This post draws directly on text posted on Euractiv’s website of 17 March 2015:
‘The European Commission unveiled the mechanism for its much-heralded €315 billion investment plan on 25 November 2014. The cash is aimed at investing in Europe’s crisis-ravaged south, in an effort to boost solidarity. The idea is to create a new European Fund for Strategic Investments (EFSI), with €5 billion coming from the European Investment Bank and an €8 billion guarantee from existing EU funds designed to secure a contribution of €16 billion in total from the institutions.
The €8 billion guarantee will come over a three-year period from the Connecting Europe Facility (€3.3 billion); Europe’s research programme Horizon 2020 (€2.7 billion) and so-called “budget margin”, or unused funds, worth €2 billion. The resulting EFSI fund totaling €21 billion is expected to generate €240 billion for long-term investments and €75 billion for SMEs and mid-cap firms over the period 2015-2017.’
But what does this mean for accountability of EU taxpayer’s money? Who exactly will audit the ‘€8 billion guarantee from existing EU funds’ – from the EU budget (€2 billion), the Connecting Europe Facility (€3.3 billion) and the Horizon 2020 programme (€2.7 billion)?
This week the European Court of Auditors has published a 19-page opinion, stressing that ‘the potential liabilities to other sources of public funds will need to be carefully controlled and disclosed.’ ‘EU taxpayers will be in the front line for absorbing losses on public projects funded with private finance under the EFSI. That means that the right arrangements need to be in place from the outset to ensure that projects guaranteed by the EU meet its criteria and can deliver public benefits, the ECA insists.’
‘In the ECA’s view, the Commission’s proposal says too little about how the performance of projects under the EFSI will be selected, monitored and assessed, how risks to public finances will be managed and scrutinised, and who will audit and report on those matters.’
The Court is asking for clarity over financial responsibility. Does this mean a new mandate for the Court or new audit arrangement? Since the Court has a legal mandate to audit the EU budget, it would seem logical that the Court has a mandate in this instance to control how these EU funds are spent, but not necessarily the EIB funds. This may lead to further complexity and fragmentation in audit arrangements. Read the ECA’s full opinion here.
By Paul Stephenson