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Governance Institute says EU won't cover funds for social enterprises

Financial support reaching €26.56 million that has been provided to so-called social enterprises by the Slovak government using EU funds was unjustified, said board chairman of the Slovak Governance Institute (SGI) Miroslav Beblavý at a press conference on Thursday, November 26, the TASR newswire reported.

Financial support reaching €26.56 million that has been provided to so-called social enterprises by the Slovak government using EU funds was unjustified, said board chairman of the Slovak Governance Institute (SGI) Miroslav Beblavý at a press conference on Thursday, November 26, the TASR newswire reported.

According to Beblavý, these non-governmental organisations were subsidised at odds with European rules on state support. “As this assistance was provided unjustifiably, Brussels will never pay the money to Slovakia. If some of them have already been subsidised, Brussels will ask for a refund,” he told TASR.

The Labour, Social Affairs and the Family Ministry has provided money from the European Social Fund (ESF) to eight pilot social enterprises. According to Beblavý, the problem lies in the fact that seven of the eight social enterprises pursue business activities.

The EU has set strict rules for subsidised businesses that aren't being met at the moment. If the enterprises hadn't been carrying out business activities the requirements for subsidies would have been met. According to SGI, the only way to by-pass these rules is to ask for an exemption, which didn't happen in this case. SGI has already sent its findings to the Finance Ministry, the Labour Ministry and the European Commission (EC).

The EC's team of auditors is currently looking into the general system of checks and management of expenditures sourced from the European Social Fund (ESF), the spokesperson for EU Commissioner for Employment Chantal Hughes told TASR. TASR

Compiled by Zuzana Vilikovská from press reports
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