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EU support ‘barely improved’ small companies, auditors say


Commission accepts some of auditors’ recommendations for nationally and regionally managed scheme

EU regional funding for small companies, which is awarded and administered by member states or local governments, has “barely improved” companies’ competitiveness, according to the European Court of Auditors.

Auditors examined the European Regional and Development Fund (ERDF), which had a budget of about €40.3 billion for improving the competitiveness of small and medium-sized enterprises between 2014 and 2020.

“EU funds stimulated SMEs’ willingness to invest, but their impact and effectiveness on competitiveness were rather limited, to the extent that most supported SMEs did simply not derive any real benefit from the EU support,” the auditors reported on 1 June.

The auditors found that several EU member states used the ERDF to support a large number of SMEs, “rather than targeting the key factors limiting SME competitiveness”. They said this “often resulted in small-scale projects that lacked the critical funding mass required to make a real difference”.

Among their recommendations, the auditors said that the European Commission should invite member states to review the design of their ERDF calls.

In a reply, the Commission accepted this recommendation, as well as a recommendation to help member states use “ambitious selection criteria and thresholds in order to achieve the best relationship between the amount of support, the activities undertaken and the achievement of objectives”.

But it did not accept a recommendation to support the selection of projects “through a non-competitive process only when duly justified”. The Commission said it “does not agree that competitive calls are always the appropriate default option for SME support”, and that authorities should remain “free to choose whatever selection procedure they consider most appropriate to maximise the contribution of Union funding in relation to each situation”.