Reprogramming EU funds and financial instruments

Subject: Reprogramming EU funds and financial instruments

Halfway through the Portugal 2020 programme, the Portuguese authorities are carrying out a reprogramming exercise that involves withdrawing money from the programmes and areas with lower implementation, and allocating it to those which make more intensive use of funds, or which are considered as national priorities. Community frameworks cover a number of years. It is therefore necessary to amend the availability of funds, depending on the needs of the economy. Indeed, this exercise is neither unique nor original in nature. The point is that a great deal of reprogramming is done at the expense of financial instruments with an exceptionally low implementation rate.

Is the Commission in a position to do away with the minimum thresholds to be allocated to the financial instruments, provided for in the Regulations governing the Structural Funds, as assessed by the low implementation rate? What impact will this assessment have on the next multiannual financial framework, where it is planned to strengthen financial instruments?

Answer given by Ms Creţu on behalf of the European Commission

(9 August 2018)

A major component of the Portuguese proposals under the current reprogramming exercise of ‘Portugal 2020’ is the reduction of the amount allocated to financial instruments. In this respect, the Commission reminds that its communication ‘An Investment Plan for Europe’ establishes as an objective that ‘Member States should commit to increase significantly their use of innovative financial instruments in key investment areas (...). This would achieve at least an overall doubling in the use of financial instruments under the European Structural and Investment Funds for the programming period from 2014 to 2020’, which should be considered as a minimum threshold.

Several factors could explain the low implementation rate for financial instruments in Portugal. For instance, the current situation in the financial markets (and access of Small and medium-sized enterprises (SMEs) to the banking system) is now very different from the one of 2013-2014 (period of negotiations of ‘Portugal 2020’). Nonetheless, the Commission considers that financial instruments are the best tool to support viable projects that do not receive sufficient funding from market sources (e.g. to ensure that promising SME can be supported).

In the next multiannual financial framework, financial instruments' role as a key delivery mechanism for the Commission will further increase — for efficiency reasons they will be integrated under one instrument, the InvestEU. The rules for their use will be strengthened, in order to ensure a better and easier implementation and a quicker set-up in all Member States, including Portugal.