MEPs backed a proposal on a risk-sharing facility to spur stalled regional development projects
The Regional Development Committee at the European Parliament approved a proposal in which MEPs agreed that sharing investment risks by public and private investors could help to kick-start stalled regional development projects. Thus, Member States benefiting from EU macroeconomic assistance would be able to ask for part of their allocation of EU regional funding to be transferred to the European Commission for use in a risk-sharing scheme.
MEPs at the Regional Development Committee approved a proposal which states that Member States benefiting from EU macroeconomic assistance would be able to ask for part of their allocation of EU regional funding to be transferred to the European Commission for use in a risk-sharing scheme. Therefore, the Commission would then conclude a risk-sharing partnership with the European Investment Bank (EIB) or another financial institution willing to lend to project sponsors and banks. This should in turn encourage private investors to back projects partly funded with contributions from the European Regional Development Fund (ERDF) and Cohesion Fund (CF).
On the other hand, MEPs highlighted that the EU's financial contribution to the risk-sharing instrument must not exceed 10% of the total 2007-2013 ERDF and CF allocation to the country concerned. The risk shared should be at least 1.5 times the size of the EU contribution. If the proposal is adopted, Member States wishing to benefit from a risk-sharing instrument must make a written request to the Commission by 31 August 2013, specifying the programmes and projects to be covered. The Commission should then decide within four months on the necessary terms and conditions.
One of the most important conditions to apply for this scheme is that, according to the proposals, only countries worst hit by the crisis and benefitting from EU macroeconomic support (currently Ireland, Greece, Portugal and Romania) would be eligible. Greece, for instance, has already declared its interest, specifically to allow its highway toll concessions projects to go on.