Success of one fifth of EU investments in business ‘not long-lasting’

16 Apr 18

European Union investments in business have not led to durable and long-lasting success in around a fifth of cases, auditors have found.

A report from the European Court of Auditors looked at the success of European Regional Development Fund investments in capital and assets.

More than €75bn was earmarked for this purpose between 2000 and 2013, and a further €68bn is set to be spent this way between 2014 and 2020.

Auditors assessed 41 projects in Austria, the Czech Republic, Germany, Italy and Poland, which were co-financed by the fund between 2000 and 2013.

They found that, while the projects audited had delivered the planned outputs, in many cases there was no long-lasting success.

Ladislav Balko, ECA member responsible for the 12 April report, said: “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.”

In some cases, the lack of durability was due to factors beyond the control of authorities and beneficiaries, such as the 2007/08 economic crisis, the auditors said.

However, the ECA said management weaknesses such as insufficient focus on project durability and poor project selection were more common explanations for the lack of sustainable success.

A change to regulations had improved durability for the 2014-20 period but the auditors said more could be done.

The report called on member states to identify and manage risks better, improve selection procedures and criteria and establish clear corrective measures and apply them consistently when projects look likely to miss targets.

The European Commission also had a role to play in ensuring member states identify and manage the durability aspects of projects chosen for funding, the auditors said.

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