Financial instruments are perceived as complimentary to subsidies in fostering territorial development. European regions and cities call for the setting up of an institutional cooperation framework with the European Commission and the European Investments Bank in order to maximize the benefits of implementing instruments financed from the European Structural and Investments Fund, through Adam Struzik's (EPP/PL) opinion entitled "Financial Instruments in support of territorial development". The document was adopted by the European Committee of the Regions Commission for Territorial Cohesion Policy and EU Budget (COTER) today.
The opinion underlines that once the EU Member States have started to implement instruments financed using the European Structural and Investments Fund (ESIF), regulation at EU level should be introduced only in exceptional circumstances:
"Under-regulating the use of financial instruments is as harmful as over-regulating it. It is important, particularly at the start of the 2014-2020 financial perspective, to adopt without delay all necessary legal solutions to avoid repeating the mistakes that occurred at the beginning of the 2007-2013 financial perspective – stresses Adam Struzik – we need to ensure that the authorities and the institutions of the European Union, particularly the European Commission, consult with representatives of the regions on any regulatory changes having an impact on the programming, implementation and clearance of financial instruments of importance for territorial development".
Struzik's opinion calls on the European Commission to urgently provide an institutional framework for a permanent dialogue between representatives of regions, the EC and the EIB on the interpretation of the binding legal provisions, the effects of implementation, or emerging problems, so as to maximise the benefits of implementing instruments financed from the EFSI.
The document also notices the role that financial instruments can play as positive tools of regional policy. It further calls on the European Commission and the European Investment Bank to ensure appropriate participation of the regions in the use of financial instruments under the Investment Plan for Europe:
"However, financial instruments should not be allowed to become excessively commercialised in order to attract private capital. The European Commission must ensure that the level of leverage in instruments financed using European funds is optimal and consistent with the social objective set, not the maximum level" – notes the rapporteur.
European regions and cities believe that sound cooperation by the EC, EIB and local and regional authorities is a key element in ensuring the successful use of financial instruments in territorial development and across the Cohesion Policy. However taking into account the experience of the crisis, it must be borne in mind that public financial instruments must not lead to the excessive growth of risk in the financial system and in the banking system in particular:
"Implementation of financial instruments using the ESIF should not focus on the clearance of the support granted, but on achieving long-term positive effects for the European economy" concludes Struzik".
The opinion will be subject to final adoption at the CoR's plenary session in October this year.
