Race to absorb EU funds
Finance Ministry hopes to fully take advantage of €23.5 bln 2014-20 Partnership Agreement
The Ministry of Finance is preparing the final revision of the 2014-20 Partnership Agreement with the hope of absorbing the total amount of the €23.5 billion – €19.73 billion from the European Structural and Investment Funds and the rest in matching funds provided by Greece – allocated to 11 “Thematic Objectives” plus technical assistance.
At the moment, the absorption of these funds stands at 83.5%, still among the highest rates achieved by EU members. But the implementation of the partnership agreement has once again shown the chronic weaknesses of the state administration. Several projects included in the original planning, usually the most ambitious and innovative, and also the most needed, have been abandoned and others have taken their place, often at the very last moment, in order to absorb a fund. It is a practice that far from enthuses Brussels, but, in most cases, a compromise has been found. In the next Partnership Agreement, covering the period 2021-27, these changes will become far more difficult, because the emphasis will be on projects that enhance productivity and contribute to the transition to a more digital and eco-friendly economy. Repairing country roads with EU funds is out, as is, mostly, financing for highway networks. Some officials are wondering how this shift is compatible with the EU’s cohesion policy, but that debate will not affect the 2021-27 agreement.
The Organization for Economic Cooperation and Development (OECD), in its assessment of previous partnership periods, has placed the Greece at mid-table regarding its effectiveness in absorbing EU funds, with each euro invested resulting in €1.6 in economic growth. In the most effective countries, this ratio is closer to 3 to 1.
According to Ministry of Finance data, the infrastructure, transport and environment program has the lowest EU fund absorption, at 70%. Ministry officials say that projects in this area are more complex, there are more ministers involved, which results in bureaucratic delays, and the Covid-19 pandemic lockdown also caused delays. The competitiveness and entrepreneurship program, on the other hand, absorbed 92.7% of the available funds due to the fact that the program funded support for businesses during the pandemic.
