Investments to diversify the rural economy and improve infrastructure in rural areas

Subject: Investments to diversify the rural economy and improve infrastructure in rural areas

In 2018 rural areas accounted for 83 % of the EU’s territory and were home to 31 % of the population. Some rural areas suffer from population loss, unemployment, very low quality basic services and a higher than usual risk of poverty or social exclusion. Since 2007 the EU has spent approximately EUR 10 billion on diversifying the rural economy and approximately EUR 15 billion on improving infrastructure in rural areas, drawing in both cases on rural development programmes. However, according to a special report published on 20 June 2022 by the European Court of Auditors, the success of these measures has varied greatly from one Member State to another and from one sector to another. The Court considers that, ‘weak economic performance and illegitimate private use affect the durability of some diversification projects’.

In light of this:

1. What steps will the Commission take to promote long-lasting benefits in projects concerning the rural economy?

2. Will it promote the use of selection procedures to limit the risk of non-viable projects being chosen?

Answer given by Mr Wojciechowski on behalf of the European Commission (8 August 2022)

1. The Commission welcomes that the report of the European Court of Auditors recognises that many supported projects are operational years after the legally required durability period. However, it regrets that some diversification projects only show weak economic performance and illegitimate private use. In case of suspected irregularity or fraud, it is the responsibility of Member States to instigate recoveries from beneficiaries. In addition, the Commission carries out risk-based audits that could lead to financial corrections. The initial assessment of the project application and the issuing of the grant decision, executed by the Member States’ administrations, are key steps to improve the economic viability of projects. Nevertheless, it will be very difficult to anticipate all external factors such as the COVID 19 pandemic in the initial project assessment. In line with the Long Term Vision for Rural Areas and the Rural Pact (1), the Commission is prepared to support the exchange between Member States and analyse its results to improve the treatment of project applications.

2. Selection procedures are already applied in the implementation of investment measures. The quality of the processing of project applications needs to be improved, in particular the assessment of the business concept. The audit report has shown that the same type of project is successful in one Member State but fails in another Member State. The abovementioned exchange between Member States may help to identify success factors for economically viable projects.

⋅1∙ COM(2021) 345 final | | ( | | )