Billions of euros of EU funds to promote growth in Europe’s rundown regions are lying idle because cash-strapped national governments cannot find the necessary matching funds to release the money.
An investigation into the EU’s Structural Funds by the Bureau of Investigative Journalism, in collaboration with the FT, highlights several concerns about the way the programme is administered.
Internal documents from the European Commission, obtained by the investigation, show that the EU has paid out only 10 per cent of the €347bn allocated by its flagship fund, even though it is more than halfway through its seven-year spending cycle.
Other EU figures show that €8.4bn has been paid out in error under the Structural Funds programme over the previous two seven-year funding periods, of which 75 per cent has so far been recovered. Official investigators also suspect tens of millions of euros have been siphoned off by organised crime, including the Italian Mafia.
The Commission said there were several reasons for the low take-up of funds, including the time it takes for the projects to be selected and the money to be spent and then reimbursed by Brussels.
Laszlo Andor, EU social affairs commissioner, said: “This is not a bank that needs to produce a balance at any given moment.”
The Commission has already launched a public consultation on how to reform its cohesion policy, backed by its Structural Funds. It wants to target fewer priority areas and to introduce stricter performance targets. Some member states are also pressing the Commission to shift all future funding to poorer countries.
EU officials fiercely defend cohesion spending as a means of realising one of the organisation’s core aims: to stimulate economic growth in Europe’s poorer regions and to narrow income gaps.