The absorption rate for EU Funds remains low across most EU Member States

​Oldřich Vlasák
With the new Multiannual financial framework (MFF) under discussion, we will be working hard to increase the impact of EU funds in our local and regional communities. For sustainable, inclusive and smart growth, we need EU Funds that are fit for purpose and we need of our regions and cities. Local and regional authorities implement most EU decisions and therefore they see first-hand their shortcomings and their strengths. The local and regional authorities have a crucial role to play in transferring their hands-on experiences onto the EU decision-making process. The EUs new multiannual financial framework aims to generate bottom-up, sustainable and inclusive growth over the next 7 years after 2020 through the use of public finance to leverage national and local funds. This requires local and regional authorities’ involvement. The first challenge will be in ensuring that the MFF is business friendly in its design so as to attract additional funds. The second challenge is going to be in ensuring that EU funds are not seen as an EU subsidy for unviable national projects. Thirdly, we will have to ensure coordination between existing Funds such as Horizon 2020 and the EFSI, which both target research and innovation.
In order to overcome the challenges, the new programming period will need to be more results focused. This can be achieved through working with local and regional authorities. We have to ensure that the projects selected deliver the intended local results. A results-focused approach will also require increasing the use of EU Funds by increasing the synergies between the various EU Funds available and by making the Funds more user-friendly. The absorption rate for EU Funds remains low across most EU Member States. In the last programming period of 2007-2013, the average absorption rate was 77.96%. We need to build on the experiences of the last programming period to increase the absorption rate. EU Funds are intended as a tool to top-up the national Funds available. However, many local and regional authorities find it difficult to access the EU Funds as they are unable to co-finance them from their side. Financial instruments need to be developed in order to help overcome this. We need to ensure that the total of EUR 351.8 billion available for Cohesion policy for the period 2014-2020 as well as those available for the European Regional Development Fund and the European Social Fund are fully utilised.
Increasing the synergies among the various EU Funds available, old and new, is very important. We should aim to strengthen the interconnectivity between the “Juncker plan” and existing Funds so as to avoid overlap and achieve a multiplier effect of our finances. Better use of synergies could be found for example between programmes that target research and innovation such as the Horizon 2020, the new EFSI and the Regional Funds for Innovation. Furthermore, we need to simplify the EUs financial instruments. They need to be simple and easy to use with the right amount of checks and balances. The controls performed at various levels need to be better coordinated so that unnecessary burdens for local and regional authorities are removed. With the help of local and regional authorities, these bottlenecks could be identified. Those considering applying to EU Funds must not be faced with a red-tape riddled EU system.