New states deny structural funds ‘risk going unspent’

By Dace Akule

Date: 08/07/04

SIGNS saying "Financed with EU money" will soon decorate the landscape in the ten new member states after the first projects sponsored by the Union's structural funds were given the green light. Around €24 billion is available for the development of poor regions in the new EU countries in 2004-06, amid doubts as to whether the newcomers will be able to use all the money.

Experts say millions of euro risk going unspent because local industry lacks the expert knowledge required to table a successful bid for grants. Arnaldo Abruzzini, secretary-general of Eurochambres, the European chambers of commerce group, said this was one of the findings of a survey of firms in new member states. "Central European enterprises are optimistic about the prospects of EU enlargement but often lack preparedness to fully benefit from the advantages that it brings," he said.

But officials from the new member states are optimistic. Poland, the biggest recipient of EU aid (8.2 billion euro), might not be able to use all the money, but "we'll try to do the best we can", said Gabriela Szuberska from the ministry of economy and labour. She stressed that Poland had good experience with the spending of EU funds it received prior to its accession. However, Szuberska admitted that there is a delay in the processing of bids as the government needs to adopt additional regulations regarding the monitoring of such projects. Among the first businesses to benefit from EU aid are construction companies that will improve the road access to seaports and connections between cities.

Peter Wostner, of the Slovenian government's office for structural policy and regional development, said he sees no problem with spending his country's share of €237.5 million. The interest is "huge" and the contracts for the first projects are already signed, he said. Wostner stressed that the first field where funds will be allocated is tourism. For example, an installation for a ski jump in the Planica resort will be repaired using EU money.

Andzs Ubelis, deputy state secretary in the Latvian finance ministry, says that those who believe the new member states will not make use of the structural funds do not realize the extent of these countries' needs. In the first month of Latvia's EU membership, companies have already submitted proposals for projects that, if approved, would amount to €8 million. This is one-third of the sum available for Latvia this year. The first contracts will be signed next week, he said, but some projects have not been approved yet because of administrative mistakes.

In Hungary, at the end of May, a group of IT companies, including database giant Oracle and Hewlett Packard launched an internet-based programme, DirectEurope, designed to support local participation in structural fund projects. The website offers expertise on projects and companies can fill in an online questionnaire designed to help check the quality of their applications for funding. Oracle's director in charge of new EU states, Alfonso Di Ianni, said there are plans to set up similar "portals" in Poland, the Czech Republic and Slovakia. Di Ianni said that nearly 1,500 companies and local authorities had used the Hungarian site during its first seven weeks. Of these, 164 have already started running projects financed by the EU.