Croatia Wants Better Terms for Using Funds from EU Budget

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ZAGREB, December 14, 2018 – During ongoing negotiations on the new multiannual financial framework for the 2021-2027 period, Croatia wants the EU budget to take account of its particularities as the newest member state so that the European project would not be perceived in Croatia as a brain drain destination but as a strong lever to boost economic growth and living standards.

“There is one aspect of membership, and that is free movement of people, which gives the impression that the EU is literally a space for brain drain, in addition to the otherwise big demographic problem. So, in order to avoid the European Union being perceived as a space for brain drain, we need a strong, quick and concrete injection of investment from the European budget to raise the level of development, living standards and GDP growth,” Plenković told reporters before the start of the second day of the EU summit in Brussels.

On the first day of the summit on Thursday, EU leaders discussed the proposed multiannual financial framework for 2021-2027. The European Commission had unveiled the document in May, proposing a larger budget for 27 member states than the present one which includes the United Kingdom, a net annual contributor of about 12 to 14 billion euro.

In addition to the budget hole that will be left by the UK’s departure from the EU next year, new needs have arisen that require more funding from the EU budget, such as migration, common defence and protection of the external borders. That’s why the Commission proposed higher contributions from member states and cuts in funding for individual policies, for example a 10 percent cut for cohesion policy and a 15 percent cut for the common agricultural policy.

While wealthier member states are opposed to increasing national contributions into the European budget and are in favour of cuts in cohesion funding, poorer members take the opposite view – they have nothing against higher national contributions, but are against reducing funding for cohesion and agriculture.

“Yesterday I elaborated to my colleagues that in our case absorption of EU funding is going well, but not fast enough to be felt in increased growth,” Plenković said. He noted that Croatia had been an EU member only five years, and that the share of EU funding in investment in member states was about 8.5 percent on average, while in Croatia it was 80 percent. “That’s why this funding is crucial to us.”

Plenković said that all this year his government had been involved in contacts with the European Commission and other institutions to ensure that, despite the proposed cuts for cohesion and agriculture policies, Croatia received roughly the same amounts for the two policies from the next budget as it had under the present budget.

“We said that account needs to be taken of Croatia’s particularities, that it is the newest member state, that it has been using EU funding only for five years, and I think we are getting sympathy,” the prime minister said.

He also advocated for Croatia to be granted a longer time frame for using EU funding and for the N+3 rule to be kept in place in Croatia’s case, under which funding can be absorbed three years after the conclusion of given contracts. The Commission proposed that this rule be changed to N+2 in the next multiannual financial framework.

Plenković said it was not true that Croatia had the lowest growth among new member states. “That’s not true, the point is that we have sound growth. … Previously, growth was generated by borrowing, while we are implementing fiscal consolidation and have healthy growth. That’s the point of this growth of 2.9 percent that we have.”

More news on Croatia’s use of EU funds can be found in our Politics section.


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