European Court of Auditors turns attention to tourism spending in emerging Europe

Analysis from four EU member states – three in emerging Europe – could help the bloc rebuild its tourism industry post-Covid.

The European Court of Auditors (ECA) is analysing whether European Union funding for public investments in tourism was effective and provided suitable support for the sector prior to the pandemic, and what the EU is doing to limit the negative impact of the Covid-19 crisis.

The aim of the EU’s tourism policy is to maintain Europe’s standing as a leading tourist destination, while maximising the industry’s contribution to growth and employment and promoting cooperation between EU countries. In 2019 the European Union was the world’s most visited region: it is estimated that tourism accounts for about 10 per cent of GDP and 12 per cent of all jobs in the EU. In some countries of emerging Europe, notably Croatia and Bulgaria, the percentage is even higher.

Financial support for tourism mostly comes from the European Regional Development Fund (ERDF) and the Cohesion Fund (CF). Together, these two funds allocated four billion euros to the tourism sector in 2014-20. So far, they have co-funded almost 10 000 projects covering a wide range of activities, from promotion to hospitality, infrastructure and development of local attractions.

In 2020, the pandemic has put over seven million tourism jobs in jeopardy and many businesses and satellite activities at risk of bankruptcy. Travel restrictions and health measures are also hindering recovery. The EU is currently supporting tourism by addressing the liquidity crunch in the sector, and by proposing harmonised criteria and procedures to restore safe, unrestricted free movement.

Moreover, while examining how to make the EU’s tourism industry more resilient to economic shocks, the European Commission has identified longer-term challenges related to sustainability, digitalisation and the competitiveness of small and medium-sized tourism companies.

“Investments in tourism are relevant for many EU citizens, both as employees and as consumers”, says Pietro Russo, the ECA member responsible for the audit. “We want to see whether the EU money for the sector has been spent effectively so far. We will also review the measures taken by the Commission to limit the negative impact of the Covid-19 crisis on tourism.”

The auditors will look at the work done by the European Commission to ensure that EU funding provided through ERDF/CF for public investments in tourism is effective, and will focus on emerging Europe: three of the four member states set to be reviewed are in the region: Hungary, Poland, and Romania. The fourth is Spain. Auditors will examine the targeting of funding and a number of public projects from selected 2014-20 operational programmes, and will in addition assess a number of completed public projects funded during the 2007-13 programming period, to see whether they are still economically viable.

The results of the audit – to be published in the third quarter of 2021 – are intended to provide relevant input to the Commission’s strategy update for the EU tourism industry in the post-Covid period.

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