site.btaTwo Institutes Say Bulgaria Absorbs EU Funds to Report Projects, Not to Achieve Goals

Bulgaria's Economic Policy Institute (EPI) and Green Policy Institute (GPI) called for better efficiency and expediency in the implementation of EU-funded projects, as well as for full use of the EU funds available for Bulgaria to achieve the EU's climate and environmental goals. The two institutes gave a news conference at BTA's National Press Club in Sofia on Thursday.

The Economic Policy Institute and nine organizations from eight countries of Central and Eastern Europe (CEE) are involved in a long-term project which looks into the efficient allocation of EU funds in Bulgaria and the CEE countries covered by the study. It is supported by the German Federal Ministry for Economic Affairs and Climate Action and the European Climate Initiative (EUKI).

In Bulgaria, EPI cooperates with the Green Policy Institute.

EPI Executive Director Yasen Georgiev said the grant funding allocated to Bulgaria is substantial. It comprises BGN 11.1 billion allocated under the National Recovery and Resilience Plan after the adjustment made as a result of the performance of the Bulgarian economy; BGN 19.2 billion under operational programmes for 2021-2027 and BGN 2.5 billion under the Fair Transition Mechanism, from which EUR 100 million has been lost and there is a risk of losing more funds.

Due to delays and a limited time-frame, the risk of non-absorption of the resources allocated to Bulgaria or their partial absorption by inappropriate and inefficient projects is growing, Georgiev said. At this stage the non-utilization of the available resources does not cancel the implementation of the national climate and environmental commitments. From today's point of view, this means that funds will have to be allocated from the public purse to achieve the national commitments, which will come at the expense of reallocating resources from other areas, tax rises or new debts.

The two institutes have identified ten main problem areas in Bulgaria's capacity to absorb EU solidarity funds more effectively to transform the base and structure of the national economy, and to bear the burden for society during the transition to a green and digital economy.

The quality of law-making is one such problem area; another problem is the inefficient use of EU funds, which are seen as "easy money" in the form of grants, Georgiev said.

The management of what has been built with EU funds is problematic due to lack of resources for maintenance, as is the case with sewage treatment plants. EU funding is also used for the creation of new but "sometimes unnecessary facilities and infrastructure". In addition, there are no opportunities for public consultation on the projects planned to be carried out with EU funds.

Another problem is the lack of indicators or of appropriate metrics on the implementation and evaluation of projects and how they have improved the social and economic environment.

The report published on the EPI website also makes recommendations about the effectiveness of EU funding in Bulgaria.