Bulgaria’s EU Funds Absorption: Maximizing the Potential!

IMF Working Papers, February 6, 2014

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Bulgaria’s EU Funds Absorption: Maximizing the Potential!

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Bibliographic details

• Authors: Iana Paliova, Tonny Lybek
• Published: February 6, 2014
• Series: IMF Working Papers
• DOI: https://doi.org/10.5089/9781475571684.001

Summary

• Focus: EU structural and cohesion funds assistance to Bulgaria during the 2007–13 program period.
• Initial weaknesses resulted in a low absorption rate.
• Mitigating measures implemented:
  • increasing advance payments;
  • applying electronic application and reporting procedures;
  • simplifying and unifying tender processes;
  • strengthening the role of international financial institutions and banks in project preparation, evaluation and monitoring.
• The paper briefly discusses the possible impact on growth and potential output.
• The risks of improper absorption are acknowledged.
• Recommendation: additional steps be taken for the next program period 2014–20.

Key findings and analysis

• Initial low absorption of EU structural and cohesion funds during 2007–13 due to administrative and procedural weaknesses.
• Effective corrective actions combined financial (advance payments) and procedural (electronic procedures, tender simplification, unification) reforms.
• Involvement of international financial institutions and banks contributed to improved project preparation, evaluation, and monitoring.
• The paper considers how improved absorption could affect growth and potential output, while noting attendant risks if absorption is improper.

Policy recommendations and implications

• Preserve and scale up measures that improved absorption:
  • continue use of electronic application and reporting procedures;
  • maintain simplified and unified tender processes;
  • sustain engagement with international financial institutions and banks for project lifecycle support.
• For the 2014–20 program period, take additional steps to build on lessons learned to further raise absorption and safeguard against improper absorption.
• Balance the pursuit of higher absorption with controls to mitigate risks of improper use of funds.

IMF Working Paper by Iana Paliova and Tonny Lybek, February 6, 2014.

Content in this bundle

• Appendix I. Post-Accession Funds in Various EU Countries: Experiences and Lessons
  • Appendix I. Post-Accession Funds in Various EU Countries: Experiences and Lessons (Markdown version)
  • Appendix I. Post-Accession Funds in Various EU Countries: Experiences and Lessons (PDF)