Development: The low absorption of structural funds in the European Union

Posted by : Radu Oprea
Country : Romania
Date : 21.07.2015
Profession : Economist
From : Young Entrepreneurs Association from the SE Region of Romania
Target institution : European Commission
Problem status :

The European Union (EU) is using the Cohesion policy and its Structural Funds to reduce disparities between regions. These funds are allocated to Member States (MS) under a complex legal framework, according to the level of development of their regions. During the budgetary framework 2007-2013, the EU allocated over €348 billion under its Multiannual Financial Framework (MFF –which establishes the global EU budget for the period), representing the second largest item in the EU budget, after agriculture. In a 2013 report, only 4 countries managed to reach 100% of project selection while the percentage of paid expenditure (absorption rate) varied from 60% in Ireland to as low as approximately 15% in Romania. 

The main reasons that led to these low absorption rates are the economic crisis, insufficient administrative capacity, changes in national and regional governments, and the effects of national sectoral reforms. In April 2013, the Commission reported that, since 2007, nearly 400,000 jobs have been created, over 53,000 start-ups received support, 2.6 million people were served by water-supply projects and 5.7 million people by wastewater projects. Every percentage of the total amount of the structural funds that is not spent means €3.48 billion that is not invested in jobs, growth, education, social services, and entrepreneurship. Also, the most economically disadvantaged regions are also experiencing the greatest difficulties in spending and absorbing these funds. (Source: Ivana Katsarova, Library of the European Parliament). 

What can the EU do in order to reach a 100% absorption rate in the new budgetary framework 2014-2020?


What is your solution?

Fields marked with * are mandatory.

*

Explain your solution: Please, be as brief and accurate as possible. This field is limited to 1500 characters. In case you need more space, publish a second solution idea. To be considered in the policy paper, your solution should meet the three criteria that form the mission of our project:

  • be feasible: this means that it can be accomplished by the existing organizations or with help from others.
  • be valuable: it should bring value to overseers, people in general or members of various communities.
  • be sustainable: it is likely to attract public support, authority and money from the political, social or business environments.
*

Your name: We publish your name to give you credit for your solution proposal and to promote you.

*

Your country: We publish your country to see how intercultural is the participation to solve this problem.

*

Your profession: We also publish your profession to give you credit.

*

Your education: We do not publish your education, but ask for it for our statistical purposes.

*

Your email: We do not publish this information. We keep it for our own records to stay in touch with you in case we need more information about your solution idea when we issue the policy paper.

*

Your phone number: We do not publish your phone number. We store it for our own records to communicate with you  when issuing the policy paper, if needed.

Your webpage: This field is not mandatory. If you have a blog or an organization, you can promote it here. However, we will not accept websites that promote sex, violence, hatred or other inappropriate behavior.

Upload a photo of yourself: This field is not mandatory. You can upload a square-sized photo of 80x80 pixels or higher. We want to promote you and give you credit for your solution idea(s). The supported formats are JPG, GIF and PNG.

The CAPTCHA Code: To avoid spam, type in the two words that show up in the CAPTCHA box.

Thank you for having the initiative to publish a solution to this problem on Public-Policies.EU, our citizen engagement platform! Your effort is making a great contribution to fulfilling our mission, that is engaging people in providing valuable, sustainable and feasible solutions to problems of public concern. With your example, we are closer to generating public policies made by citizens!


This website has been produced with the assistance of the European Union. The contents of this publication are the sole responsibility of SMART Development Center and can in no way reflect the views of the European Union.