In May 2015, a report was published by the European Court of Auditors analysing the performance of the Financial Instruments supported by the EAFRD in 2007-2013. While being rather critical towards the legal framework existing at that time, as well as implementation approaches and performance results, the report concludes that the Commission should provide guidance and actively promote the quality of the mandatory ex-ante assessments for Financial Instruments, which are intended to serve as key tools to avoid overcapitalisation. The Court sees Financial Instruments as a preferred option (to grants) especially in cases where support is given to eligible activities with particularly high risk of deadweight/displacement. The Court recommends to Member States to examine how grants and Financial Instruments can be combined to provide the best value for money by optimizing leverage/revolving effects in rural development. The Court expresses an opinion that, in order to stimulate demand, an option for Member States could be to set a certain share of the available EAFRD budget aside for Financial Instruments, and make those instruments more attractive than grants in clearly defined circumstances. The Court has also expressed its recommendations in relation to the existence of Financial Instruments and the transition between programming periods. It also called for analysing the specificities of rural development and how Financial Instruments can better address them.
In its reply, the Commission accepts all recommendations, some of which had been already partially implemented. The Commission will analyse the specificities of rural development and Financial Instruments in a study looking at the first programming of Financial Instruments in rural development in 2014-2020 and the support possibilities offered by the EAFRD regulation for using Financial Instruments, which is now planned to start in 2015 under the fi-compass technical assistance. The Commission is also developing a specific methodological guidance for Member States on ex-ante assessments for Financial Instruments in agriculture under the EAFRD, which is supposed to be delivered by the autumn of 2015 as a specific EAFRD product under fi-compass. In addition, the Commission is actively promoting the ex-ante assessments for Financial Instruments, such as during the latest EAFRD conference on the subject that took place in Dublin, Ireland on 23-24 June. While 2007-2013 transitional rules have already been adopted, the Commission will engage in a dialogue with MS for the 2014-2020 period when the time for closure comes. The Commission has also provided standard models for loan and guarantee funds in rural development. Under the ESIF technical assistance platform “fi-compass”, the Commission is currently investigating the opportunity for another model such as for energy efficiency and renewable energy. With regards to the co-operation with the EIB Group, the Commission signed a specific Memorandum of Understanding with respect to co-operation in agriculture and rural development, under which it is expected of the EIB to offer a specific FI scheme to MS to be implemented under the EAFRD, as was announced during the specific event on this MoU on 23 March 2015 (http://ec.europa.eu/agriculture/events/ec-eib-03-2015_en.htm) and outlined under the MoU's work programme (http://ec.europa.eu/agriculture/events/2015/ec-eib-coop/work-programme-2014-2016_en.pdf).