Finance Minister: Greater National Share of Co-financing EU Projects Would Burden State Budget

By 18 February 2020

ZAGREB, February 18, 2020 - Finance Minister Zdravko Marić said on Tuesday that increasing the national share of co-financing EU projects would mean additional pressure on the state budget, adding that he was confident that discussions on this topic at the EU level would result in a good compromise.

Ahead of a second meeting of Economic and Financial Affairs Council (ECOFIN) under Croatia's EU presidency in Brussels on Tuesday, Marić commented on plans to increase the national co-financing component for EU projects from 15% to 25%.

European Council President Charles Michel on Friday proposed a new Multiannual Financial Framework (MFF) for the period 2021-2027 worth €1094.8 billion, which is equivalent to 1.074% of the 27 member states' gross national income

Michel also proposes that the member-states should be supposed to co-fund projects by 25%.

"The proposal is here, a lot of countries have their own opinions about that," the Croatian minister said and added that that is an important issue for Croatia as the youngest EU member state that still has not managed to completely absorb EU funds.

Croatia currently has agreements for the absorption of 86% of allocated funds and a little more than 31% has been paid out.

"Naturally, we are taking account of the national budget too and in that light, an increase in the national component of co-financing would create additional pressure the state budget. The proposal put forward is a good basis for debate and dialogue," Marić said.

The minister is confident that the dialogue will be constructive and, in the end, that it will produce a good quality compromise.

Today's ECOFIN meeting of EU finance ministers has been convened to adopt a revised list of non-cooperative jurisdictions for tax purposes in the framework of new conclusions on this matter.

Marić recalled that the first two lists were compiled in 2017 with the aim of meeting standards and best world practice in an effort to improve the exchange of tax data, boost transparency and generally to curb tax evasion.

"In the period behind us more than 50 countries met the demands that we had defined for them, and this is the result of constructive dialogue. They are no longer on those lists. The intention now is to continue that dialogue with those still on the list so that they too meet the criteria," Marić said.

As of 14 November 2019, the EU list is composed of American Samoa, Fiji, Guam, Oman, Samoa, Trinidad and Tobago, US Virgin Islands, and Vanuatu.

During today's meeting, EU finance ministers are expected to expand that list to include Panama, the Cayman Islands, Seychelles and Palau.

More news about EU funds can be found in the Business section.