Where's our money?

The Polish Chamber of Commerce (PCC) has attacked the apparent inefficient distribution of European Union funding after it emerged that just a fraction of the EUR 13 (zł.52.4) billion made available to businesspeople in Poland has been released.

The PCC says that despite considerable interest and a high number of applications, only a handful of companies have received any EU funding.

 "Entrepreneurs are complaining about excessive bureaucracy and lengthy processing of applications," said PCC president Andrzej Arendarski.

"We have to somehow address this problem because these funds are a great opportunity for Poland. Some of the old EU member states made great use of the money and observed an impressive economic growth, other wasted their potential. EU funds can really strengthen the competitiveness of Polish companies," Arendarski added.

The organization claims there are several problems with the online application form - the so-called Generator - and with the requirement to cover at least 25 percent of the investment with bank loan money, which, the businesspeople say, increases costs and further prolongs the procedures.

The figures were gathered from data compiled by the Ministry of Economic Affairs and Labor that looked at the overall value of applications filed by June 2005. Government analysts found that applications for EU operational programs and community initiatives already exceeded the amount available for the years 2004-6 and totaled zł.40 billion. The EU Sectoral Operational Program entitled 'Improving Enterprise Competitiveness' was one of the most popular funds.

However, only 22 percent of the fund money has been allocated to particular projects and as little as 0.08 percent has actually been paid out.

Mirosław Marek from the Polish Agency for Enterprise Development (PARP) explains that the authorities have till the second half of 2006 to distribute the funds before they are frozen.

"The idea behind EU funds is that entrepreneurs obtain the subsidies after the whole project has been carried out - in a form of a refund. There are about 50,000 companies in Poland that fulfill all the formal requirements to apply for EU funds and PARP has already received 18,000 applications," Marek said.

"We expect the number to reach 25,000, however, it doesn't mean all the projects were fit for funding. PARP can only finance 4,000-5,000 projects so the businessmen's expectations surpass the reality by far."