The European Fund for Strategic Investments (EFSI), better known as the "Juncker plan", has played its role as an economic catalyst after the 2007-2008 financial crisis. This is the main conclusion of the latest report by the European Court of Auditors, published on Wednesday. However, the document points the finger at an overvaluation of the investments actually mobilised, as well as shortcomings in terms of monitoring and transparency.

Launched in 2015 by the European Commission and the European Investment Bank (EIB), the EFSI's mission was to make up for a massive investment deficit recorded in EU countries in the wake of the financial crisis and until 2014. As a reminder, total investment spending in the EU had fallen by some 430 billion euros (or around 15%) from its record level in 2007. The aim of the plan was clear: to boost investment by providing EU budget guarantees and EIB funding to attract both public and private investment.

With a guarantee of €26 billion from the EU and €7.5 billion from the EIB, the stated ambition was to multiply this amount by 15 before the end of 2022 and reach the €500 billion mark.

Investments overestimated

While "EFSI has made a substantial contribution to filling the EU's investment gap and has supported numerous and diverse activities, ranging from microfinance to major infrastructure projects", according to the Member of the Court responsible for the audit, Lefteris Christoforou. He also points out that "the targeted volume of investment has not been fully achieved".

The total amount of additional investment declared at the end of 2022 - €503 billion - would in fact, according to the auditors, be overstated by €131 billion. At fault: an imperfect calculation method applied by the European Commission and the EIB, which "included funding that had not been paid to the final beneficiaries, wrongly attributed to EFSI part of the investments mobilised by other EU instruments and failed to deduct cancelled investments".

The audit also highlights a lack of demonstration of the additionality of the investments, i.e. their real added value in the real economy. The initial objective was to finance riskier projects than those usually supported by the EIB. While the banks and investment funds that have benefited from EFSI rate its leverage effect positively, the European Commission "has not verified a posteriori whether EFSI has generated investments that would not have been possible without it".

Another dark spot: the lack of monitoring of the plan's impact on employment and sustainable growth. The initial agreement did not include specific targets on these aspects, and the reports published do not provide any detailed data on the support given to non-EU investments. "Moreover, on the basis of the data available at the end of 2021, the European Commission expected EFSI to be at least budget neutral, but there are currently no estimates of losses or surpluses over its entire lifecycle," adds the European body.

Faced with these findings, the European auditors are calling on Brussels to be more transparent in its reporting and to refine its evaluation methodologies. "EFSI's investments are still a work in progress, but the lessons learned can also help improve the management of other instruments using EU budget guarantees, such as its successor, InvestEU," the report concludes.