Slovakia prepares to receive EU regional funds

WITH THE completion of the regional development chapter of European accession requirements, Slovakia has opened the door to further European Union (EU) development funds which should smooth out massive regional economic disparities when the country joins the EU, possible as early as 2004.
The completed chapter is 27th legislative area that the Slovak government has adjusted out of the 30 candidate countries have to complete for membership in the EU.
Provided Slovakia receives an invitation to join the EU, the country will be eligible for 1.75 billion euros in development funding between 2004 and 2006, said EU competition commissioner Michel Barnier.


CHIEF EU negotiator Ján Figeľ (centre) says EU funds could soften Slovakia's regional differences.
photo: TASR

WITH THE completion of the regional development chapter of European accession requirements, Slovakia has opened the door to further European Union (EU) development funds which should smooth out massive regional economic disparities when the country joins the EU, possible as early as 2004.

The completed chapter is 27th legislative area that the Slovak government has adjusted out of the 30 candidate countries have to complete for membership in the EU.

Provided Slovakia receives an invitation to join the EU, the country will be eligible for 1.75 billion euros in development funding between 2004 and 2006, said EU competition commissioner Michel Barnier.

The money will go towards regional economic development, urban development, railway and transport infrastructure, environmental projects and training government officials, said Barnier, adding that a EU requirement that part of each project be financed locally should not be an impediment.

"You have two options: to go it alone and pay for everything yourselves, or to be in the Union and pay 15 to 25 per cent. I've been dealing with these projects for three years, and I have not seen a single country complain about 25 per cent participation in financing," said Barnier.

Slovakia's main EU negotiator Ján Figeľ said that regional development funding could help ease the massive disparities that have left the Bratislava area at 98 per cent of the EU average standard of living, but Slovakia as a whole at only 49 per cent.

"This money can contribute significantly to removing regional differences and improving the overall social and economic situation of Slovakia," said Figeľ.

Construction and Regional Development Minister István Harna said that EU structural funding had three objectives: eliminating economic underdevelopment in regions with GDP per capita 75 per cent or lower of the EU average; supporting structural and/or urban development regardless of GDP per capita; and development of human resources.

"The goal is to enable countries to connect to European transport infrastructure - either railways or highways - and to achieve a level of environmental protection similar to that in the EU," said Harna.

Such funding is already in use in EU member countries, and have given a significant impetus to development in the poorer newcomers such as Spain or Ireland.

"Ireland was able to put these funds to extremely good use, and now the country has a higher GDP per capita than the United Kingdom," said Willy Sigl, pre-accession adviser at the Slovak State Aid Office.

Tomáš Bojnický, regional development adviser with the State Aid Office, explained that the funds would be divided according to the economic status of each region, with the less developed regions getting preference.

In Slovakia's case, he said, that meant that all areas of the country who get preference over Bratislava.

Harna said a National Development Plan for distributing aid to the country's poorest regions was being prepared, according to which the Construction Ministry would coordinate the work of central government bodies and ministries active in regional development.

"The National Development Plan will be finished in November and will be sent to the European Commission for approval in February 2003. This Plan will be valid from the date of Slovakia's EU entry, because it is aimed at receiving aid from EU funds," added Harna.

However, development professionals emphasized that access to EU funds alone would not necessarily bring money rushing in to poorer regions, and that active participation and sensible planning are needed on the part of the receiving country.

Sigl, in particular, pointed to the varying success that such funding had enjoyed in new EU member states in the past.

"We've had quite mixed results. There was one really top country, Ireland, but you also saw that in other places, like Greece, development was not what everybody expected.

"I think the main thing is you need really good programmes. You have to know what you are doing. And Ireland did it in a very clever way," said Sigl.

While the door to funding has been opened, Slovakia still needs to build its capacity for development, said Figeľ, meaning, "improvement in the preparation, management, monitoring and evaluation of concrete projects".

The Construction Ministry, says Harna, is up to the task and is already making preparations.

"Before the end of this year, we will hire approximately 40 people. The government has also put aside finances for approximately 800 people, and it is preparing finances for next year as well," he said.

While pointing out that Slovakia will be eligible for a higher degree of financial support than were Spain or Greece upon entry, Barnier also said that much remains to be done.

"Closing this chapter is only one milestone on the road to membership, and it is necessary to do lots of work to prepare Slovakia to take full advantage of future funds," said Barnier.

Harna agreed: "Regional development is a long-distance run. To catch up with EU countries, we have to go faster than them, but most of our regions' economic development is lower than the EU average.

"It is not possible to finance this from our own sources - Bratislava does not have the capacity to redistribute its resources to other regions. We definitely cannot bridge this gap even over the next five or six years," he added.

According to experts from the Slovak Academy of Sciences who prepared a study on the impact of Slovakia's entry to EU, the country's GDP may reach EU levels in about 20 years.

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