Home BusinessEconomic News Finance ministry promises to avoid having to return EU subsidies | News

Finance ministry promises to avoid having to return EU subsidies | News

by Paul Morgan

Estonia is facing the risk of losing a significant amount of EU funds due to a delay in payments. According to Triin Tomingas, head of the foreign funds department at the Ministry of Finance, 7 percent of EU funds received for the 2014-2020 fiscal period, amounting to €296 million, is yet to be paid out. Tomingas stated that although payments can still be made until the end of the first quarter next year, the projects that the funds are intended for must be finalized by the end of this year.

The urgency to complete these projects stems from the requirement that all activities must be completed by December 31, 2023. This means that every school or hospital room being financed by EU funds must be finished by the end of the year. It is worth noting that Estonia has managed to pay out funds faster during previous fiscal periods, making the current situation particularly concerning.

Auditor General Janar Holm expressed his concern over the possibility of losing a part of the money, highlighting that this is the first time in the history of EU funds where such risk exists. However, Tomingas reassured that this will not happen, emphasizing that the projects are in their final stages and the funds are overbooked. In case of any last-minute delays, the use of funds can be transferred to ensure that no money is lost.

Despite Tomingas’ reassurances, Holm pointed out that making use of EU funds and fiscal period financing is taking longer than before, suggesting that this situation is part of a wider trend. He noted that over the last five years, an average of €300 million remained unspent, which could have been put towards important infrastructure projects. Holm argued that utilizing the funds at a sensible time would have allowed for the completion of more schoolhouses and hospital renovations, while also accounting for rising prices.

Tomingas acknowledged that necessary agreements for utilizing EU funds and fiscal period money are indeed taking longer, but she claimed that this is a problem shared by all Member States. She stated that Estonia is even slightly faster than average in this regard. Holm, on the other hand, suggested that hiring temporary officials at the beginning of the new fiscal period could help expedite the process. However, Tomingas disagreed, citing the necessity for specialized knowledge in EU funds and negotiations with the European Commission.

In order to avoid any potential losses, it is crucial for Estonia to expedite the completion of projects financed by EU funds. The timely utilization of these funds will not only drive economic growth but also ensure that important infrastructure projects are completed as planned.

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