Optimal Implementation Curves of European Structural and Investment Funds – The Case of Slovakia

Slovakia is a cohesion country and receives significant funding from European Structural and Investment Funds (ESIF) in 2014-2020. Similarly, as in the previous programming period, the implementation operational programmes have been delayed. In order to avoid the similar development, in the previous programming period 2007-2013 where most of the funds have been implemented in the last three years of the programming period, the Central Coordination Unit at the Government Office of Slovakia decided to construct the „optimal implementation curves“ to provide support for better policy planning in the present 2014 – 2020 period. Several papers (e.g. Radvanský, Frank 2010) show that a more even temporal distribution of the ESIF implementation provides the most efficient and sustainable macroeconomic multiplicators. The optimal implementation curves framework works with three scenarios i.e. the earliest possible scenario, optimal scenario and very late scenario. All scenarios have to fulfil several legal conditions and financial rules, based on a set of rules included in the management system adopted by the Central Coordination Unit, the Ministry of Finance as well as general and fund-specific regulations of the European Parliament and European Council. These rules, which simultaneously present the main limits of the model, are analysed in all stages of the implementation process of operational programmes, starting with the announcement of call for grants, public procurement (when necessary), approval of proposed projects and actual financial implementation. One of the crucial and most important variables is the time in which all the stages are implemented. This paper provides an analytical overview of applied methodology and its results on individual operational programmes up to 2023. The applied methodology and its results represent unique framework in the area of EU Cohesion Policy analysis and implementation. The analysis is based on data describing the implementation process in the programming periods 2007-2013 and 2014-2020 .Characteristics of the development of previous programming period are used in cases where no relevant data is available for current programming period. The main characteristics used as inputs in the optimisation model are two main types: financial and temporal. Financial characteristics of each call for grants consist of allocation, the sum of grants demanded, the sum of approved projects, the sum of contracted projects and total financial implementation. Time characteristics depict duration of proposal preparation, approval and contracting. The combination of time and financial allocation is applied to the time distribution of the implementation process after the date of contract on a quarterly basis. The optimisation model takes into account a set of characteristics applied for already opened calls, planned and expected calls for the remainder of the 2014-2020 programming period. The optimisation model finds a solution that meets the criterion of least square deviation from yearly commitment for each operational program, type of European fund and region. The Central Coordination Unit at the Government Office of Slovakia, which is the main coordinator all ESIF implementation in Slovakia is using the framework of optimal implementation curves. It is used as an early warning mechanism for the responsible Managing Authorities of individual operational programmes to avoid possible de-commitment of financial allocations. Each operational programme is analysed for its distinct features, which are then included in the individual output for each programme. The results of the optimal implementation curves are compared with mandatory financial plans of the Managing Authorities. Preliminary results indicate that some operational programmes will have difficulties to meet the minimum threshold of implementation in 2017 and 2018. When no action is taken, the programmes will lose some of it is financial allocation due to the de-commitment rule.