11 new member states conference on cohesion policy in latvia eu funds implementation in new member...

11

New Member States Conference on Cohesion Policy in Latvia

EU FUNDS IMPLEMENTATION IN NEW MEMBER STATES15 - 17 April 2009

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• Progress and Crisis (2004-2006 and 2007-2013)

• Closure & Reporting (2004-2006)• Systems and Simplification (2007-2013 and

post 2013) • Monitoring & Evaluation (2007-2013)• Lessons learned and Future (post 2014) • Any Other Business and Conclusions

Content of the presentation

2

3

1. Progress and Crisis (2004-2006 and 2007-2013)

1.1. Update on financial progress

3

4

2004-2006 Structural Funds Implementation Progress

(01.03.2009.)

4

103.

7%

95.2

%

98.6

%

99.7

%

102.

6%

101.

3%

95.0

%

92.4

%

109.

7%

94.7

%

85.1

%

80.8

% 95.0

%

88.8

%

95.0

%

95.0

%

95.0

%

93.9

%

87.8

%

92.6

%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

CY CZ EE HU LT LV MT PL SI SK

Payments to final beneficiaries (% of total EU budget)

Payments from EC (including advances; % of total EU budget)

5

2004-2006 Cohesion Fund Implementation Progress

(01.03.2009.)

5

86.2

%

60.3

% 71.1

%

60.3

% 74.4

%

66.0

% 79.0

%

58.1

%

62.1

% 79.0

%

58.9

%

65.8

%

67.2

%

49.4

%

70.8

%

71.2

% 79.8

%

54.2

%

61.0

% 70.3

%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

CY CZ EE HU LT LV MT PL SI SK

Payments to final beneficiaries (% of total EU budget)

Payments from EC (including advances; % of total EU budget)

6

2007-2013 EU Funds Implementation Progress

(01.03.2009.)

6

13.2

%

13.8

% 20.9

%

24.8

%

24.4

%

8.6%

17.0

%

50.8

%

3.6% 8.

3%

20.2

%

2.4%

0.3% 4.

5%

0.3% 1.9% 3.5%

3.3%

1.9%

0.0% 0.5% 1.1% 5.

4%

0.3%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

BG CY CZ EE HU LT LV MT PL RO SI SK

Contracted amount (% of Community funding)

Cumulative eligible expenditure paid to beneficiaries (% of Community funding)

7

2007-2013 ERDF Implementation Progress

(01.03.2009.)

7

16.4

%

13.1

%

14.0

%

16.9

% 19.8

%

11.0

%

19.0

%

40.6

%

3.4% 7.

3%

30.5

%

0.0%

0.0%

6.1%

0.6% 2.

7%

2.3% 5.

5%

3.5%

0.0% 0.2% 1.3%

9.8%

0.2%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%




8

2007-2013 ESF Implementation Progress

(01.03.2009.)

8

8.9% 12

.0%

7.9%

32.7

%

12.2

%

12.3

% 17.4

%

52.5

%

12.4

%

8.0%

30.5

%

0.0%1.6% 1.7%

0.0% 2.

4%

0.8%

0.1%

0.1%

0.0% 2.

7%

0.9% 1.6%

0.9%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%




9

2007-2013 Cohesion Fund Implementation Progress

(01.03.2009.)

9

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%




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Extension of final date of eligibility of expenditures

All 10 EU MSs who joined the EU in 2004

have extended the final date of eligibility

of expenditures of 2004-2006

programmes

10

11

Main reasons for extension of final date of eligibility of

expenditures (I)

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Mainly changes in the socio-economic situation and the labour market, attributable to the unprecedented global financial crisis (CY, MT, PL, SI)

• Depreciation of national currency that increased the funds’ allocation and as a result affected negatively the financial implementation of programmes (PL)

• Deterioration of financial liquidity of beneficiaries and contractors (PL)

12

To have longer time for administration of programmes and to be able to use the whole allocation (CZ)

There were unused funds (about 5 MEUR) (EE) The inability to make payments on time (LT) The conditions of the access to loans and the

terms have become more severe in recent months including prefinancing of projects realized by the contribution of SFs (HU)

Main reasons for extension of final date of eligibility of

expenditures (II)

13

Main problems that affected the closure of SF

programmes (2004-2006)

13

14

1.2. Impact of the crisis

1. Progress and Crisis (2004 - 2006 and 2007 - 2013)

14

15

Economic crisis and 2007-2013 programmes

Impact of each of the problem listed on 2007-2013 programmes

15

8

4

97

9

4

7

5

34

35

31

Number of projectapplicants has

decreased

Banks do notborrow/ private

beneficiaries cannotco-finance the

projects

The state budget andmunicipalities lack

money to co-financethe projects

Quality of theprojects proposed

has reduced

N+2/n+3 targets forthe next couple of

years are in jeopardy

More “misbehaviour”from the applicantsand beneficiaries

Num

ber o

f res

pons

es

No Somewhat Considerably

16

Economic crisis and 2007-2013 programmes (II)

Other effects on implementation of 2007-2013 programmes

16

Delays in projects (MT) Private beneficiaries cannot co-finance projects (PL) Beneficiaries might be unable to sustain the project

(CZ) The cost of projects has been reduced due to the

financial and economic crisis. Moreover, the continuing economic crisis and credit shortage might delay the timetable for implementation of some projects despite the efforts for speeding up the whole process. In particular, crisis in the construction sector might have an impact on the timely implementation (CY)

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Positive effects of the crisis – any?

• BG, CY, RO: higher competition for the funding in some measures (and hence better projects)

• EE, LT, LV, PL, SK: prices are falling and the projects are becoming cheaper to implement

• CZ, HU, MT, SI: crisis has no positive effects on implementaiton of programmes

17

18

Measures taken to react to the crisis in the framework

of EU programmes

5

10

4

10

4 43

0

2

4

6

8

10

12

Changing projectselection criteria

Simplification of theimplementation rules

Changing provisionsfor

minimum/maximumproject financing

Introducing additionaladvance paymentsto the beneficiaries

of the projects

Special loanschemes

International loans toco-finance and pre-finance the projects

from the statebudget

Other

Numb

er of

Resp

onse

s

18

19

Other measures taken to react to the crisis (I)

19

Priorities changes (LT)

Acceleration of public procurements (LT)

Application of financial engineering instruments (CY, LT)

New infrastructure projects that will facilitate the revitalization of the economy under the existing various Priority Axis of the Programme (CY)

20

Increased support to SMEs and especially in the sectors that are expected to be mostly affected (CY)

Extension of catalogue of beneficiaries who may obtain advances on projects’ implementation (PL)

Stimulating competition among programmes – those whose realisation is the quickest may obtain additional resources from the national performance reserve in 2011 (PL)

Introduction of principle of the settlement and certification to the EC expenditures incurred in the first phases of project’s realisation before it is formally approved – in case of major projects (PL)

Other measures taken to react to the crisis (II)

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Economic crisis and implementation of major

projects

• In 7 MS (CY, EE, HU, LT, LV, MT, PL) economic crisis has affected the plans to implement major projects

• In 6 MS (except HU) main problem – plans were affected by change of costs of projects

• In HU public procurement procedures ongoing after which the impact of crisis can be seen

• In CZ, SI, SK the crisis did not have an effect to the plans of major project implementation

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22


1.3. Information on major projects for the programming period 2007-2013 –

submission, launch, spending

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23

Major projects planned to be implemented under 2007-2013 programmes

23

236

140

12

68

14 11 7

232

73

14

45

0

50

100

150

200

250


Num

ber

of p

roje

cts

24

Number of major projects (MP) submitted to the EC and

approved by the EC

Transport Environment OtherSubmitted to the EC 11 MS (except LT) 8 MS (BG, CY, CZ, EE, HU, MT, PL, RO) CZ - Regional Library

PL - Cultural infrastructure 1PL - New Technologies 1

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0 01

0

5

0 0 0

2

9

1 1

0123456789

10


MP approved by the EC

25

Main comments of the EC regarding applications of MP

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Revenue-generating projects, int.al. Funding-gap calculation

CZ

EIAHU; LV; MT; PL; CZ; SK

CBA, int.al. co-finance rate, poor option analysisLV; MT; CZ; PL;

HU

Tariff policy, int.al. polluter-pays principle MT; HU

SCF 2007 system CZ

Eligible and ineligible costs CZ; SI; PL

26

JASPERS expertise used in project applications

• CZ, HU, LT will use JASPERS expertise in all applications

• All 12 MS were satisfied with JASPERS expertise

4 4 4 9 8

115

4430

6

0

20

40

60

80

100

120

140

BG CY EE LV MT PL RO SI SK

Number of projects

26

27

Other problems regarding preparation and

implementation of MP (I)

27

Financial contribution; cash-flowLT; HU; RO

Lengthy preparation of application (delays) and procedure by the EC

CY; HU; LV; MT; RO; CZ; PL; SI

28

Monitoring & control system of MP

• 10 MS do not have special monitoring and control system for MP

• In LT and PL there is a special monitoring and control system for MP

28

29

1.4. Amendments to the Operational

programmes (OPs) and reaction of the

European Commission (EC)


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30

Amendments to the OPs proposed to the EC (I)

• BG, CY, EE, RO, SI, SK have not proposed amendments to the OPs

• HU amendments involve reallocation of funding between OPs

• CZ, LT, LV amendments involve reallocation of funding between priorities

• CZ, LT, MT, PL amendments involve modifications to the contents

• Only OP of LT has been approved by the EC; for LV – approved partially

30

31

Modifications to the contents

31

LT

LT

LT, MT, PL

CZ, LT, MT, PL

0 0.5 1 1.5 2 2.5 3 3.5 4 4.5

Output and resultindicators

Description of activities

Description of measures

Description of priorities

32

Specific amendments proposed as reaction to

financial and economic crisis

CZ EE HU LT LV PLNew measures/activitiesIncreased financing for somemeasures/activities Changes to result and outputindicators

Other

After agreement with the EC all potential beneficiaries put down in the OP described as ‘indicative’ to avoid necessity to amend the OPs in case of related changes

32

33

Amendments and the opinion of the EC (I)

BG HU LT LV MT PL

DG Regio (for ERDF/CF OP amendments) did not approve parts

Not formally submitted yet

Amendments presented to the MC

Decision made only for the amendments related to the ‘indicative’ nature of the beneficiaries. Other amendments are awaiting approval


Don’t have a formal approval yet but DG Regio expressed positive opinion on amendments informally

DG Employ (for ESF OP amendments) did not approve parts


Amendments presented to the MC N/A

The amendments don’t concern ESF OP

Informal opinion expressed by the EC on the proposed amendments of the OPs Partially Partially

33

34

Amendments and the opinion of the EC (II)

BG HU LT LV PL

DG Regio (for ERDF/CF OP amendments) did not support parts

Has invited BG to propose changes in the OPs

The explanation given was not satisfactory

Asked for clarity

Possible implications for supporting large enterprises ;discussions regarding selection procedure for financial intermediaries for instruments

Don’t have a formal approval yet but DG Regio expressed positive opinion on amendments informally

DG Employ (for ESF OP amendments) did no support parts N/A

The explanation given was not satisfactory

Asked for clarity The amendments don’t concern ESF OP

34

35

Evaluations carried out before amending OPs

• 9 MS (BG, CY, HU, LT, MT, PL, RO, SI, SK) did not carry out evaluations before amending OPs

• CZ applied evaluations to all OPs before amendments

• In EE evaluation in progress• CZ, EE, HU outsourced evaluation

experts

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