Croatia ranked second last in the EU according to the absorption of European Structural and Investment (ESI) funds in 2020, notes a report by the European Court of Auditors (ECA) which was presented to the parliamentary Agriculture Committee on Wednesday.

By the end of 2020, Croatia had absorbed only 49 percent of ESI funds which include the Regional Development Fund, the Social Fund, the Cohesion Fund, the Agriculture Fund for Rural Development, and the Maritime, Fisheries and Aquaculture Fund.

“The average absorption rate in the EU is 55 percent, which is very low. There are still three years left to absorb those funds and they probably will be,” a member of the ECA, Ivana Maletic, told the parliamentary committee.

Croatian farmers poorly absorbing EU funds

Croatian farmers are poorly absorbing EU funds, the ECA report shows, and one of the reasons is the inaccessibility of those funds. Also, farmers consider that they cannot meet the conditions necessary to apply for funds, conservative populist Most party MP Ruzica Vukovac claimed.

The odd farm here and there manages to absorb EU funds, and one of the problems is how to connect those who set the conditions with end uses, she added.

“Too much is being standardised at the EU level yet the differences between member states are big,” said Maletic.

One solution would be for services to take over administration so that farmers can do their job. The role of institutions has to be to protect and assist beneficiaries. “We cannot expect small farms to pay consultant fees to prepare project applications,” said Maletic.

Some of the problems related to project applications refer to public procurement procedures, state subsidies and ineligible costs, she added.

The ECA gave expenditure in 2020 an unfavourable opinion “due to the high rate of mistakes in payments and high-risk costs.”

The mistakes identified related to unacceptable projects and payments, violating the rules on the internal market and on state subsidies, and not adhering to the public procurement rules, she added.

ECA negatively assessed the increase in unpaid dues which now amount to €302.2 billion.

The ECA report notes that most member states are continuing to absorb funds from structural and investment funds too slowly. There is still 45 percent of the funds allocated for that purpose that has not been absorbed or an amount of €209 billion.