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BRUSSELS, April 28 (Xinhua) -- The European Union's financial instruments have so far been unsuccessful in the field of rural development, the European Court of Auditors (ECA) said on Tuesday.
Financial instruments, including 11 guarantee funds and three loan funds established by member states of the European Union (EU) between 2009 and 2014, had so far been unsuccessful in the field of rural development in the 2007-2013 programming period, according to an ECA report published on Tuesday.
This was mainly because they were overcapitalized and did not fulfill their potential in terms of the desired leverage and revolving effects, said the report.
"Financial instruments have a potential to improve the use of scarce public resources by providing funding for more investments with the same budget, but our audit results suggest that it will be a considerable challenge to achieve the desired impact," commented Kersti Kaljulaid, the ECA member responsible for the report.
For the 2014-2020 period, persistent overcapitalization and the risk of a continued dependence on grants were among the possible remaining obstacles to a more extensive use of these instruments, said the ECA.
The ECA recommended that better incentives should be given for member states to set up financial instruments for rural development and stimulate demand from farmers or other beneficiaries.
Moreover, it said that the effectiveness of financial instruments should be improved for the 2014-2020 programming period, for instance by setting appropriate standards and targets for leverage and revolving effects.
