EU Structural Support
Ireland, having long been a recipient of EU structural support, is now considered an example, for Lithuania, too, of a successful exploitation of EU membership opportunities to stimulate economic development and growth. It is expected that by making use of structural funds resources, Lithuania could catch up with some of the older EU member states in terms of the level of development by 2015. In 2005, the Lithuanian GDP per capita amounted to 47% of that of the EU-15 average. In Portugal this indicator was equal to 65.8%, in Greece – 77%, and in Spain – 90.7%. Meanwhile, the level of Ireland’s economy has already surpassed the average of the EU-15: at present, the Irish GDP per capita amounts to 127.7% of it.
Structural support for Lithuania in 2007-2013
The 2007-2013 financial perspective became operational as of 1 January 2007. This date also marks the start of a new period in administering the EU assistance. Structural support is allocated according to the following three regional policy objectives:
- Convergence: support for the regions with lagging development;
- European Territorial Cooperation: support for the regions with severe economic and social problems;
- Regional Competitiveness and Employment: support for the modernization of training systems and the promotion of employment. Regions that receive support under the first objective are not eligible because training and employment measures are included into programmes designed for areas lagging behind.
The EU support for Lithuania is allocated under the first two objectives. It amounts to 23 billion litas for 2007-2013, while the whole support intended for Lithuania is approx. 36 billion litas (for comparison, 22 billion litas is planned for Lithuania’s state budget expenses for 2007).
In addition, Lithuania receives EU financial support for agriculture and rural development (from the European Agriculture and Fisheries funds) as well as for the participation in the European Community programmes (e.g. in the fields of culture, education, and science and research), external EU border protection, facilitation of transit to/from the Kaliningrad region through the Lithuanian territory, and financing of the closure of the Ignalina Nuclear Power Plant.
According to the indicative estimates of independent experts, additional 52 billion litas of GDP could be created if all 2007–2013 EU structural support funds were absorbed efficiently. This would grossly increase the current size of the Lithuanian economy; the Lithuanian GDP amounted to 71 billion litas in 2005.
Administration of EU support: legal basis
From Lithuania’s accession in 2004 till the end of the previous financial period (the end of 2006), EU support to Lithuania was administered according to the Single Programming Document. In order to absorb structural funds for 2007-2013, four major documents have been drawn up: EU Structural Support Absorption Strategy and three separate Action Programmes:
- Human Resources Development: this programme is allocated 16% of the structural funding obtained under the Convergence objective. Support is provided by the European Social Fund.
- Economic Growth: 45.32% of the structural funding obtained under the Convergence objective is assigned. The programme is financed from the European Regional Development Fund and the Cohesion Fund.
- Cohesion: 38.68% of the structural funding obtained under the Convergence objective is assigned; the programme is financed from the European Regional Development Fund and the Cohesion Fund.
The national strategy is harmonized with the corresponding strategic EU documents: the EU Lisbon Strategy renewed in 2005, the Integrated Guidelines for Growth and Jobs (2005-2008), and the Community Strategic Guidelines "Cohesion Policy in Support of Growth and Jobs“ (2007-2013).
Priorities
Three aims have been set for the use of structural support with a view to contribute to the rapid improvement of investment, working and living conditions in Lithuania so that all its population benefited from the economic growth:
- acceleration of economic growth in the long term,
- creation of more and better jobs,
- promotion of social cohesion.
In order to implement these aims, three priority directions have been chosen. Lithuania’s main concerns ought to be the following:
- productive human resources for the information society: to aim at attracting and retaining people in the labour market, encourage more active life-long learning, develop highest quality workforce, and enhance effectiveness of public administration;
- competitive economy: to increase the comparative share of high added-value business, the level of business productivity (especially by creating environment favourable to innovations and small and medium-size enterprises), and to improve the effectiveness of economic infrastructure;
- life quality and cohesion: to better employ the local potential, offer accessible quality public services, and seek better quality of the environment.
Common (horizontal) fields that go beyond the framework of any single programme have also been selected; they should be incorporated into each of the programmes. Thus four fields have to be considered aiming at the absorption of the EU structural support:
- information society development,
- sustainable development,
- equal opportunities,
- regional development.
There have been chosen the following ”breakthrough areas“ – areas that should contribute to the growth of the Lithuanian economy in the long term most:
- enhancement of knowledge and qualification of the Lithuanian people (human resources),
- scientific research,
- technological development and innovations.
It is planned to allocate several times greater funding to these areas, as compared to the period of 2004–2006. Compared to the average annual funding in 2004–2006, it is also planned to double investments aiming to enhance business conditions and encourage innovations, as well as promote scientific research and technological development. Even 1/10 of the whole structural support is planned to finance scientific research and technological development.
Administration of EU support
The administration of structural support for Lithuania is directed by the Ministry of Finance. Three major principles have to be observed while implementing Action Programmes drawn upon the basis of the National Strategy:
- subsidiarity: some functions, for instance, the primary selection of projects and formation of the investment package, are transferred to the regional development councils,
- proportionality: amount of investment for the development of separate regions is determined according to explicit criteria,
- publicity.
In 2007–2013, institutions of local government rather than the ministries will decide on how to invest 12% of the whole EU structural support for Lithuania for the first time (this will amount to approx. 2.8 billion litas).
Considering the lessons from the period of 2004–2006 and proposals made by the social and economic partners, 2007-2013 EU structural support for Lithuania is going to be administered according to the new procedure.
More on structural support for Lithuania: www.esparama.lt/en/
