ZAGREB, October 9, 2019 - Representatives of the European Commission and the Croatian government will meet in Zagreb next week to discuss the use of EU funds in the period from 2021 to 2027, when there will be less money available to all EU member states, it was said at the European Week of Regions and Cities conference in Brussels on Tuesday.

This will be the second such meeting after last month an informal dialogue started in anticipation of the next seven-year period financial period.

The Croatian side is expected to be led by Regional Development and EU Funds Minister Marko Pavić while the European Commission is to be represented by Aurelio Cecilio, who heads a unit in charge of Croatia, Slovenia and Bulgaria.

The Croatian government depends on money from EU funds, which account for about 80% of public investments in the country. The EC, the EU's executive body that approves financial allocations, in February this year published a report with guidelines for cohesion policy investments.

It proposed that Croatia should invest in areas such as research and development, environmental protection and digital and transport connectivity, which includes connecting Croatian islands with the mainland to improve the life of local population and stop emigration.

Croatia is yet to determine its priorities. In recent years most of the EU money has been invested in transport and agriculture, the most expensive project being the construction of the 526 million euro Pelješac Bridge. Talks held between the EC and Croatia so far indicate that there will be no more of such big and visible individual projects and that money is to be invested in a large number of smaller projects.

In the 2021-2027 period Croatia is expected to receive 6% less allocations from the EU budget than is now the case. Over the past seven years Croatia has had at its disposal 10.7 billion euro from the EU budget.

However, this is not the only piece of bad news for countries like Croatia. This week the EC has continued to insist on greater participation of local authorities in joint projects. In the period from 2014 to 2020 the EC has given a maximum 85% of the money for individual projects while the remaining 15% has been provided by local government units.

The EC now wants the share from the EU budget to be reduced to 70% and the share given by local authorities to increase to 30%. This is mostly supported by northern EU countries that pay more into the joint budget than they get from it while south-eastern countries, which take more money than they pay into the joint budget, are against it.

Their position is supported by the European Committee of the Regions, the EU's advisory body representing European regional and local authorities, but during Tuesday's European Week of Regions and Cities, the biggest annual event on the EU's cohesion policy, the EC insisted on its view that the share of local project funding should be increased, notably owing to economic recovery and GDP growth.

The final decision could be made next year, when the EU will be chaired by Croatia in the first six months, after which Germany takes over the six-month presidency.

More news about EU funds can be found in the Politics section.

ZAGREB, October 8, 2019 - The European Court of Auditors (ECA) has established certain weaknesses in the calculation of cohesion policy allocations which Croatia can use as an argument in the debate on the multiannual financial framework, ECA member Ivana Maletić said on Monday.

Under the European Commission's proposal, Croatia should receive in the 2021-27 multiannual financial framework about 6% less funds as part of the cohesion policy than in the current one. Although Croatia is in the group of countries with Bulgaria and Romania, whose GDP is below 60% of the EU average, the other two countries should receive 8% more.

Presenting a report on the execution of the 2018 EU budget, Maletić said the ECA found weaknesses in the calculation and that as the country presiding the EU next year, Croatia could ask for a correction.

The report shows that absorption of cohesion funds was low and Croatia is ranked last as to funds paid out, which is no surprise given that contracting gained momentum only in 2017 and 2018, she said.

According to Commission data from the end of June, Croatia contracted 78% and paid out 25% of the funds envisaged in the 2014-20 period.

Of the 11 member states which use structural and investment funds the most, the most successful in contracting is Hungary (109%), followed by Latvia (85%), Romania (83%), Poland (79%), Croatia, Estonia and Slovakia (78%), Slovenia and Lithuania (77%), Bulgaria (72%) and the Czech Republic (71%).

As for funds paid, Estonia is first (40%), followed by Lithuania (39%), Latvia (38%), Hungary and Bulgaria (33%), Poland and the Czech Republic (32%), Slovenia (29%), Romania (27%), Slovakia (26%) and Croatia (25%).

In its draft for the 2021-27 multiannual financial framework, the Commission proposes for the first time linking fund allocation and the rule of law, a sort of message to member states which the Commission believes bring the independence of the judiciary into question.

Maletić said this was not a good idea, claiming that end users and not states would be punished. She suggested, instead, that state which did not respect the rule of law pay more into the EU budget.

More news about European Union funds can be found in the Politics section.

ZAGREB, August 6, 2019 - A Finance Ministry analysis of data on budget execution in 2018 shows that last year Croatian towns absorbed more than 314 million kuna from EU funds, three times more than in 2017, when 89 million kuna was absorbed, with the northern Adriatic port city of Rijeka and the island town of Komiža being the most successful, according to the gradonacelnik.hr web portal.

Last year towns signed ten times more contracts for EU-funded projects than in 2015 and three times more than in 2017, with projections for this year indicating a further increase.

Apart from the fact that the number of towns which last year contracted money for EU-funded projects grew, from 75 in 2017 to 97 in 2018, the amount of the funding grew as well. In 2017 the town of Lipik was the recorder, with EU funding absorbed amounting to 233 kuna per capita, and only nine other towns absorbed more than 100 kuna per capita.

In 2018 those figures grew tenfold, with the town of Komiža on the island of Vis being the best performer, with 2,505 kuna of EU money absorbed per capita. It was followed by Pleternica, with 1,222 kuna, Lipik, with 1,157 kuna, and Opuzen, with 1,117 kuna. The ten best performers also include Grubišno Polje, Nin, Otok, Pazin, Hvar and Prelog.

In terms of the share in the total amount of EU funding contracted, last year's best performer was Rijeka, with a share of more than 10%. It was followed by Osijek, Pleternica, Petrinja, Virovitica, Vukovar, Požega, Koprivnica, Šibenik and Zadar.

The gradonacelnik.hr web portal notes that these figures include only EU funding contracted directly or indirectly by towns as project managers and do not include funding contracted by town institutions or local companies and the towns themselves as project partners, which makes it realistic to assume the contracted amount is actually higher.

In the last five years, the most successful towns in terms of absorption of EU funding were Ludbreg, which had the highest average amount of EU funding absorbed - 544 kuna per capita annually - and Zadar, which was the best performer in terms of the share of EU funding in the total amount of EU funding contracted, with a share of more than 7%.

Most of EU-funded projects so far have referred to environmental protection, cultural heritage and entrepreneurship.

More news about EU funds can be found in the Business section.

ZAGREB, August 6, 2019 - Eleven agreements were signed on Monday in Knin to support entrepreneurs in the areas of Knin and Benkovac with EU grants worth 8.5 million kuna.

The agreements were signed by Minister of Regional Development and EU Funds Marko Pavić and representatives of 11 companies.

Pavić said that the funds would contribute to encouraging young people in the area stay there as the funds were earmarked for job creation.

"These agreements support entrepreneurship, trades and companies and the 8.5 million kuna will help create 20 new jobs and preserve 32 more," Minister Pavić said.

He explained that the funds were earmarked for areas formerly affected by the war.

Pavić expressed satisfaction that the agreements were signed in Knin on Victory and Homeland Thanksgiving Day and the Day of Croatian Veterans.

He announced that new agreements, worth more than 22 million kuna, would be signed for the Knin area soon.

More news about EU funds can be found in the Business section.

ZAGREB, August 1, 2019 - The Paying Agency for Agriculture, Fisheries and Rural Development on Wednesday signed 400 new agreements worth a total of 94 million kuna from the Rural Development Programme, intended for young and small farmers and the development of non-agricultural activities.

The agreements include 90 agreements to support young agrarians, 271 agreements to support the development of small farm and 39 agreements to support the development of non-agricultural activities in rural areas.

Newly-appointed Agriculture Minister Marija Vučković attended the signing ceremony and said that these measures were important because they would contribute to the survival of Croatian agriculture, the development of small farms, generational revival and would provide support for non-agricultural activities such as rural tourism, hospitality industry, and preserving and developing traditional skills.

She added that so far contracts had been agreed for 70% of available funds from the Rural Development Programme and more than 40% had been paid out. She called on farmers to merge, to use innovations and EU funds.

Vučković said that Croatian farmers were still faced with numerous challenges, but that it was worth noting that certain progress was evident at the end of 2018 - in the volume of European funds being absorbed and faster growth of exports compared to imports. "It is too early to talk about trends but we in the ministry will do everything for that not to be a coincidence," she said.

With today's agreements included, 1,367 agreements granting 473.3 million kuna have been signed to date, the ministry said in a press release.

The ministry added that with regard to absorption from the Rural Development Programme, 97% or 17.5 billion kuna has been put at the disposal of agrarians and other beneficiaries, 70% or 12.6 billion kuna has been contracted and 40% or 7.3 billion kuna has been paid out of the funds available.

More news about EU funds can be found in the Business section.

ZAGREB, July 23, 2019 - The Ministry of Health and the Croatian Employment Service in Zagreb on Tuesday presented health institutions and organisations with 7.7 million kuna (1 million euro) worth of grant agreements aimed at increasing public awareness of the importance of health promotion and disease prevention.

The agreements were presented as part of the project "Health Promotion and Disease Prevention - Phase 1" from the European Social Fund.

The total amount of the grants is 27 million kuna (3.6 million euro), and today the first 12 successful applicants were granted 13 agreements worth 7.7 million kuna. EU funding will be used to promote healthy habits and good health, increase public awareness of the importance of preventing chronic contagious, non-contagious, rare and malignant diseases, and provide additional training for medical staff.

These projects will help health organisations throughout the country "to raise public awareness of how important it is for each of us to take measures to prevent numerous diseases, primarily cardiovascular ones," Health Minister Milan Kujundžić said.

He said that smoking and alcohol were "the two greatest evils" affecting people's health and family lives.

"I hope that through education people will become aware how harmful smoking and alcohol are and that in the years ahead far fewer Croats will suffer from diseases they could influence through prevention," Kujundžić said.

More health news can be found in the Lifestyle section.

ZAGREB, June 29, 2019 - European Commissioner for Regional and Urban Policy Corina Cretu said on Friday that Croatia was doing well in absorbing EU funds considering that it was the last country to join the Union, and added that she believed Croatia would be prepared for the presidency of the Council of the European Union in January.

Croatia had a shortage of experts to work on European funds, however progress has been made and today the country is doing well in absorbing money, Cretu told Hina on the margins of a meeting of Danube countries in Bucharest.

The two-day forum, which ends on Friday, was convened to discuss EU-funded projects in 14 countries along the Danube River. It was the last event organised by Romania as the chair of the Council of the EU. Finland will chair the Council for the next six months and as of January 2020 the presidency will assumed by Croatia for the first time.

My advice is that Croatia should not be underestimated as a country. I am sorry that Romania's chairmanship started with a lot of presumptions that it would not be capable of that task, yet it managed to achieve a lot. This is not just about politicians, but an entire machinery and I believe that Croatia will be prepared for the task, Cretu said.

She added that she hoped that the next multi-annual budget will be adopted during Finland's chairmanship. If the budget is not adopted in the coming months, thousands of projects could be jeopardised, she warned.

Croatia has been a member since 2013 and has great expectations from EU funds.

In countries like Croatia, Greece, Romania and Bulgaria, more than 60% of public investments are funded by the EU, she said.

Cretu added that the cohesion policy has for three decades tried to reduce the difference in development between poorer and wealthier member states as well as assisting neighbouring countries that are still not part of the EU but participate in projects funded by the EU.

Countries like Bosnia and Herzegovina and Serbia are already participating in some common forums with member states like the Forum of Danube Countries.

The EU Strategy for the Danube Region (EUSDR) is a macro-regional strategy adopted by the European Commission in December 2010 and endorsed by the European Council in 2011. The Strategy seeks to create synergies and coordination between existing policies and initiatives taking place across the Danube Region.

The EU finances joint cross-border projects for nine member states and five countries that are still not members and some projects include emergency situations such as floods, wildfires and so on.

The Commission's President Jean-Claude Juncker had decided that during his term in office (2014 - 2019) enlargement would not occur, however recently negotiation procedures and preparations of future members have continued and Cretu believes these procedures need to be accelerated.

More news about EU funds can be found in the Business section.

ZAGREB, May 21, 2019 - The Zagreb Infrastructure Summit was held on Tuesday to discuss the planning and development of infrastructure projects in Croatia, including the development of seaport, airport and railway transport infrastructure.

"We are witnessing a major pickup in the financing of transport infrastructure. Since funding from one source is not enough, we are combining all sources available to us," said Tomislav Mihotić, state secretary for infrastructure at the Ministry of Maritime Affairs, Transport and Infrastructure.

He said that large investment projects regarding railway, road and airport infrastructure were planned, citing the railway lines Dugo Selo - Križevci, Zabok - Zaprešić, and Gradec - Sveti Ivan Žabno.

"We are building the Pelješac Bridge, the largest road infrastructure project that is being implemented with EU funding, and we have also begun projects relying on domestic funding. Some are being implemented from domestic sources, some through concessions, some with the aid of EU funding, and some based on private-public partnerships," Mihotić said.

Speaking of road infrastructure, Mihotić pointed out the 160 million euro Bina Istra project to upgrade the motorway network in Istria County, including the reconstruction of the Učka tunnel. He mentioned the planned construction of a road from Krapina to the Slovenian border and the construction of an express road from Solin to Split to Omiš in southern Croatia, a project worth 300 million euro.

He also mentioned the construction of a bridge across the Sava river at Stara Gradiška and the continued construction of a motorway from the bridge at Beli Manastir in eastern Croatia to the Hungarian border.

Mihotić said that one of the largest projects was the construction of a lowland railway from the northern Adriatic city of Rijeka to the Hungarian border. "This is an extremely important strategic project because it develops maritime transport, trade and railway. If we manage to obtain funds from the EU and use them for part of this project, we will try to cover the rest through concession agreements," he said.

"Our interest is to link up with China and other remote countries so that they can use our ports as their gateway to the European market. But the general problem is the underdevelopment of all Croatian Adriatic ports, because of total traffic through the Suez, about 8 percent enters the Adriatic, while over 50 percent uses the Baltic. The port infrastructure should be much better if Central Europe is to be interested in changing the existing transport routes. That's why Chinese partners are extremely important to us," Mihotić said.

The deputy director for EU funds of the HŽ Infrastruktura railway company, Janja Groš, said that the company planned investment projects of 9.3 billion kuna (1.26 billion euro), of which 60 percent would be provided by the EU.

Liu Kai, economic adviser at the Chinese Embassy in Croatia, said that the Pelješac Bridge project was a good example of cooperation between the two countries. "After a Chinese company has been selected in the tender for the construction of Pelješac Bridge, China's cooperation with Croatia has opened up a new dimension. The bridge is a symbol of the road to a joint success and cooperation between China, Croatia and the EU," Liu said.

He said that the Chinese economy had risen by 6.4 percent in the first quarter of this year as a result of strong industrial growth and higher consumer spending.

"Complying with EU rules and standards, more and more Chinese companies are interested in investing in projects in Croatia, not just in infrastructure, but also in science, culture and tourism," Liu said.

More news about transport infrastructure can be found in the Business section.

ZAGREB, May 19, 2019 - European funds are the key to development, better living standards and economic growth, Prime Minister Andrej Plenković said on Sunday, adding that over the past 15 years the EU had invested 365 billion euro in the development of central and east European countries and that 80% of public investment in Croatia came from EU funds.

Until 2020, Croatia has 10.7 billion euro in EU funds at its disposal and it expects as much in the next seven-year budget, Plenković said at the EU Funds Open Doors Day.

"The Croatian state couldn't find that in the form of grants in any other way," he said, citing as an example the renovation of the roundabout in Zagreb's Remetinec neighbourhood, which costs 330 million kuna, of which 273 million kuna comes from EU funds and 50 million kuna from the government.

"This modernisation proves how important EU membership is and how much it improves the quality of living," Plenković said.

He announced that an agreement will be signed on Monday for the establishment of the Shared Services Centre which will coordinate and manage the utilisation of all IT applications and e-services which government institutions provide to citizens. The project is worth 360 million kuna, of which 307 million kuna comes from EU funds.

The prime minister said the EU had invested 365 billion euro in the development of central and east European countries that became member states in 2004 and 2007. "And when we know that 80% of public investment in Croatia comes thanks to the European Union, then we see that it's the key to our development, better standards and economic growth."

The EU Funds Open Doors Day was organised by the Regional Development and EU Funds Ministry under the slogan "EU funds are changing Croatia".

Minister Gabrijela Žalac said that at the end of October 2018 contracted European projects were worth 7.3 billion kuna and that now the amount was 54 billion kuna. "That's 68% of the contracted allocation of 10.7 billion kuna."

The government's goal is for the contracting rate to reach 85% by the end of the year, she said, adding that applications had been called for over 88% of the allocation.

EU projects worth 1.8 billion kuna have been contracted in Zagreb, she said. "We will keep up the same tempo next year so we can contract 100% of the allocation."

The head of the European Commission Representation in Croatia, Branko Baričević, said the cohesion policy was one of the most successful EU policies, voicing confidence that Croatia would know how to use it. EU funds "are aimed at increasing overall prosperity and prepare the countries using them to transform their economies into self-sufficient economies," he added.

More news about Croatia and the EU funds can be found in the Business section.

ZAGREB, May 2, 2019 - Regional Development and EU Funds Minister Gabrijela Žalac said at a government meeting on Thursday that she was exceptionally satisfied with indicators of EU structural and investment funds absorption from mid-2017 to late 2018, stressing that in the said period contracts were signed for projects worth 4.3 billion euro.

Meeting its obligation to report to parliament every six months about the absorption of EU funds for the 2014-2017 period, the government sent to parliament three six-month reports for the following periods: 1 July-31 December 2017, 1 January-30 June 2018 and 1 July-31 December 2018.

According to Žalac, in the period covered by the three reports, contracts were signed for projects worth 4.3 billion euro.

End beneficiaries have received a total of 1.3 billion euro in the period from mid-2017 to late 2018. A total of 1.5 billion euro has been verified and the European Union has released 937.4 million euro.

The minister also presented data for the 2007-2013 financial period, given the N+3 rule which means that allocations are divided into annual amounts which must be spent within three years.

The minister said that the number of irregularities in funds' absorption is on a mild rise which was in correlation to a rise in the rate of the conclusion of contracts on EU funds.

More news about EU funds can be found in the Business section.