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1 ERDF & funding opportunities for Bulgarian businesses 2007-13 in OP Competitiveness (HBCB workshop) How do the EU Structural & Cohesion Funds function?

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Presentation on theme: "1 ERDF & funding opportunities for Bulgarian businesses 2007-13 in OP Competitiveness (HBCB workshop) How do the EU Structural & Cohesion Funds function?"— Presentation transcript:

1 1 ERDF & funding opportunities for Bulgarian businesses in OP Competitiveness (HBCB workshop) How do the EU Structural & Cohesion Funds function? Sofia, 21 June 2010 Nassos Sofos Directorate General Regional Policy European Commission

2 2 Content EU Structural Funds: what is it ? How does it work? Challenges in Bulgaria today - benchmarking Issues from implementation of OP Competitiveness

3 3 EU Funds: Advantages for Member States NOT ONLY THE MONEY ! but also: Multi-annual planning and programming –Of the budget –Of the project pipeline –Of the implementation & control systems Own administrative capacity (systems). –To run programmes-projects smoothly, on time –To check the sound management of funds –To forecast expenditure and evaluate outcome

4 4 What does the EU want from Bulgaria? NOT ONLY A FUND ABSORPTION ! But also: A wise use of the money Invest the money in good projects to leverage development effects –EU funds are not a simple transfer of funds to the countrys coffers! –EU funds to leverage promising areas of the economy – not prolong the death of anyway dying economic activities Ensure the sound management of funds away from irregularities, corruption and fraud. Prepare for the future: Budget and priorities for are proposed next year!

5 5 EU Cohesion / Regional Policy - Purpose The EU is one of the worlds most prosperous economic zones BUT: Huge disparities exist among the 271 EU regions – weakens the EUs dynamism HENCE: The political goal of reducing the gaps in development

6 6 EU Cohesion / Regional Policy - Purpose EU-27 GDP per capita in PPS in 2006 Source: Eurostat structural indicators EU 27= 100

7 7 < EU Cohesion / Regional Policy - Purpose Differences in development in the EU-27 GDP per head as a % of the community average

8 8 Index EU 25 = 100 Source: Eurostat Geographical Eligibility for Structural Funds Support Objective 'Regional Competitiveness and Employment' Phasing-in regions, "naturally" above 75% Convergence objective statistically affected regions Objective 'Regional Competitiveness and Employment' Convergence objective (Regions > 75% in EU25)

9 9 The EU Budget /3 of the budget (1B) aims at Cohesion/Regional Policy (=Structural & Cohesion Funds): 347 billion over 7 years

10 10 Entrepr./R&D/Innovation Environment Transport Information society Social infrastructure Energy Tourism Culture Institutional capacity Human capital Employment Adaptability of workers and firms Social inclusion Capacity building Technical assistance Cohesion/Regional Policy: Structural & Cohesion Funds by sector European Regional Development Fund (ERDF) and Cohesion Fund (CF) billion European Social Fund (ESF) - 76 billion

11 11 Multiannual programming:

12 12 JASPERS, JEREMIE and JESSICA 3 joint initiatives (Commission and IFIs) to increase investment, leverage Structural Funds money, and improve regional/national capacities: JASPERS – Joint Assistance to Support Projects in European Regions JEREMIE – Joint European Resources for Micro to Medium Enterprises JESSICA - Joint European Support for Sustainable Investment in City Areas x_en.htmhttp://ec.europa.eu/regional_policy/funds/2007/jjj/inde x_en.htm

13 13 Implementation of Structural Funds in Members States At national or regional level? BG opted for national level due to organisation of state. Trend towards regionalisation is inevitable: France, Italy, Greece. National-regional subsidiarity: distribution of clear roles and responsibilities (who does what) in the country. Need to develop administrative capacity also in the regions, also outside Sofia.

14 14 Implementation of Structural Funds in Members States Operational Programme Competitivenss (OPC) elsewhere: Several M-States with long experience from programming business support, competitiveness or R&D and innovation OPC at central level: Romania, Hungary, Portugal, Estonia OPC at central level and similar measures ate regional level: Greece, Italy, Spain, Poland, Competitiveness measures at regional level: Germany, Ireland, UK, Finland Channels to provide funds to enterprises: A mix of public agencies and banking networks: Greece, Italy, etc A mix of public agencies and Funds: UK, Ireland, Estonia, etc

15 15 A snapshot of the Greek OPC AX IS CO DEDESCRIPTION COMMUNITY FUNDING NATIONAL CONTRIBUTI ON INDICATIVE ANALYSIS OF NATIONAL CONTRIBUTION PERCENTAGE TOTAL FUNDING (Base of calculation of Community Contribution )CO-FUNDING % ΕRDF SFSFTOTAL NATIONAL PUBLIC FUNDING NATIONAL PRIVATE FUNDING 124 = = 6+767*8 = 4+59 = 4/8 1 AXIS 1 : CREATION AND EXPLOITATION OF INNOVATION, SUPPORTED BY R&TD ,00% 2 ΑXIS 2 : STRENGTHENING OF ENTREPRENEURSHIP AND EXTROVERT ORIENTATION ,00% 3 ΑXIS 3 : IMPROVING THE BUSINESS ENVIRONMENT ,00% 4 ΑXIS 4 : INTEGRATION OF COUNTRYS ENERGY SYSTEM AND STRENGTHENING OF SUSTAINABILITY ,00% 5 ΑXIS 5 : TECHNICAL SUPPORT FOR IMPLEMENTATION ,56 % TOTAL ,99%

16 16 Objective/FundBudget (billion EUR) % 1. Convergence ERDF3.205 ESF1.185 CF2.283 Total convergence: % 2. Territorial Cooperation ERDF % 3. Total = % Cohesion Policy Budget for Bulgaria (not including the Funds for Rural Development and Fischeries which are not Structural Funds

17 17 Key players National level Coordination structures (Council of Ministers) Managing Authority for each OP (Directorates within Ministries) Certifying authority – (Min of Finance) Audit Authority (Audit of EU Funds Executive Agency, MinoFin) Monitoring Committees EU level European Commission, European Court of Auditors reports for the Structural funds management to the European Parliament.

18 18 OPs financial implementation Operational programme EU Budget for (MEUR) Interim and final payments verified by the MA (EU share) (MEUR) EU funds contracted By 1 June 2010 (MEUR) OP Regional Development 1, ,335, % OP Transport1,625 10,047, % OP Environment1, ,492, % OP Competitiveness ,300, % OP Technical Assistance ,713, % Total5,488 1,757,890, % Certification rate 2.1% 2.8% 0.1% 2.3% 0.1% 1.25%

19 19 Bulgaria: General challenges - selection Lack of management culture and clear allocation of responsibility: –Slow absorption of funding across the sectors –Low administrative capacity –Redundant reporting and control –Complicated or unclear rules and procedures –Slow or late payments to projects Project pipeline poor Regularity issues (corruptive environment, weak judiciary, conflict of interest concept not always understood, procurement high risk) New financial perspectives (EU budget review) Budget deficit

20 20 Bulgaria: Business/Innovation/R&D challenges - selection Lack of forward-thinking and a well targeted strategy. Weak co-operation and co-ordination between institutions. (eg. Too many universities/research institutes weaken cooperation ties). Very slow implementation of measures in programmes. No or limited regional/local approach to innovation. Difficulties to secure funding for innovation. Slow process for attribution of patents. Knowledge transfer – benchmarking: Learn from others and apply in your region/locally (German Länder example). More effort needed to promote co-operation between private sector and research institutions.

21 21 Bulgarian OPC – Implementation issues (authorities) Sustainable (continuous) information/advice/support to beneficiaries (=enterprises): Weak in particular outside Sofia: –BSMEPA offices must be upgraded (quality) –Networks and information points (Chambers, « Enterprise Europe Network », socioeconomic partners offices) must be used to a maximum. « Learning-by-doing »: not tolerated anymore –Improve/simplify rules, procedures, decrees, evaluation, complaints, etc. –Delays to certify a payment or proceed to a payment of incurred expenditure. –Multiple checks of same expenditure –Exchange experience with other Member States and ask help from experienced consultants (TA)! Political will is present – Restructuring started –Review of policy along EUROPE 2020 policy –Restructuring of systems (needs to accelerate).

22 22 Bulgarian OPC - Implementation issues (beneficiary enterprises) Inform yourself - Be proactive ! –Do not expect everything from the state. –Register in networks, Chambers and information providers, follow specialised web site, benchmark Read carefully details of calls and follow them to the letter! –Sound management of EU implies rules must be 100% followed. –« Pre-accession » times are over. You are responsible now. –Apply early – Do not wait until the last minute. –Follow information days and campaigns closely.

23 23 THANK YOU! БЛАГОДАРЯ! ΕΥΧΑΡΙΣΤΩ!

24 24 EU Web sites: Useful web sites: grants/index_en.htm guide/home_en.html

25 25 Bulgarian web sites Bulgarian Ministry of Finance: –www.eufunds.bgwww.eufunds.bg Bulgarian Ministry of Economy, E & T: –http://www.opcompetitiveness.bg/en/index.htmlhttp://www.opcompetitiveness.bg/en/index.html Bulgarian SME Promotion Agency: –http://www.sme.government.bghttp://www.sme.government.bg

26 26 European Regional Development Fund – ERDF (1) a)Investments for creating and safeguarding sustainable jobs. Direct investments in SMEs b)Investment in infrastructure c)Development of endogenous potential by measures which support regional and local development through: –Support for SMEs, –Financing instruments (venture capital, loan and guarantee funds, local development funds, interest subsidies), –Networking, cooperation and exchange of experience between regions, towns, and relevant social, economic and environmental actors

27 27 European Regional Development Fund – ERDF (2 ) –Research and technological development –Innovation and entrepreneurship –Information society –Smaller transport (road, rail, etc) –Protection of environment –Tourism, culture and national heritage –Energy investments –Health and social infrastructure

28 28 The Cohesion Fund Infrastructure environmental and transport projects Transport (larger): Trans-European transport networks, rail, river and sea transport intermodal transport systems and their interoperability, management of road, sea and air traffic, clean urban transport and public transport Environment: water delivery, waste, energy efficiency and renewable energy

29 29 Financial implementation issues Advance payments at OP level (89 million in OPC) Interim payments follow (if compliance assessment OK) Structural Funds must be spent in line with the rules (automatic de-commitment or N+3/2 rule, suspensions, financial corrections are possible) : –Absorption difficulties with the funds allocated for the : around 40% net implementation in the Environmental ex-ISPA sector (end 2011)

30 30 Total EU funding for research and innovation (annual average funding) Funding from: 7th FP, CIP and Structural Funds

31 31 Programme implementation cycle


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