Proposal for a Regulation of the European Parliament and of the Council amending Council Regulation (EC) No 1083/2006 as regards certain provisions relating to risk sharing instruments for Member States experiencing or threatened with serious difficulties with respect to their financial stability

The sustained financial and economic crisis is increasing the pressure on national financial resources as Member States are reducing their budgets. In this context ensuring a smooth implementation of cohesion policy programmes is of particular importance as a tool for injecting funds into the economy.

Nonetheless, the implementation of the programmes requires significant amounts of funding from public and private stakeholders, who, due to the the liquidity problems faced by financial institutions are not able to provide such funding. This is particularly the case for those Member States which have been most affected by the crisis and have received financial assistance under a programme from the European Financial Stabilisation Mechanism (EFSM) for the EURO countries or from the Balance of Payments (BoP) mechanism for non EURO countries.

To date, six countries - including Greece which has received financial assistance outside the EFSM - have requested financial assistance under these mechanisms and have agreed with the Commission a macro-economic adjustment programme. These countries are Hungary, Romania, Latvia, Portugal, Greece and Ireland. Hungary, which entered the BoP mechanism in 2008, has already exited in 2010.

In order to ensure that these Member States (or any other Member State which may be concerned by such assistance programmes in the future) continue the implementation of the Structural Funds and Cohesion Fund programmes on the ground and disburse funds to projects, the current proposal contains provisions that would allow the creation of a risk sharing instrument.

In order to implement this instrument the transfer of part of the financial allocations available to these Member States back to the Commission would be allowed. The objective would be to provide capital contributions to cover expected and unexpected losses of loans and guarantees to be extended under a risk-sharing partnership with the European Investment Bank and/or other financial institutions with a public policy mission who are willing to continue to lend to project sponsors and banks with a view to provide private match funding for projects implemented with Structural Funds and Cohesion Fund contributions.

The overall allocation under cohesion policy for the period 2007-2013 would therefore not be modified. This will provide additional liquidity to implement infrastructure and productive investments in the Member States at a critical juncture and will facilitate the continuation of the implementation of the programmes on the ground.

Where the financial allocations made available for the risk sharing instrument has not been used to cover losses, it will stay at the disposal of the Member State to continue the risk sharing facility or as part of the enveloppe available for operational programmes. Finally, the financial allocations to the risk-sharing instrument would be strictly capped and not create contingent liabiities for the Union or the Member State concerned.

EUR-Lex: COM(2011)655: Follow the progress of this document through the decision-making procedure http://eur-lex.europa.eu/legal-content/EN/HIS/?uri=COM:2011:655:FIN

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