BRUSSELS (Reuters) - EU auditors have criticized the European Commission’s plan to boost a flagship investment scheme aimed at stimulating the bloc’s faltering economy, saying there is scant evidence to justify the move, a year after its launch.
The opinion from the European Court of Auditors (ECA), published on Friday, comes a month after it said the European Fund for Strategic Investments (EFSI) may offer no added value as private investment made through the plan might have happened anyway.
Equipped with a 16 billion-euro guarantee from the EU budget and 5 billion in capital from the European Investment Bank, the EFSI aims to attract private investment of at least 315 billion euros ($340 billion) by mid-2018.
The Commission wants to increase its guarantee to 26 billion euros and the EIB’s share to 7.5 billion euros and to extend the program to 2022.
“This is a considerable change compared with the original timeline. It is still too soon for the economic, social and environmental impacts to be measured or for a conclusion to be drawn as to whether EFSI is achieving its objectives,” ECA member Mihails Kozlovs said.
The ECA, which assesses EU spending, questioned the lack of a comprehensive impact assessment and the removal of a provision linking the continuation of EFSI to the results of an independent evaluation.
It said cutting the provisioning rate for the guarantee fund to 35 percent from 50 percent could lead to a potential liability for the EU budget of as much as 26 billion euros. Auditors also said the multiplier effect may be overstated.
Reporting by Foo Yun Chee; editing by Andrew Roche