A new European Commission Guidance note has been published to clarify how Member States should deal with interest or other gains generated from the investment of European Structural & Investment (ESI) Funds contributions to financial instruments. In the context of ESI Funds, the term 'treasury management' is used in relation to Article 43 of the Common Provisions Regulation which provides for investing the ESI Funds contribution to a financial instrument following the principles of sound financial management, and regulates the use of interest and other gains generated thereto.
This new Guidance note was drafted in relation to questions raised to the Commission by Member States in terms of how to deal with treasury management issues (and notably negative interest rates resulting from the economic/financial crisis).
Many Member States have finalised their ex-ante assessments and are now constituting their financial instruments, thus the Guidance note is pertinent because they need to decide and include treasury management provisions for the funding agreements with fund managers. Content in the Guidance note covers the way resources from the treasury management gains should be treated, and provides information on several specific cases (including the issue of treatment of negative interest rates).
Download the Guidance note here.