ZAGREB, February 4, 2020 – Prime Minister Andrej Plenković said on Tuesday that Croatia is faced with a crucial decade for its membership of the European Union because only after the country absorbs funds from the second financial perspective will it be able to draw the line and say how much it has advanced as a member.
Plenković was addressing a conference on the new Multi-annual Financial Framework (MFF) 2021-2027 and the status of the cohesion policy in the new budget, organised by the Ministry of Regional Development and EU Funds and the Adult Education Institution for European structural and investment funds and EU programmes as part of the Croatian presidency of the Council of the EU and an official visit by the President of the European Court of Auditors, Klaus-Heiner Lehne.
He highlighted the importance of development investments for infrastructure and agriculture, which come from the Competitive and Cohesion Operational Programme and are crucial for the entire decade ahead.
When it comes to Croatia’s starting position in the negotiations for the new MFF, Plenković pointed out the specific and special position Croatia has as being the only country of all member states that has only had the opportunity to utilise one financial perspective and that it is the only country that experienced military aggression, practically until it signed the Stabilisation and Association Agreement in 2001 it did not have any contractual relations or any macroeconomic support and pre-accession funds, and that it is still trying to catch up with those member states that have been in the Union longer.
He recalled that on Saturday he participated in an informal meeting in Portugal of Friends of Cohesion – 17 member states that are net beneficiaries from the EU budget – who said that they do not want the modernisation of the budget and financing new challenges like climate change, security and innovations to be at the expense of the cohesion policy and balanced regional development of individual areas in all member states.
Plenković said that preparations are underway for bilateral consultations to be held this week in Brussels with European Council President Charles Michel regarding an extraordinary meeting of the Council which will mark the first debate on the so-called negotiating box.
“Numbers will finally be presented which will serve as the basis for us to seek an agreement at the level of member states, that is, at the level of heads of state and government and then once an agreement is reached, negotiations will also be conducted with the European Parliament and Commission,” Plenković explained, adding that the aim is for Croatia to achieve its budget objectives for the next seven years in an intelligent, effective and well-reasoned manner.
Considering the negotiations on the MFF, there are four positions which should be brought closer. The Commission has proposed a budget equivalent to around 1.11% of the gross national income (GNI). The Friends of Cohesion, which are net recipients, propose that outlays for agriculture and cohesion should be kept at the same level, maintaining the national shares of project co-financing and maintaining the current duration for the implementation of such projects. Finally, the European Parliament adopted a position on the MFF in November 2018 which reads that 1.3% of GNI should serve as an equivalent for the budget, so that all the promises can be delivered regarding fighting climate change, research and innovation programmes, regional policy and social rights.
Plenković believes that the negotiations will be exceptionally demanding, underlining that it is important that the budget is adopted on time so operational programmes are not delayed. After a political agreement is reached at the level of the European Council, some 40 MFF-related bills need to be adopted, which he estimates could take until the end of this year, while he hopes that an agreement at the level of member states can be achieved during Croatia’s presidency.
“In that regard we will endeavour to protect Croatia’s interests so that our EU membership in the next 10 years is an added value and the main driver of our development,” Plenković added.
Plenković described Croatia’s presidency of the EU so far as pretty good, adding that the first month of chairmanship was quite intensive, particularly with regard to Brexit.
He underscored the importance of the European Court of Auditors for the overall functioning of the EU as its task is not only to control spending but with its advice it can improve the process of budget planning and its execution as well as contributing to managing the budget efficiently.
Klaus-Heiner Lehne explained that in addition to monitoring the regularity of payments in terms of legality and mathematical correctness, the court is dedicating more attention to whether payments are achieving their purpose.
Minister of Regional Development and EU Funds Marko Pavić said that Croatia has absorbed 20.9 billion kuna more than it has paid into the European budget to date. Croatia has paid 22.4 billion kuna and received 43.3 billion kuna, said Pavić.
During this government’s term in office, Croatia has increased the absorption of EU funding from the 2014-2020 financial perspective from 9% to 86% with about one-third being paid out from the current financial envelope which can be used until 2023, Pavić said, adding that he is certain that all the funds will be utilised in that time.
Croatia’s member of the Court of Auditors Ivana Maletić said that the court had made its recommendations regarding the European budget and emphasised the importance of demographic challenges and climate change, in the context of which the European Commission has adopted the Green Deal.
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