Slovakia is losing the value of Eurofunds due to their slower drawdown, measures during a pandemic are to blame
Slovakia is losing the value of Eurofunds due to their slower drawdown. Due to a poorly set pumping system, resources in the amount of almost 200 mil. EUR in the price of 2015. The ability to smoothly use the Eurofund’s measures was limited during the coronavirus pandemic, according to an analytical commentary by the National Bank of Slovakia (NBS).
Difficulties in meeting obligations
It assumes that with the expected rise in prices, they will face difficulties in meeting commitments, new, respectively. Public procurement will need to increase prices in their budgets.
“The basic scenario assumes that the drawing of Slovakia follows the development of the previous years in the years 2014 – 2021. The remaining part is completely used up in the years 2022 and 2023 in a ratio of 1: 1,” said the NBS. According to Slovakia’s alternative drawing in the years 2014 – 2021, the EU17 copies and in such a scenario the evenly used balance remains.
“If Slovakia followed this development, at the end of 2021, instead of 58%, 71% would have been used up and less than a third remained to be used up,” the NBS said.
Loss of approximately 190 million euros
After recalculating the two scenarios into constant 2015 prices, the difference in cumulative values is approximately 190 mil. eur. Co-financing from the state budget also cooperates with this. Using a more efficient co-financing rate of 13%, according to the NBS’s own estimate, the additional volume is approximately 30 mil. EUR, a total of 220 mil. eur.
“The loss, which arose from the price shock itself with the unchanged drawdown scenario, is approximately 190 mil. including co-financing. The scenario is based on the GDP deflator in 2022 and 2023 with an average growth of 3.2% according to last year’s alternative autumn forecast of the NBS, “the National Bank explained.
Real drawdown
NBS analyst Marián Labaj pointed out that higher inflation will cause a real drawdown. “Given the expected higher inflation, the transfer of unused funds to the next two years deprives us of their real contribution to Slovakia’s development. By faster implementation in a period when the impact of prices was negligible, we would be able to procure more goods and services worth about 200 million. as in the case of a slow pace and the concentration of resources in a period of high inflation, “said the analyst, adding that the country would lose about one infrastructure project.
In the case of the approaching end of the period under the n + 3 rule (year 2023) and with a relatively high honey of unspent resources, according to Labaj, the risk of loss persists. “In this case, it is still in our power to prevent decomitment in some cases by consistent crisis management. The second part is a recent phenomenon and is accompanied by uncertainty as to how long and in what honey higher inflation will persist. We probably won’t avoid a real strategy here, “he added.
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