Three ministries performed better than expected, others drew up to HRK 1 billion less than planned from EU funds

Ministry of Veterans' Affairs underperformed badly, absorbing 77% less, followed by Administration Ministry with 63%

There is no more doubt that Croatia will absorb significantly less EU funds than originally planned, but final figures vary between institutions. While revised State budget revealed that the original sum of HRK 12.7 billion will be some 2.7 billion lower, the Government stressed that decline will stand at 2.25 billion.

Be as it may, the fact remains that decline will stand at approximately 20%. However, some State institutions contributed more, while some absorbed more funds than planned. Minister of Environmental Protection and Energy is responsible for almost 50% of the decline, whose Ministry originally planned to absorb HRK 1.5 billion from EU funds, but drew on just 575 million, which presents less than 40% of the planned sum. Minister Ćorić did not want to talk about the reasons, while the Ministry noted in its written response that some EUR 2 billion are allocated for it and added that it closed contracts for 68.8% of the sum, stressing that "this presents growth of 50% compared to 2017."

Long-lasting projects

The Ministry listed results and large projects that are underway, including the public water supply and wastewater management project started in cooperation with Hrvatske Vode (HV) water utility and launch of five competitions for waste management, implementation of energy efficiency projects and renewable energy sources, among other. However, the Ministry pointed out that the projects in question are long-lasting infrastructural projects and offered a general explanation.

-After stages of drawing up and preparing EU projects are completed and public procurement competitions successfully wrapped up, physical implementation of projects starts, where new problems emerge: works are performed slower than planned (all projects), there is a lack of qualified workers due to emigration to EU and subcontractors go bankrupt, noted the Ministry of Environmental Protection and Energy.

The Ministry stressed that, in order to speed up the process of closing secondary contracts through public procurement, it is "cooperating with users on preparation and implementation of strategic projects, while the Environmental Protection and Energy Efficiency Fund (FZOEU) provides education on correct and timely implementation of public procurement processes." Considering the large number of projects that have been prepared, the Ministry hopes it will not breach deadlines and implement the projects by end 2023.

Agriculture

Besides the Ministry of Environmental Protection and Energy, three more ministries saw significant underperformance compared to planned absorption of EU funds: Agriculture with HRK 525 million, Economy with 431 million and Veterans' Affairs with 74.7 million. Even though he ranks second with regard to underperformance in absorption of funds, Minister of Agriculture Tomislav Tolušić has hardly underperformed. His Ministry absorbed highest amount of EU funds, as much as HRK 4.5 billion, which means that the Ministry absorbed 11.7% less than planned. Tolušić explained this himself, pointing out that the Ministry started competitions for 85% of allocated funds.

-Approximately HRK 4 billion will be used up in agriculture this year, compared to the planned 4.5 billion. I do not believe this is too little. It is fine. While the deadline expires in 2023, we will try to close contracts for, and hopefully absorb, all the funds. That would make us fully prepared for the next financial period - said Tolušić to reporters at the margins of a meeting. Compared to it plan, it appears that the Ministry of Veterans' Affairs underperformed the worst and absorbed about 77% less than planned, followed by the Administration Ministry with 63%, Ministry of Environmental Protection and Energy is third, followed by Ministry of Health with approximately 40% and Ministry of Economy with 29%.

On the other hand, some ministries overshot their goals: Minister of Labor and Pension System Marko Pavić is apparently "the best student." On top of the planned HRK 902 million, he absorbed additional 102 million, which is 11.3% more than planned. However, the Justice Ministry could be the best positive surprise as it absorbed 350% of planned funds. Instead of HRK 24.6 million, the Ministry absorbed 85.7 million. Minister of Construction and Spatial Planning Predrag Štromar did a good job as well, with his Ministry absorbing some HRK 75 million or about 37% more than planned.

State offices

Several State offices absorbed several percent more than planned, including the Office for Digital Society Development and Office for Sports, while the information commissioner absorbed as much as 28.5% more than planned. At the same time, the Central State Office for Reconstruction and Housing absorbed just 4% of planned funds.

When we look at the totals, we can see that amount of EU funds pouring in the State budget each year is growing each year: from HRK 7.8 billion in 2016 to 8.5 billion last year and further to 10.5 billion this year. However, the fact remains that there is room for improvement. Some State institutions are failing to fulfill their plans, with underperformance standing at 8.6% last year and 17.7% this year.

Still happy

The Ministry of Regional Development and EU Funds presented figures that suggest there is no reason to be unhappy despite criticism. It stressed that number of contracts for absorption of EU funds in the period between 2014 and 2020 has increased in this Government's term.

-Contracts worth EUR 5.86 billion have been closed compared to 984 million from end October 2016, which presents growth of 494% - stressed the Ministry. It pointed out that the Government placed EUR 4.06 billion at disposal of users through competitions last year and in first half of this year, noting that it launched 206 competitions for EU structural and investment funds.

Competitions worth EUR 6.9 billion have been launched, which accounts for 64% of total allocation for the period between 2014 and 2020. For comparison, in the period between 2014 and end 2016, competitions worth EUR 2.8 billion were launched, which is about 26% of total allocation, meaning that in 2017 and 2018 the number of launched competitions increased 144%.