Tuesday, 12 March 2019

Istria Leader in EU Funds Absorption

Istria is one of the most developed Croatian counties with a GDP of 24.9% above the Croatian average and an unemployment rate lower than the EU average. The rate of immigration to Istria is higher than the rate of emigration, which is why it is often called "little Ireland", reports Lokalni.hr on March 12, 2019.

The economic and social development of Istria is a consequence of the successful absorption of EU funds and, in general, excellent cooperation with different European regions and European institutions. “Users from Istria have so far participated in more than 60 different programmes and through nearly one thousand European projects they have secured 3.2 billion kuna in grants,” said Istrian County prefect Valter Flego.

According to available data, money from EU funds has been invested mostly in agriculture and fisheries, entrepreneurship, science and research, energy and environment, transport, culture and education, employment and promotion of gender equality. In addition to the European projects, Istria is also very successful in cross-border programmes through which beneficiaries from the county have absorbed as much as 215 million kuna.

“Istrian County has some form of formalised cooperation with as many as five Italian regions, and through the partnership with them we have implemented a number of projects in the fields of culture, tourism, environmental protection and transport,” explains Flego.

While Croatia, with an average absorption rate of 29 per cent of EU funds, is at the bottom of the EU rankings, Istrian County is exceptionally successful in this regard. Flego explains that this should be attributed to the fact that Istria has systematically worked on strengthening project implementation capacities and has invested heavily in education on EU policies and funds. Over the last few years, about 600 people from Istria have been trained. Also, the county is continually informing all potential beneficiaries about the possibilities of project financing.

“To ensure greater EU funds utilisation, counties must be involved in planning future operational plans, which has not been the case so far. Exclusion of counties has led to the fact that it is impossible to build new homes for seniors or necessary maritime port infrastructure with money from EU funds. I hope that we will be able to plan such projects in the next budgetary period from 2021 to 2028,” said Prefect Flego, adding that Croatia had available almost nine billion euros in that period.

“That money is waiting for someone to take it. I hope the state will be smart enough not to hinder us and allow us to withdraw that money. Besides, Croatia must decentralise the management of EU funds. Such a model provides a degree of autonomy and influence in the process of defining strategic priorities and project selection. Who knows better what is needed than the people who live and work in the region in question?” asked prefect Flego.

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

Translated from Lokalni.hr (reported by Snježana Bičak).

Thursday, 7 March 2019

Croatian President Calls on EU Not to Cut Cohesion Funds

ZAGREB, March 7, 2019 - During talks with European Council President Donald Tusk and European Commission President Jean-Claude Juncker on Thursday in Brussels, Croatian President Kolinda Grabar-Kitarović suggested that cohesion funds shouldn't be decreased in the next European budget.

"There was talk about the situation in Croatia but also about the multi-annual financial arrangement considering the current negotiations about that. Croatia has its interest concerning the efforts to retain funding for classic policies such as the Joint Agriculture Policy and Cohesion Policy," Grabar- Kitarović told reporters after meeting with the heads of European institutions.

The European Commission proposes the 10-percent reduction of funds in the next EU budget for the cohesion policy that is intended to decrease the difference in development of regions in the EU.

Grabar- Kitarović underscored that that it would be detrimental to Croatia if the national share in projects that are co-funded from EU funds were to be increased.

That would be detrimental, particularly in some areas that even with the current prescribed percentage (15%) cannot co-finance projects, the president said.

In its draft multi-annual financial framework for the period 2021 to 2027, the European Commission has proposed that the national share in co-financing projects be increased from the current 15% to 30%. Most member states in central and eastern Europe have voiced their objections to that proposal.

The Croatian head of state also discussed the Three Seas Initiative with the EU officials. "Both presidents offer full support, particularly for projects because the initiative is directed to cohesion of European space and promoting European ideas and values," she said.

During the talks with Juncker, Grabar- Kitarović discussed the coming EU-China summit scheduled for April 9 considering the fact of China's growing presence in Europe.

Asked whether there was any mention of the arbitration for the Slovenia-Croatia border row, the president said that they touched on that topic and that she expressed her dissatisfaction to Juncker about some statements made by some members of the Commission in that regard.

"I told President Juncker that some opinions and some statements coming from the Commission and some of its members are not directed at achieving a bilateral agreement between Slovenia and Croatia," Grabar - Kitarović said calling for the refraining from statements like that. "I am not referring to him (Juncker) personally but to some others," she said.

There was also talk on enlargement and the situation in Bosnia and Herzegovina. "Croatia advocates the policy of enlargement, based on absolute fulfilment of all the criteria," she said.

As far as Bosnia and Herzegovina is concerned, she said that she has more understanding for endeavours to change the electoral law.

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

Thursday, 7 March 2019

More EU Funds for Poorer Regions

ZAGREB, March 7, 2019 - The next seven-year financial period in the European Union will be a continuation of greater co-financing for poorer regions whose GDP accounts for less than 75% of the EU average, and that includes Croatia, Vittoria Alliata di Villafranca, Director DG Regional and Urban Policy, said at a two-day international conference on EU funds which started in the northern Croatian town of Trakošćan on Wednesday.

The conference, focusing on the new financial period 2021-2027 and the experience of strategic development and implementation of EU projects of other EU member states, was organised by the PJR consulting company and drew more than 250 participants.

Alliata di Villafranca, who is one of the authors of new rules for the 2021-2027 financial period, held an introductory lecture on preparing for the cohesion policy in the new period.

She underscored that the cohesion policy had created more than 1.6 million jobs in the current financial period and that some of the challenges in the coming period included Brexit, security, controlling borders and climate change.

She announced that co-financing would continue for poorer regions that have a GDP that is less than 75% of the EU average, which also includes Croatia.

The European Union and European Commission wish to simplify the system so that states can work faster, however, the administration and legal framework of a member state often pose a problem. Croatia has to work to simplify the business environment which is good at the regional level, however, it is rather slow at the national level, she said.

Assistant Regional Development and EU Funds Minister Ana Odak spoke about the National Development Strategy for the period until 2030, underscoring that the main objective was to make order in the system of strategic planning.

The ministry's state-secretary, Spomenka Đurić, presented data on the absorption of EU funds stating that Croatia had signed contracts for 65% of the total allocation yet only 15% had been granted.

"The ministry is aware of the huge discrepancy however this and next year, it plans to make a large number of payments to beneficiaries. In the first two months of 2019, intensive payments have begun. In the past two years we focused mostly on contracting and now the implementation of most of the projects is starting," Djuric said.

The conference also heard about the experiences of Romania and Latvia regarding EU fund investments and the implementation of strategic projects.

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

Tuesday, 5 March 2019

“No Need to Worry about Funding for EU Projects for Croatia”

ZAGREB, March 5, 2019 - European Commissioner for Regional Policy Corina Cretu said in Dubrovnik on Tuesday that there is no danger for future EU projects in Croatia that would be financed from the Cohesion Fund following a reduction of budget funds, and Croatia's minister responsible for European funds, Grabrijela Žalac, said that Croatia had some objections to the European Commission's proposed budget for the period 2021-2027.

A ministerial conference of the group of "Friends of Cohesion - Cohesion Policy and Structural Reforms Post 2020", organised by the Ministry of Regional Development and European Union Funds, was held in Dubrovnik on Tuesday, with Žalac and Cretu attending.

Cretu said that the EC has proposed a reduction of 10% in funds for cohesion policy and that a total of 373 billion euro has been secured, which is more than ever.

There is no danger for future projects in Croatia due to the reduced funds. We will begin negotiations in March with all member states on their operational programmes. The Croatian government and regions have to prepare a strategy based on the funding they have available and the rate of co-financing, Cretu said.

Žalac said that Croatia, as the newest EU member state, is a recipient of European funds and that it has some objections to the European Commission's proposed multi-annual budget 2021-2027, which will increase the rate of co-financing from 15% to 30% while reducing the rate of pre-financing, and the deadline to implement projects will be reduced from three to two years.

"We want to discuss that in detail with EC representatives, particularly with the Directorate-General for Budget. Everyone should not be treated equally considering that Croatia only started to use the benefits of the cohesion policy two years ago and only now are the effects of that visible in the field. By the end of the year we need to adopt all the necessary regulations for the new financial perspective, and our EU presidency will be marked by the adoption of the European budget, Žalac said.

Last May the EC presented its proposal for the multi-annual budget for the period 2021-2027, which is larger than the present budget but foresees lower amounts for cohesion policy and agriculture. According to the proposal, Croatia would receive about 6% less than in the current multi-annual budget.

The purpose of the Dubrovnik conference, which brought together ministers and state-secretaries for regional development and EU funds of EU member states, was to exchange opinions on connections between cohesion policies and structural reforms in the period after 2020 and to find answers to key issues related to cohesion policy and the proposed multi-annual financial framework for the period following 2020.

The "Friends of Cohesion" group consists of 16 EU member states opposed to cut backs in cohesion funding in the new EU multi-annual budget, which is supposed to reduce the gap between wealthier and poorer EU countries. The group is made up of Croatia, Czech Republic, Estonia, Hungary, Malta, Poland, Slovenia, Slovakia, Bulgaria, Cyprus, Latvia, Lithuania, Romania, Italy, Portugal and Greece.

Cretu said that the conference discussed the future of the cohesion policy, what is important for Croatia, which has EUR 9.9 billion at its disposal for the 2021-2027 period, but also for Europe overall.

I recalled three key points in the EC's proposal through a simple and pragmatic approach. Above all, a more modern policy that focuses on the transition toward a 'smart economy' and a low-carbon economy and so the cohesion policy has to pass through all European regions preparing for that transition. We need an effective policy that requires public policy that will stimulate investment and innovation and an efficient administration, Cretu said.

She added that the cohesion policy should be simplified particularly with regard to the implementation of projects, and in that regard the European Commission proposes 80 various measures.

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

Friday, 15 February 2019

Zagreb Takes Lead among Croatian Regions in Absorbing EU Funds

ZAGREB, February 15, 2019 - With 8.5 billion kuna (1.15 billion euro) worth of EU-funded projects agreed in 2017 and 2018, the City of Zagreb takes the lead among Croatian regions in absorbing EU funds, followed by Dubrovnik-Neretva County with 4.4 billion kuna (595 million euro), the Ministry of Regional Development and EU Funds said on Friday.

The ministry said in a statement that a considerable increase in the number of EU-funded projects had been recorded in the term of the present government, adding that the total amount of the contracts agreed had increased from 985 million euro at the end of October 2016 to 6.75 billion euro, which is an increase of 585 percent.

Among these projects are the construction of the Pelješac Bridge, the upgrade of the Vinkovci-Vukovar railway line, the reconstruction and construction of the Dugo Selo-Križevci railway line, the modernisation of the tram infrastructure in Osijek, equipment for day hospitals and surgery wards, and projects relating to the Croatian Scientific and Educational Cloud, the Centre for Advanced Laser Techniques, the Institute of Physics and the Vučedol Archaeological Park.

More news on the EU funding in Croatia and other EU-related issues can be found in the Business section.

Tuesday, 12 February 2019

Twenty EU Environment Projects Presented

ZAGREB, February 12, 2019 - Twenty projects relating to environment and nature protection and climate action were presented at a conference in Zagreb on Tuesday. The environment projects are worth over 14 million euro, of which nine million is provided by the European Union.

The LIFE conference is organised by the Environment and Energy Ministry as a national contact point for the EU's LIFE Programme, State Secretary Mario Šiljeg said.

The purpose of the conference is to show that LIFE-funded projects are among the best ways to improve the implementation of environment and climate policies and a mechanism to achieve European and national goals.

The EU launched the LIFE Programme in 1992 to address challenges to the environment, nature and climate, and Croatia recognised its value even before it joined the EU. "This is not surprising given that the programme encourages an innovative approach and the application of new measures and methods," Šiljeg said.

As part of the LIFE Programme in Croatia, efforts are being made to protect the Drava river and its backwaters, improve biodiversity in wetlands, protect large wild animals such as lynx and bear, and take action against bird poaching.

"I am confident that all projects that are being implemented under the LIFE Programme will contribute to economic growth and sustainable development," Šiljeg said. "I am sure that already in April we will see progress in the participation of Croatian business entities in LIFE projects."

This year's tender for the LIFE Programme is expected to be opened in April and all those interested were invited to contact the Environment and Energy Ministry.

More news on the environmental protection in Croatia can be found in the Lifestyle section.

Friday, 1 February 2019

Construction of Pelješac Bridge Proceeding Faster Than Planned

ZAGREB, February 1, 2019 – Prime Minister Andrej Plenković on Thursday visited the construction site of the Pelješac bridge in southern Croatia, saying works were proceeding very well, faster than envisaged, and that the bridge should be completed in three years' time.

"The final deadline for the completion of all access roads and the Pelješac bridge is 31 January 2022," he told reporters, adding that pylons were currently being installed which would later hold the bridge columns.

Plenković said everything indicated the works would be completed in time. "In that way, we will finally achieve the strategic goal of connecting Croatia's south with all of Croatia."

The fact that the European Union is co-financing the bridge with 357 million euro "shows all of Croatia how important the cohesion policy is and how important the aid from the European budget is for this key infrastructure project," he said.

"This project was prepared seriously and will be a permanent symbol of the first seven years of our European Union membership," he said, adding that the bridge would show "how much we have all profited from it."

Plenković said the bridge was "of enormous significance for Croatia because we are making a new, special dimension of our cooperation with China." He thanked the China Road and Bridge company, which is building the bridge, Croatian Roads and the Ministry of the Sea, Transport and Infrastructure for their engagement in the construction.

Maritime Affairs, Transport and Infrastructure Minister Oleg Butković said that what they saw today was "indeed impressive and satisfactory." He added the 15th pylon was installed today. "It was envisaged that 1.35 pylons per day would be installed, yet we have two pylons per day being installed on average."

Butković said procedures for the second, third and fourth stages of construction were under way and that Croatian Roads would soon select the contractor for the second stage, which includes building 12 km of access roads. "Bids for the third and fourth stages will be submitted on February 14," he said, adding that the construction of Pelješac bridge was "a positive and successful story."

More news on the Pelješac bridge construction can be found in the Business section.

Thursday, 24 January 2019

Government Launches Changes to NUTS Statistical Subdivisions

ZAGREB, January 24, 2019 - The government on Wednesday launched changes to the Nomenclature of Territorial Units for Statistics (NUTS 2), dividing Croatia into four statistical non-administrative units which will improve regional aid allocation and ensure better terms for the absorption of European Union cohesion funds.

Another goal is forming as homogeneous regions as possible in terms of development, and the new division will also redress the injustice done in 2012, when less developed parts of the country, notably Slavonia and Baranja, were obstructed in attracting EU funds, said Regional Development and EU Funds Minister Gabrijela Žalac.

The government's decision, under which the country is divided into Pannonian Croatia, North Croatia, Adriatic Croatia and the City of Zagreb, will go into force on 1 January 2023, at the same time as new European regulations, she said, adding that the proposal would be submitted to Eurostat by February 1 this year and that the EU's new financial perspective would be based on the new regulations.

Žalac said that under the current division, the continental region comprises 14 counties and the City of Zagreb and the Adriatic region seven coastal counties.

The counties of the former Pannonian Croatia – five in Slavonia and Bjelovar-Bilogora, Sisak-Moslavina and Karloavac counties – will again make up one statistical region, she said, recalling that these counties were at 40% of the EU development average.

Five counties in north Croatia – Krapina-Zagorje, Varaždin, Međimurje, Zagreb and Koprivnica-Krizevci – make up the third statistical region, while Adriatic Croatia is made up of the seven coastal counties.

The City of Zagreb becomes a separate unit as it has a population of over 800,000 and is the only unit in Croatia whose development is more than 100% above the EU average, and also to prevent its development degree from spilling over to other counties and diminishing their businesses' ability to absorb higher percentages of regional aid.

Prime Minister Andrej Plenković said Bjelovar-Bilogora County would be part of Pannonian Croatia, although the county said they wanted to be part of North Croatia. He said such a decision was in the interest of all those wishing to invest and create jobs in the county.

He noted that Bjelovar-Bilogora was the eighth most undeveloped county and that it would get higher economic aid. He said the county could intensively cooperate on joint European projects with the northern counties.

More news on the Croatia and EU funds can be found in the Business section.

Tuesday, 15 January 2019

New Statistics Subdivision to Improve EU Funds Usage?

ZAGREB, January 15, 2019 - Prime Minister Andrej Plenković held a meeting on Tuesday with representatives of the associations of Croatian counties, municipalities and cities for the talks on a new subdivision of Croatia for statistical purposes as envisaged by the Nomenclature of Territorial Units for Statistics (NUTS) developed and regulated by the European Union for the purposes of EU funds usage.

Plenković said that his cabinet was open to suggestions and proposals, noting that the existing statistical subdivision of Croatia into two NUTS statistical regions was made in 2012. Many debates have been held since then about whether this division is good or bad.

"We are currently considering new proposals for the statistical subdivision. At the initiative of the Regional Development and the EU Funds Ministry, we have engaged the Institute for Development and International Relations to prepare an expert assessment that can help us in the new circumstances and based on the acquired experience from the past five-six years to make a decision that is supposed to connect the subdivision of regions to the highest extent with the future 20121-2027 financial perspective," said Plenković.

The purpose of today's meeting is to consult county heads who have an insight into the state of affairs and are well acquainted with this topic, he added.

In attendance were a few cabinet ministers and Regional Development and EU Funds Minister Gabrijela Žalac made a presentation on this topic concerning NUTS regions.

More news on the EU funds and Croatia can be found in the Business section.

Monday, 14 January 2019

Croatia’s EU Funds Usage Improves

ZAGREB, January 14, 2019 - Regional Development and EU Funds Minister Gabrijela Žalac said on Monday that 2.9 billion euro was made available in 2018 through 152 tenders for the allocation of European Union funds, whereby 79% of the total 10.7 billion euro has been made available.

Speaking at a press conference, Žalac said the total amount of the tenders advertised had risen to 8.5 billion kuna. She added that in the 2014-18 period tenders were advertised for 5.6 billion euro, 52% of the available allocation.

Žalac said project contracting had risen in this government's term, from 975 million euro at the end of 2016, the beginning of the term, to 6.6 billion euro. She added that 62% of the EU funds allocated had been contracted, a surge of 572%.

At the end of 2018, 1.98 billion euro in EU funds had been disbursed, of which 1.05 billion last year alone. At the end of October 2016, 291 million euro had been paid out, accounting for a surge of 578% until the end of last year.

Žalac said a statement of expenditure worth 1.03 billion euro was forwarded on the last day of 2018 and that 1.83 billion euro had been verified to date. In line with that statement, Žalac expects the European Commission to appropriate the approved funds to the Croatian budget by the end of this month.

As for the N+3 rule, under which a member state has an additional three years to absorb funds after the year in a project was approved, Žalac said all the funds allocated to Croatia for 2015 had been submitted to the European Commission.

She said the contracting rate had increased more than five times and that the goal was to reach at least 85% of the 10.7 billion euro by the end of this year.

Žalac underlined the Slavonia, Baranja and Srijem Project, as part of which grants worth 8.7 billion kuna were contracted last year, 47% of the total 18.75 billion kuna.

She announced changes to statistical regions, saying the aim was to redress the injustice made in 2012 when the City of Zagreb was added to the Continental Croatia region, whereby GDP in undeveloped areas jumped from 39% to 64% overnight.

The minister said the Competitiveness and Cohesion Operational Programme would be amended this year, with a view to transferring funds to finished projects. She said "major underperformance" was recorded in the programme's information and communication technologies and environment and resource efficiency thematic priorities, and that "we are surprisingly poor" in climate change and risk prevention.

Žalac said those funds did not go to waste but would be redirected to the economy and enterprises, adding that Croatia was most successful in the SMEs competitiveness priority.

Asked which beneficiaries had the biggest contracting problems, she said big infrastructure projects in water agglomeration. She added that poor project documentation also affected implementation.

The minister said the EU's draft multiannual framework for 2012-27 envisaged 9.9 billion euro for Croatia, 5.6% less than the current framework for the cohesion policy and 6% less for the common agricultural policy. She said the draft also envisaged increasing national co-financing from 15 to 30% as well as doubling the current pre-financing. She said was this was unacceptable for Croatia and that negotiations at EU level were yet to begin.

More news on the EU funds and Croatia can be found in the Business section.

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