EU 2014-2020: A New Budgetary Perspective

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Galiniak at the Polish language Wikipedia, Creative Commons

A few days ago the European Commission confirmed the last of the Polish operation programmes for the years 2014-2020. Media and public opinion have welcomed the decision with a wave of enthusiasm, glad that just in a few more weeks the first call for proposals shall be announced. But is this enthusiasm really valid in the present circumstances?

During the past few years a lot of myths have been created around the European funds. It is said that it is thanks to those funds that Poland remained a “green island” amidst the economic crisis. It is also said that those funds are the driving force of GDP growth. It is even said that thanks to them thousands of innovative microbusinesses were created. It is said, it is said…

In reality, there are not many studies analysing the effects of implementing projects from the previous perspective (2007-2013). And I do not mean here statistical effects but measuring a real influence on the economy. Before the next “seven-year-old” will have its début, it is worth to consider the topic with a bigger dose of realism and a smaller one of success propaganda.

Let”s start with the basic fact which is, however, often disregarded – namely, that this new EU perspective has been launched already 14 months ago. Despite that, up to now there has been announced only one call for proposals (on e-administration development by Operational Programme Digital Poland). From the very onset we are therefore significantly behind (and without any doubt we will get even more behind – it may take one and a half, and maybe even two years until next calls are announced). The question is: how could this happen? The situation is a dead ringer of the years 2007-2008 when first calls for proposals appeared two years later than expected. Yet, back then such delay could be explained by the lack of experience resulting from the fact that Poland was a rookie in the EU. Now this argument is invalid. Of less importance is the fact that it is European Commission that is partly (and even in a greater part) responsible for this gap; the fact is that no conclusions were drawn from previous experiences. We could say – better late than never. Of course, we could say so, nevertheless that”s no excuse. As an effect, due to political pressure in the final years of the new perspective a cumulation of calls for proposals will arise, in order to contract the financial resources and not to waste the opportunity and allow them to go back to Brussels. Of course, it”s better to spend than to give it back, but do we really want to repeat the fault of wastefulness seen in the previous years? It seems that we may have no choice…

Purposefulness of the distribution of resources is a key issue we have been, are and will be faced with. Stories about billions of Polish zlotys spent on boondoggles such as training programmes on innovative ways of conducting hydromassage actually did happen. I was a member of various recruitment committees in projects directed at enabling people threatened with social exclusion to set up in business. Each time a few dozens of people have received huge amounts of money for purchasing Apple computers – 10k each, used cars driving only backwards, computer games to virtual kindergartens, tulip bulbs to backyard greenhouses and so on, and so forth. I do not claim that each of these ideas was bad – I”m just saying that after operating for the required 12 months, 75% of those new companies were shut down. Unfortunately, the official statistics did not reflect that aspect of reality.

And there”s a number of similar examples – that”s the direct result of making offering an equal share for everyone a rule. And so, the EU “water hole” was shared between training programmes and environmental protection; new machinery in companies and thermal modernisations; tourism and transport; education and health care; highways and social economy. We haven”t specialized in anything concrete, no emphasis neither was nor is put on one thing in particular. What”s worse, no one has analysed the effects of the previous budgetary perspective in order to write programmes for the next years in a better way. I”ll even risk saying that it is (and will be getting) even worse.

Just looking over any Regional Operational Programme (ROP) we will find out that they are all almost exactly the same and they”ve been all imposed by the European Commission. Saying that it has been “imposed” instead of “negotiated” is a deliberate choice of words, as in a quite surprising way they copy the Partnership Agreement – a strategic document which regulates the priorities of the implementation process of the new budget on the state level. Each time, the arrangement of priorities axes, their allocation, and often even their order, were drawn up by using “copy and paste” technique. And so: to support entrepreneurship and education 15-20% of the resources were allocated; sustainable transport – 12-16%; low-carbon economy (judging by ROP it”s a real favourite of the Commission) – 10-25%; combating social exclusion – 10-20%; environmental protection – 10-15%; education, health care, labour market and other priorities – 5-10% each.

The most striking thing about it is that the priorities and allocations are exactly the same in all voivodeships and they do not include the differences between them, despite the fact that every time we are made to believe that the approved form of the programme is the result of careful analysis (vide the quote from the ROP of Łódź Voivodeship: ”(…)distribution is the result of a careful analysis of socio-political situation of Łódź Voivodeship on the basis of which the key challenges the region must face were formulated”).

The conclusion is as follows: not only no conclusions were drawn from the years 2007-2013 to improve the programming of public intervention but also even more rigid corset was introduced into the application of horizontal online casino canada goals. And let”s state it up front – goals which were often blown out of proportion, not realistic, responding to the needs of developed economies of the older member states – at best, but definitely not to the needs of Poland.

But that”s not even the worst. What”s much worse is that this new perspective is addressed at a real economy only to a very small extent. There”s nothing there for small and medium enterprises (SMEs) in the new calls for proposals. Huge amounts of money will be allocated to support the joined forces of public enterprises and public higher education institutions which were created thanks to public authorities, what – according to governmental and union planners – would improve the level of the so-called “innovativeness of our economy” due to the sole power of the decree. No doubt that the goal in itself is honourable. It is the method that is wrong.

Let me refer here to my personal experience: in December last year, I visited DG Connect in Brussels (the European Commission”s Directory General, responsible for telecommunications, among others) in order to discuss how are doing the 5 applications by Internet providers from different locations in Poland submitted as a part of one of the EU initiatives. Most of them were rejected due to unclear reasons. During the meeting I was told that SMEs want to do something but the EC is not looking for such projects. It would be perfect if they were merged into one big project, joined by some public partner and then we could hope to receive some support.

Another example from the same sector (I focus here on telecommunications as the sector I”m very familiar with): in spring 2014, in the process of discussing the form of the Digital Poland Operational Programme (within the scope of which broadband internet access networks are to be built) a huge interest of governmental administration has been caught by the idea by Orange Polska1 to create under its auspices one big special purpose vehicle for building the network in the entire country and to use for that purpose all allocations thus €1bn. Meanwhile, the experience of previous years clearly shows that small and medium enterprises are much better in dealing with such tasks, creating ultramodern fiber-optic networks while Orange is still far behind, with its obsolete copper telecommunication cabling

The question therefore is: what is the reasoning of the decision-makers who choose such and not another development policy model? It is not my intention to criticise the sole idea behind EU funds, which are definitely highly beneficial for Poland. However, it”s clear that their key influence affects the most expensive infrastructural investment projects. Nothing else would so sufficiently make up for a huge financial support that enables Poland to cover the gap in the financing of building roads, airports, sewage treatment plants by public sector or revitalisation of the previously spoiled fabric of many Polish cities and towns. Nonetheless, I think that the level of the economy”s competitiveness cannot be governed centrally. Especially if one chooses to support big projects with state or quasi-state involvement. Such centalized – even Fordist – model worked perfectly in the 1960s, but it doesn”t work today. And just to make it clear – Polish government isn”t the only one to be accused of that. An important, if not the key, role in defining the goals of the Cohesion Policy in such a manner plays the European Commission, which prefers it when the Weberian caste of bureaucrats pilots the economy manually.

I believe that we would all agree that for the sake of our homeland we should make the most of the next EU budgetary perspective. Poland is still considered as a country working its way up therefore we cannot afford wastefulness which may be accepted by our richer Western neighbours. This is why we need a serious and grown-up debate on the priorities and ways of spending the granted funds within the scope of this next seven-year-old project. So we could build something more than mere hairdressing salons.

On the other hand, we shouldn”t overestimate the significance of this “manna from heaven”. It will never substitute a sensible economic policy that would provide all our entrepreneurs – the salt of the earth – with freedom to work for our common prosperity.

 

An article by Piotr Wiąckiewicz. Originally published on liberte.pl

Translation: Olga Łabendowicz

 

1Orange Polska is a Polish telecommunications provider established in December 1991. It is a public company traded on the Warsaw Stock Exchange, with a controlling stake owned by Orange S.A., the latter controlling over 50% of this stake by 2002.

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