The European Court of Auditors slammed the European Commission over banking measures in the Mediterranean area in the context of the MEDA Programme

On 18 March, the European Court of Auditors presented a report on “Banking activities covering the Mediterranean basin in the framework of the MEDA programme and earlier protocols.”

The MEDA regulations, which have been replaced by the new European Neighbourhood and Partnership Instrument (ENPI), covered the period 1996-2006 to provide support for the reform of economic and social structures in the partner countries in the context of the Euro-Mediterranean partnership.

In order to determining whether projects were being monitored appropriately by the Commission and the European Investment Bank (EIB), and whether they had achieved their objectives, the Court audited the three types of banking activities financed by the EU budget and implemented by the EIB.

The three banking measures funded under the MEDA Regulations or the previous protocols from the EU budget and implemented by the EIB are: technical assistance through the FEMIP (Facility for Euro-Mediterranean Investment and Partnership) Support Fund, interest rate subsidies for certain EIB loans and risk capital transactions.

At the end of 2007 such activities represented the equivalent of €1 billion.

According to the Court the European Commission did not carry out its own monitoring activities and relied entirely on the work performed by the EIB. The Court found that until 2005 the EIB’s monitoring work was inadequate. The Court also concluded that coordination was lacking between the EIB's activities and the Commission's, particularly at the local level.

On the achievement of project objectives, the Court found that technical assistance projects had generally achieved their goals. However, the Court’s conclusions were not positive for projects benefiting from low-interest loans and risk capital operations since they only partially achieved their objectives. According to the Court the projects receiving low-interest loans were frequently behind schedule.

According to a member of the Court “The Commission’s response does not contradict our conclusions." Moreover, Igors Ludborzs said “We hope this report will help the budget authority, the Commission and the EIB to assess more accurately the strengths and weaknesses of the MEDA programme.”