EU funds

In the first six months of EU membership, Croatia will have 655.1 million Euros from the EU budget at its disposal

Following the signing of the Stabilization and Association Agreement (SAA), the Republic of Croatia has, since 2000, became the beneficiary of assistance and pre-accession programs. The aims and objectives of the pre-accession funds are the implementation of reforms, assistance in adjustments with the implementation of the “acquis communautaire”, preparation of the beneficiary countries for full EU membership as well as the preparation for the post-accession funds - structural funds and the Cohesion Fund.

In the past decade, through a number of financial instruments (OBNOVA, CARDS, PHARE, ISPA, SAPARD, IPA and IPARD) and EU programs such as the Lifelong Learning Program, Europe for its Citizens, Youth in Action and others, more than a billion Euros was directed to Croatia. The areas covered by these projects significantly differ in their scope, the amount of funds and the number of participants and provide an overview of the number of the EU financial aid opportunities. The approved projects financed or co-financed by the European Union covered the numerous areas in which the European Union is actively involved and improve the welfare of citizens in Croatia: from major infrastructural and environmental projects whose value is estimated to tens of millions of Euros (railway networks reconstruction, support of a business infrastructure development, centers for waste management, water supply and sewage networks), through a comprehensive reform of the judiciary system to the reconstruction of high school laboratories and small projects grants for NGOs operating in local communities in the area of protection of human rights, youth employment, entrepreneurship, capacity building, etc. The projects activities were implemented throughout the whole Croatia – from Eastern Slavonia and Zagreb to Istria and Dalmatia. Funds are now managed by a decentralized system, while a commitment for their full implementation, including the systematic public information, was taken by the Croatian institutions (Source: EU Delegation, 2011).


PRE-ACCESSION ASSISTANCE– IPA (2007 - 2013)
From 2007 till the accession to the European Union, the Republic of Croatia had the funds from the pre-accession assistance program (IPA - Instrument for Pre-accession Assistance) at its disposal. Five IPA components offered grants for Building and Strengthening of Institutions (I), Cross-border Cooperation (II), Regional Development (III), Human Resources Development (IV) and Rural Development (V). In addition to IPA, Croatia at its disposal had funds from selected EU programs whose purpose was promotion of cooperation between member states in various fields connected with common European Union policies..

It is expected that the time limit of the current IPA pre-accession fund utilization in the Republic of Croatia will be a few more years

For example, the Central Finance and Contracting Agency (CFCA) within its competences has contracting the funds from IPA I (Transition Assistance and Institution Building) and IPA IIIC components (Regional Competitiveness) in their entirety, as well as a part of IPA III A component (Operational Transport Programme - priority 2 (Improving the Inland Waterway System in Croatia) and priority 3 (Technical Assistance)), as well as a small part of IPA III B component (Operational Program of Environment Protection) - priority 3 (Technical Assistance). Regarding IPA I component (IPA TAIB), the Financing Agreement for IPA TAIB 2012 was signed on May 9th 2013. A deadline for contracting of the projects within IPA 2012 program under the mentioned Agreement is May 9th 2016 (3 years from the date of signing the Agreement), while the deadline for contract implementation is 2 years from the final date of contracting (2018). The Financing Agreement IPA TAIB 2013 has not been signed yet. However, since the proposal of the Financing Agreement states that the final date for entering into agreement is December 31st 2014, the final deadline for contracting of the projects will be 3 years from the date of signing the Financing Agreement (December 31st 2017 the latest). Regarding the final deadlines for the implementation of contracts within IPA 2013, they are counted as two years from the final date of contracting.


  FULL MEMBERSHIP:
  WHICH EU FUNDS ARE AVAILABLE FROM JULY 1st 2013?



After July 1st 2013, the date of entry to the European Union, a broader range of sub-programmes for financing became available for the Republic of Croatia, with significantly greater sources and amounts of funding.

At the end of June 2013, through the amending of the EU budget, the EU finance ministers allocated 655.1 million Euros to the Republic of Croatia. These funds are aimed at financing of the first six months of Croatian membership in the EU

Croatia has, by its accession to the EU, started using structural funds (European Fund for Regional Development and European Social Fund) and the Cohesion Fund. These funds are intended for the economically less developed areas of the EU. In addition to these funds, Croatia has, since the date of the entry to the EU, the possibilities to use the funds intended for agriculture, fisheries and rural development, the preparation for accession to the Schengen area, as well as other programs and initiatives (Source: Delegation of the European Union, 2011).






How the resources from the EU funds are allocated?

The EU funds are available to the beneficiaries in the Republic of Croatia through grant schemes, public contracts and special credit lines of the EU financial institutions. Grants are intended for users who promote the (non-commercial) EU policy objectives, and are allocated from the EU budget directly to the beneficiary organizations through Calls for Proposals. The grants beneficiaries are mostly public, private and non-governmental organizations, and the candidates’ eligibility is specified in each Call for Proposals and appropriate Guidelines for Applicants. The grant contracts generally require the co-financing of projects by the client, while the amount of co-financing is defined in each Call for Proposals. It is usually in the range of 10-25% of the amount of co-financing for non-governmental organizations and 50% for small and medium enterprises. Regarding the grants for a business sector, they have been relatively limited so far because the EU funds are public resources and are, as such, primarily intended for financing of public projects which are of public importance and essential to the community.

The good news for entrepreneurs is that the structural funds available to us now allow greater amounts of support for entrepreneurship

The applicants who wish to use the EU grants have to be aware of the following factors: available EU funds are limited, which means increased competition for funds and consequently the "risk" of a small percentage of co-financing; submitted projects must fit in the relevant priorities of the European Union; the procedure for obtaining of funds can be long-lasting while getting funds - especially after the accession to the EU (and unless otherwise specified in Calls for Proposals) - will most likely be retroactive (reimbursement), only after the beneficiary, upon completion of the approved project, submit all invoices and justify all costs.


EU funding: public calls for grant applications, EU public procurement and special credit lines
The tenders for grants within IPA, which will be available to us for a few more years, are conducted for Component II (Cross-border Co-operation), Component IIIc (Regional Competitiveness), Component IV (Human Resources Development), Component V (IPARD) and the Programs of the European Union. Information about them can be found on the websites of the relevant institutions responsible for the implementation of a specific operational program and the websites of the institutions which inform the public about the possibilities of obtaining financial support from the available EU funds.
  Note: After the accession to the EU, IPA III component became a part of structural instruments

In addition to grants allocated through Calls for Proposals, Croatian entrepreneurs can benefit from EU resources by getting work on projects funded by the EU, through the public tender for the procurement of goods, services and works. It is important to mention that the rules of the European Union for the allocation of public contracts applicable in the beneficiary countries are strictly regulated, while procedures for procurement and contracting are conducted in accordance with the Practical Guide to Contract Procedures for EU external actions (PRAG).

The EU public procurement can be monitored on the following website:
http://ted.europa.eu/TED/misc/chooseLanguage.do

Important: In the Republic of Croatia, the bidding procedures and contracting of projects from the EU funds after July 1st 2013 are conducted according to the national Public Procurement Act

The special EU credit lines are funds which, through the EU financial institutions - the European Investment Bank (EIB) and the European Investment Fund (EIF), or through financial intermediaries (development and commercial banks) are placed as specially designed financial instruments that facilitate access to capital for entrepreneurs.


FINANCIAL OUTLOOK OF THE EU FOR THE PERIOD 2014 – 2020 & CROATIA

The available resources from the structural funds and the Cohesion fund which will be available for the Republic of Croatia in the financial period of the European Union 2014 - 2020 amount to around 8 billion Euros. Production of the high quality and comprehensive programming documents is one of the key elements for effective use of the EU funds which will be allocated to the Republic of Croatia.

Ministry of Regional Development and EU Funds (MRDEUF) in April 2012 started a process of preparation of programming documents through numerous workshops, seminars and trainings with the aim of achieving the best possible results for the new financial period of the European Union 2014 - 2020. Furthermore, the inter-sectional Coordinating Committee for the preparation of programming documents for the financial period of the European Union 2014-2020 was established. This Committee is responsible for the preparation of programming documents as the basis for the use of resources from the structural funds and the Cohesion Fund.

The main tasks of the Coordinating Committee are:
• establishing the Thematic working groups for development of programming documents;
• coordinating and supervising the work of Thematic working groups;
• analyzing of Thematic working groups proposals;
• ensuring the involvement of all relevant authorities in the programming process;
• ensuring the coherence of national policies and strategies;
• harmonization and approval of the draft proposals of programming documents before their submission to the Government of the Republic of Croatia and the European Commission.

Thematic working groups are advisory groups of the Coordination Committee for the preparation of programming documents for the financial period of the European Union 2014-2020. The members of the Thematic working groups are the ministries responsible for the development of programming documents for the financial period of the European Union 2014-2020, as well as representatives of relevant agencies, public companies, and other stakeholders and regions. The tasks of Thematic working groups include drafting proposals of programming documents with their priorities, ensuring the grounds for the proposed priorities in national strategies and plans as well as preparation of additional relevant materials. Here you can find the spreadsheet overview of Thematic working groups adopted by the Coordinating Committee, as well as information about the competent ministry for each Thematic working group. Ministry of Regional Development and EU Funds (MRDEUF) coordinates and prepares the Economic Program of the Republic of Croatia while Ministry of Agriculture concurrently with the MRDEUF activities draws up the Rural Development Program of the Republic of Croatia for the period 2014-2020.

Partner consultations
Partner consultations represent the start of public discussion on the areas which will be financed from the structural funds within the financial period of the EU 2014-2020. All interested groups will informally be involved in the process of programming and drawing up measures within the future Operational Programs. The process of public consultation for preparation of strategic documents for the next programming period started at the annual MRDEUF conference held on June 6th and 7th 2013 in Zagreb. Till July 10th, the interested public had the opportunity to express opinions on development priorities of the Republic of Croatia through an on-line survey. Continuation of public consultation is planned for the autumn, during the phase of drawing up of the later stage drafts of programming documents. Here you can learn more about the partner consultations.


The next steps of the process of programming EU funds for Republic of Croatia


The next steps and a time frame

Source: MRDEUF, June 2013

Our recommendation is, for all information about the process of programming, to regularly monitor the website of the Ministry of Regional Development and EU Funds as well as reports from meetings of the Coordinating Committee.

  The Report from the V. Meeting of the Coordinating Committee from July 17th 2013 can be found here

For those who want to learn more about structural funds we recommend:
Presentation: Possibilities of financing from EU funds 2014-2020
and
CCE publication Towards Cohesion policy funds in Croatia (second edition) which can be downloaded here.