Estonia can lose billions of euros from EU

Estonia has not been able to use the European Union's support funds at the required pace. If this continues, it could lose hundreds of millions of euros intended to mitigate the post-pandemic crisis, EPL reported.

Estonia has now used EUR 24.9 million. This represents 0.7 percent of EUR 3.37 billion of EU stimulus funds allocated for 2021-2027. And of the recovery funds of EUR 953 million, which have a shorter term - only 19.6 million.

Funding for the restoration was agreed in the EU in early 2021. Estonian plans for its use were approved in the autumn of the same year, and in December EUR 126 million in pre-financing was transferred from Brussels to the Ministry's account.

"As of May 2023, EUR 100 million of this transfer has not been utilized and is resting in the state account, while significant inflation is underway," EPL wrote.

In 2020, the European Union has not yet managed to finally block its usual seven-year budget period (2021-2027), when the entire world is gripped by the corona crisis. Member states believe that in order to recover from the inevitable recession, they will need additional amounts in addition to the usual funding to boost their economy.

Unlike structural funds, the recovery fund has a very strict timetable.

"In the first half of 2026, the events planned for a billion should be finished and all funds released. There's no time to waste - if you don't make it, you're out," the experts added.

But the problem of using EU funds is related not only to the recovery fund, but also to the 2021-2027 budget period and the use of the structural fund (incentive fund) for the budget period, i.e. regular EU subsidies.

Despite the fact that their implementation requires more preparation and the launch takes longer, the implementation of grant funds of this financial period was much slower than last time.

Two and a half years after the start of the previous seven-year budget period (2014-2020) in May 2016, about EUR 150 million, or 4.4 percent of the existing EUR 3.3 billion, had been allocated to support projects aimed at the Estonian economy.

Now, as of the start of May 2023 (for the period 2021-2027), EUR 25 million, or 0.7 percent, had been paid out of EUR 3.37 billion that should have been received in the period 2018.

Consequently, funds in euros accumulates in public accounts, inflation continues to gnaw on them, but payments to stimulate the economy are not made.