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EXPERTS WARN THE COUNTRY COULD END UP PAYING MORE THAN IT RECEIVES AS AN EU MEMBER

Inefficiency keeps EU funds from reaching Slovakia

ALTHOUGH a successful referendum in May cleared the way for Slovakia's EU entry in 2004, the country could lose out on millions of euro because of insufficient preparation, experts say.
As a new EU member, in 2004 Slovakia is to pay Sk10 billion (€242 million) into the common European budget. In return, it has been promised as much as Sk23 billion (€556 million) from EU structural funds, but only if it is able to prepare enough projects in time and to a high-enough standard.
If not, the country may find itself contributing more than it is receives.

ALTHOUGH a successful referendum in May cleared the way for Slovakia's EU entry in 2004, the country could lose out on millions of euro because of insufficient preparation, experts say.

As a new EU member, in 2004 Slovakia is to pay Sk10 billion (€242 million) into the common European budget. In return, it has been promised as much as Sk23 billion (€556 million) from EU structural funds, but only if it is able to prepare enough projects in time and to a high-enough standard.

If not, the country may find itself contributing more than it is receives.

"The situation regarding the drawing of EU funds is serious, and if we don't take decisive steps, we will not be able to use all the available money," said Minister of Construction and Regional Development László Gyurovszký on June 3.

Gyurovszký's statement came after strong criticism of Slovakia's attempts to access EU post-accession funds was reported in the Slovak media.

In Brussels at the end of May, the head of the EC's Directorate General for Regional Policy, Luiz Riera, told Slovak deputy prime minister for European integration Pál Csáky that Slovakia was "the least-prepared [candidate] country," the daily Pravda reported.

The problems dogging Slovakia's attempts to access EU money seem to be the same for the pre-accession and post-accession funds, insiders say. As in other fields of Slovak public life, corruption is high on the list of concerns.

"It is a fact that in the committee [that evaluates the projects and decides who gets the money] there is always one person who has greater decision-making rights, or has the ability to influence the outcome of a decision, and that person always favours a certain group of applicants," said an entrepreneur from eastern Slovakia who wished to remain anonymous.

He said that he had to use some unusual methods in his efforts to get money from a pilot grant scheme for the support of tourism run by the Economy Ministry as part of the PHARE programme.

"I myself succeeded [in getting approval for a project], but not in the way I would have imagined," he said, but added that he would not talk about specifics over the phone.

"It is necessary to find a person who has influence in the committee, somehow reach an agreement with him, and then you can get approval," he said.

However, EU officials in Slovakia say they have no reason to believe that the allocation of EU resources is currently being influenced by corruption.

"The only case I can remember is the one with Ronald Tóth, and I think he was cleared of any criminal charges," said Onno Simons, counsellor with the EC delegation in Slovakia.

In April 2001, the European Commission stopped the inflow of finances into Slovakia because of allegations that Tóth, at that time director of the foreign aid section at the Government Office, made a considerable profit by helping companies prepare projects and making sure such projects were approved.

"After this case, the Commission and the Supreme Audit Office made a number of recommendations, which were followed through by the Slovak authorities. I think there is now much more clarity," said Simons.

"I don't hear rumours about corruption as regards the funds, and I don't really see how it could happen," Simons said, adding: "It's now mostly in the hands of Slovak authorities to deal with these funds."

But while allegations of corruption remain unacknowledged by officials, few deny that a lack of preparation is preventing Slovaks accessing EU funds.

"Corruption is not the main problem at this point," said Emil Plíha, board member of the Association for Regional Development and Environment, a group of consulting firms working with EU funds.

"If there was enough corruption, we would perhaps at least draw all the funds," he jokingly added.

"The main problem is that people are not sufficiently prepared," Plíha said, pointing to a lack of professionalism at the Slovak ministries and insufficient information reaching the regions and cities, for whom much of the post-accession aid is intended.

"The administration is small, people change often, and [those coming in] are mostly inexperienced and are primarily concerned with how to do their jobs. Yet there is an enormous amount of work," said Plíha.

At the end of May, the EC returned a number of strategic documents related to the drawing of structural funds for corrections to the Slovak government.

"There was an absence of clarity [in the documents]," said Dieter Thiel, head of the PHARE/ISPA section of the EC Delegation in Slovakia in an interview with the daily SME, in which he added that the documents lacked consistency.

"The problem is that the basic documents were prepared without any significant participation from the regions. Today the copy-and-paste method is very popular, so many times the ministry officials just took documents drawn up in other countries," said Plíha.

In an effort to tackle the problems related to EU financing, the government on May 28 approved a set of measures intended to improve the current situation. Among them were plans to monitor how much funding is coming into Slovakia, to undertake an audit of institutions involved in handling funding, and to find a way of informing the public about the various instruments of EU aid.

The government said it also wants to increase the number of ministry officials who deal with the EU agenda.

In April, there were just over 300 people working on EU-related issues, but that number should rise to 600 by the end of August. Gyurovszký has announced that people dealing with EU funding at the Construction Ministry can hope to receive a salary as high as Sk45,000 (€1,090) per month. The average monthly salary in Slovakia is currently at about Sk14,000 (€340).

Even with the right people in the right positions, finances may remain a problem, as EU structural funds, intended to help regions and cities, require co-financing from municipalities, but few regional governments in Slovakia have the money to commit.

"We have to contribute to each project. In our budgets there isn't a single crown for that," Jozef Tarčák, head of the Žilina regional government, told the daily Pravda.

"Perhaps the [national] government will allocate some money for co-financing, but we need to know under what circumstances we can get it," he added.

"This is a fundamental problem," Plíha acknowledged. "The state should be able to say that it has a certain amount for co-financing, but the state cannot say that, because it has trouble finding enough money to fill the budget."

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