EU support for productive investments in business needs greater focus on durability

There was not enough emphasis on durability of results in the management of EU Regional Development support for productive investments in European businesses between 2000 and 2013, according to a new report from the European Court of Auditors. The auditors concluded that the results of around one in five projects did not last beyond completion and that for another quarter they did so only partially. This was mainly due to a lack of emphasis on durability in the management of the support.

The European Regional Development Fund helps finance investment in capital or assets to create and safeguard sustainable jobs through measures which also encourage local and regional development. Over €75 billion was earmarked for this purpose between 2000 and 2013, and more than €68 billion is planned for 2014 to 2020. The auditors assessed whether this funding had been managed in a way which ensured durability of outputs and results and what were the main factors affecting it. They examined 41 completed productive investment projects co-financed between 2000 and 2013 in Austria, the Czech Republic, Germany, Italy and Poland.

The auditors found that durability requirements under EU law were met in all the regions audited. Moreover, the projects audited had, in general, delivered outputs as planned and, in most cases, the assets purchased and other outputs still existed and were being used. However, in many cases, no long-lasting results were attained.

“A majority of the projects examined had generated the expected direct results, mostly related to job creation, improved access to finance and loans, increased production and productivity. But, in one fifth of them, the results achieved by completion did not last,” said Ladislav Balko, the Member of the European Court of Auditors responsible for the report.