Economy Minister Darko Horvat said on Thursday that an application procedure for the allocation of EU grants for small and medium businesses, in which 53 million kuna (€7.1 million) worth of funding was allocated online in just 35 seconds, would be annulled.

The procedure set up by the Economy Ministry, designed to help improve the competitiveness and efficiency of small and medium enterprises through IT technology, lasted for only 35 seconds on Wednesday, causing ridicule in the public.

Entrepreneurs wishing to upgrade their operations with information and communications technologies, had started submitting their project proposals online when the program kicked off at 11 a.m.

However, the ministry’s system stopped accepting registrations 35 seconds later, because the amount of grants sought in the already processed applications had exceeded 200 percent of the total allocations envisioned by the programme.

Business owners who got shorthanded, with nearly 600 applications that could no longer be submitted, suspected software irregularities, or irregularities in the allocation of funds.

“When an application procedure for which you prepare 53 million kuna (€7.1 million) in grants receives a response from businesses that exceeds the total funding three times, it only means that we have chosen the right application procedure. We will discuss the situation during the day, and most probably rescind the procedure, secure more money and invite applications anew. We want all those who apply and who meet the ministry criteria, to obtain EU money in order to increase their competitiveness,” Horvat said ahead of a government session on Thursday.

Asked by reporters why clicking speed was crucial in the allocation of funds, he said that it was not, and that project quality is and should be the key factor.

Minister for Regional Development and EU Funds, Gabrijela Zalac, said before the government session that the application procedure in question was not designed by her ministry and blamed the Economy Ministry for it.

“More than 800 applications were submitted for the 53 million kuna allocation, and the value of those applications exceeded 350 million kuna (€47.2 million). I will increase the allocation, but I will certainly see to it that procedures like this one do not happen again,” Zalac said.

She said that she did not know why the Economy Ministry had opted for such a way to allocate funds, given its insufficient capacity to process project applications. Zalac added that there were no irregularities in the procedure and that applicants should not worry.

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