| Author (Corporate) | European Commission: DG Regional Policy |
|---|---|
| Publisher | EU |
| Series Title | Factsheet |
| Series Details | March 2012 |
| Publication Date | February 2012 |
| Content Type | Overview |
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The European Commission adopted legislative proposals for cohesion policy for 2014-2020 in October 2011. This factsheet is one in a series highlighting key elements of the future approach. Financial instruments represent a resource-efficient way of deploying cohesion policy resources in pursuit of the Europe 2020 Strategy objectives. Targeting projects with potential economic viability, financial instruments provide support for investments by way of loans, guarantees, equity and other risk-bearing mechanisms including policy-based guarantees for the European Social Fund (ESF), possibly combined with interest rate subsidies or guarantee fee subsidies within the same operation. Besides the obvious advantages of recycling funds over the long term, financial instruments help to mobilise additional public or private co-investments in order to address market failures in line with Europe 2020 and cohesion policy priorities. Their delivery structures entail additional expertise and know-how, which helps to increase the efficiency and effectiveness of public resource allocation. Moreover, these instruments provide a variety of incentives to better performance, including greater financial discipline at the level of supported projects. Financial instruments have been used for delivering investments for Structural Funds since the 1994-1999 programming period. Their relative importance has increased during the current programming period 2007-2013 and they now represent around 5% of total European RegionalDevelopment Fund (ERDF) resources. In the light of the current economic situation and the increasing scarcity of public resources, financial instruments are expected to play an even stronger role in cohesion policy in the 2014-2020 programming period. |
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| Source Link | http://ec.europa.eu/regional_policy/sources/docgener/informat/2014/financial_instruments_en.pdf |
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| Subject Categories | Politics and International Relations |
| Countries / Regions | Europe |
