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The Warsaw Voice » Business » July 29, 2011
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Funds Well Spent
July 29, 2011   
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Regional Development Minister Elżbieta Bieńkowska talks to Andrzej Ratajczyk.

Poland was awarded almost 68 billion euros in EU funds for the 2007-2013 period. How much of that has been allocated so far?
Agreements signed so far involve EU grants worth over zl.170 billion, which means Poland has absorbed almost two-thirds of the total amount. Coupled with funds set aside for individual projects, that is, ones which are of key importance to Poland’s development and do not need to formally compete for grants, there is not much more money left to distribute. There are 60,000 ongoing projects involving funds awarded for the 2007-2013 period and they are worth almost zl.250 billion. This amount is actively working for the economy.

At the beginning, institutions and beneficiaries concentrated their efforts on securing contracts, but I said at the end of 2009 that those who wanted to apply for grants should hurry. There will be far fewer competitions this year, because now is the time to actually carry out and then account for projects.

Compared with the rest of the EU, how has Poland been doing when it comes to EU funds absorption?
As far as the amount already disbursed to Poland is concerned, we are the leaders in Europe. The European Commission has transferred almost 90 billion euros to member states as part of the EU cohesion policy and 19.5 billion euros of that has been transferred to Poland. Skeptics might, of course, say that since Poland has the largest amount at its disposal, there is nothing special about this. However, funds transferred to Poland by the Commission are 3 percentage points higher on average than those received by other member states. This shows that EU funds have been absorbed at the right pace, in step with available resources. Besides, countries which have awarded smaller amounts find them easier to manage.

Poland has a very good reputation in Brussels. When I meet with European Commission officials, I am frequently told that Poland is a role model as far as EU funds absorption is concerned. This is the best recommendation for us.

As far as EU funds are concerned, isn’t efficient spending more important than the absorption rate? What is your opinion on Poland’s efficiency in this department? How have EU funds affected Poland’s economic growth?
You rightly pointed out that a fast absorption rate is not all there is. The key question is whether the Polish economy is becoming more competitive in the process. My ministry regularly checks the effect EU funds have on the Polish economy. Our estimates indicate that in 2010, EU funds may have caused GDP to increase by 5.8 percent and added 0.6-0.7 percentage points to the GDP growth rate. EU funds were responsible for over half of Poland’s economic growth in 2009, which was a particularly tough year. We believe that EU funds may have helped create up to 315,000 jobs in 2010. It is beyond any doubt that the cohesion policy helped Poland deal with the fallout of the economic slowdown.

Poland has changed enormously. You can see completed and ongoing EU projects virtually everywhere. We are paying particular attention to projects that are sure to produce long-term effects. Poland is a different country than what it was back in 2004 and probably everybody can see that.

During the recent crisis, some EU member states struggling with their public finances have become somewhat reserved about the cohesion policy. Can this affect the future EU budget? What is Poland going to do to persuade the skeptics and to remain the largest beneficiary of EU funds?
When crisis strikes, every country will watch its expenses more carefully. During the Polish presidency of the EU, we want to convince our partners in Europe that the cohesion policy is the best response to difficult times. The European Commission too is aware of the need to continue the cohesion policy. This is shown by the draft EU budget the Commission unveiled recently. In the fifth cohesion report released in November last year, the Commission makes it clear that the cohesion policy has helped spread economic growth and affluence across the EU. A total of 1.4 million new jobs were created in Europe from 2000 to 2006 thanks to the cohesion policy. What’s more, money which the “old” EU member states invest in the cohesion policy return in the form of increased trade. Our estimates show that the 15 “old” EU countries have been receiving 46 cents in the form of additional exports in return for every euro paid to the EU coffers for cohesion policy in Poland between 2004 and 2015. The benefits for Germany, Poland’s main trade partner, have been the highest, at 85 cents.

Do you expect EU spending on cohesion policy will change in the next financial perspective?
We have been saying for years that cohesion policy requires changes to ensure more efficient use of available funds. Challenges defined in the Europa 2020 Strategy indicate that the funds should be directed where they can produce measurable results. Complicated procedures should not prevent anyone from accessing the funds. What we have also proposed is to introduce greater concentration of funds, that is, reduce the number of areas in which EU funds are invested. The funds should also be adapted to better address the needs of individual regions. I also expect ordinary grants to be partially replaced by a reimbursement system. This is a good idea, as it allows for EU funds to work for the economy more efficiently and for a longer period of time.
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