European funds are allocated as part of seven-year financial periods or perspectives, and we are right at the beginning of the new financial period 2021-2027. The budget envelope of the European Union is the largest so far and amounts to EUR 1,824.3 billion, a more than EUR 25 billion is available for the Republic of Croatia. Funds allocated to the Republic of Croatia for the financial period 2021-2027. amount to more than EUR 14 billion from the Multiannual Financial Framework and slightly more than EUR 11 billion from NGEU (Next Generation EU).
Partnership Agreement of the European Commission with Croatia for the period 2021-2027. includes funds from the European Regional Development Fund (ERDF), the Cohesion Fund, the European Social Fund Plus (ESF+) and the Just Transition Fund.
The Common Provisions Regulation (CPR) establishes the main investment goals of the European Union until 2027, as well as the basic framework for the development of program documents, implementation, evaluation, management and control.
The CPR defines five policy goals that reflect the main priorities of the European Union: A more competitive and smarter Europe; A greener, resilient, low-emission Europe; A more connected Europe by strengthening mobility; An inclusive Europe with a more prominent social component; Europe closer to citizens.
The European Regional Development Fund (ERDF) contributes to reducing the differences between the levels of development of different regions and reducing the backwardness of regions in the most disadvantaged position, among which special attention is paid to regions that are exposed to serious and permanent natural or demographic difficulties, such as the northernmost regions with very low population density of island, border and mountain regions.
Support from the ERDFin with investments in infrastructure, activities for applied research and innovation, including industrial research, experimental development and feasibility studies, investments in access to services, productive investments in small and medium-sized enterprises (SMEs) and investments aimed at preserving existing jobs and creating new jobs, equipment, software and intangible assets, networking, cooperation, exchange of experiences and activities involving innovation clusters, among others, between companies, research organizations and public authorities, information, communication and studies, and technical assistance.
In the period 2021-2027. The European Fund for Regional Development (ERDF) will continue to help strengthen the economic and social cohesion of the EU member states, and will enable investments so that all European regions are:
By including an additional EUR 47.5 billion from the EU Next Generation Fund, the EU has allocated more than EUR 370 billion to its economic, social and territorial cohesion policies for the period 2021-2027. Through the use of the European Fund for Regional Development, Croatia has available co-financing of 50 to 75% of the total value of the project.
The financial allocation for Croatia (2021-2027) amounts to EUR 5.54 billion.
The European Fund for Regional Development is regulated by sector Regulation (EU) 2021/1058 of the European Parliament and the Council of June 24, 2021 on the European Regional Development Fund and the Cohesion Fund.
The European Social Fund Plus (ESF+) is the main instrument of the European Union for investing in people and systems in employment, education and social inclusion policies, which supports economic, social and territorial cohesion. Investments from the ESF+ contribute to the implementation of the European Pillar of Social Rights. The ESF+ is also one of the foundations of the European Union’s socioeconomic recovery from the coronavirus pandemic, during which participation in the labor market decreased, and education and health systems faced numerous challenges, and inequality increased. ESF+ will be one of the key instruments that will help member states to solve these problems. ESF + is the EU’s main financial tool for strengthening the social dimension of the Union. Croatia uses this instrument to implement quality national policies through various projects aimed at increasing the education and employment of Croatian citizens. The main goal of ESF + is to contribute to a more social Europe and make the European Pillar of Social Rights a reality in application. ESF+ contributes to economic and social convergence throughout Europe. Funding from the ESF+ will also contribute to the implementation of employment guidelines as defined in the European Semester of Policy Coordination and the overall goal of smart, inclusive and sustainable growth after 2020 (UN Sustainable Development Goals), such as ensuring a high level of human of health. The initiative will help improve employment opportunities, raise living standards, facilitate labor mobility and increase economic, social and territorial cohesion as set out in the Treaty on the Functioning of the European Union (TFEU) and the EU Charter of Fundamental Rights. The rate of co-financing is from 50 to 85% of the total value of the project.
The financial allocation for Croatia (2021-2027) amounts to EUR 1.98 billion.
Thematic concentration of the fund: education, training and lifelong learning; efficiency of the labor market and equal access to quality employment; social inclusion, health and the fight against poverty.
The following can be financed from the Fund:
The European Social Fund Plus is regulated by sector Regulation (EU) 2021/1057 of the European Parliament and the Council of June 24, 2021 on the establishment of the European Social Fund plus (ESF+) and the repeal of Regulation (EU) no. 1296/2013.
The ERDF in Croatia primarily serves to achieve goals from two programs: the Competitiveness and Cohesion Program 2021-2027 and the Integrated Territorial Program 2021-2027.
Policy objective 1: A more competitive and smarter Europe by promoting innovative and smart economic transformation and regional ICT connectivity;
Rationale for choosing the policy objective: In accordance with the recommendations of the Council on the National Reform Program for 2019 and 2020, measures are being taken to focus on the growth of investment policy on research and innovation, taking into account regional differences, measures to promote the acquisition of skills, measures to increase access to digital infrastructure and services, and further investments in broadband internet. The policies were chosen keeping in mind the guidelines for investments from the Report for Croatia 2019, where among others, the following were identified as priorities: improvement of innovation results and the number of innovative companies in the field of smart specialization, as well as investment in skills in the aforementioned field, activities that will contribute to commercialization research results, promotion of interoperable e-services and their use among citizens as well as integration of digital technology in small and medium-sized enterprises, advancement in global value chains, improvement of the quality of entrepreneurial support institutions and business environment. Activities related to this goal will also contribute to reducing the difference in regional GDP per inhabitant in order to reduce the differences between the most developed and least developed regions.
Policy objective 2: A greener, resilient, low-emission Europe transitioning to a net-zero carbon economy by promoting the clean and fair energy transition, green and blue investments, circular economy, climate change mitigation and adaptation, risk prevention and management, and sustainable urban mobility.
Rationale for choosing the policy objective: In the context of sustainable development, the European Green Plan has set an ambitious goal of transforming the EU economy towards a sustainable future and achieving a climate-neutral and circular economy by 2050. In order to contribute to the transition to an economy with zero net carbon emissions, based on the National Energy and Climate Plan, selected policies aimed at the transition to clean and fair energy, including the use of renewable energy sources (RES), decarbonization of buildings and the economy, establishment of smart energy networks, development of the green and blue economy, adaptation to climate change and mitigation of its effects, strengthening of prevention and management risks and natural disasters, sustainable development of water supply and drainage, transition to a circular economy, strengthening biodiversity, including through the development of green urban infrastructure, and promoting sustainable urban mobility. All these selected policies will contribute to the green transition process.
Policy objective 5: Bringing Europe closer to citizens by encouraging sustainable and integrated development of all types of areas and local initiatives.
Rationale for choosing the policy objective: The policies were selected taking into account the guidelines for investments from Annex D of the Report for Croatia in 2019, which, among other things, establishes as priority needs the strengthening of the role of leading economic centers as drivers of regional growth and sustainable and integrated development of their functional areas, as well as the need for investments in with the aim of reducing inequality between regions and taking into account geographical specificities (islands), encouraging economic activity and connecting them with leading developed centers with an emphasis on the islands’ energy self-sustainability.
This program is linked to the achievement policy objectives 4: A more inclusive Europe with a more prominent social component through the implementation of the European Pillar of Social Rights.
Rationale for choosing the policy objective: Croatia is faced with numerous challenges in terms of employment, social issues and skills, some of which are still affected by the consequences of the COVID-19 pandemic. All investments will follow the principles of preventing segregation and discrimination, with an emphasis on encouraging access to regular inclusive services in education, housing, employment, health and social care. The employment rate increased from 57.2 in 2013 to 68.2% in 2021, while the HR goal of the EU pillar for social rights by 2030 is 75%. Access to the labor market is particularly difficult for women, young people and people with disabilities. In 2018, 0.72% of GDP was allocated for active employment policy measures (MAPZ), less than most other member states. In order to improve outcomes on the labor market, it is necessary to strengthen training and retraining measures. The participation rate of children in preschool education is one of the lowest at 81.8% (EU 95.2). 69% of Roma children aged 3-6 do not attend kindergarten and preschool. More than 60% of students in vocational education and training do not gain work experience during schooling, and it is necessary to ensure support for vocational education in terms of relevance and quality. The rate of risk of poverty is 20.5% (EU 21.5), more pronounced in certain groups, and the HR goal of the EU pillar of social rights is to reduce the rate of risk of poverty or social exclusion by 2030 by 298,000 people. In Croatia, poverty has a strong territorial dimension. The specific needs of areas threatened by poverty are related to their geographical characteristics, socio-economic factors and long-term degradation, which does not allow them to use their potential. The process of deinstitutionalization in the last 10 years has intensified and recorded progress, but still more than 20% of children without adequate parental care, with behavioral problems, developmental difficulties, and more than 80% of people with mental disabilities have an institutional form of care. Accommodation facilities in homes for the elderly and infirm cover only 3.68% of the elderly over 65, while the coverage of home assistance services is insufficient. Long-term care is insufficiently developed and significantly institutionalized (HR 2019. issuances 3.03%; EU 16.11%), 13% of people dependent on care receive institutional care, 14% official help at home. Lack and regional unevenness of social. the service affects children, young people, families at risk of poverty and social. exclusion, people with disabilities, elderly people, homeless people, victims of domestic violence, human trafficking, people with addiction problems.
The COVID-19 pandemic and two devastating earthquakes in Croatia marked 2020 and 2021. The activities undertaken at the national level during the COVID crisis were successfully aligned with EU instruments in order to preserve jobs and the health of citizens, however, a significant impact of the pandemic on certain vulnerable groups in society is assumed, especially in the context of access to health, social and educational services. The Effective Human Resources 2021-2027 program is aimed, among other things, at contributing to the recovery from the crisis in order for Croatia to continue the development trends before the pandemic. In the implementation of the ESF program 2014-2020. partnership with social partners and civil society organizations (CSOs) showed full potential for achieving the set goals of the program. Through the implementation of activities, social partners and CSOs have the opportunity to develop their capacities to achieve ESF+ goals. CSOs are particularly active in providing social services and implementing activities for the social inclusion of vulnerable groups, and social partners are a key stakeholder in the labor market. Investments from the ESF+ program will contribute to balanced regional development. Given the significant regional differences in needs in the areas of employment, social inclusion, education and health, ESF+ investments will have a regional/local character when designing interventions, taking into account specific local and regional needs. This especially applies to social and health services, where investments will be made based on needs mapping at the local level (Zajeli, community services, personal assistants, etc.).