Absorption of the financial resources allocated from the EU funds is a very important aspect of the European integration process. Observations on success factors and lessons learnt from building a system for the absorption of EU funds in Poland can guide decision makers on how to build an effective system of absorption of EU Funds in Ukraine.
This is the second out of two articles prepared based on the paper “EU Pre-accession Processes in the fields of Decentralisation, Regional Policy and Coordination of Structural Instruments” by Piotr Zuber. Two articles provide a case study that illustrates the concept, process and functioning of institutions and procedures for the absorption of EU funds both in the pre-accession and membership periods using the example of Poland. In the previous article, you could learn about prerequisites for building an efficient model for managing EU funds in Poland. This article will cover the features of the procedural and institutional system of absorption including legislative framework, programming system and coordination system.
Membership in the EU means a lot of obligations for Member States but also the possibility to use financial resources of European policies for building and modernization of infrastructure, supporting business and increasing the quality of human resources. One of those policies which is of crucial importance for Ukraine’s development and modernisation of the whole public sphere is EU cohesion policy. However, as experience of other countries joining the EU in the past has shown, effective use of cohesion policy requires building of complex legal, programming and multilevel management systems of absorption.
The implementation of EU cohesion policy funds in Member States requires adherence to an extensive legal system that encompasses both EU and national regulations. Compliance with EU requirements is not only a subject of accession negotiations, but it is also the subject to constant monitoring and assessment by the European Commission during the implementation of programmes. Without harmonising the rules required or challenged by the European Commission, programmes and projects cannot be implemented.
In Poland, there are two basic comprehensive legal acts that regulate issues related to the development policy programming system (including regional policy), which includes EU programmes and the rules for implementing programmes co-financed by the EU:
- Act of 6 December 2006 on the Principles of Conducting Development Policy. The Act defines the principles of conducting development policy, the system of programming documents, entities conducting this policy and the mode of cooperation between them.
- The so-called implementation acts (of 2014 and 2022) on the principles of implementation of programmes and tasks financed from European funds in the financial perspectives of 2014-2020 and 2021-2027. These laws define the institutional system for management and implementation of programmes and actions co-financed by the EU, rights and obligations of beneficiaries and the rules for including social partners into the program implementation process.
An important role in the process of absorption of funds is the preparation of planning documents that comply with EU regulations as well as integrating national objectives with those implemented at sectoral and regional levels.
Since 2001, all new national documents in Poland have gradually adopted the methodological basis developed for the European integration process and planned projects to be supported by EU funds including structure, objectives, indicators, multiannual financing, and coordination rules.
In order to strengthen the coordination and programming centre for cohesion policy, the Ministry of Regional Development was established in 2005, and in 2006 the Act on the Principles of Conducting Development Policy was adopted, which precisely defined the programming system and the roles of various actors, including local self-government entities, in the implementation of development policy.
In 2008, the Ministry of Regional Development proposed a comprehensive reform of the programming system, covering both national and EU documents and strengthening strategic coordination within public policies. The reform aimed to establish a system of coordinated long- and medium-term documents, including those related to specific areas. During this process, it was discovered that numerous national documents adopted in previous years did not align with the EU-agreed strategic documents, leading to the decision to eliminate over 230 strategies, plans, and programs in 2009.
This decision reflected the need for better coherence and consistency in the planning and implementation of development activities, as well as the recognition of the importance of adhering to EU guidelines and standards in order to effectively utilise EU funds and support Poland’s overall development goals. The system introduced by the Act covers all strategic and operational planning documents related to both socio-economic and spatial planning in Poland. This included governmental long-term and medium-term socio-economic strategies prepared by the minister in charge of regional policy, nine horizontal strategies prepared by relevant ministers, 16 voivodship strategies prepared by regional self-government, regional spatial development plans and all documents prepared for the purpose of EU programming. Although public institutions are responsible for preparation of all those documents, their assumptions and various elements are widely discussed with stakeholders (local authorities, business, CSOs) in the broad consultation process assured by national legislation.
From a financial perspective, for the period 2014-2020, the Partnership Agreement is the basic strategic document agreed between the Member State and the European Commission. It lists goals, priorities and tools for using EU funds to achieve EU and national goals, as well as the layout of operational documents. In the case of Poland, the layout of operational documents for cohesion policy has remained relatively unchanged since 2006, which ensures stability of structures and predictability for beneficiaries. However, it also has some drawbacks, such as the risk of certain groups of beneficiaries becoming dependent on receiving funds.
All these programmes are prepared in close coordination with the assumptions of the Partnership Agreement, which is supervised by the Ministry of Funds and Regional Policy (the successor of the Ministry of Regional Development). If necessary, the Minister may issue additional guidelines on various elements of programming and implementation of structural funds, such as territorial instruments, monitoring indicators, evaluation rules, accounting rules, etc.
The success of the programming system in supporting the absorption of EU funds in Poland can be attributed to the development of analytical skills within the government and local administration, as well as collaboration with the scientific community and relevant institutions involved in the programming cycle, including national and regional statistical offices.
The institutional system of national regional policy and the use of EU funds under cohesion policy is extensive and involves multiple institutions operating at the national, regional and local levels. These institutions specialise in various horizontal and sectoral aspects of development policy such as transport, environment, support for enterprises and human resources development.
As part of the implementation system of the Partnership Agreement 2014-2020, the following institutions operate in accordance with applicable EU and national regulations in Poland :
- Strategic and Coordinating Institution: The Ministry responsible for regional development – currently the Ministry of Funds and Regional Policy, serves as the strategic and coordinating institution.
- Managing Authorities: There are managing authorities for national programmes located in the Ministry of Funds and Regional Policy, as well as two other ministries – the Ministry for Rural Development for the Rural Development Programme and the Ministry of Maritime Economy for the programme dedicated to fisheries and aquaculture. In addition, there are independent managing authorities for regional programmes located in the Marshal’s Offices of 16 voivodships.
- Intermediate Bodies: Intermediate Bodies are located in ministries, special purpose funds, and specialised agencies, and are responsible for day-to-day management of EU funds at the regional and local level.
- Implementing Bodies: Implementing bodies are responsible for implementing various components of operational programmes, including organising competitions, clearance, payments, supervision, and other related tasks.
- Managing Authorities and Joint Technical Secretariats: Managing authorities and joint technical secretariats are responsible for handling the European Territorial Cooperation (ETC) programmes managed by Poland.
- Audit Authority: The Audit Authority, located in the Ministry of Finance, together with 16 regional chambers of tax administration, is responsible for auditing the systems of implementation of programmes and projects, as well as verifying and assessing the fulfilment of the designation criteria.
- Institution for Receiving Payments: The Ministry of Finance is the institution responsible for receiving payments from the European Commission (EC).
During the 2014-2020 period, a total of 144 institutions were identified in the system of implementing cohesion policy, based on EU and national regulations. These institutions include 22 Managing Authorities, 85 Intermediary Institutions, and 7 Implementing Institutions. Running this system costs approximately 3-4% or even more of the value of programmes.
Coordination system – the role of the Minister in charge of regional policy
The leading role in the Polish system of regional policy, including programming and absorption of Cohesion Policy, is held by the Minister responsible for regional policy.
The Minister leads a robust administrative structure, currently known as the Ministry of Funds and Regional Policy, which, by Polish administrative standards, comprises a large and well-educated staff of approximately 1200 apolitical officials and experts, who are professionally prepared and on average well-compensated.
This well-structured administrative setup has a positive impact on Poland’s ability to safeguard its interests during negotiations with the European Commission, ensure compliance with EU law and implementation procedures, and maintain high quality of national regional policy. The programming and implementation of regional policy in Poland largely aligns with EU standards brought by cohesion policy regulations.
Role of regional self-governments
In the Polish system of implementing regional policy and absorbing EU funds, the voivodeship self-government plays a fundamental role alongside the minister responsible for regional policy. Discussions on the creation of large voivodeships, based on historical lands of Poland instead of the small 49 voivodeships that were functioning in 1975-1999 and were headed by representatives of the central government, have been ongoing since the early 1990s. In scientific circles and among representatives of most political parties at that time, there was a consensus that this was a crucial condition for successful structural modernization and increasing the efficiency of the state, allowing for taking full advantage of the upcoming accession to the EU. The creation of “visible on the map of Europe” regions with sufficient financial and human resources was seen as a necessary step towards planning and effectively implementing development actions based on local and regional needs.
The increasing importance of the voivodship self-government in conducting the development activities of the state was primarily associated with the process of strengthening its role in the management of European cohesion policy programmes. A significant milestone in the process of enhancing the role of voivodeship self-governments was the preparation and delegation of management responsibilities to regional self-governments for 16 regional operational programmes that were initially co-financed only by one Fund, namely the European Regional Development Fund (ERDF), during the financial perspective of 2007-2013. Since 2007, all 16 regional self-governments in Poland have acted as managing authorities of regional operational programmes.
In the financial perspective 2014-2020, the responsibilities of voivodeship self-governments were further extended to include the direct management of a significant portion of the activities under the European Social Fund (ESF). The financial resources at the disposal of voivodeship self-governments also increased, and currently they are responsible for the use of over 40% of all cohesion policy funds (ERDF, ESF, Cohesion Fund) in Poland. Starting from 2021, regional programmes are also implementing actions for the transformation of regions dependent on fossil fuels, financed from the new Just Transition Fund.
According to the Commission, in 2018 EU funds accounted for about 80-85% of all public expenditures allocated to pro-development activities in Poland (investments in infrastructure, public support for companies and activities for the development of human resources). This has given voivodeship self-government authorities a strong, although not necessarily dominant, position in the country’s development policy.
Poland has built its own efficient model for managing EU funds, characterised by the following features:
- Strong connection between EU fund management and regional policy: the management of EU funds is closely linked with regional policy and spatial planning at the national level, creating a holistic approach to socio-economic and spatial development.
- Decentralization of EU fund management: around 40% of all cohesion policy funds are managed at the regional level, thanks to legal regulations and administrative reinforcement provided to local governments within the framework of national regional policy. This allows for effective implementation of EU-funded projects at the regional level, taking into account local needs and priorities.
- Key role of the Ministry of Regional Policy: the Ministry of Regional Policy and the Minister for Regional Policy play a crucial role in negotiations with the EU, coordination, programming, management of national programmes, law-making, control, monitoring, and evaluation of EU-funded projects. This ensures effective governance and oversight of EU funds at the national level.
- Cooperation and coordination mechanisms: efficient cooperation and coordination mechanisms are in place between the government and regional self-government, as well as other actors involved in the implementation of EU funds.
- Comprehensive socio-economic programming system: EU programming is integrated into the national system of socio-economic programming rather than being treated as something external to it. This ensures a comprehensive and hierarchical approach to development planning, where EU funds are aligned with national priorities.
- Use of mechanisms and procedures from cohesion policy: Poland has adopted mechanisms and procedures from EU cohesion policy for the implementation of national development policies, including investments and other types of development projects. This increases the quality and effectiveness of public policies in Poland.
- Specialised public bodies for implementation of EU funds at the national and regional levels. Many of these bodies were created during the pre-accession period, ensuring efficient implementation of EU-funded projects.
- Cooperation with academia: Poland has established good cooperation with academia, facilitated by the large role of monitoring and evaluation in EU cohesion policy. This ensures evidence-based decision-making and implementation of EU-funded projects.
- Administrative support programmes: numerous administrative support programmes and projects are in place to provide assistance to administrations managing and implementing EU funds, as well as different types of beneficiaries. This ensures smooth implementation and management of EU-funded projects in Poland.
Poland has successfully absorbed 100% of available cohesion policy funds since its accession to the EU, which has contributed significantly to GDP growth at both national and regional levels (the ratio of Poland’s GDP per capita (in PPP) to the EU-27 average improved from 51.5% in 2004 to 75.7% in 2020; it is estimated that around 3,8 p.p. of this increase was possible thanks to the EU cohesion policy). Thus, the described model is highly efficient in terms of technical capacity. This is evident in the effective application of procedures, swift spending, well-organised project competitions, and tenders, among other factors.
This short article has been produced with the assistance of the European Union and its member states Germany, Poland, Sweden, Denmark, Estonia and Slovenia. It is part of a Policy Paper “EU Pre-accession Processes in the fields of Decentralisation, Regional Policy and Coordination of Structural Instruments”, prepared by Piotr Zuber, international expert of U-LEAD with Europe, in March 2023 (U-LEAD with Europe – EU Pre-accession Processes in the fields of Decentralisation, Regional Po…). The contents of this article are the sole responsibility of Piotr Zuber. All terms in this article are meant to be used neutrally for men and women.
 The data on institutions and employment are presented on the basis of the report “Administrative effectiveness of the implementation of the institutional system of the Partnership Agreement in the sphere of cohesion policy (as of December 31, 2021)”, published by the Ministry of Regional Development Funds (MFRD) in May 2022.
The author doesn`t work for, consult to, own shares in or receive funding from any company or organization that would benefit from this article, and have no relevant affiliations