesion policy, based on financial distribution per capita, on one hand, and on national GDP, on the other. According to the CPRM analysis, there is “clearly” a dichotomy between the member states eligible to the cohesion fund and the others.
Maps published by the CPMR show that most Central and Eastern European countries greatly benefit from ESI funds but much less from the EFSI. The Baltic States are an eloquent example of this. While they receive between €450 and €700 euro per capita from the ESI, only Lithuania seems to be a recipient of the EFSI with around €80 to €120 per capita. Estonia and Latvia lag far behind with an average of €40 to €60 per capita. Findings are similar using national GDP as an indicator, but should nonetheless be qualified: in addition to Estonia, Greece, Slovakia and, to a lesser extent, Portugal seem to receive funding from both the ESI and the EFSI.
The breakdown of the EFSI is still more telling: the member states which receive the greatest amount of funding are Italy, France, and the United Kingdom; while Cyprus, Malta and Slovenia bring up the rear.
Explanation. This, according to the CPMR, can be explained by the fact that no territorial reasoning has underpinned the EFSI since its creation. Citing a 2016 study by Ernst & Young, the organisation puts forward further explanations: - competition with the ESI, with project promoters preferring subsidies to loans; - the lack of resources for setting up projects likely to be “bankable”; - the lack of experience in establishing public-private partnerships; - and the small size of projects.
CPRM proposals. In order to address the territorial blindness of the EFSI, the CPRM considers that member states could, from now on, voluntarily introduce a territorial dimension to projects financed within the framework of the Juncker plan. Nonetheless, in order to ensure there is a true political territorial dimension, the organisation would in future contemplate adding a “development window” to cover operational risks and those linked to a market specific to certain less-favoured geographical areas, with a view to supporting the less developed regions. Another possibility would be to do away with the minimum size requirement for projects. Finally, the CPRM suggests establishing clear sectoral limits between projects eligible to the ESIF and those targeted by the ESI.
This research memo is a foretaste of the CPRM’s political stance on the future cohesion policy after 2020, due to be adopted on 22 June. The Council of European Municipalities and Regions (CCRE), for its part, endorsed its position on Thursday 15 June (see related article). (Original version in French by Pascal Hansens)