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European Structural and Investment Funds assist SMEs

Eugene Eteris, RSU/BC, Riga, 15.12.2017.Print version
Numerous European funds play vital role in, generally, strengthening the EU Single Market, but also helping stats’ economies in supporting job creation and innovation. The number of EU-funded projects in the EU states doubled during last year.

A new report (December 2017) highlighted the achievements the EU five “structural” reached since the beginning of new multi-year budget in 2014. These European structural and investment funds (ESIF) for the period 2014-20,  together with the member states’ co-financing, represent an investment volume of about €638 billion, including €181 billion dedicated to "smart growth", particularly aimed at investments in research and innovation, in digital technologies and in direct support to over two million SMEs in Europe. 


Assisting SMEs

The report is done in the context of major novelties introduced in 2014 to enhance the quality of spending, such as thematic concentration, new preconditions to investments and enhanced focus on results and performance measurement mechanisms.


ESIFs are part of the EU’s general cohesion policy framework and are concentrated on eleven thematic objectives, which have to be kept in mind by SMEs in choosing the sectors of activity.

Four of these key priorities are forming the “structure” of European Regional Development Fund (ERDF): = Research and innovation; = Information and communication technologies; = SMEs competitiveness, and Low carbon economy.


Besides, the member states and regions must allocate a certain share of ERDF funding to at least three of these key priorities: at least 80 % of ERDF funding for more developed regions; at least 60 % of ERDF funding for transition regions; and at least 50 % of ERDF funding for less developed regions.


Other seven “thematic objectives” are also important to orient SMEs applications: = Climate change and risk prevention; = Environment and resource efficiency; = Transport and energy networks; = Employment and labour market; = Social inclusion; = Education and training, and Efficient public administration.  

See more: http://ec.europa.eu/regional_policy/en/policy/themes/

 

Up to October 2017, almost half of the ESI funds’ budget for 2014-20 had been committed to concrete projects. During 2014-16, almost 793,500 SMEs had received support from the funds, creating an estimated 154,000 new jobs. About 7.8 million people have already benefitted from assistance in finding a job or developing skills, while the biodiversity of 23.5 million hectares of agricultural land has been improved. Overall, 2 million EU-funded projects had been selected by the end of 2016, which is 1 million more than the year before; the biodiversity of 11 million hectares of agricultural land was improved and one million EU-funded projects were selected, for a total value of almost €60 billion.

Source: http://europa.eu/rapid/press-release_IP-16-4421_en.htm

 

Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness, said that ESIF played a vital role in strengthening the EU Single Market, helping stats’ economies grow and supporting job creation and innovation. He underlined that “blending Structural Funds with the European Fund for Strategic Investments also allowed financing some riskier but promising projects; that would encourage project promoters to consider this option”. Commissioner for Regional Policy Corina Crețu mentioned that the number of EU-funded projects in the EU states doubled during one year.


In addition, novelties introduced in the 2014-20 plan allowed the EU funding include digital, social inclusion and environmental projects.

 

New prerequisites contributed to a better environment for investments

In March 2017, a first assessment of the new prerequisites to successful investments (so-called ex-ante conditionalities*) showed that these proved to be powerful incentives for reforms across a wide variety of sectors – compliance with energy efficiency or public procurement legislation, investment planning for innovation, transport or digital technologies.


Note: term ex-ante (sometimes written ex ante) is a phrase meaning "before the event". Ex-ante is used most commonly in the commercial world, where results of a particular action, or series of actions, are forecast in advance (or intended). The opposite of ex-ante is ex-post (actual) (or ex post). See in: https://en.wikipedia.org/wiki/Ex-ante

*) Ex ante conditionalities (ExAC) are one of the key elements of the cohesion policy reform for 2014-20. They were introduced for the European Structural and Investment Funds (ESI Funds) to ensure that the necessary conditions for the effective and efficient use of ESI Funds are in place. These conditions are linked to:


1.      policy and strategic frameworks, to ensure that the strategic documents at national and regional level which underpin ESI Funds investments are of high quality and in line with standards commonly agreed by Member States at EU level;

2.      regulatory frameworks, to ensure that implementation of operations co-financed by ESI Funds complies with the EU acquis;

3.      sufficient administrative and institutional capacity of public administration and stakeholders implementing the ESI Funds.


There are 7 general ExAC linked to the horizontal aspects of programme implementation and 29 thematic ExAC, which set out sector-specific conditions for relevant investment areas eligible for support under cohesion policy (so-called investment priorities).

http://ec.europa.eu/regional_policy/en/policy/what/glossary/e/ex-ante-conditionalities

 

For the post-2020 financing period, it is envisaged to strengthen further the link between EU funds and the support to structural reforms in the Member States, as outlined in the Commission's reflection paper on the future of EU finances**) and in the Commission's proposals for the deepening of Europe's Economic and Monetary Union (December 2017).

 See: http://www.baltic-course.com/eng/modern_eu/?doc=135767&ins_print;

**) on the EU finances, see Commission press release “EU budget fit for tomorrow: Commission opens debate on the future of EU finances”, in: 

http://europa.eu/rapid/press-release_IP-17-1795_en.htm

 

= Less red-tape for the beneficiaries of the funds. The report mentions that the EU states have increasingly been using the simplification opportunities of the 2014-20 Cohesion Policy framework, namely: - online procedures in the management of the funds ("e-cohesion"), - simpler application processes for businesses ("single entry points") and simpler ways for beneficiaries to claim reimbursements from the EU.

Simplification is also at the core of the reflection on the architecture of the future Cohesion Policy, with the valuable input of the High Level Group on Simplification set by the Commission.

= Smarter use of available resources led to an increased mobilisation of private finance. In line with the Investment Plan's objective to mobilise more investments, the 2014-20 framework was set up to support a more widespread use of financial instruments. By the end of 2016, €13.3 billion under ESI Funds programmes was committed to such instruments, mostly for SME support, research and innovation and the low-carbon economy.


Over 76,000 businesses are currently supported by the ESI funds through financial instruments. SME support projects selected so far under the European Regional Development Fund (ERDF) represent €11.5 billion of leveraged private financing, out of a target of €42 billion. 

 

More information: = Factsheet - The European Structural and Investment Funds at work; = The 2017 Strategic report on the implementation of the European Structural and Investment Funds; = The Cohesion Open Data Platform.

Reference: http://europa.eu/rapid/press-release_IP-17-5201_en.htm; Latvian version at:

http://europa.eu/rapid/press-release_IP-17-5201_lv.htm, 13.xii.2017  






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