Eyes on different prizes – EU funds negotiations enter last lap in Slovakia

The EU funds programming process in Slovakia is gaining speed as it enters its final phase for allocating just over EUR 15 billion in the 2014-2020 budgetary period. Slovakia is keen to start drawing EU funds as soon as possible – with good reason. The state budget is spread thin, with spending gaps evident in the regions and affecting public services. Companies await new deals, and Slovak institutions and authorities have their eyes trained on new financial injections via the EU funds.

How, then, is this crucial spending planning shaping up?

The final weeks of February saw the official commenting procedure for the Partnership Agreement (the main strategic document underpinning the new Cohesion Policy) concluding after tough negotiations involving all stakeholders and an impossible time frame of five working days. At first sight the Partnership Agreement fulfils most of the formal and legal requirements set by the EU: the key words are there, the analytic sections are bursting with graphs, charts and figures, and the strategic part suggests that Slovakia has its own view on so-called ‘thematic concentration’, with almost all the thematic objectives covered.

Yet herein lies one of the key difficulties: the finalised Partnership Agreement commits to a wide range of investments into all areas, contrary to European Commission intentions to concentrate and focus funding for key strategic areas.

The measures included in the spending blueprint are, nevertheless, fairly progressive, with attention given to climate and the environment, the low-carbon agenda, civil society and partnership, bottom-up implementation, an integrated approach to regional development, and more. The horizontal (or cross-cutting) principle of sustainable development will be enshrined in new EU spending thanks to cooperation between the authorities and NGOs during negotiations. Equally, the inclusion of Community Led Local Development (CLLD) was celebrated as a success of many stakeholders as the government reversed its original decision not to apply the approach. And a survey, carried out by Bankwatch in 2013, of how well climate change initiatives feature in national EU spending plans revealed Slovakia as the best scoring among CEE new member states.

The key, though, is the translation of these good intentions into real concrete measures and actions – and financial allocations.

The CLLD tool is one example. A large chapter in the Partnership Agreement describes all the development disparities, investment priorities, benefits, mechanisms for implementation, requirements for new capacity building and management systems that will need to be taken account of in the advancement and realisation of community-led local development initiatives.

However, the same chapter reveals that the allocation for this vast area of intervention is a mere EUR 130 million. This is a major funding shortfall, and Slovak NGOs continue to call for 10 percent of the total allocation of EU funds – roughly 1.5 billion euros – to go towards CLLD. And why not? If Slovakia really believes that this bottom-up approach to EU funds is the right way to go for the regions, there has to be an appropriate commitment of resources.

The same issue is hampering the currently proposed allocation of ‘global grants’. This is a potentially very useful tool for specific micro and small beneficiaries such as small municipalities, community initiatives, micro businesses or NGOs. The tool is mentioned in a very short paragraph of the Partnership Agreement, But, again, there is no tangible financial commitment despite previous positive experience with this kind of instrument via Norwegian and Swiss funds. Experts I’ve spoken with suggested that as much as five percent of Slovakia’s total allocation of EU funds could be distributed in this way and make a significant difference for small economic stakeholders and local economies.

Finally, regarding ‘sustainable development’ matters, Several excellent proposals have made it into the Partnership Agreement, including green public procurement, a climate performance evaluation, sustainability criteria for the use of biomass in energy and instruments to steer the application of the ‘polluter pays’ principle. However, it will be crucial in the coming days for the state authorities to show willingness to finish what they have started, by both underpinning these concepts with concrete mechanisms and instruments, and ensuring their translation into the implementation documents of Slovakia’s individual operational programmes.

The Partnership Agreement is the place to state not only intentions but commitments, yet the latter are missing in Slovakia’s EU funds blueprint for now.

Recent experience during negotiations and dialogue with some representatives of the state has seen a positive change of attitude that has lead to some promising outcomes. Now is the time to finish what has been started and put on the table clear statements, concrete mechanisms and credible financing numbers to cover everything that is envisioned within this key strategic document. If not, Slovakia will face the very familiar, dreary implementation of business as usual projects with questionable results.

The programming process is now entering a phase of official negotiations with the European Commission, where a final round of comments and demands should be settled before the Commission’s approval of the Agreement. This should take place as soon as possible as the Slovak authorities are eager to get the spending going already in 2014. However, the European Commission is proving to be a hard partner to bargain with, and will no doubt continue to insist on clear, well defined and quantifiable outcomes from the plans.