site.btaNew EU Financial Instruments Should Not Be Juxtaposed with Grant Aid Schemes, Minister Says

New EU Financial Instruments
Should Not Be Juxtaposed
with Grant Aid Schemes, Minister Says


Sofia, June 6 (BTA) - The Minister for the Bulgarian EU Presidency in 2018, Liliyana Pavlova, believes that the EU's financial instruments after 2020 should not be juxtaposed with grant aid schemes at a time when the bloc will still need to tackle migration, terrorism and other security challenges.

Addressing a conference on the EU's financial instruments, organized by the audit authorities of Bulgaria and the EU, Pavlova said that the bloc's financial instruments have a future, but they should be made more efficient. She called against dropping cohesion policy tools that support basic policies, local governments and municipal infrastructure. "It is important for Bulgaria to defend the need for European grant schemes, which are essential to our country and other EU nations that are less developed, with poorer regions in them, and needing investments in basic infrastructure and social policies that cannot be supported through financial engineering," the minister reasoned.

According to her, the big debate during the Bulgarian Presidency of the EU Council in the first half of 2018 will be about how to achieve a balance between the recommendations of the European Court of Auditors and the lessons learned by Bulgaria's National Audit Office concerning investment and re-investment, and the low share of private capital in total investments in the EU.

Discussing Bulgaria's experience in attracting financial resources, Pavlova said that the country has been cited as a model to be emulated by the other member states and is often asked to share its good practices from the 2007-2013 programming period. Bulgaria has been successful in efficiently using EU money, attracting private capital, and ensuring return on investment, with all its visible effects, she said. The minister noted that the effect of JESSICA funding for urban development in Bulgaria has been tripled by adding other investments, the projects have been implemented successfully, and the money has been re-invested.

Over 700 million leva in initial capital for Bulgaria for the 2007-2013 period was doubled and tripled, Pavlova reported. She said that in the 2014-2020 period, at least 10 per cent of the programmes should be funded with financial engineering instruments. This means that 1.5 billion leva in initial capital should be doubled with the support of businesses. The money should reach small and medium-sized enterprises via urban development and nature conservation facilities.

Pavlova admitted that "the fund of funds" (the Bulgarian Financial Instruments Manager Fund) started out rather slowly and there are many projects waiting to be supported by it, some of them devised under the JESSICA and JEREMIE programmes of the EU. She expressed hope for a prompt start of the fund manager selection procedure. Enormous amounts of unused capital in the banks can be invested in the economy through "the fund of funds," she said.

National Audit Office President Tsvetan Tsvetkov said the EU financial instruments and their more efficient use will help make the economy competitive, thus increasing public revenues and boosting individual incomes. PK/VE

/СН/