Financial instruments could be an important tool in territorial development as they interfere less with natural market mechanisms than subsidies – suggests Adam STRUZIK (EPP/PL) in his working document on the Financial Instruments in support of territorial development, which was discussed today at the European Committee of the Regions' commission for Territorial Cohesion Policy (COTER) external meeting in Riga, Latvia.
The opinion emphasises that under-regulating the use of financial instruments could be as harmful as over-regulating it. "All necessary legal solutions should be adopted without delay to avoid repeating the mistakes that occurred at the beginning of the last financial perspective – suggests the rapporteur - once Member States have started to implement instruments, regulation at EU level should also be introduced only in exceptional circumstances".
Loans, equity and risk-sharing and guarantee instruments are particularly important in areas where there is an extensive need and natural market mechanisms do not operate effectively. However, the document calls for adoption of the principle that their use should not affect public debt ratios.
"Financial instruments are different from other instruments and therefore subsidy regulations should not be applied to them – explains Struzik - on the one hand unnecessary regulatory constraints should be eliminated but on the other we need to avoid public financial instruments which lead towards excessive risk growth in the financial system and the banking system in particular".
Members of the COTER commission gave further input to the opinion underlining that the assessment of technical support provided by national authorities, the European Commission and the European Investment Bank is paramount and that adequate measures need to be taken in order to make better use of financial instruments so as to solve local and regional issues and ensure faster economic growth. The rapporteur stresses that better cooperation between the European Commission and the European Investment Bank with local and regional authorities could increase the synergy effect.
The opinion will be subject to adoption at the next COTER commission in July and the final adoption by the CoR at its plenary session in October this year.
