ECONOMY

Race against time to absorb all EU funds set aside for 2013

The Development Ministry has cranked up efforts to absorb all European Union funds set aside for Greece for 2013 – amounting to 3.9 billion euros – by the end of December and to meet the target set in Greece’s bailout agreement with its international creditors.

So far, the ministry has managed to disburse 2.9 billion euros, meaning that another 1 billion euros will have to be absorbed in the five weeks left until the end of the year.

Sources at the ministry have suggested that the target can be reached, given that most payments are declared in the last month of each year. In order to speed up the process, the ministry has called for the entities involved to submit their next payment demands as soon as possible and to avoid exhausting the period until end-December.

This initiative is part of an overall drive to avoid the delays usually observed in the disbursement of funds from the EU budget, as most member states submit their payment requirements en masse at the end of each year. The ministry is eager to avoid a repetition of last year’s phenomenon, when the excessive demands for funds from the EU budget led to a delay in the disbursement of the money.

Sources say that besides hitting the target set out in the bailout agreement, the ministry is also likely to manage to abide by a European Commission rule dictating that funds must be allocated within two years of being pledged: The latest data on the use of resources from the National Strategic Reference Framework show a 68 percent absorption rate this month, which is considerably higher than last month’s 58 percent.

Beyond intensified efforts to meet the target in the final month of the year, the increase in the absorption rate is also due to the reduction of the national contribution to projects from 15 percent to just 5 percent, as the subsidy program has effectively been cut from 24.3 billion euros to 21.3 billion in order to avoid the loss of EU funds. This was the second time agreed resources were slashed since the start of the subsidy program in 2007.

Despite the reduction, delays in certain important sectors remain. Programs for the environment, digital convergence and administrative reform are, as usual, the biggest laggards.