Implementation of the European structural and investment funds (ESI funds) has now “reached cruising speed” after a particularly difficult start, with a number of projects selected in October 2017 worth €278 billion, or 44% of the total investment plan for the period from 2014 to 2020 (ESU funds and co-financing). Some €198 billion of this comes from the EU budget, according to our information.
The European budget for the ESI funds amounts to €454 billion for the current period. National public and private co-financing comes to €184 billion, taking total investments to €638 billion. Thus, there remains €360 billion out of the total envelope to invest between now and 2023, the end of the programming period.
The European Commission has noted rapid acceleration in the implementation of structural and investment funds since the start of the multi-annual financial framework: at the end of 2016, 9% of all the funding available for the period had been paid to the member states from the European Union budget; by October 2017, 44% of funds had been allocated, with 13% of payments made (payments reimbursed by the European Union). The Commission believes that payments will accelerate further “over the course of the next few months”.
The report, which summarises the reports from member states, reveals that the level of project selection over 2014-2016 is comparable to the early years of the 2007-2013 period. “Forthcoming implementation rates are likely to be broadly similar to those in the past period”, it states.
However, the Commission notes that major differences in implementation between member states remain. In the annexes to the report, the Commission highlights that some member states, such as Belgium (selection level of 54.8%) and the United Kingdom (58.3%) show very good results while others, like Spain (11.4%) and Cyprus (6.1%) still lag behind.
Among the reasons for the delays given by the member states in the report are late adoption of the regulatory framework, difficulties with the designation of authorities and, in some cases, weak administrative capacity.
In its conclusions, the Commission says that it is now “imperative” that the accelerated pace of implementation is followed up by a “strong and quick” increase in real spending. It calls on the member states to make sure that the committed funds are disbursed.
European semester and ex ante conditions. The European Commission reports that several member states have indicated that the ESI funds “help significantly” to address country-specific recommendations in the European semester. The Commission says that significant reforms have been introduced but that improvement in the business environment remains below expectations. It adds that ex ante conditionalities have acted as a lever for quality projects and says that some 75% of all applicable conditionalities had been fulfilled when the programmes were adopted. It states that over 800 action plans were set up to address unfulfilled conditions. 97 % of those action plans have now been successfully completed, it states. It may be recalled that a Commission report had already highlighted the positive impact of ex ante conditionalities (see EUROPE 11760).
To view the full report, follow the link: http://bit.ly/2z8JQgz (Original version in French by Pascal Hansens)