Between 2014 and 2020, Croatia received almost 4 billion Euros from the European Union for regional and social development projects. An overview of the data

07/05/2022 -  Ornaldo Gjergji

In the period 2014-2020, the European Union allocated almost 4 billion Euros to Croatia as part of its cohesion policy  - the strategy by which the EU promotes balanced and sustainable territorial development, so as to reduce the gap between the different regions of Europe.

About one third of the total EU budget is allocated to cohesion policy, so much so that in the 2014-2020  budget period, 351.8 billion Euros were allocated to all 28 member states. These resources have funded hundreds of thousands of projects across Europe, implemented through the European Regional Development Fund (ERDF ), the European Social Fund (ESF ), the Cohesion Fund (CF ), and the Youth Employment Initiative (YEI ). Additional funds go to INTERREG  programmes, which aim to encourage cooperation between regions belonging to different states. Appropriate national and regional operational programmes define the priorities and activities with which to exploit the available resources.

Cohesion policy allocations depend on the level of development of each region: less developed regions - those where GDP per capita is less than 75% of the EU average - receive proportionately much more funds than regions considered to be in transition or more developed - all Croatian are less developed than the EU average.

The priorities of the cohesion funds in Croatia

Of the roughly 4 billion Euros Croatia received in the 2014-2020 budget period, more than half was from the European Regional Development Fund.

The thematic priority to which Croatia allocated the majority of cohesion funds was the competitiveness of small and medium-sized enterprises. Environmental protection and infrastructure development also received considerable resources.

The distribution of cohesion funds on the territory

2.6 of the 4 billion Euros disbursed to Croatia were accounted for at the NUTS 3 regional level, and it is therefore possible to see in more detail how they were distributed throughout the territory.

In absolute terms, the Zagreb region is the one that received the highest share of cohesion funds, with 485.9 million Euros in the period 2014-2020, followed by the Dubrovnik region with almost 300 million Euros.

However, the absolute values can be misleading: the same investment can make a greater or lesser difference on the territory depending on the size and level of each economy. To better grasp the extent of European investments in Croatia, we can therefore compare the cohesion funds to the GDP produced by each region in 2014. From this point of view, the Zagreb region received much lesser funds than the rest of the country - around 33,000 Euros for every million of GDP produced in 2014. On the contrary, the Dubrovnik region is confirmed as one of the main beneficiaries of cohesion policy in Croatia.

Similarly, we can relate the cohesion funds allocated to each region to the number of inhabitants. Also from this point of view, the Dubrovnik region, with around 2450 Euros per capita, received at least three times as much as other territories in Croatia.

The ability to absorb the allocated funds

These data refer to the cohesion funds that were actually disbursed in the 2014-2020 period. However, this is only a part of what the European Union had initially allocated for Croatia: as in other cases, countries and regions are not always able to absorb all the available funds. Often there is no adequate capacity for planning, spending, or managing approved projects - but European funds are disbursed only on the basis of very detailed evidence.

No region of Croatia was able to use more than half of the funds it had available. In general, the territories of inner Croatia have managed to use the cohesion funds more than others.

Beyond the performance of individual regions, the ability to absorb European funds also depends on the thematic area: some investment priority axes manage to be more exploited than others. For example, more than two thirds of the funds allocated for the competitiveness of small and medium-sized enterprises were actually disbursed in Croatia. Other resources, on the other hand, were not exploited efficiently: only 17.8% of the funds allocated to environmental protection were spent, and this percentage falls below 2% for information and communication technologies.

The data

This table shows in more detail the data on cohesion projects in Croatia in the period 2014-2020, aggregated by region, priority axis, and fund. The original dataset can be consulted here.