Presentation on theme: "Directorate General “Regional Policy”"— Presentation transcript:
1 Directorate General “Regional Policy” “ERDF & funding opportunities for Bulgarian businesses in OP Competitiveness” (HBCB workshop) “How do the EU Structural & Cohesion Funds function?”Sofia, 21 June 2010Nassos SofosDirectorate General “Regional Policy”European Commission
2 Content EU Structural Funds: what is it ? How does it work? Challenges in Bulgaria today - benchmarkingIssues from implementation of OP Competitiveness
3 EU Funds: Advantages for Member States NOT ONLY THE MONEY !but also:Multi-annual planning and programmingOf the budgetOf the project pipelineOf the implementation & control systemsOwn administrative capacity (systems).To run programmes-projects smoothly, on timeTo check the sound management of fundsTo forecast expenditure and evaluate outcome
4 What does the EU want from Bulgaria? NOT ONLY A FUND ABSORPTION !But also:A wise use of the moneyInvest the money in good projects to leverage development effectsEU funds are not a simple transfer of funds to the country’s coffers!EU funds to leverage promising areas of the economy – not prolong the death of anyway dying economic activitiesEnsure the sound management of funds away from irregularities, corruption and fraud.Prepare for the future: Budget and priorities for are proposed next year!
5 EU Cohesion / Regional Policy - Purpose The EU is one of the world’s most prosperous economic zonesBUT:Huge disparities exist among the 271 EU regions – weakens the EU’s dynamismHENCE:The political goal of reducing the gaps in development
6 EU Cohesion / Regional Policy - Purpose EU-27 GDP per capita in PPS in 2006 Source: Eurostat structural indicators EU 27= 100
7 EU Cohesion / Regional Policy - Purpose <50³ 125Differences in development in the EU-27GDP per head as a % of the community average
8 Geographical Eligibility for Structural Funds Support 2007-2013 Objective 'RegionalCompetitiveness and Employment'Convergence objective(Regions > 75% in EU25)Convergence objectivestatistically affected regionsObjective 'RegionalCompetitiveness and Employment'Phasing-in regions,"naturally" above 75%Index EU 25 = 100Source: Eurostat
9 The EU Budget /3 of the budget (“1B”) aims at “Cohesion/Regional Policy” (=Structural & Cohesion Funds): €347 billion over 7 years
10 Cohesion/Regional Policy: Structural & Cohesion Funds by sectorEuropean Regional Development Fund (ERDF)and Cohesion Fund (CF) - €271 billionEuropean Social Fund (ESF)- €76 billionEnvironmentTransportEmploymentEntrepr./R&D/InnovationHuman capitalAdaptability of workers and firmsSocial inclusionCapacity buildingTechnical assistanceInformation societyTourismSocial infrastructureCultureEnergyInstitutional capacity
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 RegionsJEREMIE – Joint European Resources for Micro to Medium EnterprisesJESSICA - Joint European Support for Sustainable Investment in City Areas
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, alsooutside Sofia.
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 innovationOPC at central level: Romania, Hungary, Portugal, EstoniaOPC at central level and similar measures ate regional level: Greece, Italy, Spain, Poland,Competitiveness measures at regional level: Germany, Ireland, UK, FinlandChannels to provide funds to enterprises:A mix of public agencies and banking networks: Greece, Italy, etcA mix of public agencies and Funds: UK, Ireland, Estonia, etc
15 A snapshot of the Greek OPC AXIS CODEDESCRIPTIONCOMMUNITY FUNDINGNATIONAL CONTRIBUTIONINDICATIVE ANALYSIS OF NATIONAL CONTRIBUTION PERCENTAGETOTAL FUNDING (Base of calculation of Community Contribution)CO-FUNDING %ΕRDFSFTOTALNATIONAL PUBLIC FUNDINGNATIONAL PRIVATE FUNDING124 = 1+2+35 = 6+767*8 = 4+59 = 4/8AXIS 1 : CREATION AND EXPLOITATION OF INNOVATION, SUPPORTED BY R&TD85,00%ΑXIS 2 : STRENGTHENING OF ENTREPRENEURSHIP AND EXTROVERT ORIENTATION3ΑXIS 3 : IMPROVING THE BUSINESS ENVIRONMENT4ΑXIS 4 : INTEGRATION OF COUNTRY’S ENERGY SYSTEM AND STRENGTHENING OF SUSTAINABILITY5ΑXIS 5 : TECHNICAL SUPPORT FOR IMPLEMENTATION84,56 %84,99%
16 Cohesion Policy Budget for Bulgaria (not including the Funds for Rural Development and Fischeries which are not “Structural” FundsObjective/Fund Budget (billion EUR) %1. ConvergenceERDF 3.205ESF 1.185CF 2.283Total convergence: %2. Territorial CooperationERDF %3. Total = %
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 CommitteesEU levelEuropean Commission,European Court of Auditors reports for the Structural funds management to the European Parliament.
18 OPs financial implementation Operational programmeEU Budget for(MEUR)Interim and final payments verified by the MA(EU share)EU funds contractedBy 1 June 2010OP Regional Development1,361526,335,49638.7%OP Transport1,62510,047,48120.8%OP Environment1,466323,492,77232.7%OP Competitiveness988485,300,87729.9%OP Technical Assistance48412,713,56428.1%Total5,4881,757,890,19032.0%Certification rate2.1%2.8%0.1%2.3%1.25%
19 Bulgaria: General challenges - selection Lack of management culture and clear allocation of responsibility:Slow absorption of funding across the sectorsLow administrative capacityRedundant reporting and controlComplicated or unclear rules and proceduresSlow or late payments to projectsProject pipeline poorRegularity issues (corruptive environment, weak judiciary, conflict of interest concept not always understood, procurement high risk)New financial perspectives (EU budget review)Budget deficit
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 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 anymoreImprove/simplify rules, procedures, decrees, evaluation, complaints, etc.Delays to certify a payment or proceed to a payment of incurred expenditure.Multiple checks of same expenditureExchange experience with other Member States and ask help from experienced consultants (TA)!Political will is present – Restructuring startedReview of policy along EUROPE 2020 policyRestructuring of systems (needs to accelerate).
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, benchmarkRead 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.
24 EU Web sites: e-mail: email@example.com Useful web sites:
25 Bulgarian web sites Bulgarian Ministry of Finance: Bulgarian Ministry of Economy, E & T:Bulgarian SME Promotion Agency:
26 European Regional Development Fund – ERDF(1) Investments for creating and safeguarding sustainable jobs. Direct investments in SMEsInvestment in infrastructureDevelopment 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 actorsArticle 4ConvergenceUnder the “Convergence” objective, the ERDF shall focus its assistance on supporting sustainable integrated regional and local economic development and employment by mobilising and strengthening endogenous capacity through operational programmes aimed at the modernisation and diversification of regional and local economic structures, and the creation and safeguarding of sustainable jobs. This should be achieved primarily through the following priorities, the precise policy mix depending on the specificities of each Member State:Research and technological development (R&TD), innovation and entrepreneurship, including strengthening research and technological development capacities, and their integration into the European Research Area, including infrastructures; aid to R&TD notably in SMEs and to technology transfer; improvement of links between SMEs, tertiary education, research institutions and research and technology centres; development of business networks; public-private partnerships and clusters; support for the provision of business and technology services to groups of SMEs; and fostering of entrepreneurship and innovation funding for SMEs through financial engineering instruments;Information society, including development of electronic communications infrastructure, local content, services and applications, improvement of secure access to and development of on-line public services; aid and services to SMEs to adopt and effectively use information and communication technologies (ICTs) or to exploit new ideas;3) Local development initiatives and aid for structures providing neighbourhood services to create new jobs, where such actions are outside the scope of ESFRegulation;4) Environment, including investments connected with water supply and water and waste management; waste-water treatment and air quality; the prevention, control and fight against desertification; integrated pollution prevention and control; aid to mitigate the effects of climate change; rehabilitation of the physical environment, including contaminated sites and land and brownfield redevelopment; promotion of biodiversity and nature protection, including investments in NATURA 2000 sites; aid to SMEs to promote sustainable production patterns through the introduction of cost-effective environmental management systems and the adoption and use of pollution-prevention technologies;
27 European Regional Development Fund – ERDF (2) Research and technological developmentInnovation and entrepreneurshipInformation societySmaller transport (road, rail, etc)Protection of environmentTourism, culture and national heritageEnergy investmentsHealth and social infrastructure5) Prevention of risks, including development and implementation of plans to prevent and cope with natural and technological risks;6) Tourism, including promotion of natural assets as potential for the development of sustainable tourism; protection and enhancement of the natural heritage in support of socio-economic development; aid to improve the supply of tourism services through new higher value‑added services and to encourage new, more sustainable patterns of tourism;Investments in culture, including protection, promotion and preservation of cultural heritage; development of cultural infrastructure in support of socio-economic development, sustainable tourism and improved regional attractiveness; and aid to improve the supply of cultural services through new higher added value servicesTransport investments, including improvement of trans-European networks and links to the TEN-T network; integrated strategies for clean transport which contribute to improving the access to and quality of passenger and goods services, to achieving a more balanced modal split, to promoting intermodal systems and reducing environmental impacts;Energy investments, including in improvements to trans-European networks which contribute to improving security of supply, the integration of environmental considerations, the improvement of energy efficiency and the development of renewable energies;Education investments, including in vocational training, which contribute to increasing attractiveness and quality of life;11) Investments in health and social infrastructure which contribute to regional and local development and increasing the quality of life.
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 transportEnvironment: water delivery, waste, energy efficiency and renewable energy
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 Funding from: 7th FP, CIP and Structural Funds Total EU funding for research and innovation (annual average funding)