Finance Ministry Promises to Avoid Having to Return EU Subsidies

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Estonia will have to return nearly €300 million from the previous EU funding period if it cannot find ways to spend the money before the year’s end. While the National Audit Office warns the pace of using EU funds is too slow, the Ministry of Finance vows Estonia will not have to return the money.

Estonia is yet to pay out 7 percent of EU funds received for the 2014-2020 fiscal period or €296 million, said Triin Tomingas, head of the foreign funds department at the Ministry of Finance.

“We can still make payments until the end of the first quarter next year. This means that while we have more time regarding payments, the projects we use the money for need to be finalized by the end of this year. All activities must be completed by December 31, 2023,” Tomingas said.

This means that every school or hospital room the EU funds are paying for must be finished by year’s end. Estonia has managed to pay out the sums faster during previous fiscal periods, Auditor General Janar Holm said.

“This is the first time in the history of EU funds where we are at risk of losing a part of the money.”

But Tomingas said that this would not happen. The projects are in their final stages and the funds are overbooked, meaning that should there be last-minute delays, the use of funds can be transferred.

“Just as in previous periods, we will not miss a single euro from Brussels,” the ministry official promised.

But Holm said that making use of EU funds’ and fiscal period financing is taking longer than before, suggesting that the current situation is part of a wider trend.

“It would have been possible to use those funds much sooner over the years. We concluded last year that the average volume of money not spent for the last five years was €300 million. Putting that money toward the economy would have gone a long way. We would have more schoolhouses, and completed more hospital renovations by now had we used the money at a sensible time because prices have and will continue to go up.”

Tomingas admitted that agreements necessary for making use of EU funds and fiscal period money are taking longer but added that it is a problem all Member States share. Estonia is even a little faster than average. The auditor general said that while the National Audit Office seldom recommends hiring more officials, this could be done temporarily at the start of the new fiscal period. Tomingas disagreed.

“It would probably be insensible to add to the army of officials just for a sprint of a few years. The field requires very specific knowledge of [EU] funds, their inner workings, negotiations with the European Commission and many policy fields,” she said.

Source : ERR