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Friday, July 7, 2017

Structural Funds: to be improved and simplified

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The new generation of the European Structural and Investment Funds (ESIF) is an important source of funding. But are funds well used and managed effectively?

With around € 27 billion allocated to France for the 2014-2020 period, the ESIF allow the European Union (EU) to invest in the French regions. However, only 4.5 billion euro of the European Regional Development Fund (ERDF) and the Read more

The new generation of the European Structural and Investment Funds (ESIF) is an important source of funding. But are funds well used and managed effectively?

With around € 27 billion allocated to France for the 2014-2020 period, the ESIF allow the European Union (EU) to invest in the French regions. However, only 4.5 billion euro of the European Regional Development Fund (ERDF) and the European Social Fund (ESF) have been used by now. The largest number of investments have been made in the areas of social inclusion, training, energy transition and employment.


As to 31 March 2017, three years after the adoption of the ERDF-ESF regional operational programs, 16 787 projects (31% of the available envelope) have been programmed for the 2014-2020 period. There is still 69% to be programmed for the next 3 years.


The regions which used the most their envelope to plan ERDF and ESF projects are: Basse-Normandie (ERDF 44%, ESF 53%), Picardie (ERDF 35%, ESF 97%), Brittany (ERDF 24%, ESF 43%) and PACA (ERDF 41%, ESF 33%). The regions that have programmed the least are: Ile-de-France (ERDF 16%, ESF 31%) and Burgundy (ERDF: 8%, ESF: 30%) (Source: CGET).


In September 2016, the European Commission presented its proposal for a mid-term review of the Multiannual Financial Framework (MFF - review under Article 2 of Council Regulation No 1311/2013). The Commission concluded that ESI funds are delivering tangible results: around 300 projects were approved in 26 EU Member States in July 2016. This represents support for around 200 000 SMEs and mobilizes 115.7 billion euro of investments.


Nevertheless, EU priorities require a simplified budget to encourage regions to make greater use of ESI funds. The Commission recently created the High Level Group on Simplifying Access to FESI. For the time being, only a few concrete recommendations have been made. The Group proposes the creation of an e-governance system to encourage the Commission to set up a single platform for Member States to reduce the number of procedures. It also advises to clarify state aid rules and simplify access to subsidies for SMEs. The high-level group is expected to deliver its final report in 2018, which will serve as a basis for the development of post-2020 cohesion policy.

                                                                               
Simplification has been at the heart of the Commission's proposals for the programs covered by the 2014-2020 MFF. Efforts should therefore continue as several difficulties persist. The beneficiaries are faced with cumbersome procedures and financial problems caused by the long period of reimbursement of the expenses incurred. So would the generalization of a system of advances, as practiced on intra-community programs, be a solution?


Will this mid-term review prompt the Commission to introduce simplification measures for the current period or only for the post-2020 period?


In order to consume all the funds allocated for the period 2014-2020, would a strengthened implication and communication from French Regions to inform local actors also lead to better programming of funds?



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