It is not clear whether and how the investment plan and the special instrument for employment can work. The European Court of Auditors issued critic opinions on what are supposed to be the two main pillars of the EU recovery
by Emanuele Bonini
The future of the European Union is at stake, and the EU itself risks to miss the last call for a new social consensus for the idea of Europe. The investment plan and the Youth Guarantees are the last chance for European leaders in order to boost economy and, above all, confidence in the single market. The problem is both pillars are strongly criticised by the European Court of Auditors (ECA), whose role is to check that EU funds are correctly accounted for, are raised and spent in accordance with the relevant rules and regulations and have achieved value for money. Wasting resources and time could be more than a scenario, accordgin to the ECA. The 16th of March the Luxembourg-based institution warned the European Commission against the insufficient clarity of the proposal for a Regulation on the European Fund for Strategic Investments (EFSI), which is supposed to be the financial instrument of the 315 billion euro investment plan. Today the ECA made clear the EU Youth Guarantee could be a failure.
The EU auditors concluded that the European Commission provided timely and appropriate support to the Member States in setting up their Youth Guarantee schemes. At the same time the European Commission was found responsible of «not carrying out an impact assessment specifying expected costs and benefits, despite this being a standard procedure for all major Commission initiatives». As a result, actually «there is no information on the potential global cost of implementing the scheme across the EU and, consequently, a risk that total funding may not be adequate». Together with the lack of a clear definition of a «good quality» job offer, this represents a major risk that the scheme «might be implemented ineffectively and inconsistently across the EU». According to Iliana Ivanova, the ECA Member responsible, the Youth Guarantee's future success «cannot be taken for granted while serious questions remain unanswered». Since Europe has to deal with a sensitive issue, «addressing these risks early is key for the effectiveness of the Youth Guarantee».
The Youth Guarantee scheme was established in June 2013 in response to the worsening situation for young unemployed people, which was exacerbated by the economic and financial crisis. More than one in five Europeans under the age of 24 on the labour market are out of work, while in some Member States the jobless rate is as high as half of all young people on the labour market. From 2014 to 2020, the scheme will be partly financed to a total of €12.7 billion from the EU budget through the European Social Fund and a dedicated Youth Employment Initiative.
Earlier this month the European Court of Auditors issued a critic opinion on the European Fund for Strategic Investments (EFSI). According to the institution the proposal «doesn't provides for what legal form the fund will take nor how it will function». Secondly, there is no a clear definition of EFSI «risk bearing capacity», and «it would be appropriated give it» clearly. Thirdly, estimations as well as evaluations don't exist. The ECA stressed that the criteria for assessing the added value, the mobilisation of the private sector resources, the estimated and actual outputs, outcomes and impacts of EIB financing and investment operations «should be indicated», but they are not. Still, the investment plan is supposed to create public-private partnership as well as EU-National joint-ventures. Thus, financial assistance of the same projects by different funding sources, under several legal frameworks, might create a conflict of applicable rules. Unfortunately «these issues are not addressed in the proposal».
So, it appears the European Union put on the table good intentions rather than good proposals. They have to be corrected and revised, and this is no a strong signal for all those who believe Europe is the problem rather than the solution. The day of his elections as new president of the European Commission, Jean-Claude Juncker, pointed out his Commission will represented the «last chance» to win back citizens’ trust. Juncker's investment plan and the EU Youth Initiative should provide the basis for all that, but the impression is these measures are just a good example of confusion. Perhaps the confusion ruling today in the European Union? Of course something could make Juncker's Commission the "missed chance" for Europe.
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| The ECA headquarters in Luxembourg |
The future of the European Union is at stake, and the EU itself risks to miss the last call for a new social consensus for the idea of Europe. The investment plan and the Youth Guarantees are the last chance for European leaders in order to boost economy and, above all, confidence in the single market. The problem is both pillars are strongly criticised by the European Court of Auditors (ECA), whose role is to check that EU funds are correctly accounted for, are raised and spent in accordance with the relevant rules and regulations and have achieved value for money. Wasting resources and time could be more than a scenario, accordgin to the ECA. The 16th of March the Luxembourg-based institution warned the European Commission against the insufficient clarity of the proposal for a Regulation on the European Fund for Strategic Investments (EFSI), which is supposed to be the financial instrument of the 315 billion euro investment plan. Today the ECA made clear the EU Youth Guarantee could be a failure.
The EU auditors concluded that the European Commission provided timely and appropriate support to the Member States in setting up their Youth Guarantee schemes. At the same time the European Commission was found responsible of «not carrying out an impact assessment specifying expected costs and benefits, despite this being a standard procedure for all major Commission initiatives». As a result, actually «there is no information on the potential global cost of implementing the scheme across the EU and, consequently, a risk that total funding may not be adequate». Together with the lack of a clear definition of a «good quality» job offer, this represents a major risk that the scheme «might be implemented ineffectively and inconsistently across the EU». According to Iliana Ivanova, the ECA Member responsible, the Youth Guarantee's future success «cannot be taken for granted while serious questions remain unanswered». Since Europe has to deal with a sensitive issue, «addressing these risks early is key for the effectiveness of the Youth Guarantee».
The Youth Guarantee scheme was established in June 2013 in response to the worsening situation for young unemployed people, which was exacerbated by the economic and financial crisis. More than one in five Europeans under the age of 24 on the labour market are out of work, while in some Member States the jobless rate is as high as half of all young people on the labour market. From 2014 to 2020, the scheme will be partly financed to a total of €12.7 billion from the EU budget through the European Social Fund and a dedicated Youth Employment Initiative.
Earlier this month the European Court of Auditors issued a critic opinion on the European Fund for Strategic Investments (EFSI). According to the institution the proposal «doesn't provides for what legal form the fund will take nor how it will function». Secondly, there is no a clear definition of EFSI «risk bearing capacity», and «it would be appropriated give it» clearly. Thirdly, estimations as well as evaluations don't exist. The ECA stressed that the criteria for assessing the added value, the mobilisation of the private sector resources, the estimated and actual outputs, outcomes and impacts of EIB financing and investment operations «should be indicated», but they are not. Still, the investment plan is supposed to create public-private partnership as well as EU-National joint-ventures. Thus, financial assistance of the same projects by different funding sources, under several legal frameworks, might create a conflict of applicable rules. Unfortunately «these issues are not addressed in the proposal».
So, it appears the European Union put on the table good intentions rather than good proposals. They have to be corrected and revised, and this is no a strong signal for all those who believe Europe is the problem rather than the solution. The day of his elections as new president of the European Commission, Jean-Claude Juncker, pointed out his Commission will represented the «last chance» to win back citizens’ trust. Juncker's investment plan and the EU Youth Initiative should provide the basis for all that, but the impression is these measures are just a good example of confusion. Perhaps the confusion ruling today in the European Union? Of course something could make Juncker's Commission the "missed chance" for Europe.
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