The European Court of Auditors (ECA) on Tuesday warned of the risk of delays in the absorption of funding for the 2021-2027 financial period due to a significant increase in funds compared to the previous period.

“In view of the great challenges that lie ahead of us, we must remain even more vigilant about the financial soundness of the EU”, ECA President Klaus-Heiner Lehne said. “Over the next seven years, the EU will spend significantly more than in the previous programme period.”

During that period, the Union will have €1.8 trillion at its disposal.

In addition to the revised multiannual financial framework (MFF) for 2021-2027, worth €1.1 trillion, this also includes Next Generation EU recovery instruction of €750 billion, created in response to the COVID-19 crisis, the ECA President said.

The European Court of Auditors on Tuesday released the annual report concerning the financial year 2020, the last year of the 2014-2020 period.

Since the funds from the previous programming period are being absorbed more slowly than planned, due to a late start of the implementation of the programme, auditors warn of the risk of this occurring again in this financial period.

By the end of 2020, the last year of the current seven-year budget, only 55 percent of the committed funds for the 2014-2020 period were absorbed, leading to an increase in outstanding commitments, which reached €303.2 billion by the end of 2020. The funds for this programming period can be used by the end of 2023.

Croatia doing well in terms of committed funds

Croatia is doing well in terms of committed funds, and by the start of October 2021 it had over 122 percent of committed funds compared to its allocation. However, it was one of the countries with the lowest absorption rate, with only Italy behind it, and Spain performing slightly better.

Croatia has a total of €10.731 billion at its disposal from the total envelope of the European Structural and Investment Funds (ESIF), and about 47 percent of that amount was absorbed by the end of 2020, while another €5 billion is to be disbursed.

Croatia’s ECA Member, Ivana Maletic, said that, as a new member, Croatia hadn’t had enough projects prepared in the first years of its membership, but everything was speeding up now and a big jump in absorption was expected. She cited as an example the construction of the Peljesac Bridge in the south of the country, which will increase absorption by as much as 20 percent once the funds for this year and next are disbursed.

The ECA points out at its website that “member states’ absorption of the European Structural and Investment (ESI) Funds has continued to be slower than planned.”

The slowdown was also partly due to coronavirus, and, in Croatia, due to earthquakes, so some projects could not begin, Maletic said at a press conference.

“By the end of 2020, the final year of the current seven-year budget, only 55 percent of the agreed EU funding for the 2014-2020 period had been paid out. This has had the effect of inflating outstanding commitments, which reached €303.2 billion by the end of 2020, the equivalent of nearly two annual budgets,” the ECA wrote.