Transcript The EU Cohesion Policy: The Case of Bulgaria

The EU Cohesion Policy:
The Case of Bulgaria
Prof. Dimitar Hadjinikolov
University of National and World Economy,
Sofia, Bulgaria
Part II
1.Briefly about Bulgaria as a member state
2.EU Cohesion policy in Bulgaria, priorities
and institutional framework (2014-2020)
3.Achievements during MFF 2007-2013
4.Transport infrastructure projects
5.Environmental projects
6. Key problems
1. Briefly about Bulgaria as a member state
Indicator
Unit
Population
1000 inh.
Population growth
pro mille
Population aged 65+
GDP per head (PPS)
%
EU = 100
Government gross debt as
a share of GDP
% of total employment
% of GDP
0 to 100
Public debt
Employment in Agriculture
R&D expenditure
Competitiveness Index
Population aged 25-64 with high
educational attainment
Density of motorways
Density of railways
Employment rate, ages 20-64
Unemployment rate
At risk of poverty or exclusion
Male life expectancy at birth
Female life expectancy at birth
%
Index of length, relative to
area and
population
%
% of active population
% of population
Years
Years
Year(s) Bulgaria EU avg.
504265,
2012 7306,8
9
20012011
-8,0
3,7
2012
18,8
17,8
2015
46
100,0
2012
18,5
85,3
2011
2011
2012
20,0
0,6
19,7
5,2
2,0
54,7
2012
2008
24,0
32,5
27,7
100,0
2010
2012
2012
2011
2011
2011
98,3
63,0
12,3
49,1
70,7
77,8
100,0
68,5
10,5
24,2
77,4
83,2
Since 2007 Bulgaria’s economy has grown at a faster rate than the EU average.
See the graph below. The average growth of Bulgarian economy in the years 20072015 was 1.8% and of the EU economy only 0.7%.
However, it is insufficient as at this rate, about a century will be needed for
Bulgaria to catch up with the EU average level GDP per capita.
10
8
6
4
EU
2
1.8
0.7
0
2007
-2
-4
-6
2008
2009
2010
2011
2012
2013
2014
2015
Average
BG
2. EU Cohesion policy in Bulgaria priorities and institutional
framework
Programs title
Rural Development
Program
Operational Program
"Transport and Transport
Infrastructure"
Operational Program
"Environment"
Operational Program
"Regions in Growth"
Priorities
Bulgarian organizations
responsible for the
programs
Small enterprises and job creation
support; Efficiency in energy and water
Ministry of Agriculture and
use; Transport infrastructure; Reducing
Food
nitrous oxide and methane emissions;
Organic farming
Transport infrastructure - motorways,
Ministry of Transport,
railways, Sofia metro; intermodal
Information Technology
transport
and Communications
Water supply and sanitation
infrastructure; Municipal waste
Ministry of Environment
management; Biodiversity; Flood and
and Water
landslides prevention; Air quality
Ministry of Regional
Urban development (Sofia metro); Energy
Development and Public
efficiency; Educational infrastructure;
Works
Road infrastructure; Tourism
EU funding
(2014-2020,
€ Mil.)
2339
1605
1505
1312
Bulgarian
EU funding
organisations
(2014-2020,
responsible for the
€ Mil.)
programmes
Program title
Priorities
Operational Program
"Innovations and
Competitiveness"
Techno,ogical development and innovations;
SMEs; Energy and Resource Efficiency;
interconnections with the neighbouring gas
systems (Greece, Turkey, Serbia and Romania)
Ministry of
Economy;
Ministry of Energy
1181
Operational Program "Human
Resources Development"
Reducing poverty; Promoting social inclusion
(Roma integration);
Ministry of Labour
and Social Policy
938
Research and innovation - Centers of Excellence
and Centers of Competence; Reducing and
Operational Program "Science
preventing early school leaving (Roma
Ministry of Science
and Education for Smart
integration); Improving access to higher
and Education
Growth"
education and lifelong learning for
disadvantaged groups
Increasing institutional capacity and efficiency
Operational Program "Good
of public administrations and public services; Ministry of Finance
Governance"
Anti corruption measures; E-government
Ministry of
Data collection, control, inspections; use of EU
Maritime and Fisheries
Agriculture and
financial instruments
Programme
Food
TOTAL
596
286
88
9850
Ministry of Agriculture and Food is managing 25% of the EU funding in Bulgaria!
Ministry of Regional Development and Public Works only 13%.
Question for reflection: Which Ministry is more important for the Cohesion policy?
3. Achievements during MFF 2007-2013
What results have been achieved so far?
The total allocation from Cohesion Policy funding for the 2007-2013
period in Bulgaria was € 6.9 billion.
As of 31.12.2016 about 85% of the allocated funding was used. It means
that Bulgaria has used in 2007-2013 about € 5.86 billion. In the same
period Bulgarian GDP was € 356.6 billion.
The EU Cohesion Policy funding in Bulgaria was equivalent only to
about 1.64% of the country’s GDP.
Nonetheless, EU Cohesion Policy funding has been an important driver
for reforms in Bulgaria, a role which will further increase in 2014-2020.
EU Cohesion Policy funding has helped Bulgaria to develop the
transport infrastructure and to improve the living conditions for a
significant part of the population (especially in the capital Sofia).
EU Cohesion Policy funding has helped Bulgaria to:
 serve over 280,000 more people by waste water projects;
 implement many transport infrastructure projects, such as the
extension of the Sofia metro, Trakiya Motorway, the Sofia
Airport;
 improve urban transport for some 1,289,744 citizens, mainly in
the 6 biggest cities of Bulgaria, namely Sofia, Plovdiv, Varna,
Burgas, Pleven, Stara Zagora;
 improve educational infrastructure for over 30,000 students and
pupils;
 provide scholarships to some 172,000 students;
 provide social services in a family environment for more than
51,000 persons;
 modernize 20 cultural facilities;
 invest in energy saving measures in public buildings and schools,
etc.
4. Transport infrastructure projects
Total length of motorways in 2007 – 418 km; in 2016 – 707 km
In Bulgaria,
construction of
motorways
started in the
1970’s. However,
construction
speed was very
slow – about 1015 км annually.
Only since 2007
there has been
accelerated
construction.
The only fully completed motorway in Bulgaria is Sofia-Burgas motorway.
It is part of EU Orient-East Med Core Network Corridor.
Another part of the corridor is Sofia-Thessaloniki motorway, which is under
construction.
The picture
shows the
bridge called
“New Europe”
over the
Danube river in
the Bulgarian
town of Vidin.
It is 1971 m
long, includes
two lanes in
each direction,
electrified
railway track
and a bicycle
lane.
This long northwest-south eastern corridor will connect central Europe with the
maritime interfaces of the North, Baltic, Black and the Mediterranean Sea, making it possible
to optimize the use of the ports concerned and the motorways to the seas.
The corridor starts in Greece (Athina – Patra/Igoumenitsa) and reaches to Berlin and
Hamburg in Germany.
There are plans to develop Bulgaria’s railway system, to guarantee higher speed of trains,
in compliance with EU standards. There are allocated investments for development of the
Black Sea ports and those at the Danube river.
Project “Electrification and reconstruction of Svilengrad-Turkish Border railway
line” to reach a speed of 160 km/h.
The first railway line in Bulgaria was
opened in 1866 and has a length of 223
km.
Railway electrification began in 1963
and since then there have been double
track railways.
The state company BDZ operates the
railway transport.
5. Еnvironmental projects
Although there is a separate operational program “Environment”, the
implementation of environmental projects can be found in all operational
programs.
In the period 2007-2013, through this operational program about €1.2
billion or € 170 million annually were utilized from the EU budget. Most of
these funds were used for funding local projects, run by municipalities,
predominantly in the capital municipality and some other big municipalities.
Project №DIR-592113-1-9 “Integrated System of Municipal Waste Treatment
Facilities for Sofia Municipality “
Funding sources
Value in €
isposedMil.
in landfills
% of eligible project costs
EU funding
150
85
Own contribution from Sofia
Municipality, incl. EIB loan
27
15
Total cost of the project with VAT:
177
100
Waste management is a
serious problem in Bulgaria as well
as in other southern EU members
states.
Sofia and other big cities have
accumulated huge amounts of
household
waste
kept
in
temporary landfills.
Recycling is one of the
solutions. Another one is to
process the waste into useful
biomass. Part of the waste is burnt
into modern waste treatment
facilities like the new one.
Priority axis 1: Water
Project: Improving and developing the infrastructure for drinking water and
waste water in the municipality of Veliko Turnovo
The project provides construction of new sewerage network (including
collectors) and water pipeline network (€ 3766.69 m).
Amount of the project € 22 Mil. (85% from the EU).
Similar projects were implemented also in a number of other Bulgarian
municipalities: Burgas, Vratsa, Gabrovo, Dimitrovgrad, etc.
6. Key problems
-
Duplication of responsibilities and activities. This leads to waste of
resources and overexpansion of administrative staff.
Example: Road infrastructure development is a task of three different Operational
programs: "Transport and Transport Infrastructure“; "Regions in Growth“; “Rural
development”. Тhis creates prerequisites for duplication of projects.
It is difficult to implement complex regional projects for infrastructure development
because in Bulgaria there are no real regions. After joining the EU , 6 purely formal
Planning Regions were created (according to NACE 2 - Nomenclature of Territorial Units
for Statistics).
In reality, the infrastructure is
managed centrally by the government or
the municipalities which are quite different.
The largest and strongest is the capital
municipality – with a population of 1.5
million. The smallest municipality in
Bulgaria has 625 people!
Guess where money would go?
- Strong geographic concentration of resources – mainly in the capital Sofia
and several big cities
The result is:
And it should be like this:
-
Lack of effective system of impact assessment. Financial parameters of
projects are mainly monitored, while monitoring of economic, social and
environmental impact is formal.
Example:
Under Operational program “Development of the Competitiveness of the
Bulgarian Economy” a total of € 15 million were spent to create clusters of
SMEs in Bulgaria in the period 2007-2013. About 250 new clusters were
created. However, according to the Association of Business Clusters most of
them are incidental communities, created for the sole purpose to utilize EU
funds. No impact analysis has been made, but again in 2014-2020 another
€10 million have been allocated for “clusters”.
-
Poor sustainability of projects, financed with EU funds
Example: A key activity, funded by the EU is road construction. These
projects, however, do not allocate funds for maintenance of roads already
built. This is one of the reasons for the poor state of Bulgaria’s road
infrastructure, in spite of the fact that more and more new roads are built.
-
Subsidizing can become a good environment for corruption, especially if
there is no transparency in tender procedures.
Bulgaria consistently ranks among the
EU Member States with the highest
perceived level of corruption, and corruption
is considered to be one of the most
important barriers to doing business in
Bulgaria.
As part of its anti-corruption strategy,
the Bulgarian government has launched a
number of initiatives targeting corruption
more generally throughout the public
administration. These include a reform of the
administrative inspectorates, measures to
improve the public procurement system, and
the preparation of sectorial anti-corruption
plans containing preventive measures in a
number of specific sectors considered to be
at high-risk of 'low-level' corruption.