INNOVATIVE FINANCIAL INSTRUMENTS IN THE EXECUTION OF EUROPEAN UNION BUDGET

Florea Ianc Maria Mirabela and Ciurlau Loredana
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Florea Ianc Maria Mirabela: UNIVERSITY CONSTANTIN BRANCUSI, ROMANIA
Ciurlau Loredana: UNIVERSITY CONSTANTIN BRANCUSI, ROMANIA

Annals - Economy Series, 2017, vol. 2Special, 150-155

Abstract: One of the main reasons invoked to support the use of public funds through financial instruments is that these funds can be used several times: they are therefore "renewable". For example, if a loan granted through such an instrument was repaid after three years, the repaid money could be used later to provide a new loan. Was examined therefore examined whether this renewal effect really materialized. The extent to which funds are renewed in practice depends on the type of financial support but also on the investment period of the instrument concerned. The objective of this article is to highlight that financial instruments have been and are always a way of supporting the attraction and bringing of specific advantages compared to other forms of financing from the European Union. The imbalance between the development environment of Central and Eastern Europe countries, candidate countries and EU member states, is quite large and the regions it is even more pronounced. These differences represent serious obstacles in the smooth functioning of the entire Community. The existence of the word "poverty" in some areas of the EU border disrupts the harmony and balance within the community and prevents the creation of an area of equilibrium across the European continent. Essentially, to reduce these imbalances, EU financial support to candidate countries through pre-accession structural instruments, which have a particularly important role in this process. I believe that the Financial Instruments are an effective way of mobilizing cohesion policy resources to achieve the objectives of the Europe 2020 strategy. Targeting projects with potential economic viability, financial instruments provide support for investment through loans, guarantees, capital investment and other bearing mechanisms of risk, which may be combined with technical assistance, interest rate subsidies or contributions to the guarantee fees in the same operation. In addition to the obvious long-term benefits of fund recycling, financial instruments contribute to mobilizing additional public or private co-investments to address market failures, in line with the priorities of the Europe 2020 strategy and cohesion policy. Their implementation structures involve a wealth of expertise and know-how, which contributes to increasing the efficiency and effectiveness of public resource allocation. Moreover, these tools provide a wide range of incentives to improve performance, including greater financial discipline at the level of supported projects.

Keywords: financial instruments; support; budget; U.E (search for similar items in EconPapers)
Date: 2017
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