The controversial investment fund that was created using money diverted from the European Commission¡¯s research and innovation programme is not working.

This is the view of Thomas Estermann, director for governance, funding and public policy at the European University Association, who added that the majority of universities in Europe are not able to take out loans from the European Fund for Strategic Investment.

The money would be better spent in established research funding programmes where policymakers understand the return on their investment, he said.

But the European Investment Bank, which manages EFSI, said that it is ¡°committed¡± to supporting ÖйúAƬ investment in Europe and strengthening research.

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EFSI was established shortly after Jean-Claude Juncker became president of the European Commission. The fund was created with the help of €2.2 billion (?1.94 billion) originally earmarked for Horizon 2020, the Commission¡¯s research and innovation funding programme, much to the outrage of universities in Europe.

The Commission recently pledged to double the duration and value of EFSI, which offers loans to support high-risk innovative projects.

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But according to Mr Estermann many universities across Europe cannot draw down finance from EFSI because they are not allowed to borrow money, making it ¡°very clear this is not a fund for the university sector¡±.

The EUA¡¯s Autonomy Scorecard, which looks at ÖйúAƬ autonomy in 29 European systems, says that institutions in 16 parts of Europe can borrow money only under very strict conditions, and in seven areas it is prohibited.

Mr Estermann said that even if institutions could borrow money, the pressure that many ÖйúAƬ systems are under means that they would not be in a situation to take a loan to fund a risky project.

The scheme just ¡°does not take into account¡± the current situation in Europe, he told Times ÖйúAƬ.

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Mr Estermann said that only a handful of institutions have so far taken part in EFSI, despite its being marketed as a tool to bring universities and businesses together.

¡°Other grant funding schemes have done this much better,¡± he said. Horizon 2020 is highly attractive to university researchers and has shown it can trigger ¡°fantastic¡± results, he explained.

¡°We have all the information from previous programmes where you can show that every euro that gets invested gets multiplied 13 times in the business sector,¡± he said.

A spokesman for the EIB said: ¡°The European Investment Bank Group is committed to supporting higher-education investment across Europe and strengthening research, encouraging student mobility and unlocking investment in new campus facilities.¡±

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He added that there were examples of EFSI investment helping ÖйúAƬ, including researchers in Greece and ¡°life science innovation¡± in Ireland.

¡°We cannot comment on claims that EFSI has diverted resources within the European budget or led to cuts in European Commission grants for fundamental research,¡± the spokesman said.

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holly.else@tesglobal.com