Case Study 2: Improvements to the European Union’s co-financing arrangements through greater transparency, visibility and financial control.
Submitting InstitutionUniversity of Leeds
Unit of AssessmentPolitics and International Studies
Summary Impact TypeEconomic
Research Subject Area(s)
Economics: Applied Economics
Commerce, Management, Tourism and Services: Banking, Finance and Investment
Studies In Human Society: Policy and Administration
Summary of the impact
The global financial crisis led the European Union (EU) to diversify its
sources for the EU Budget, including co-financing instruments with
multilateral development banks. Dr Robinson's research addressed key
concerns about financial risk and the lack of transparency created through
such partnerships. His research has been recognised as improving the
understanding of these complex instruments within EU institutions and its
impact may be measured through the implementation of several of its key
recommendations. These include the creation of the `EBRD Representative
for EU affairs' within a participating bank, the acceleration of EU
co-financing strategy, and the unprecedented action of the EU Court of
Auditors including the banks in their auditing process.
The underpinning research for this case study has been undertaken by Nick
Robinson (University of Leeds; Lecturer 2000-2012 Associate
Professor 2013-present) at Leeds from 2004 onwards, and has resulted in a
series of conference papers and articles published in SSCI ranked
journals. This research sets out the case for a new understanding of
European Union (EU) expenditure policy which takes into account the role
of blended instruments and matched funding (where EU money works alongside
money from the private sector, national governments, and loans from
banks), and the important role played by the European Investment Bank
Robinson's research highlighted the inadequacy of existing
accounts of EU expenditure policy, arguing that the focus of both policy
makers and scholars on headline conflicts over the budget has led to
fundamental flaws in the understanding of EU expenditure policy. Ignoring
the importance of the additionality and matched funding principles, the
pressures for increased spending caused by decisions on inter alia
accession and foreign direct investment, and the impact of the EIB had
resulted in a failure to account for over €150bn of additional spending
These issues were first highlighted in the journal Comparative
European Politics (2007) , where Robinson argued that
despite the EIB's long history and its status as the largest multilateral
development bank in the world (lending €61bn in 2011), its role in EU
redistribution had been chronically under-emphasised. This argument for
the importance of the EIB in any analysis of financial lending,
transparency and accountability within the EU was developed more
comprehensively in the Journal of Common Market Studies (2009)
. Specifically, this article identified (i) the need for systematic
future research into the EIB's impact on EU strategic objectives and (ii)
the importance of applying the EU lens of transparency, legitimacy and
visibility to the workings of the EIB, a conclusion which is further
underpinned by Robinson's study of informal power in the EU in the
Journal of Power (2009) .
Key findings of Robinson's research on the EIB highlighted
concerns about financial risk, as well as the inevitable tension between a
multilateral development bank making loans on a commercial basis that
operates under terms of strict confidentiality and the need — and desire —
of the EU to conduct activities in the spirit of transparency and
With the European Parliament undergoing a wide-ranging and systematic
review of the basis for future financing of the budget, in 2010 Robinson
was commissioned by the EU Parliament's Committee on Budgets and funded
with a grant of €56,000 to undertake a further research-led report to
investigate the implications of co-financing for the EU budget, looking at
transparency, visibility and financial control . The report —
co-authored with Bain, an independent researcher — focused on the EIB and
another less well-known multilateral bank, the European Bank for
Reconstruction and Development (EBRD) and was presented to the European
Parliament in May 2011. Building on the insights from [1, 2 and 3], the
findings of the report can be summarised as follows:
Financial control of the EU budget:
- Co-financing presents few, if any, risks in terms of liability to the
- The EIB's external lending poses little threat to the EU budget.
- There are adequate protection mechanisms in place in terms of loss
- Co-financing presents the European Parliament with multiple
challenges in terms of its ability to control programmes which are only
part-funded by the EU budget.
Governance and transparency
- Co-financing makes it more difficult for EU institutions to track how
the budget is spent and to evaluate effectiveness.
- There is a tension between the EU's desire of transparency and the
EIB and EBRD's desire for commercial confidentiality.
- Co-financing presents acute problems in terms of visibility, both at
the level of stakeholder and beneficiary and between EU institutions
References to the research
1. Robinson, N. (2007), `More than a Regulatory State: Bringing
Expenditure (Back) into EU Research', Comparative European Politics,
vol. 5, no. 2, pp. 179-204. Article in leading peer-reviewed SSCI ranked
2. Robinson, N. (2009), `The European Investment Bank: the EU's
Neglected Institution', Journal of Common Market Studies, vol. 47,
no. 3, pp. 651-73. Article in leading peer-reviewed SSCI ranked journal in
fields of both politics and international relations.
3. Robinson, N. (2009), `Informal Power in Regional
Organisations: The Case of the EU', Journal of Power, vol. 2, no.
1, pp. 111-135.
4. Robinson, N. and Bain, R. (2011), `The Implications of EIB and
EBRD co-financing for the EU Budget', Brussels: European Union. 128pp.
ISBN 13 978-92-823-3366-2. Available at:
ISBN: 978-92-823-3366-2. Funding for the production of this research-led
report was provided by Robinson, N. (2010) `The Implications of
EIB and EBRD co-financing for the EU budget'. Tender No:
IP/D/BUDG/IC/2010-153. Grant size: €56K. November 2010 to May 2011.
Details of the impact
The research has had significant policy impact in terms of enhancing the
visibility and policy role of the European Bank for Reconstruction and
Development (EBRD); legitimating the financial viability of co-financing,
and changing the operational practice of the European Court of Auditors.
This impact can be attributed to the fact that Robinson's research was the
first to explore in a systematic way the implications for the EU budget of
working with the European Investment Bank (EIB) and the EBRD for the
delivery of EU policy objectives.
Enhanced policy role of European Bank for Reconstruction and
The impact of Robinson's research can be clearly demonstrated
through specific changes implemented by the EBRD — which lends €10bn per
year to transition economies — to improve its visibility within the EU. As
his research concluded that although many EU actors were familiar with the
EIB, much less was known about the EBRD in terms of its capacity and
capabilities, Robinson advocated the creation of a specific post
to raise the EBRD's profile and liaise between the EU and the EBRD. As a
direct result of his research, EBRD's vice president, Jan Fischer,
announced they would be employing an EBRD Representative for EU Affairs,
who has been in the post since May 2011:
"as requested in the [Robinson] report, we are taking steps to
enhance our visibility in Brussels, including through the appointment of
the new special representative of the EBRD in Brussels, that is Madame
Mandeep Bains who is sitting on my left-hand side here in this meeting"
(speech to the European Parliament's Committee on Budgets, 2nd May 2011).
[A. See also B; F]
Members of the European Parliament Secretariat have corroborated
Robinson's impact in terms of this policy recommendation as follows:
"From the perspective of the European Parliament secretariat, we would
argue that this appointment has significantly increased the visibility of
the EBRD. In policy terms, this has resulted in a significant number of
visits and policy exchanges between members of the EBRD and the European
Parliament, with MEPs now more aware of the possibilities that exist from
working with the EBRD. The implications of this have been extremely
significant, with the EBRD now increasingly seen as a crucial policy
partner for the EU, particularly in its lending operations outside the EU"
Following the success of the appointment of the EBRD Representative for
EU Affairs, the EBRD is now establishing a permanent office in Brussels
[F]. Directorial level staff from DG Development and Co-operation (DEVCO)
described the legacy of the research's recommendations as having brought
`significant added value' [C]:
"The impact of the increase in visibility of the EBRD has been important
in policy terms, serving to enhance the status of the EBRD in lending
operations outside the EU [the EBRD lends approx. €10bn per annum] and
increasing their role in policy discussions" [C].
From the EBRD's point of view, the implications of this have been to
`significantly raise the status of the EBRD ... making us a formal policy
partner' [F]. For example, in the ongoing review of the Existing Blending
Mechanism, the EBRD is now working alongside the EIB in the Technical
Group of the EU Platform for Blending in External Co-operations `which are
working on improving the quality and efficiency of EU blending mechanisms'
[C]. Furthermore, Key EBRD staff have been seconded to DEVCO. This is
Acceleration of co-financing strategy
The impact of Robinson's work has been to vindicate and
legitimise DG Economic and Financial Affairs' (ECFIN's) strategy in terms
of co-financing, through his assessment of the extremely low risks
presented by the instruments. Robinson's research — located
outside the inter-institutional relationship between the European
Parliament and the European Commission — demonstrated to the European
Parliament the limited liability posed by the use of these financial
instruments in an unequivocal fashion. This had significant policy
"Dr Robinson's research has had a considerable impact on the
subject at stake...The confirmation through Dr. Robinson's
research that these financial instruments did not pose any threats to the
EU budget in terms of financial liability had significant policy
implications. Had his study reached the opposite conclusion this would
have been very problematic for us and would have affected the
implementation of the Commission's proposals for financial instruments"
Changes to audit culture
Robinson's research concluded that co-financing posed problems for
the EU in terms of transparency — a key concern of the European
Parliament. Ivailo Kalfin (MEP appointed to follow the study) publicly
identified that the study clearly raised critical issues which would need
further investigation and explicitly states that the study had and would
inform the nature of policy debate. [E]
To this end, Robinson's research `prescribed a different type of
evaluation for co-financing, strongly advocating an emphasis on asking
difficult questions of instruments, rather than the existing pattern of
audit that was focused on EU `success stories.'' [B] The impact of Robinson's
work can be clearly illustrated by the European Parliament's decision to
commission four subsequent studies (total cost approx. €250,000). MEPs
have also responded directly to Robinson's research, authoring
numerous reports on co-financing [B].
Given that a central theme of Robinson's research was
transparency, the report made an explicit recommendation for a more robust
form of audit by the European Court of Auditors, which included a review
of the contribution made by the EIB and EBRD:
"Dr Robinson's research made specific recommendations in relation
to the way in which the European Court of Auditors undertakes to audit
co-financing. As officials from the European Parliament, we have seen a
significant change in ECA audit culture following the publication of Dr.
Robinson's research. The ECA now undertakes a much more wide-ranging form
of audit, auditing all of the funds spent as part of the co-financed
instrument rather than just the contribution from the EU budget, which was
historically the pattern. This change reflects the recommendations made in
Dr. Robinson's research" [B].
Sources to corroborate the impact
Please note that file copies of the corroboratory letters/testimonials
are held for auditing purposes
A. Speech by the EBRD Executive Vice President, Jan Fischer to the
European Parliament's Committee on Budgets, 2nd May 2011 announcing the
creation of the post of EBRD Representative for EU Affairs. Available at:
B. Letter from Senior Official, Policy Department D — Budgetary Affairs,
European Parliament, in relation to the importance of the EBRD's enhanced
profile, how the research has shaped policy within the European Parliament
and the role of the research in terms of changing the audit culture of the
European Court of Auditors. Letter dated 8th May 2013.
C. Letter from Senior Official, European Commission DG Development
Cooperation - EuropeAid, in relation to the importance of the research for
policy in relation to the EBRD and international development. Letter dated
20th June 2013.
D. Letter from Senior Official, Co-ordination with the EIB Group, EBRD
and IFIs, European Commission DG Economic and Financial Affairs, in
relation to the policy impact of the research on co-financing. Letter
dated 13th May 2013.
E. Speech by Ivailo Kalfin (MEP; then Vice Chair Committee on Budgets) to
the European Parliament's Committee on Budgets, 2nd May 2011 stating the
policy significance of the research for the European Parliament. Available
at: Available at: http://www.polis.leeds.ac.uk/impact
F. Letter from Senior Official, Donor Co-Financing Unit, European Bank
for Reconstruction and Development in relation to the importance of the
research in shaping policy in the EBRD. Letter dated 28th June 2013.