Thursday

20th Feb 2020

Poorest regions get least out of EU funding

  • The poorer and more mismanaged a region is, the less it's going to profit from EU funds (Photo: snorski)

Countries with a poor public administration are absorbing less EU cohesion funds, meaning some of the poorest regions are getting the least out of the available money, the EU commission has said.

"Results are sometimes patchy and member states need to speed up their efforts to use the EU resources," EU regional policy commissioner Johannes Hahn said on Thursday (18 April) when publishing a report on the performance of EU's 27 countries in using regional funds.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or join as a group

The report singles out Romania - the EU's second-poorest country - as having the lowest absorption rate: only 14 percent of the €20bn allocated to the country until the end of this year were paid out by January 2013.

Bulgaria, the bloc's poorest member, absorbed some 28 percent of its funds by January.

At the other end was Ireland, which got 60 percent of its funds paid out already, followed by Sweden and Portugal. Ireland and Portugal were able to claim more money in the first years of the economic crisis as part of their bailouts.

The EU's €347 billion worth of structural funds - aimed at helping regions, cities and small businesses get better internet connections, clean water plants or better roads - work best in countries that are already well off and not marred by corruption, says a report published last year by Bruegel, a Brussels-based economic think tank.

Confronted with this conclusion, Hahn's spokeswoman Shirin Wheeler on Thursday admitted that having a "decent administrative capacity, that controls the efficient use of funds goes along with having good results."

She said the commission is trying to help by allocating some of the funding to the training of ministry or local administration officials in eastern European countries.

"Clearly, we would agree that there is a relationship between administrative capacity and good and effective use of funds."

Both Bulgaria and Romania over the past years have scored poorly in corruption perception rankings carried out by Transparency International.

Bianca Toma, an expert with the Bucharest-based Centre for European Policy, told this website that her country's poor performance in absorbing funds "is unfortunately linked to low administrative capacity and slow progress in good governance reforms."

She said Romania fell behind the other countries because last year almost all payments were frozen after an audit by the European Commission found conflicts of interest and threw up suspicion of fraud in many of the projects.

"Basically, for almost six months, Romania received no euro from Brussels, thousands of beneficiaries of EU projects were blocked and some of the companies involved in the projects are almost bankrupt," Toma said.

As of April, some of the payments had been resumed, but some, such as the transport funding programme, is still on freeze after €6 billion were embezzled by a local businessman, now in jail, whose company was supposed to build a highway, but instead used part of the money to buy a jet.

The EU commission's report was the first one also to evaluate to what extent the use of these funds created more jobs or helped reach the EU climate goals. But the data is based on self-evaluation, with governments themselves reporting how they achieved the goals.

More scrutiny on the use of these funds was a key dispute point in the EU 2014-2020 budget negotiations. Countries like Germany, Britain and the Nordic states called for better - and lower - spending while countries in the east and south wanted spending to be maintained. The deal still needs the approval of the European Parliament.

MEPs against macro strings on regional spending

The European Parliament is opposing demands by a German-led group of countries to link the payment of EU regional funds to how countries sticks to macroeconomic reforms.

Magazine

A deep dive into the EU regional funds

While the regional funds account for a full third of the EU budget, they are somewhat under-reported. EUobserver's latest edition of the Regions & Cities magazine looks at the EU's cohesion policy.

Magazine

A tourist's guide to EU-funded Amsterdam

When it comes to projects paid for by EU regional funds, most people think of roads in Romania or bridges in Bulgaria. But richer regions also receive money. EUobserver takes you on a tour of selected projects in Amsterdam.

News in Brief

  1. EU unveils white paper on AI and data strategy
  2. Dutch court rules against Russia in €46bn Yukos case
  3. Britain to bar 'Polish plumber-type' migrants
  4. Greece seeks EU help to get back classical statues from UK
  5. HSBC to cut 35,000 jobs worldwide
  6. Regions chief appeals against cutting EU cohesion funds
  7. Verhofstadt criticises UK Brexit negotiator
  8. Turkish court acquits Gezi park activists

Magazine

A deep dive into the EU regional funds

While the regional funds account for a full third of the EU budget, they are somewhat under-reported. EUobserver's latest edition of the Regions & Cities magazine looks at the EU's cohesion policy.

Magazine

The EU Agencies Race

In this edition of EUobserver's Regions & Cities magazine, we take a closer look at some of the EU agencies, exploring how their location matters and the benefits for cities and regions to host them.

Stakeholders' Highlights

  1. Nordic Council of MinistersScottish parliament seeks closer collaboration with the Nordic Council
  2. UNESDAFrom Linear to Circular – check out UNESDA's new blog
  3. Nordic Council of Ministers40 years of experience have proven its point: Sustainable financing actually works
  4. Nordic Council of MinistersNordic and Baltic ministers paving the way for 5G in the region
  5. Nordic Council of MinistersEarmarked paternity leave – an effective way to change norms
  6. Nordic Council of MinistersNordic Climate Action Weeks in December

Latest News

  1. EU leaders face major clash on rule of law budget link
  2. North Macedonia warns EU on 'dirtiest ever' election
  3. Western 'endarkenment' and the voodoo politics of Europe
  4. Warning of agricultural 'digital arms race' in EU
  5. Cayman Islands put on tax-haven blacklist after Brexit
  6. Boris' Brexit bluff? - UK will resist alignment to the end
  7. US still open to Kosovo-Serbia land swap
  8. EU countries enter final phase of budget talks

Join EUobserver

Support quality EU news

Join us