Study on national policies and cohesion : annex II : country briefings / policy fiches / case studies.
Date: 2020-01-29
Institutions: Directorate-General for Regional and Urban Policy
Subjects: EU Member State, EU policy - national policy, European Structural and Investment Funds, economic and social cohesion, regional development, regional disparity

Study on National Policies 
and Cohesion 

Annex II – Country briefings / Policy fiches / Case 
studies 

Contract No 2017CE16BAT125 

Prognos, POLIMI, technopolis 
December 2019 

EUROPEAN COMMISSION 

Directorate-General Regional and Urban Policy 
Unit B1 Policy Development and Economic Analysis 

Contact: Joerg Lackenbauer 
E-mail:  REGIO-B1-HEAD-OF-UNIT@ec.europa.eu

European Commission 
B-1049 Brussels

EUROPEAN COMMISSION 

Study on National Policies 
and Cohesion 

Annex II – Country briefings / Policy fiches / Case 
studies 

Contract No 2017CE16BAT125 

Directorate-General for Regional and Urban Policy 

2020 

EN

Europe Direct is a service to help you find answers  
to your questions about the European Union. 

Freephone number (*): 

00 800 6 7 8 9 10 11 

(*) 

The information given is free, as are most calls (though some operators, phone 

boxes or hotels may charge you). 

Manuscript completed in December 2019 

The European Commission is not liable for any consequence stemming from the reuse of this publication.  

Luxembourg: Publications Office of the European Union, 2020 

ISBN 978-92-76-10243-4 
doi: 10.2776/483098 

© European Union, 2020 
Reuse is authorised provided the source is acknowledged.  
The reuse policy of European Commission documents is regulated by Decision 2011/833/EU (OJ L 330, 
14.12.2011, p. 39). 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Study on National Policies and Cohesion  

This study is carried out for the Unit B1 Policy Development and Economic Analysis from 
DG Regional and Urban Policy, European Commission, through a call for tenders by open 
procedure  No  2017CE16BAT125.  This  report  is  based  on  the  contract  between  the  DG 
Regional and Urban Policy and a Consortium of Prognos AG (Lead), Politecnico di Milano 
and Technopolis Group SPRL dated 8 December 2018. 

Authors: 

Project Manager:  

Jan-Philipp Kramer (Prognos AG) 

Technical Lead:  

Paul Jeffrey (Prognos AG) 

Lead Experts:  

Roberta Capello (POLIMI), Nikos Maroulis (Technopolis Group). 

Core Project Team:  

Janis Neufeld, Janosch Nellen, Moritz Schrapers, Neysan Khabirpour (all Prognos AG); 
Roberto  Camagni,  Ugo  Fratesi,  Silvia  Cerisola  (all  POLIMI);  Kinscö  Izsak,  Laurent 
Laurich (all Technopolis Group). 

Quality Assurance:  

Bärbel Birnstengel (Prognos AG); Phil McCann (University of Groningen). 

The authors are responsible for any remaining errors or omissions. 

Date: 19 December 2019. 

6 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
TABLE OF CONTENTS 

5 

4 

2 

3 

TABLE OF CONTENTS ..................................................................................................... 7 
GLOSSARY ................................................................................................................... 8 
BULGARIA ........................................................................................................... 10 
1 
Country briefings ................................................................................................. 10 
Country fiches ..................................................................................................... 12 
Case study .......................................................................................................... 17 
CROATIA ............................................................................................................ 20 
Country briefings ................................................................................................. 20 
Country fiches ..................................................................................................... 24 
THE CZECH REPUBLIC .......................................................................................... 52 
Country briefings ................................................................................................. 52 
Country fiches ..................................................................................................... 54 
Case study .......................................................................................................... 63 
HUNGARY ........................................................................................................... 67 
Country briefings ................................................................................................. 67 
Country fiches ..................................................................................................... 70 
Case study .......................................................................................................... 76 
ITALY ................................................................................................................. 79 
Country briefings ................................................................................................. 79 
Country fiches ..................................................................................................... 82 
Case study .......................................................................................................... 92 
POLAND .............................................................................................................. 95 
Country briefings ................................................................................................. 95 
Country fiches ..................................................................................................... 97 
Case study ........................................................................................................ 105 
PORTUGAL ........................................................................................................ 110 
Country briefings ............................................................................................... 110 
Country fiches ................................................................................................... 112 
ROMANIA .......................................................................................................... 123 
Country briefings ............................................................................................... 123 
Country fiches ................................................................................................... 126 
Case study ........................................................................................................ 131 
SLOVAKIA ......................................................................................................... 136 
Country briefings ............................................................................................... 136 
Country fiches ................................................................................................... 138 
10  SLOVENIA ......................................................................................................... 145 
Country briefings ............................................................................................... 145 
Country fiches ................................................................................................... 149 
Case study ........................................................................................................ 161 
11  SPAIN .............................................................................................................. 165 
Country briefings ............................................................................................... 165 
Country fiches ................................................................................................... 168 
Case study ........................................................................................................ 184 

8 

6 

7 

9 

7 

 
 
 
GLOSSARY  

CEE  

CEF 

CF 

COSME 

DG 

EARFD 

EBRD 

EC 

EIB 

EMFF 

EP 

ERDF 

ESF 

ESIF 

ESI Funds 

EU 

EEC6 

EEC9 

EEC10 

EEC12 

EU15 

EU25 

Central and Eastern Europe Member States 

Connecting Europe Facility 

Cohesion Fund 

Competitiveness  of  Enterprises  and  Small 
and Medium-sized Enterprises 

Directorate-General 

European  Agricultural  Fund 
Development 

for  Rural 

European  Bank  for  Reconstruction  and 
Development 

European Commission  

European Investment Bank 

European Maritime and Fisheries Fund 

European Parliament 

European Regional Development Fund 

European Social Fund 

European Structural and Investment 
Funds 

European Structural and Investment 
Funds 

European Union 

Belgium, France, Italy, Luxembourg, the 
Netherlands and the Federal Republic of 
Germany (1957) 

EEC6 + Denmark, Ireland, the United 
Kingdom (1973) 

EEC9 + Greece (1981) 

EEC10 + Portugal, Spain (1986) 

EEC12 + Austria, Finland and Sweden 
(1993) 

EU15 + Cyprus, Czechia, Estonia, 
Hungary, Latvia, Lithuania, Malta, Poland, 
Slovakia and Slovenia (2004) 

EU27 

EU25 + Bulgaria and Romania (2007) 

8 

 
 
 
 
 
EU28 

FEI 

FDI 

FP 

GDP 

GDP PPS 

GDP per capita in PPS 

GFCF 

H2020 

ICT 

ITI 

LDR 

MA 

MDR 

MS 

NPS 

NUTS 

OP 

PA 

POC 

R&D 

R&I 

SEA 

SME 

TO 

EU27 + Croatia (2013) 

Financial Engineering Instrument 

Foreign direct investment 

Framework Programme 

Gross domestic product 

Gross domestic product, purchasing 
power standards  

Gross domestic product per capita, 
purchasing power standards 

Gross fixed capital formation (consists of 
resident producers’ investments, 
deducting disposals, in fixed assets during 
a given period) 

Horizon 2020 

Information and communication 
technology 

Integrated Territorial Investment 

Less developed region 

Managing Authority  

More developed regions 

Member States 

National Programme for R&D&I (the 
Czech Republic) 

Nomenclature des unites territoriales 
statistiques (The NUTS 2021 
classification, that will be valid for data 
transmissions to Eurostat from 1 January 
2021, lists 104 regions at NUTS 1, 283 
regions at NUTS 2 and 1345 regions at 
NUTS 3 level) 

Operational Programme  

Partnership Agreement 

Complementary Operational Programme 
(Italy) 

Research & Development 

Research & Innovation 

Single European Act 

Small and medium-sized enterprises 

Thematic Objective 

9 

 
 
 
1 

BULGARIA 

Country briefings 

National Policies addressing regional economic disparities – Bulgaria (BG)  

1. Background 

Bulgaria is divided into 6 NUTS 2 regions which 
all  are  regarded  as  Less  Developed  Regions. 
Administrative  regions  are  only  the  28  NUTS  3 
counties.     

Among  the  NUTS  2  regions,  the  South-West, 
where Sofia is located, is the most advanced in 
terms of the economy and the infrastructure with 
a  GDP  per  capita  double  of  that  of  the  other 
regions at around 79% of the EU average in PPS 
in  2017.  Its  contribution  to  the  national  GDP 
(48% in 2016) is almost equal to the contribution 
of  all  the  other  five  regions,  put  together.1 On 
the contrary, the North-Western region occupies 
the  last  place  in  almost  all  major  development 
indicators.   

A  major  challenge  for  the  country  is  the 
depopulation  and  migration  of  population  from 
the less developed areas to economically more attractive regions and cities. Sofia and the six other 
major cities are unevenly distributed in the territory of the country creating interregional and intra-
regional disparities.2  

Source: European Commission (2019). 

2. Architecture of national policies addressing regional economic disparities 

Focus  

Cohesion in Bulgaria is understood as the reduction of the economic and social disparities and the 
improvement of connectivity in terms of functionality and spatial coverage. Regarding economic 
cohesion, the aim is to reduce differences in economic development at three levels - European, 
national and intra-regional. In doing so, the focus is on improving the competitiveness, stimulating 
innovation and the development of a knowledge-based economy. 

The  National  Regional  Development  Strategy  (NRD)  of  Bulgaria  recognises  the  problem  of  the 
domination of the capital in the national space, which elevates the dichotomy “centre-periphery” 
to the national level and seeks approaches for strengthening the role of other cities and medium 
towns  as  balancing  forces.  Besides,  the  disparities  within  the  regions,  such  as  the  differences 
between districts and municipalities, are also regarded as serious issues.   

The  resources  allocated  for  implementation  of  the  NRD  include  only  the  ESI  Funds,  the  central 
government co-financing, the co-financing from the municipalities and up to 5% additional funding 
from EIB, EBRD, and financial engineering instruments (FEI). More than 53% of the overall funding 
is expected to be channelled to the three least developed regions, the North-Western region, the 
North-Central region and the South-Central region. However, South-Western Bulgaria, the most 
developed region, still receives the second highest support, which corresponds to 19% of the total 
budget addressing disparities. 

In addition to the measures supported by the ESI Funds, four other national instruments fall under 
more  than  one  policy  category  and  have  been  identified  as  contributing  to  reduce  regional 
economic disparities. These measures are not part of the NRD but are part of  sectoral policies. 
Three of them create a favourable business environment, two promote sector development and 

1 Based on Eurostat data (nama_10r_2gdp, last updated 26.02.2019, extracted 16.06.2019). 
2 National Regional Development Strategy 2012-2022. 

10 

 
 
 
targeted investments, while two support the development of skills and mobility. 

Design and governance  

The overall national strategy is set in the National Development Programme, Bulgaria 2020, which 
is operationalised in 3-year Action Plans to be implemented. Among the priorities, priority three 
sets the vision and the objectives of regional development. The main document that defines the 
regional  and  cohesion  strategy  is  the  National  Regional  Development  Strategy  2012-2022.  The 
Regional Development Plans 2014-2020 (RDPs) operationalise the implementation of the strategy 
for  the  current  programming  period,  taking  into  consideration  the  sectoral  policies.  The  RDPs 
constitute the basis for the formation of the ESI Funds’ programming documents. 

The  Ministry  of  Regional  Development  and  Public  Works  is  in  charge  of  the  overall  regional 
development policy (including EU Cohesion policy) in Bulgaria and its planning and programming. 
However,  the  authorities  at  the  NUTS  3  level  and  the  municipalities  are  responsible  for  their 
respective plans. Thematic ministries are also involved in the area of their competences. 

Relationship of national funding and support through the ESI Funds 

Policies  with  explicit  cohesion  objectives  are  financed  only  by  the  ESI  Funds  and  national  co-
financing. Policies financed by the national budget serve other policy domains and contribute only 
indirectly to the objectives addressing regional disparities.  

3. Overview of national policy measures addressing regional economic disparities 

All measures financed by the national budget are horizontal policies without an explicit objective 
to address regional economic disparities. However, they provide some additional benefits or more 
favourable conditions if the supported activity is located in regions with unemployment equal or 
higher than the national average.     

Two  measures  provide  incentives  for  encouraging  business  investments.  The  law  on  corporate 
income tax levying (fiche BG1) applies 0% corporate tax to companies that locate their activities 
or invest in areas with an unemployment rate 25% higher than the countries average. Also, the 
Investment Promotion Act (fiche BG3) supports investments (including FDI) related to the setting-
up  of  new  enterprises,  the  extension  of  the  capacity  of  existing  enterprises,  diversification  of 
products  and  services  or  overall  change  of  the  production  processes  of  an  existing  enterprise. 
Further, incentives are provided for the upskilling of personnel. Even though the measure provides 
incentives to invest in all regions, the required thresholds for being eligible for support are lower 
in regions with relatively higher unemployment rates. 

The  instrument  related  to  the  category  Industrial  Zones  (fiche  BG2)  supports  the  creation  of 
industry-friendly  areas  and  offers  tax  incentives  to  companies  that  are  relocated  in  one  of  the 
zones. Currently, six zones are operating, and one is established in Sofia. The other five zones are 
located outside of the capital region. 

Finally, another measure encourages the upskilling of human resources. The measure Enhancing 
the employability of unemployed by providing training to acquire qualifications (fiche GB4) support 
the upskilling of unemployed people. Although companies from all regions are eligible, the measure 
is expected to have more impact on the regions with high unemployment.  

4. Classification of policy measures 

Title 

Law on corporate 
income tax levying 
(BG1) 

Type of 
funding 

Tax brakes 

Policy category 

Policy instrument 

Business 
Environment and 
Trade 

Tax incentives 

Industrial Zones (BG2) 

Public 
procurements 

Business 
Environment and 
Trade 

Special economic zones, 
tax incentives 

Funding and 
implementation 

Funding, design 
and 
implementation 
at the national 
level 

Funding, design 
and 
implementation 

11 

 
 
 
  
Investment Promotion 
Act (BG3) 

Grants 

Sector Development 
and Targeted 
Investment 

Industrial parks and 
other businesses 
infrastructures  

Business 
Environment and 
Trade 

Investments promotion 

Sector Development 
and Targeted 
Investments 

Business development 
and innovation support 
to firms 

Skills and Mobility 

New skills development 
Labour market training 

Grants 

Skills and Mobility  

Life-long learning 
Labour market training  

Enhancing the 
employability of 
unemployed by 
providing training to 
acquire qualifications 
(BG4) 

5. Main Sources 

Interviews 

at the national 
level 

Funding, design 
and 
implementation 
at the national 
level 

Funding, design 
and 
implementation 
at the national 
level 

  Anton Gladnishki, Ministry of Finance, Head of Department, Economic and Financial Policy 

Directorate 

  Maria Georgieva, Ministry of Regional Development and Public Works  
  Dessislava Dakova, Ministry of Regional Development and Public Works 

Main documents and sources 

  Government of Bulgaria, (2019): National Reform Programme Bulgaria, 

https://ec.europa.eu/info/sites/info/files/2019-european-semester-national-reform-
programme-bulgaria_en.pdf  

  Government of Bulgaria, (2007): Corporate Income Tax Act  
  National Regional Development Strategy of the Republic of Bulgaria 2012-2022 
  Partnership Agreement Bulgaria – 2014-20, 

https://ec.europa.eu/info/publications/partnership-agreement-bulgaria-2014-20_en  

Country fiches 

Law on corporate income tax levying: Tax relief in the cases of carrying out production 
activities in municipalities in which the unemployment rate is higher than the country’s 
average unemployment rate 

ID  BG1 

Country  Bulgaria  

Region(s) affected  Municipalities in which the unemployment rate is higher than the 

country’s average unemployment rate  

Time horizon  N/A 

Objectives and Scope  Stimulate investments in municipalities with high unemployment  

Overview  0% corporate tax in areas with high unemployment – 25% higher 
than  the  country  average,  when  the  following  conditions  are 
fulfilled:  

  

the assets are located entirely within the administrative 
boundaries of the municipality with high unemployment  

12 

 
 
 
 
  

  

  

taxable entity has no liquid tax liabilities and liabilities for 
obligatory insurance payments  

tax has been invested in acquiring long-term tangible and 
intangible assets necessary for the production activity for 
a period of up to three years after the year for which the 
cession is used  

the  value  of  the  intangible  assets  from  the  initial 
investment  is  no  more  than  25  percent  of  the  value  of 
the long-term material assets from the initial investment  

(art.184)  (Source: http://www.investbg.government.bg/en and 
the Corporate Taxation Law)  

Figure 1 Level of unemployment  

Green: unemployment lower than country average  

Yellow: unemployment equal or higher than average  

Blue: unemployment 25% higher than country average  

Rationale  Companies  establishing  business  in municipalities  with  high 

unemployment are stimulated  

Type of policy category  Business environment and trade  

Type of policy instrument  Tax incentives  

Type of funding  Tax brakes 

Budget and expenditures  Not available  

Governance  Ministry of Finance,   

National Revenue Agency   

Policy implementation 
and policy mix 

N/A  

Relevant ESIF measures 
(if any) 

N/A 

Impact: monitoring and e
valuation  

N/A 

Link  Corporate Income Taxation Act (2007)  

13 

 
 
  
 
 
Industrial Zones 

ID  BG2 

Country  Bulgaria  

Region(s) affected  Six of the projects of the National company have already been 

operating: in Sofia, Burgas, Vidin, Ruse, Svilengrad and Varna. Five 
projects are under development 
in Kardzhali, Stara Zagora, Karlovo, Telish and Suvorovo. 

Time horizon 

Objectives and Scope  Attract  investors  in  industrial  zones. One  of  the  goals  of  NCIZ  is  to 

support the development of different economic regions in Bulgaria.  

Overview  The company assists investors in realizing projects in economic zones 
with  built  up  infrastructure,  first-class  locations  and  transport 
connections.  The  company  manages  11  industrial  zones  across  the 
country with a total area of more than 7.4 million square meters.   

Rationale  When  implementing  projects  in  state-owned  industrial  zones, 
investors  can  rely  on  predictability  and  competitive  conditions, 
partnership and assistance throughout the investment process.  

Type of policy category  Business environment and trade  

Sector Development and Targeted Investment 

Type of policy instrument  Special economic zones  

Industrial Parks and other businesses infrastructures 

Type of funding  Public procurements, tax brakes  

Budget and expenditures  N/A 

Governance  "National  Company  Industrial  Zones"  is  a  company  under  the 
guidance  of  the  Bulgarian  Ministry  of  Economy,  which  designs, 
develops and manages industrial and free zones.  

Policy implementation 
and policy mix 

 N/A 

Relevant ESIF measures 
(if any) 

 N/A 

Impact: monitoring and  
evaluation 

N/A 

Link   http://nciz.bg/ 

14 

 
 
 
  
 
Investment Promotion Act 

ID  BG3 

Country  Bulgaria  

Region(s) affected  All regions are eligible however the thresholds for investments in 
regions  with  unemployment  equal  or  higher  than  the  national 
average are lower.   

Time horizon  On going 

Objectives and Scope  The main objective of the Act is to stimulate business investments 
in  Bulgaria  and  to  enhance  the  competitiveness  of  the  Bulgarian 
economy  

Overview  The  Act  supports  investment  related  to  the  setting-up  of  a  new 
enterprise, to the extension of an existing enterprise or activity, to 
diversification  of  the  output  of  an  enterprise  or  activity  into  new 
additional  products  or  to  a  fundamental  change  in  the  overall 
production process of an existing enterprise or activity.  

Companies  that  invest  a  large  amount  of  money  obtain  special 
status  and  favourable  treatment.  There  are  certain  requirements 
listed in Investment Promotion Act – IPA that have to be fulfilled 
by  companies  to  receive  the  status  of  certified  investors. 
Investments exceeding certain thresholds and satisfying particular 
criteria are considered as Priority Investment Projects. Apart from 
the  priority  investment  projects,  investments  may  be  Class  A  or 
Class B depending on the value of the investment.  

The  thresholds  are  lower  in  cases  of  investments  in  areas  with 
unemployment equal or higher than the country average. 

Foreign investors which invest more than BGN 250 000 (€128.000) 
in Bulgaria can benefit from permanent residence permit for them 
and  their  families.  Such  permit  significantly  facilitates  the  entry 
and the exit of the country. 

Rationale 

IPA  aims  at  attracting  prospective  investors  to  Bulgaria  by 
introducing a system of incentives for initial investments in tangible 
and intangible fixed assets and new job opportunities arising out 
of such investments. 

Type of policy category  Business environment and trade  

Sector Development and Targeted Investments 

Skills and mobility 

Type of policy instrument 

Investment promotion 

Business development and innovation support to firms 

New skills development 

Labour market training 

Type of funding  Grants 

Budget and expenditures   The budget is defined at an annual base.    

Governance  Ministry of the Economy through the Invest Bulgaria Agency 

Policy implementation 
and policy mix  

 N/A 

15 

 
 
Relevant ESIF measures 
(if any)  

 N/A 

Impact: monitoring and            

                         evaluation 

Link  https://www.investbg.government.bg/en/pages/4-investment-

promotion-act-170.html      

Enhancing  the  employability  of  unemployed  by  providing  training  to  acquire 
qualifications 

ID  BG4 

Country  Bulgaria  

Region(s) affected  All but with strong regional implications  

Time horizon  2013-2018 

Objectives and Scope 

Increase labour market adaptability of unemployed  

Overview 

Increase adaptability of unemployed to the labour market  

Type of policy category  Skills and mobility  

Type of policy instrument  Life-long learning  

Labour market training    

Type of funding  Grants 

Budget and expenditures  €38.4 million secured between 2013 and 2018  

Governance  Ministry of Labour and Social Policy  

Policy implementation 
and policy mix 

Expected outreach to more than 80,000 unemployed  

Relevant ESIF measures 
(if any) 

N/A 

Impact: monitoring and 
evaluation 

Link  2019-2020  Action  Plan  for  the  Implementation  of  the  National 

Development Programme Bulgaria 2020 

16 

 
 
  
 
 
 
 
 
 
 
 
 
Case study 

Investment Promotion Act – Bulgaria (BG)  

1.  Executive Summary 

Since the moment of its adoption in 2004 the Investment Promotion Act (IPA) has played a role 
as a factor in attracting domestic and foreign direct investments to Bulgaria both in developed and 
underdeveloped regions of the country. The priority it gives to regions with high unemployment 
has been a factor for redirecting some investments to these regions hence reducing economic and 
social  disparities.  IPA  has  a  relatively  simple  governance  system  headed  by  the  Ministry  of 
Economy,  a  specially  established  Bulgarian  Investment  Agency  and  the  municipalities.  They  all 
have  a  defined  role  in  IPA  implementation.  Actors  like  economic  zones  and  clusters  are  also 
involved  in  the  implementation  of  the  act.  All  incentives  within  IPA  have  been  of  interest  to 
investors  including  the  faster  administration;  reimbursement  of  social  security  charges;  land 
acquisition  on  preferential  terms;  and  support  for  trainings  and  education.  The  budget  for  IPA 
implementation  is  insufficient  especially  when  the  budget  for  trainings  is  concerned.  There  is  a 
lack of synergies between IPA and the European Structural and Investment Funds (ESIF) is another 
serious  weakness.  ESI  Funds  provide  the  majority  of  measures  and  investments  for  regional 
development in Bulgaria. 

2.  Background and Context 

There is a high degree of regional economic disparities in Bulgaria. These come from the inherent 
structure of the economy and its historical development. This is also conditioned by the availability 
of labour which defined the level of investments in different regions. As it is visible from the figure 
below,  these  have  a  serious  impact  on  the  average  unemployment  rate.  Sofia,  Plovdiv,  Stara 
Zagora,  Burgas  and  Varna  attract  most  of  the  foreign  and  domestic  investments  and  therefore 
have an unemployment rate lower than the country average. Inversely, the North West and the 
North East (without Varna), the mountainous and border regions in the South, the municipalities 
along the Danube river (except Ruse) have witnesses lower investment activity and unemployment 
higher than the average. As demonstrated in the Bulgarian country study in the spring of 2019, 
since 2007 most of the regional policy in Bulgaria has been happening in the framework of the 
European Structural and Investment Funds (ESIF).  There are only a  few dedicated policies and 
strategic frameworks which are not related to the Structural and Cohesion funds and which have 
implementation  budgets  of  their  own  coming  from  the  national  budget.  In  addition  to  the 
Investment  Promotion  Act,  these  are  the  Regional  Development  Act  (2008),  the  Employment 
Promotion Act (2001) and the Law on Corporate Income Tax from 2007. An Industrial Zone Act is 
currently under preparation. 

3.  Description of the Policy Measure 

The Investment Promotion Act (IPA) has been in force since 2004. It has been assessed as one of 
the  very  few  successful  measures  combatting  regional  disparities.  In  the  framework  of  IPA  the 
Ministry  of  Economy  grants  certain  investment  projects  of  national  and  regional  importance  a 
status of Priority projects Class A or Class  B projects. Class C is granted by municipalities. The 
status  depends  on  the  type  of  activity,  project  value,  jobs  created  and  the  region  where  the 
investment is taking place. Investments have to be associated with the creation of a new enterprise 
or expansion of a current one. Investments need to be maintained for a minimum of five years (3 
years for SMEs). This threshold is reduced for investments in municipalities with unemployment 
equal  or  higher  than  the  average  and  for  investments  in  high-tech  activities  of  the  industrial 
sectors. In both cases the requirements for new job creation are 25 new jobs for Class A and 10 
new  jobs  for  Class  B.  When  the  investment  is  in  high-tech  activities  of  the  service  sector  the 
requirements for new job creation are 50 new jobs for Class A and 25 new jobs for Class B. 

The precise level of the incentives have evolved during the years and are reflected in a regulation 
for  the  implementation  of  IPA.  An  additional  ‘Priority’  class  of  investments  was  added  in  2013. 
These  are  very  large  projects  (for  the  Bulgarian  context)  with  a  minimum  of  50  MEUR  of 
investments  creating  a  minimum  of  50  jobs.  Additional  criteria  include  creation  of  jobs  in 
underdeveloped  regions  and  high-technology  sectors  as  well  as  the  establishment  of  industrial 
zones  and  technological  parks.  In  addition  to  the  benefits  under  Class  A  these  have  priority  in 
setting up public-private partnerships; and receive research and innovation subsidies. In practice, 
there have been only a few projects of this type. The investments which have received a certificate 
for class are encouraged through the following measures: 

17 

 
 
 
 
shorter times (by 1/3) for administrative services (Class "A" and "B"); 
 
individual administrative services (provided by Invest Bulgaria Agency) (Class "A"); 
  options  for  acquisition  of  title  or  limited  rights  over  real  estates  on  properties  at 

 

 

for  construction  of 

preferential terms (for Class "A" and "B"); 
financial  aid 
infrastructure  elements  (for  Class 
technical 
"A" investments and in case of a joint application of two or more investment projects from 
class "B"); 
financial aid for staff training for acquiring professional qualifications of persons occupying 
the new jobs created by the investments (Class "A" and "B"). 

  Class C investment certificates are granted by local authorities and comprise individualised 
administrative  services  and  shorter  delays;  and  acquisition  of  property  rights  or 
establishment  of  limited  rights  to  real  estate  municipal  property  without  tender  or 
competition after market price determination by two independent assessors. 

4.  Policy Implementation 

The Ministry of Economy was the initiator of the measure in 2004. It was designed to be the main 
investment promotion measure in Bulgaria. Invest Bulgaria Agency has been the implementation 
agency  of  the  measure.  While  the  practical  document  collection  is  done  by  the  Invest  Bulgaria 
Agency it is the Ministry of Economy that issues the certificate and signs the contracts with the 
investors. The available budget varies through the years and is spent on:  

 
 
 

reimbursement of social security of new employees as specified by the act;  
construction of infrastructure to the company; 
training and education.  

It  has  to  be  noted  that  in  practice  the  public  procurement  for  the  construction  of  adjoining 
infrastructure  is  done  by  the  local  municipalities.  Infrastructure  is  accessible  to  all  due  to 
requirements of the State Aid Directive. 

5.  Performance 

A formal evaluation of the Investment Promotion Act has not been conducted. Therefore, in judging 
the  IPA  implementation  performance  we  have  relied  on  desk  research  and  two  interviews:  the 
Ministry of Economy who is the main institution in charge of the measure 

and Trakia Economic Zone (TEZ) which is closely involved in attracting new investors to Plovdiv 
using IPA as a tool. A proper study on the benefits of IPA for investors would have to involve a 
survey among all those companies who have been granted a priority class. In  the cases where 
certificates  are  given  for  the  purpose  of  quicker  administration  there  is  no  formal  obligation  to 
prove  investments  and  job  creation.  However,  if  companies  receive  subsidies  for  the 
reimbursement of social security for new employees they sign a contract for investment size and 
job  creation.  In  this  case,  investors  are  obliged  to  report  once  a  year  and  this  is  the  main 
instrument of the Ministry of Economy to monitor what is happening. Based on that, the Ministry 
of Economy observations are that some 90% of investments have happened in the scope planned 
beforehand. 

Additionally, the Ministry of Economy has observed that almost all companies which invested under 
this law extend their investments and reapply with other requests for certification when extending 
their activities. This is a proof in itself that from the point of view of the certified companies the 
certification has played a positive role. 

Municipalities also play a role in investment promotion through long-term partnerships with the 
Ministry. On one hand, municipalities issue the Class C certificates. On the other hand, they also 
offer  land  within  Class  A  and  B  certificates  and  carry  out  the  construction  of  the  adjoining 
infrastructure through municipal procurement. 

6.  Strengths and Weaknesses 

 

It  gives  very  concrete  and  tangible  benefits  to  companies  easily  calculated  as  financial 
gains, the individualised administrative support reduces the upfront administrative burden 
on companies and saves time and money. 

18 

 
 
 
 
 
 

Insufficient  budget  for  implementation  of  the  act,  much  is  spent  on  reimbursement  of 
social charges and on infrastructure construction, the education component is not actively 
implemented due to lack of budget. 

  Attempts  have  been  made  by  the  Ministry  to  create  synergies  between  IPA  and  other 
instruments  (such  as  Operational  Programme  (OP) Human  Resources  in  the 2014-2020 
Programming period) to compensate for the low budget for the implementation of the Act, 
however, as only several municipalities have been approved within the OP, implementation 
has been limited. 

7.  Transferable Lessons 

  An act like IPA is an instrument which is relatively simple to implement and has immediate 
effects  on  employment  and  regional  development.  Even  single  investments  have  the 
potential to change regions and impact macro indicators. 

  Countries like Bulgaria are in severe competition with other EU and non-EU countries for 
attracting foreign direct investments. Therefore, the introduction of an instrument like the 
Investment Promotion Act is needed and well-justified.  

  The regional component of IPA allows smaller projects the possibility to comply with the 
criteria and receive a high status. The reason for that is the fact that unemployment is one 
of the main criteria for receiving the priority status.  

  There are very little synergies between IPA and the European Structural and Investment 

Funds (ESIF). Improving this will leverage enormously IPA’s impact. 

  The  governance  of  the  incentive  measure  whereby  a  dedicated  agency  is  set  up  for  its 
implementation  is  positive.  The  inclusion  of  municipalities  in  IPA’s  implementation  is 
noteworthy. There are signs of cooperation between the Ministry of Economy and other 
actors such as the industrial zones, clusters, etc. 
IPA  implementation  will  benefit  significantly  if  the  budget  for  its  implementation  is 
increased.  This  is  especially  the  case  with  the  educational  budget  which  is  considered 
insufficient.  

 

19 

 
 
 
 
 
2 

CROATIA 

Country briefings 

National Policies for addressing regional economic disparities – Croatia  

1. Background  

Croatia joined the European Union in 2013 in the middle 
of  a  six-year  recession.  Since  2015,  the  economy  has 
grown  at  an  annual  average  rate  of  2.9%  although  the 
momentum is lost compared to the 3.5% growth achieved 
in  2016.  The  real  per  capita  disposable  income  has 
increased  and  reached  the  pre-crisis  2009  level.  The 
economic recovery has resulted in an employment rate in 
2018  that  exceeds  the  pre-crisis  level.  Inequality  has 
decreased and is now at its lowest level since 2009.3 

Croatia  has  two  NUTS  2  regions,  both falling into  the 
category  of  the  less  developed  regions with a GDP  per 
capita at current market prices of 40% (Kontinentalna 
Hrvatska) and of  38%  (Jadranska  Hrvatska) of  the  EU 
average (in 2017).4   

2.  Architecture  of  national  policies  for  addressing 
regional economic disparities 

Source: European Commission (2019). 

Focus 

Due to the relatively homogenous growth of regions, national policy addressing disparities focuses 
mainly  on  the  convergence  of  the  whole  economy,  rather  than  on  specific  regions,  to  the  EU 
average. Priority is given to the competitiveness of the entire economy and the increase of exports 
within  the  EU  internal  market  by  improving  the  conditions  for  investments  and  encouraging 
innovations. 

In addition to the overall development objectives, the territorial differences across the regions are 
also taken into consideration aiming at a balanced development. Attention is given to territories 
facing specific development challenges due to geography and its effects on living costs and the 
quality of life of citizens.  

The cities are seen as growth engines, and therefore the development of urban agglomerations 
and larger urban areas is also fostered through Integrated Territorial Investments (ITIs). 

Design and governance 

The  Strategy  for  Regional  Development  has  been  designed  by  the  Ministry  of  Regional 
Development and EU Funds (MRDEUF) in consultation with stakeholders. It was adopted in 2017 
and mainly includes priorities supported by the ESI Funds. The Ministry of Regional Development 
and the EU Funds is responsible for various regional development programmes, including support 
to assisted mountainous areas and islands. Sectoral ministries also take part in the design and 
implementation  of  programmes  which  are  within  their  areas  of  responsibility,  for  example,  the 
Ministry  of  Maritime  Affairs,  Transport  and  Infrastructure  (transport  infrastructure)  and  the 
Ministry of Tourism (competitiveness of SMEs involved in tourism activities). 

In  addition to  the  above, the  Ministry  of  Economy,  Entrepreneurship  and  Crafts  (MEEC)  has  its 
own Strategic Plan 2019–2021 which focuses on the improvement of the competitiveness of the 
whole economy and thus, the measures implemented are horizontal covering the entire country. 
Most of the activities are financed by the ESI Funds and therefore there is a coordination with the 
Strategy for Regional Development through the Partnership Agreement. The national funding is 

3 Eurostat and World Bank http://www.worldbank.org/en/country/croatia/overview#3. 
4 Based on Eurostat data (nama_10r_2gdp, last updated 26.02.2019, extracted 16.06.2019).  

20 

 
 
 
directed to the Croatian Agency for SMEs and Investments (HAMAG-BICRO) to support companies 
and technology transfer. 

Relationship of national funding and support through ESI Funds   

The  primary  source  of  funding  for  the  support  of  economic  development,  such  as  support  for 
business investments and infrastructures, research, development and innovation in enterprises, 
development of human resources, internationalisation of SMEs, transport and digital networks are 
the ESI Funds.  

The resources available from national sources during the period 2014-2018 are relatively limited 
to around €280 million allocated to 19 programmes. Several of the programmes have been started 
long before Croatia joined the EU, and some of them ended within the current programming period. 
Among them, eleven programmes focus on sector development and targeted investments, two of 
them  on  the  improvement  of  the  business  environment  and  trade,  three  on  urbanisation  and 
connectivity, one on skills and mobility and three on a portfolio of subprogrammes and projects 
covering  several  policy  categories.  The  latter  is  related  to  territorial  interventions.  Due  to  the 
emphasis  on  the  development  of  the  entire  country,  most  of  the  measures  are  countrywide  in 
scope.     

3. Overview of national policy measures addressing regional economic disparities 

When  Croatia  joined  the  EU,  a  policy  mix  supporting  economic  development  and  growth  was 
already in place. Several of its measures continue operating for some more years after 2014. The 
majority of the programmes financed by the national budget that remain in place or created during 
the period 2014-2020 are focusing on business development and targeted investments. Among 
them, several measures support research and innovation. The Proof of concept – PoC (fiche HR1) 
provides support (€5.1 million) to early stages of innovation development by providing grants to 
SMEs  to  test  the  commercialisation  feasibility  of  their  research  results.  The  Development  of 
knowledge-based enterprises – RAZUM (fiche HR2) with a budget of €3.3 million, provides early-
stage support and R&D funding to knowledge-intensive start-ups. The Research and development 
programme – IRCRO (fiche HR4) supports collaborative research between SMEs and  PROs with 
€1.8 million. Two programmes are meant to support basic research of international quality. The 
Research projects (fiche HR8) finance basic research with international partners with a budget of 
€53.4 million, while the programme Installation research projects (fiche HR9) provides €21 million 
to young scientists for encouraging them to establish their own laboratory or research group at 
Croatian universities and public research institutes. Infrastructures and institutions for the support 
of business-oriented research and technology transfer are supported by the Programme for the 
development of technological infrastructures – TEHCRO (fiche HR3). With a budget of €9.5 million, 
the TEHCRO programme supports technology incubators, technology-business centres, centres of 
competence, and R&D centres. The programme Support to technology transfer offices – TTO (fiche 
HR5)  provides  funding  of  €1.5  million  to  Technology  Transfer  Offices  in  universities  and  public 
research institutions for implementing technology transfer projects.   

Support  to  specific  groups  of  companies  for  encouraging  investments  is  provided  by  the 
Preservation and development of traditional and artistic trades (fiche HR11) with a budget of €1.1 
million  and  by  the  Development  of  SMEs  and  crafts  in  areas  inhabited  by  members  of  national 
minorities  (fiche  HR12)  with  a  budget  of  €1.8  million.  Tourism  is  the  only  sector  with  its  own 
programme.  The  Tourism  competitiveness  programme  (fiche  HR13)  provides  €20.8  million  for 
SMEs and family farms providing accommodation and tourist services, including special forms of 
tourism. 

The development of a favourable business environment and trade is supported by two measures 
that make access to finance easier for companies. The State Guarantees programme (fiche HR6) 
provides  guarantees  of  €35  million  for  business  loans  to  SMEs.  Under  the  Private  sector 
investments-  HBOR  programme  (fiche  HR7),  the  Croatian  Bank  for  Reconstruction  and 
Development  (HBOR)  provides  favourable  loans  to  companies  to  promote  various  types  of 
investment.   

Skills are supported by one programme with a budget of €1.6 million for the period 2014-2019 
under the category of Lifelong learning for crafts (fiche HR10). Urbanisation and connectivity are 
supported by the Support to county administrations for maintenance, reconstruction and building 
of county and local roads (fiche HR14) with a budget of €24.3 million and the Support to local and 

21 

 
 
regional administration unit for the development of river traffic, county harbours and docks (fiche 
HR15) with a small budget of only €0.4 million. 

Several programmes support territorial investments. The islands are supported by the measure 
Development of Adriatic Islands (fiche HR18) with a budget of €14.9 million. The measure supports 
the improvement of the quality and availability of public services such as entrepreneurial, tourist 
cultural, educational, health, social, sport, and other public services, along with systemic support 
in  environmental  protection  and  applications  of  energy  efficiency  and  renewable  energy. 
Investments to islands are also supported by the Fund for financing capital projects of interest for 
islands (fiche HR19). Other programmes supporting territorial investments with an impact on the 
local  economy  are  the  Development  assisted  areas  (fiche  HR16)  with  €47.9  million  and  the 
Development of hill and mountain areas (fiche HR17) supporting integrated territorial investments 
and hill and mountain areas with €8.1 million.  

Policy category 

Policy instrument 

4. Classification of policies  

Title 

Proof of concept – PoC 
(HR1) 

Type of 
funding 

Grants 

Development of knowledge-
based enterprises – RAZUM 
(HR2) 

Loans 

Programme for the 
development of 
technological 
infrastructures – TEHCRO 
(HR3) 

Grants 

Research and development 
programme – IRCRO 
(HR4) 

Grants 

Support to technology 
transfer offices – TTO 
(HR5) 

Grants 

Sector    
Development 
and Targeted 
Investment 

Sector 
Development 
and Targeted 
Investment 

Sector 
Development 
and Targeted 
Investment 

Sector 
Development 
and Targeted 
Investment 

Sector 
Development 
and Targeted 
Investment 

State Guarantees (HR6) 

Guarantees for 
loans 

Business 
Environment and 
Trade 

Private sector 
investments- HBOR (HR7) 

Loans 

Business 
Environment and 
Trade 

Research projects (HR8) 

Grants 

Installation research 
projects (HR9) 

Grants 

Lifelong learning for crafts 
(HR10) 

Grants 

Preservation and 
development of traditional 
and artistic trades 
programme (HR11) 

Development of SMEs and 
crafts in areas inhabited 
by members of national 
minorities (HR12) 

Grants 

Grants 

Sector 
Development 
and Targeted 
Investment 

Sector 
Development 
and Targeted 
Investment 

Skills and 
Mobility 

Sector 
Development 
and Targeted 
Investment 

Sector 
Development 
and Targeted 
Investment 

22 

Business    
development and  
innovation support 
to firms 

Business 
development and 
innovation support 
to firms 

Clusters, centres of 
excellence and 
technology centres, 
research 
infrastructures 

R&D Programmes 

Funding and 
implementation 

Funding, design and 
implementation at the 
national level 

Funding, design and 
implementation at the 
national level 

Funding, design and 
implementation at the 
national level 

Funding, design and 
implementation at the 
national level 

Commercialisation 
of research and 
technology transfer 

Funding, design and 
implementation at the 
national level 

Venture capital 
funds and other 
financial 
instruments 

Venture capital 
funds and other 
financial 
instruments 

R&D programmes 

R&D programmes 

Labour market 
training 

Business 
development and 
innovation support 
to firms 

Business 
development and 
innovation support 
to firms 

Funding, design and 
implementation at the 
national level 

Funding, design and 
implementation at the 
national level 

Funding, design and 
implementation at the 
national level 

Funding, design and 
implementation at the 
national level 

Funding, design and 
implementation at the 
national level 

Funding, design and 
implementation at the 
national level 

Funding, design and 
implementation at the 
national level 

 
 
Support to county 
administrations for 
maintenance, 
reconstruction and building 
of county and local roads 
(HR14) 

Support to local and 
regional administration 
unit for the development 
of river traffic, county 
harbours and docks 
(HR15) 

Development assisted 
areas (HR16) 

Development of hill and 
mountain areas (HR17) 

Tourism competitiveness 
programme (HR13) 

Grants 

Sector 
Development 
and Targeted 
Investment 

Business 
development and 
innovation support 
to firms 

Funding, design and 
implementation at the 
national level 

Grants 

Urbanisation and 
Connectivity 

Transport 
infrastructure 

Funding, design and 
implementation at the 
national level 

Grants 

Urbanisation and 
Connectivity 

Transport 
infrastructure 

Funding, design and 
implementation at the 
national level 

Various 

Various 

Various 

Various 

Various 

Various 

Sector 
Development 
and Targeted 
Investment 

Sector 
development and 
targeted 
investment 

Urbanisation and 
Connectivity 

Transport 
infrastructure 

Energy 
infrastructure 

Various 

Various 

Development of Adriatic 
Islands (HR18) 

Grants, public 
procurements 

Fund for financing capital 
projects of interest for 
islands (HR19) 

Grants and 
public 
procurements 

5. Main Sources: 

Interviews 

Funding, design and 
implementation at the 
national level 

Funding, design and 
implementation at the 
national level 

Funding, design and 
implementation at the 
national level 

Funding, design and 
implementation at the 
national level 

  Lovro Novoselac, Ministry  of  Regional  Development  and  EU  Funds,  Unit  for EU 

 

Funds Coordination and Programming  
Jadranka Šegota, Ministry of Regional Development and EU Funds, Unit for Legal and 
Strategic Framework of the Regional Development Policy  

  Sanja Rendić Miočević,  Ministry  of  Regional  Development  and  EU  Funds,  Sector  for 
Sustainable Island Development Policy and Preparation of Development Programmes   
  Bruno Grubešić, Ministry of  Economy, Entrepreneurship and Crafts, Head of Unit for 

preparation of research, development and innovation programmes  

  Mislav Jurišić, 

and Investments)   

Main documents and sources 

HAMAG-BICRO (Croatian Agency for 

SMEs, Innovations 

  Government of Croatia, (2019): National Reform Programme Croatia, 

https://ec.europa.eu/info/sites/info/files/business_economy_euro/economic_and_fis
cal_policy_coordination/documents/2019-european-semester-national-reform-
programme-croatia-hr.pdf    

  HAMAG-BICRO website. Last accessed: 06/06/19. Available at: 

https://hamagbicro.hr/bespovratne-potpore/programi-podrske-inovacijskom-
procesu/poc/ 

  Partnership Agreement Republic of Croatia 2014-2020, 

https://ec.europa.eu/info/publications/partnership-agreement-croatia-2014-20_en  

  World Bank website. Last accessed: 27/06/2019. Available at:  
http://www.worldbank.org/en/country/croatia/overview#3 

23 

 
 
 
 
 
 
Country fiches 

Proof of concept – PoC (Program provjere inovativnog koncepta – PoC) 

ID  HR1 

Country  Republic of Croatia 

Region(s) affected  National – all regions affected 

Time horizon  Duration of the programme: 2010–2020 

Objectives and Scope  To  provide  support  to  innovation  in  earliest  phase  of  research  in 
for  technical  and 

order  to  ensure  pre-commercial  capital 
commercial evaluation of proof of concept.  

Overview 

Implementation of a PoC project provides confirmation that an idea 
or a proposed solution is actually feasible and can be commercially 
utilised. Promotes innovation commercialisation. 

Target groups are SMEs participating in innovative activities. 

Activities which are eligible for funding: 

Intellectual property review and protection 

  
   Development of a functional prototype 
   Demonstration of technical feasibility 
(market  analysis/ 

study, 
Additional  activities 
development  of  a  concept  and  strategies  for  development  or 
commercialisation of a product) 

feasibility 

Type of policy category   Sector Development and Targeted Investment 

Type of policy instrument  Business development and innovation support to firms 

Type of funding  Grants 

Budget and expenditures  Total budget: 

2019: €3 million 

2018: €2.1 million 

Total funding 2014-2020: €5.1 million 

Governance  Institution responsible: The measure was implemented by the 
Croatian Agency for SMEs and Investments (HAMAG-BICRO) as an 
IBRD  Loan  Beneficiary  which  carries  out  five  programmes  to 
support public and private  users in each  phase of the  innovation 
process. 

Funding: National 

Design: National 

Implementation: National / Regional 

Policy implementation 
and policy mix 

N/A 

Relevant ESIF measures 
(if any) 

N/A 

Impact: monitoring and 
evaluation 

Performance indicators for the period 2010–2016: 

Number of Calls published: 6; 

24 

 
 
Number of funded projects: 222 

Total value of projects funded: HRK 83m 

Total value of financing: HRK 55m 

Indicators for the period 2010–2015 (first five calls): 

60% of projects continued further development activities; 

34% of projects started commercialisation activities; 

20% of projects placed an innovation on a market; 

96  newly  employed  in  R&D  activities  during  and  after  the 
implementation of the projects; 

Average  annual  growth  rate  in  revenue  coming  from  innovative 
products in three years after the end of the project: 26%; 

Increase of a share of R&D costs in total revenues: from 9.3% to 
12.5%. 

Link  HAMAG-BICRO  website.  Last  accessed:  06/06/19.  Available  at: 

https://hamagbicro.hr/bespovratne-potpore/programi-podrske-
inovacijskom-procesu/poc/ 

HAMAG  BICRO  (2019)  Public  Call  for  PoC8.  Last  accessed: 
06/06/19.  Available  at:  https://hamagbicro.hr/otvoren-javni-
poziv-poc8/ 

HAMAG  BICRO  (2018)  Public  Call  for  PoC7.  Last  accessed: 
06/06/19. Available at: https://hamagbicro.hr/javni-poziv-poc7/ 

Development of knowledge-based enterprises – RAZUM (Razvoj na znanju utemeljenih 
poduzeća - RAZUM) 

ID  HR2 

Country  Republic of Croatia 

Region(s) affected  National – all regions affected 

Time horizon  Duration of the programme: 2005 – ongoing 

Objectives and Scope 

  The  objective  of  the  Programme  is  to  provide  the  initial 
funding of the newly established companies, or to provide 
initial funding for the development of new products and/or 
services in existing SMEs.  

  Goals of the Programme are the following: 

  Enabling 

the  establishment  and  development  of 

knowledge-based, technology-oriented SMEs, 
  Development of academic entrepreneurship, 
  Technological modernisation of SMEs and improvement of 
capacities related to production, market and management, 

  Development  of 

competitive  advantages 

in 

the 

international environment, 

  Encouraging  collaborative  efforts  between  experts  from 

industry and R&D sector, 

25 

 
 
 
 
  Fostering the general technological level of economy and 
encouraging the creation of new industrial branches, 
  Gradual  development  of  export-oriented  sectors  on 

knowledge-based SMEs, 

  Encouraging growth of knowledge-based economy. 

Overview  Target groups are SMEs participating in innovative activities. 

The  funding  is  provided  to  technologically  innovative  projects  in 
order to foster the competitiveness of domestic SMEs and products, 
as well as creating conditions for a successful knowledge transfer.  

Rationale  The  Programme  is  focused  on  the  development  of  knowledge-
innovation 

the  process  of 

facilitating 

based  SMEs  and 
commercialisation. 

Type of policy category   Sector Development and Targeted Investment 

Type of policy instrument  Business development and innovation support to firms 

Type of funding  Conditional loans  

Budget and expenditures  Total budget: 

2015: €3.3 million 

Governance 

Institution responsible: HAMAG-BICRO 

Funding: National  

Design: National 

Implementation: National 

Policy implementation 
and policy mix 

N/A 

Relevant ESIF measures 
(if any) 

N/A 

Impact: monitoring and 
evaluation 

Period 2005–2013 

Total number of contracted projects: 24 

Total contracted funding: HRK 117.4million 

RAZUM 2015: 

Total number of contracted projects: 7 

Total contracted funding: HRK 24.7 million 

Average contracted amount: HRK 3.5 million 

Allocation by County: 

Zagreb (HR04) – 1 project: HRK 1.1 million 

City of Zagreb (HR04) – 5 projects: HRK 22.9 million 

Istria (HR03) – 1 project: HRK0.7 million 

Technological areas:  

ICT – 3 projects (HRK 14.3 million), 

  
   Energy,  environment  and  materials  –  2  projects  (8.5 

million), 

26 

 
 
   Engineering,  naval  architecture  and  aircraft  -  2  projects 

(HRK 1.8 million). 

Link  HAMAG-BICRO  website.  Last  accessed:  06/06/19.  Available  at: 

https://hamagbicro.hr/bespovratne-potpore/programi-podrske-
inovacijskom-procesu/razum/ 

Programme for the development of technological infrastructures – TEHCRO (Program za 
razvoj tehnološke infrastrukture – TEHCRO) 

ID  HR3 

Country  Republic of Croatia 

Region(s) affected  National – all regions affected 

Time horizon  2008–ongoing 

Objectives and Scope  The Programme objectives are as follows: 

   Efficient commercialisation of research results, 
   Better  utilisation  of  intellectual  capital  on  universities  and 

within scientific institutions, 

   Development and growth of knowledge-based companies, 
   Knowledge  and  technology  transfer  from  universities  and 
other scientific organisations towards the business entities, 

  

improvement of quality and increasing the competitiveness 
of  companies  and  probabilities  for  their  success  in  the 
market. 

Overview  Target groups are business supporting institutions. 

The Programme supports four types of institutions: 

   Technology incubators, 
   Technology-business centres, 
   Centres of competence, and  
   R&D centres. 

Rationale  Main  goal  of  the  TEHCRO  programme  is  to  increase  the 
competitiveness of Croatian economy through the development of 
efficient  business-supporting  institutions.  These  institutions  are 
envisaged  to  create  a  favourable  environment  for  technological 
transfer  and 
for  growth  and 
sustainability  of  innovative  technology  companies,  especially 
knowledge-based companies established on the basis of scientific 
research results and new technologies (start-up, spin-off).  

the  opportunities 

increase 

Type of policy category   Sector Development and Targeted Investment 

Type of policy instrument  Clusters, centres of excellence and technology centres 

Type of funding  Grants 

27 

 
 
 
 
Budget and expenditures  Total funding 2008 - 2016: €9.5 million 

Allocation by region EURO: 

County 

Varaždin 

Dubrovnik-
Neretva 

Istria 

Nuts 2 

HR04 

HR03 

HR03 

Total grant 

  1,512,431.71  

  2,453,531.29  

  1,834,635.74  

Brod-Posavina 

HR04 

     710,641.42  

Međimurje 

HR04 

  1,624,928.90  

Osijek-Baranja 

HR04 

     474,054.01  

City of Zagreb 

HR04 

     957,203.97  

Total 

  9,567,427.05  

Institution responsible: HAMAG-BICRO  

Governance 

Funding: National 

Design: National 

Implementation: National 

Policy implementation 
and policy mix 

N/A 

Relevant ESIF measures 
(if any) 

N/A 

Impact: monitoring and 
evaluation 

N/A 

Link  HAMAG-BICRO  website.  Last  accessed:  06/06/19.  Available  at: 

https://hamagbicro.hr/bespovratne-potpore/programi-podrske-
inovacijskom-procesu/tehcro/ 

Research  and  development  programme  –  IRCRO  (Program  za  istraživanje  i  razvoj  – 
IRCRO) 

ID  HR4 

Country  Republic of Croatia 

Region(s) affected  National – all regions affected 

Time horizon  2008–ongoing 

Objectives and Scope  Objectives of the Programme: 

   Encouraging SMEs to increase their own R&D activities, 
   Fostering and strengthening linkages between the industry 

and science, 

  

Improved utilisation of  the  existent  scientific  and  research 
infrastructure, 

   Providing assistance to SMEs in shortening the time period 

necessary for R&D project implementation, 

28 

 
 
  
 
 
 
   Encouraging science-industry collaboration. 

Overview  The programme provides grants for collaborative research between 

SMEs and PROs   

Rationale  The purpose of the Programme is to encourage SMEs to collaborate 
with scientific research institution in order to initiate their own RDI 
activities. It promotes business sector R&D activities and science-
industry collaboration. 

Type of policy category   Sector Development and Targeted Investment 

Type of policy instrument  R&D Programmes 

Type of funding  Grants 

Budget and expenditures  Total funding: 

2015: €1.8 million 
Allocation by region EURO: 

County 

Nuts 2 

Number 
projects 

of 

Total 
funding 

value 

of 

Istria 

HR03 

City 
Zagreb 

of 

HR04 

Zagreb 

HR04 

Split-
Dalmatia 

HR03 

2 

11 

3 

3 

19 

     162,041 

  1,116,344 

     254,788.20 

     252,878 

  1,786,053 

2008-2012: €2.3 million 

Governance 

Institution responsible: HAMAG-BICRO 

Funding: National 

Design: National 

Implementation: National 

Policy implementation 
and policy mix 

N/A 

Relevant ESIF measures 
(if any) 

N/A 

Impact: monitoring and 
evaluation 

IRCRO 2015: 

Total number of projects: 19; 

Total amount of co-financing: HRK 13.2 million  

Average funding per project: HRK 696,138 

Technology areas of projects: 

   Medicine,  biomedicine,  pharmaceuticals  –  2  projects  (HRK 

1.4 million), 

   Electronics  and  electrotechnics  –  5  projects  (HRK  3.4 

million), 

29 

 
 
  
  
 
ICT – 9 projects (HRK 6.6 million), 

  
   Food technology – 1 project (HRK 0.35 million), 
   Engineering, naval architecture and aircraft – 1 project (HRK 

0.9 million), 

   Energy,  environment  and  materials  -  1  project  (HRK  0.55 

million). 

Link  HAMAG-BICRO  website.  Last  accessed:  06/06/19.  Available  at:  

https://hamagbicro.hr/bespovratne-potpore/programi-podrske-
inovacijskom-procesu/ircro/ 

Support to technology transfer offices – TTO (Podrška uredima za transfer tehnologije 
– UTT) 

ID  HR5 

Country  Republic of Croatia 

Region(s) affected  National – all regions affected 

Time horizon  N/A 

Objectives and Scope  The  goal  of  the  Programme  is  to  strengthen  the  role  of  TTOs  in 
universities  and  public  research  institutions  in  Croatia,  as  the 
central  bodies  for  fostering  and  conducting  technology  transfer 
activities.  The  main  purpose  of  the  Programme  is  to  encourage 
results,  and 
efficient  commercialisation  of 
development of TTO’s capacities.  

research 

the 

Overview  The  programme  supports  Technology  Transfer  Offices 

in 
universities  and  public  research  institutions  for  implementing 
technology transfer projects 

finance  technology  transfer  activities 

The  programme 
i.e. 
intellectual  property  protection,  development  of  market  analysis, 
development  of  a  business  plan,  development  of  intellectual 
property  strategy,  costs  of  licensing,  contracting,  legal  affairs, 
costs of establishing spin-off/spin-out/start-up companies, product 
certification, product design, brand development, etc.  

Rationale 

It promotes knowledge and technology transfer and improvement 
of capacities of TTOs. 

Type of policy category   Sector Development and Targeted Investment 

Type of policy instrument  Clusters, centres of excellence and technology centres 

Type of funding  Grants 

Budget and expenditures  Total funding: €1.5 million 

Funding per project: €0.001 million – €0.08 million 

Governance 

Institution responsible: HAMAG-BICRO 

Funding: National 

Design: National 

Implementation: National 

30 

 
 
 
Policy implementation 
and policy mix 

N/A 

Relevant ESIF measures 
(if any) 

N/A 

Impact: monitoring and 
evaluation 

N/A 

Link  HAMAG-BICRO  website.  Last  accessed:  06/06/19.  Available  at: 

https://hamagbicro.hr/bespovratne-potpore/programi-podrske-
inovacijskom-procesu/utt/ 

State Guarantees 

ID  HR6 

Country  Republic of Croatia 

Region(s) affected  National – all regions affected 

Time horizon  2010–ongoing 

Objectives and Scope  Fostering  business  investment  and  increasing  availability  of 

funding for business investments 

Overview  The guarantees of HAMAG-BICRO provide insurance for a portion 
of  a  loan  which  is  raised  by  SMEs  in  order  to  implement  an 
investment.  

Type of policy category   Business environment and trade 

Type of policy instrument  Venture capital funds and other financial instruments 

Type of funding  Guarantees for loans 

Budget and expenditures  Total allocation (expenditures): €34.9 million 

2018: €13.1 million 

2017: €21.8 million 

Rationale  HAMAG-BICRO provides guarantees for insuring a portion of a loan 

for financing an investment project of an SME. 

Governance 

Institution responsible: HAMAG-BICRO Funding: National 

Design: National 

Implementation: National 

Policy implementation 
and policy mix 

N/A 

Relevant ESIF measures 
(if any) 

N/A 

Impact: monitoring and 
evaluation 

N/A 

31 

 
 
 
Link  HAMAG-BICRO  website.  Last  accessed:  06/06/19.  Available  at: 

https://hamagbicro.hr/financijski-instrumenti/kako-do-
jamstva/msp/nacionalna-jamstva/ 

Private sector investment- HBOR (HBOR – Investicije privatnog sektora) 

ID  HR7 

Country  Republic of Croatia 

Region(s) affected  National – all regions affected 

Time horizon  Continuous 

Objectives and Scope  Providing favourable loans to business entities from private sector 
for  financing  capital  costs  intended  for  modernising  business 
activities,  introducing  new  technologies,  increasing  capacities, 
investing into R&D, etc; as well as financing working assets. 

Overview  The Croatian Bank for Reconstruction and Development (HBOR) 

Purpose of loans: 

  

Investments in fixed assets (tangible and intangible assets) 
for  the  purpose  of  business  modernisation,  introduction  of 
new  technologies,  increase  in  capacities,  investments  in 
R&D  and  introduction  of  new  products  or  services, 
promotion  of  environmental  protection,  energy  efficiency 
and renewable energy resources projects, tourist capacities 
and facilities as well as promotion of new employment 
   Working capital: up to 30% of the contracted loan amount 

Interest rates: 

   Market  competitive  business  entities  investing  in  activities 

of special interest: 1.50% p.a. fixed  

   Business entities investing in special areas of the Republic 
of Croatia and are market competitive: 2.00% p.a. fixed  

   Other business entities: 3.00% p.a. fixed 

Repayment: usually up to 14 years 

Minimum loan: €0.3 million. There is no upper limit for the amount 
of  the  loan.    and  depends  on  the  specific  features  and 
creditworthiness  of  the  borrower,  purpose  and  structure  of 
investment  as  well  as  available  HBOR’s  sources  of  finance. 
Financing  through  loan  can  be  up  to  75%  of  the  estimated 
investment value, VAT not included. 

Rationale  Loans with favourable interest rates 

Type of policy category   Business environment and trade 

Type of policy instrument  Venture capital funds and other financial institutions 

Type of funding  Favourable loans 

Budget and expenditures  Minimum loan: €0.3 million. There is no upper limit for the amount 

of the loan.   

32 

 
 
 
 
Governance 

Institution  responsible:  Croatian  Bank  for  Reconstruction  and 
Development (HBOR)  

Funding: National 

Design: National 

Implementation: National 

Policy implementation 
and policy mix 

Part  of  the  loan  services  provided  by  HBOR,  which  envisages 
favourable loans for certain users. It provides favourable loans for 
investments  in  economic  activities  of  special  interest  and  special 
areas  of  Republic  of  Croatia,  in  line  with  the  General  eligibility 
criteria 
https://www.hbor.hr/wp-
at: 
content/uploads/2019/05/Op%C4%87i-kriteriji-prihvatljivosti-
ENG.pdf) 

(available 

Relevant ESIF measures 
(if any) 

N/A 

Impact: monitoring and 
evaluation 

N/A 

Link  HBOR  website.  Last  accessed:  06/06/19.  Available  at: 
https://www.hbor.hr/kreditni_program/investicije-privatnog-
sektora/ 

Research projects (Istraživački projekti) 

ID  HR8 

Country  Republic of Croatia 

Region(s) affected  National – all regions affected 

Time horizon  2001 - ongoing 

Objectives and Scope  The objective of the Research Projects Programme is to create new 
and enhance existing knowledge. It is the main support instrument 
to international cooperation. The ultimate goal is to create a critical 
mass  of  research  groups  that  will  be  competitive  on  the 
international level. 

Overview  The  programme  provides  funding  to  research  groups  that  are 
working on internationally competitive research project of national 
interest  and  whose  principal  investigators  have  been  recognised 
for their scientific achievements and mentoring skills. The projects 
need to include international collaborations.  

Rationale  Financing  basic  research  which  create  new  and  improve  existent 
focused  on  better 
knowledge 
understanding of the research subject, as well as applied research 
which are conducted with clear technological, economic and social 
goals.   

in  specific  areas  and  are 

Type of policy category   Sector Development and Targeted Investment 

Type of policy instrument  R&D programmes 

Type of funding  Grants 

Budget and expenditures  Total funding: €53.4 million 

2014: €14.4 million  

33 

 
 
 
2016: €16.1 million 

2018: €17.5 million 

2019: €5.4 million 

Governance 

Institution responsible: Croatian Science Foundation  

Funding: National 

Design: National 

Implementation: National 

Policy implementation 
and policy mix 

N/A 

Relevant ESIF measures 
(if any) 

N/A 

Impact: monitoring and 
evaluation 

Status of the research projects (by deadline in which the project 
applied): 
was 
11-2013: HRK 129.1m  

   Aborted – 8 projects; HRK 3.8m 
   Ongoing – 47 projects: HRK 35.6m 
   Ended – 129 projects: HRK 89.8m 

09-2014: HRK 107.0m 

   Aborted – 5 projects; HRK 2.7m 
   Ongoing – 119 projects; HRK 93.5m 
   Ended – 19 projects; HRK 10.7m 

06-2016: HRK 119.1m 

   Ongoing – 153 projects; HRK 119.1m 

01-2018: HRK 129.3m 

   Ongoing – 143 projects; HRK 129.3m 

In the period 2013–2018, 76% of total number of funded projects 
were conducted by the University of Zagreb and its constituents, 
and research organisations in situated in the City of Zagreb. Total 
value of these projects amounted to 78% of total value of funding 
awarded. 

Link 

 CSF  website. 
http://www.hrzz.hr/default.aspx?id=2313 

Last  accessed:  06/06/19.  Available  at: 

CSF  Project  database.  Last  accessed:  06/06/19.  Available  at: 
http://www.hrzz.hr/default.aspx?id=78 

Installation research projects (Uspostavni istraživački projekti) 

ID  RH9 

Country  Republic of Croatia 

Region(s) affected  National – all regions affected 

Time horizon  2007-ongoing 

Objectives and Scope  The  goal  of  the  programme  is  to  ensure  the  acceleration  of 
establishment  of  independent  research  careers,  where  young 
scientists got the opportunity to establish research groups that deal 

34 

 
 
 
with internationally competitive issues at Croatian universities and 
public research institutes.  

Overview  The  programme  encourages  scientists  to  establish  their  own 
laboratory and/or research group. At the same time, the institution 
must  support  the  work  of  the  emerging  research  group,  and 
demonstrate its support to the young researcher's group even after 
the  completion  of  the  project  funded  by  the  Croatian  Science 
Foundation ensuring the transfer of specialised knowledge and the 
successful  development  of  professionals  in  the  internationally 
competitive issues. 

Rationale  The programme is focused on allocating financial resources of the 
Croatian  Science  Foundation  to  foster  the  development  of 
independent research careers of young scientists in order to foster 
the development of human capital in science and academia. 

Type of policy category   Sector Development and Targeted Investment 

Type of policy instrument  R&D programmes 

Type of funding  Grants 

Budget and expenditures  Total funding €21.2 million 

Governance 

Institution responsible: Croatian Science Foundation 

Funding: National 

Design: National 

Implementation: National 

Policy implementation 
and policy mix 

N/A 

Relevant ESIF measures 
(if any) 

N/A 

Impact: monitoring and 
evaluation 

Status of the research projects (by deadline in which the project 
was 
applied): 
11-2013: HRK 36.1m  

   Aborted – 3 projects; HRK 1.6m 
   Ongoing – 4 projects; HRK 2.9m 
   Ended – 49 projects; HRK 31.5m 

09-2014: HRK 26.0m 

   Aborted – 3 projects; HRK 1.6m 
   Ongoing – 24 projects; HRK 15.2m 
   Ended – 20 projects; HRK 9.2m 

05-2017: HRK 111.1m 

   Aborted – 1 project; HRK 0.8m 
   Ongoing – 78 projects; HRK 110.3m 

Share of projects and funding allocated to University of Zagreb and 
its constituents, and research organisations in the City of Zagreb 
amounted to 72.5%  

Link  CSF  website. 

Last  accessed:  06/06/19.  Available  at:  

http://www.hrzz.hr/default.aspx?id=2313 

35 

 
 
CSF  Project  database.  Last  accessed:  06/06/19.  Available  at: 
http://www.hrzz.hr/default.aspx?id=78 

Lifelong learning for crafts (Program “Cjeloživotno obrazovanje za obrtništvo”) 

ID  HR10 

Country  Republic of Croatia 

Region(s) affected  National – all regions affected 

Time horizon  Continuous 

Objectives and Scope  The objectives of the Programme are: 

   Adoption of key skills and competences for craft professions; 
   Encouraging employment and self-employment in crafts 

Overview  The programme provides grants to SMEs and physical persons for 

training for crafts 

Obtaining  permits 
apprenticeship exercises. 

for  conducting  practical  classes  and 

Rationale  Providing  grants  intends  to  encourage  specific  educational 
programmes  for  crafts  which  will  ensure  quality  and  motivated 
workforce  for  the  purpose  of  strengthening  competitiveness, 
encouraging  productivity,  as  well  as  growth  and  development  of 
crafts.  

Type of policy category   Skills and mobility 

Type of policy instrument  Labour market training 

Type of funding  Grants 

Budget and expenditures  Funding:1.6 €million 

Allocation by region (number of grants) 

County 

Bjelovar-
Bilogora 

Brod-
Posavina 

Dubrovnik-
Neretva 

City 
Zagreb 

of 

Istria 

Karlovac 

Koprivnica-
Križevci 

Krapina-
Zagorje 

NUT
S 2 

HR0
4 

HR0
4 

HR0
3 

HR0
4 

HR0
3 

HR0
4 

HR0
4 

HR0
4 

2014 

2015 

2016 

2017 

2018 

Total 

31 

29 

21 

32 

12 

125 

47 

40 

46 

45 

39 

217 

7 

15 

14 

19 

14 

69 

222 

109 

79 

136 

121 

667 

52 

26 

39 

32 

37 

186 

23 

23 

12 

18 

18 

94 

31 

22 

31 

25 

23 

132 

52 

53 

50 

54 

53 

262 

36 

 
 
 
Lika-Senj 

Međimurje 

Osijek-
Baranja 

Požega-
Slavonia 

Primorje-
Gorski 
kotar 

Sisak-
Moslavina 

Split-
Dalmatia 

Šibenik-
Knin 

Varaždin 

Virovitica-
Podravina 

Zadar 

Zagreb 

Vukovar-
Srijem 

HR0
3 

HR0
4 

HR0
4 

HR0
4 

HR0
3 

HR0
4 

HR0
3 

HR0
3 

HR0
4 

HR0
4 

HR0
3 

HR0
4 

HR0
4 

10 

5 

4 

8 

6 

33 

10 

22 

16 

28 

35 

111 

88 

56 

79 

87 

95 

405 

30 

30 

17 

18 

25 

120 

66 

38 

41 

45 

42 

232 

46 

44 

41 

31 

40 

202 

85 

51 

36 

83 

61 

316 

3 

3 

3 

7 

4 

20 

38 

23 

19 

21 

41 

142 

39 

29 

38 

34 

32 

172 

52 

60 

17 

43 

48 

220 

101 

62 

48 

59 

61 

331 

115 

53 

62 

73 

54 

357 

Total 

1.148  793 

713 

898 

861 

4.413 

2014: HRK 3.1m 

2015: HRK 2.13 million 

2016: HRK 2.0 million 

2017: HRK 2.4 million 

2018: HRK 2.0 million 

Governance  Responsible institution: Ministry of Economy, Entrepreneurship and 

Crafts (MEEC) 

Funding: National 

Design: National 

Implementation: National 

Policy implementation 
and policy mix 

N/A 

Relevant ESIF measures 
(if any) 

N/A 

Impact: monitoring and 
evaluation 

2018 

Number of supports: 861 

Total funding: HRK 2.0 million 

37 

 
 
  
2017 

Number of supports: 898 

Total funding: HRK 2.4 million 

2016 

Number of supports: 713 

Total funding: HRK 2.0 million 

2015 

Number of supports: 793 

Total funding: HRK 2.13 million 

2014 

Number of supports: 1,148 

Total funding: HRK 3.1 million 

Average value of support: HRK 2,637.77  

Link  MEEC  (2018)  Lifelong  learning  for  crafts  programme  (Program 
za  obrtništvo”).  Available  at: 

“Cjeloživotno  obrazovanje 
https://www.mingo.hr/public/documents/Program%20Cjelo%C5
%BEivotno%20obrazovanje%20za%20obrtni%C5%A1tvo%20za
%202018.%20godinu.pdf  

MEEC  database  of  awarded  incentives.  Last  accessed:  06/06/19. 
Available at: http://poticaji.mingo.hr/ 

Preservation and development of traditional and artistic trades  (Program “Očuvanje i 
razvoj tradicijskih i umjetničkih obrta”) 

ID  HR11 

Country  Republic of Croatia 

Region(s) affected  National – all regions affected 

Time horizon  Continuous 

Objectives and Scope  Programme objectives: 

   Preservation and development of traditional artistic trades 
   Strengthening the competitiveness of traditional and artistic 

trades 

  

Increase of recognition of traditional and artistic products 

Overview  Target users: Grants are provided SMEs and physical persons. for 
investing  into  production  improvement;  development  of  new 
products/services;  adapting  and  improving  office  and  production 
spaces;  introducing  quality  control  system,  norms  and  quality 
certificates;  managing  and  protection  of  intellectual  property; 
marketing activities and investments for entering new markets. 

Rationale  Providing  grants  in  order  to  ensure  the  preservation  and 
development  of  traditional  crafts,  predominantly  conducted  by 
manual work, and heritage of special craftsmanship, by relying on 
patterns  of  traditional  culture  and  artistic  crafts  which  are 
distinguished by products of high aesthetic value. 

38 

 
 
 
Type of policy category   Sector Development and Targeted Investment 

Type of policy instrument  Business development and innovation support to firms 

Type of funding  Grants 

Budget and expenditures  Funding €1.1 million 

Allocation by region (number of grants) 

County 

NUTS 
2 

2017 

2018 

Grand 
Total 

Brod-Posavina 

HR04 

4 

Dubrovnik-Neretva 

HR03 

City of Zagreb 

HR04 

41 

Istria 

Karlovac 

HR03 

HR04 

Koprivnica-Križevci 

HR04 

Krapina-Zagorje 

HR04 

Međimurje 

HR04 

Osijek-Baranja 

HR04 

Požega-Slavonia 

HR04 

Primorje-Gorski 
kotar 

HR03 

Sisak-Moslavina 

HR04 

Split-Dalmatia 

Šibenik-Knin 

Varaždin 

HR03 

HR03 

HR04 

Virovitica-Podravina  HR04 

3 

5 

9 

9 

2 

5 

2 

4 

9 

2 

1 

5 

4 

2 

Zadar 

Zagreb 

HR03 

HR04 

16 

Vukovar-Srijem 

HR04 

4 

1 

30 

2 

3 

3 

4 

1 

8 

1 

1 

3 

1 

1 

3 

2 

1 

5 

2 

8 

1 

71 

5 

8 

12 

13 

3 

13 

3 

5 

12 

3 

2 

8 

6 

3 

21 

2 

Total 

123 

76 

199 

2017: HRK 4.9 million 

2018: HRK 3.3 million 

Governance  Responsible institution: Ministry of Economy, Entrepreneurship and 

Crafts (MEEC) 

Funding: National 

Design: National 

Implementation: National 

Policy implementation 
and policy mix 

N/A 

39 

 
 
 
  
 
  
Relevant ESIF measures 
(if any) 

N/A 

Impact: monitoring and 
evaluation 

2018 

Number of supports: 123 

Total funding: HRK 4.98 million 

2017 

Number of supports: 76 

Total funding: HRK 3.3 million 

Average value of support: HRK 41,620.20 

Link  MEEC (2018) Preservation and development of traditional and 
artistic trades programme (Program “Očuvanje i razvoj 
tradicijskih i umjetničkih obrta”). Available at: 
https://www.mingo.hr/public/Program%20TU%202018.pdf 

MEEC  database  of  awarded  incentives.  Last  accessed:  06/06/19. 
Available at: http://poticaji.mingo.hr/ 

Development of SMEs and crafts in areas inhabited by members of national minorities 
(Program  “Razvoj  malog  i  srednjeg  poduzetništva  i  obrta  na  područima  naseljenim 
pripadnicima nacionalnih manjina”) 

ID  HR12 

Country  Republic of Croatia 

Region(s) affected  Regional – focused on areas of local administration units, belonging 
to the first four groups according to the value of their development 
index  (in  line  with  the  government  decision:  https://narodne-
novine.nn.hr/clanci/sluzbeni/2017_12_132_3022.html),  in  which 
the share of minorities in total population exceeds 5%. 

Time horizon  Continuous 

Objectives and Scope  Objectives of the Programme are: 

   Growth and development of entrepreneurship, 
   Technological 

enhancement 

and 

increasing 

competitiveness, 

   Balancing the regional growth. 

Overview  Beneficiaries  are  SMEs,  for  the  purpose  of  improving  production, 
investing 
into  the  development  of  new  products/services, 
adaptation  and  improvement  of  office  and  production  spaces, 
marketing activities and investments for entering new markets, as 
well as education and training of employees and owners. 

Rationale  Providing  grants 

for 

local 
administration units classified as assisted (in line with the article 
36 of Regional Development Act – OG 147/14, 123/17), in which 
the share of minorities in total population exceeds 5%. 

the  development  of  SMEs 

in 

Type of policy category   Sector Development and Targeted Investment 

Type of policy instrument  Business development and innovation support to firms  

Type of funding  Grants 

40 

 
 
 
Budget and expenditures 

Initial Budget: €1.8 million 

Allocation by region (number of grants) 

County 

NUTS 2 

2018 

Bjelovar-Bilogora 

HR04 

Brod-Posavina 

Karlovac 

HR04 

HR04 

Koprivnica-Križevci 

HR04 

Međimurje 

Osijek-Baranja 

Požega-Slavonia 

HR04 

HR04 

HR04 

8 

7 

6 

9 

5 

7 

1 

Sisak-Moslavina 

HR04 

22 

Split-Dalmatia 

Šibenik-Knin 

Varaždin 

HR03 

HR03 

HR04 

Virovitica-Podravina 

HR04 

Zadar 

Vukovar-Srijem 

HR03 

HR04 

Total 

1 

3 

1 

11 

1 

13 

95 

Funding (Expenditures): HRK 13.3 million 

Governance  Responsible institution: Ministry of Economy, Entrepreneurship and 

Crafts (MEEC) 

Funding: National 

Design: National 

Implementation: National 

Policy implementation 
and policy mix 

N/A 

Relevant ESIF measures 
(if any) 

N/A 

Impact: monitoring and 
evaluation 

2018: 

Number of supports: 95 

Average value of support: HRK 139,662.61 

Total support granted: HRK 13.3 million 

Link  MEEC (2018) Development of SMEs and crafts in areas inhabited 
by members of national minorities programme (Program “Razvoj 
malog i srednjeg poduzetništva i obrta na područima naseljenim 
pripadnicima nacionalnih manjina” za 2018. godinu). Available at: 
https://www.mingo.hr/public/Javni%20poziv%20Nacionalne%20
manjine/ProgramRazvoj%20malog%20i%20srednjeg%20poduzet
ni%C5%A1tva%20i%20obrta%20na%20podru%C4%8Djima%20

41 

 
 
  
 
naseljeni%20pripadnicima%20nacionalnih%20manjina%20za%2
02018%20godinu.pdf 

MEEC  database  of  awarded  incentives.  Last  accessed:  06/06/19. 
Available at: http://poticaji.mingo.hr/ 

Tourism 
gospodarstva”) 

competitiveness  programme 

(Program 

“Konkurentnost 

turističkog 

ID  HR13 

Country  Republic of Croatia 

Region(s) affected  National – All regions affected 

Time horizon  Continuous 

Objectives and Scope  Main objective of the Programme is to increase attractiveness and 
competitiveness of Croatian tourism, but also to contribute to the 
following strategic objectives: 

Improvement of structure and quality of accommodation, 

  
   New employment. 
  
  
   Development  of  tourism  in  areas  with  underdeveloped 

Increase of tourist consumption, 

Implementing new investments, 

tourist supply, 

   Prolonging the tourist season to all year long. 

Overview  Beneficiaries  are  SMEs  and  Family 

farms  which  provide 
accommodation  and/or  tourist  services.  The  grant  scheme  is 
divided into seven different measures depending on the category 
of  the  user  (Measure  A:  hotels,  camps,  other  accommodation 
providers, family farms) and investment intentions (special forms 
of  tourism  (Measure  B),  availability  and  security  (Measure  C), 
recognisability (Measure D)). Measure A is awarded for increasing 
the  standard  and  quality  of  existing  accommodation  providers, 
development and improvement of additional content, certification 
of  hotels,  investing  in  green  entrepreneurship  in  tourism, 
reconstruction and expansion of camps, development of new camp, 
activating hunting and hiking lodges, reconstruction and expansion 
of family farms, etc.  

The intensity of support amounts to 60% of eligible project costs, 
with the exclusion of projects applied under the Measure C, which 
can  be  fully  funded  by  the  grant.  The  value  of  awarded  grants 
ranges  between  HRK  0.02m  and  HRK  0.40m,  depending  on  the 
measure in question. 

Rationale  The programme provides support to entities operating in the tourist 
sector  in  order  to  increase  international  competitiveness  of  the 
Croatian tourist economy by increasing the standard, quality and 
additional supply of accommodation objects, development of new 
and 
business 
internationalisation,  sustainable  development,  supply  chain 
diversification, etc. 

innovative 

products, 

fostering 

tourist 

Type of policy category   Sector Development and Targeted Investment 

Type of policy instrument  Business development and innovation support to firms 

42 

 
 
 
Type of funding  Grants 

Budget and expenditures  Total budget 2014-2019: €20.8 million 

Governance  Responsible institution: Ministry of Tourism (MINT) 

Funding: National 

Design: National 

Implementation: National 

Policy implementation 
and policy mix 

N/A 

Relevant ESIF measures 
(if any) 

N/A 

Impact: monitoring and 
evaluation 

N/A 

Link  Ministry of Tourism (2019). Tourism competitiveness programme 
(Program “Konkurentnost turističkog gospodarstva”) for Available 
at: 

https://mint.gov.hr/UserDocsImages/AA_2018_c-
dokumenti/002_190128_KTG_P.pdf 

Ministry of Tourism (2018). Tourism competitiveness programme 
(Program “Konkurentnost turističkog gospodarstva”) for Available 
at: 

https://mint.gov.hr/UserDocsImages/AA_2018_c-
dokumenti/002_180904_jp_program.pdf 

Ministry of Tourism (2017). Tourism competitiveness programme 
(Program “Konkurentnost turističkog gospodarstva”) for Available 
at: 
https://mint.gov.hr/UserDocsImages/arhiva/170306_KTG2017/2
_170301_program.pdf 

Ministry of Tourism (2016). Tourism competitiveness programme 
(Program “Konkurentnost turističkog gospodarstva”) for Available 
at: 
https://mint.gov.hr/UserDocsImages/arhiva/2_160427_KTG016_
program.pdf 

Ministry of Tourism (2015). Tourism competitiveness programme 
(Program “Konkurentnost turističkog gospodarstva”) for Available 
at: 
https://mint.gov.hr/UserDocsImages/arhiva/150223_JP_k_progra
m2.pdf 

Ministry of Tourism (2014). Tourism competitiveness programme 
(Program “Konkurentnost turističkog gospodarstva”) for Available 
at: 
https://mint.gov.hr/UserDocsImages/arhiva/140228-
KTG14P1-bd.pdf 

Ministry 
Finance. 
http://www.mfin.hr/hr/drzavni-proracun-arhiva 

State 

of 

budget 

archives: 

43 

 
 
 
 
Support  to  county  administrations  for  maintenance,  reconstruction  and  building  of 
county  and  local  roads  (Potpora  županijskim  upravama  za  ceste  za  održavanje, 
rekonstrukciju i građenje županijskih i lokalnih cesta) 

ID  HR14 

Country  Republic of Croatia 

Region(s) affected  National – All regions affected 

Time horizon  Continuous 

Objectives and Scope  The  objective  of  the  measure  is  to  provide  support  to  Regional 
administration units in maintaining, reconstruction and building of 
county and local roads. 

Overview  The  objective  of  the  measure  is  to  provide  support  to  Regional 
administration units in maintaining, reconstruction and building of 
county and local roads. The funds are allocated in accordance to 
the Croatian Roads Act (OG 84/11, 22/13, 54/13, 148/13, 92/14) 
and it depends on the size of county and local road network, the 
amount of direct revenue of county’s road company, the degree of 
construction of county and local roads network, state of pavements 
in  a  given  county  and  local  roads  network,  average  annual  daily 
business revenues. 

Rationale  The  measure  provides  support 

financing  the  costs  of 
maintenance, reconstruction and development of county and local 
roads. 

in 

Type of policy category   Urbanisation and Connectivity 

Type of policy instrument  Transport infrastructure 

Type of funding  Grants 

Budget and expenditures  Total budget and expenditures: €24.3 million 

2018: €13.5 million 

2017: €10.8 million 

Governance  Responsible institution:  Ministry  of  Maritime  Affairs,  Transport 

and Infrastructure (MMATI) 

Funding: National 

Design: National 

Implementation: National 

Policy implementation 
and policy mix 

N/A 

Relevant ESIF measures 
(if any) 

N/A 

Impact: monitoring and 
evaluation 

Allocation by County: 

Bjelovar-Bilogora – HRK 6.2 million 

Brod-Posavina – HRK 1.5 million 

Dubrovnik-Neretva – HRK 1.5 million 

Istria – HRK 3.0 million 

Karlovac – HRK 7.0 million 

44 

 
 
Koprivnica-Križevci – HRK 5.6 million 

Krapina-Zagorje – HRK 1.5 million 

Lika-Senj – HRK 7.6 million 

Međimurje – HRK 1.M million 

Osjek-Baranja – HRK 2.7 million 

Požega-Slavonija – HRK 3.2 million 

Primorje-Gorski Kotar - HRK 2.12 million 

Sisak-Moslavina – HRK 8.7 million 

Split-Dalmatia - HRK 6.2 million 

Šibenik-Knin – HRK 5.1 million 

Varaždin – HRK 2.2 million 

Virovitica-Podravina – HRK 4.6 million 

Vukovar-Srijem – HRK 1.5 million 

Zadar – HRK 8.0 million 

Zagreb – HRK 2.9 million 

Link  MMATI (2018) Decision on the allocation of funds for 

maintenance, reconstruction and construction of county and local 
roads in 2018. Available at:  https://narodne-
novine.nn.hr/clanci/sluzbeni/2018_05_41_796.html 

Ministry 
Finance. 
http://www.mfin.hr/hr/drzavni-proracun-arhiva 

State 

of 

budget 

archives: 

Support  to  local  and  regional  administration  unit  for  the  development  of  river  traffic, 
county  harbours  and  docks  (Pomoći  JLS/JRS  za  razvoj  riječnog  prometa,  županijskih 
luka i pristaništa) 

ID  HR15 

Country  Republic of Croatia 

Region(s) affected  National – All regions with water traffic  

Time horizon  Continuous 

Objectives and Scope  The  objective  of  the  measure  is  the  establishment  of  traffic 
connections  by  inland  waterways  in  populated  areas  without  the 
traffic infrastructure, i.e. bridges, through training, enabling work, 
equipping,  modernisation  and  increase  in  the  number  of  vessels 
owned by the local/regional administration.  

Overview  Financial  assistance  is  provided  to  eligible  local  and  regional 
administration  units 
for 
for  co-financing 
maintenance  and  other  operative  costs  of  conducting  regular 
transportation  of  passengers  and  goods  on  inland  waterways  of 
international and national importance.  

investment  costs 

Rationale  The Ministry provides financial support to regional administration 
units with the requirement or need to conduct river transport, as 

45 

 
 
 
well  as  maintenance  and  modernisation  of  the  county-owned 
vessels; and have the need for maintaining river traffic. 

Type of policy category   Urbanisation and Connectivity 

Type of policy instrument  Transport infrastructure 

Type of funding  Grants 

Budget and expenditures  Total funding: €0.4 million 

Governance  Responsible institution: Ministry of Maritime Affairs, Transport and 

Infrastructure (MMATI) 

Funding: National 

Design: National 

Implementation: National 

Policy implementation 
and policy mix 

N/A 

Relevant ESIF measures 
(if any) 

N/A 

Impact: monitoring and 
evaluation 

Annual number of vessels owned by a local/regional administration 
unit capable of transporting passengers and goods.  

Link  MMATI  (2018)  Public  tender  to  local  and  regional  administration 
units for applying for co-financing of costs relating to vessels for 
transformation  of  passengers  and  goods.  Available  at: 
http://www.mppi.hr/UserDocsImages/Javni%20poziv%20-
%20Tekuce%20POMOCI%20JLS%202018%2007-05_18.pdf 

Ministry of Finance. State budget archives: 
http://www.mfin.hr/hr/drzavni-proracun-arhiva 

Development of Assisted areas 

ID  ΗΡ16 

Country  Republic of Croatia 

Region(s) affected  National  –  All  regions  with  administrative  units  whose  level  of 
development  is  considered  below  average  according  to  the 
development index. 

Time horizon  Continuous 

Objectives and Scope  The  objective  of  a  policy  is  to  contribute  to  the  economic  and 
general  development  of  regional  and  local  administrative  units 
whose level of development is considered below average according 
to the development index.  

Overview  Financial assistance is provided for: 

   The  development  and  implementation  of  programmes  of 

integrated territorial investments in assisted areas,  

   Preparation  of  development  projects  in  assisted  areas, 
which  are  planned to  be  financed  from  the  ESI  Funds  and 
other sources, 

   Expert support to assisted areas for recognition and optimal 

utilisation of its own development potential, 

46 

 
 
 
  

Implementation  of  projects  contributing  to  sustainable 
development of local community in the context of improving 
availability of local infrastructure, 

   Development  of  human  capacities  of  local  and  regional 
administration  units  in  preparation  and  implementation  of 
development projects. 

Main users of the policy are regional administration in the first two 
categories  according  to  the  development  index,  and  local 
administration  units  categorized  in  the  first  four  categories 
according to the development index. 

Rationale  MRDEUF  allocates  funding  from  its  budget  towards  programmes 
and projects which contributing to sustainable development of local 
and regional community in the context of increasing availability of 
local  infrastructure,  social  and  demographic  revitalisation  of 
assisted  areas  and  subsequently  facilitating  balanced  regional 
growth.  

Type of policy category   Regional development 

Type of policy instrument  Development of underdeveloped areas 

Type of funding  Various 

Budget and expenditures  Budget: €49.7 million 

Governance  Responsible institution: Ministry of Regional Development and 

EU Funds (MRDEUF) 

Funding: National 

Design: National 

Implementation: National 

Policy implementation 
and policy mix 

 N/A 

Relevant ESIF measures 
(if any) 

N/A 

Impact: monitoring and 
evaluation 

N/A 

Links  Assisted 

areas 

act 

(OG 

118/18). 

Available 

at: 

https://www.zakon.hr/z/1767/Zakon-o-potpomognutim-
podru%C4%8Djima 

Ministry 
Finance. 
http://www.mfin.hr/hr/drzavni-proracun-arhiva 

State 

of 

budget 

archives: 

Development of hill and mountain areas 

ID  HR17 

Country  Republic of Croatia 

Region(s) affected  National – All regions with hill and mountain areas 

Time horizon  Continuous 

47 

 
 
 
 
Objectives and Scope  The  goal  of  the  policy  is  to  contribute  to  economic  and  general 
development of hill and mountain areas in line with their specific 
characteristic. 

Overview 

In  line  with  the  available  budget,  Ministry  provides  expert  and 
financial assistance for: 

   The  development  of  utility  and  social  infrastructure  in  hill 

and mountain areas, 

   Elimination  of  consequences  made  by  adverse  climatic 

conditions in hill and mountain areas, 

   Preparation of project documentation for local development 

projects, 

   Preparation  of 

infrastructure  as  a  precondition 

for 

investments and economic recovery, 

   Fostering  competitiveness  and  entrepreneurship  through 
support for activities of importance for economic growth of 
hill and mountain areas, 

Subsidies  for  accommodation  of  persons  in  deficient  professions 
and persons which can contribute to improving the quality of life in 
hill and mountain areas. 

Rationale  MRDEUF  allocates  funding  from  its  budget  towards  programmes 
and projects which contributing to sustainable development of hill 
and mountain areas, their, social and demographic, strengthening 
of  social  cohesion  and  implementing  the  concept  of  sustainable 
development. 

Type of policy category   Regional development 

Type of policy instrument  Development of underdeveloped areas 

Type of funding  Various 

Budget and expenditures  Budget 2014-2019: €8.1 million 

Governance  Responsible institution: Ministry of Regional Development and 

EU Funds (MRDEUF) 

Funding: National 

Design: National 

Implementation: National 

Policy implementation 
and policy mix 

N/A 

Relevant ESIF measures 
(if any) 

N/A 

Impact: monitoring and 
evaluation 

N/A 

Links  Hill  and  mountain  areas  act  (OG  118/18).  Available  at: 
https://www.zakon.hr/z/754/Zakon-o-brdsko-planinskim-
podru%C4%8Djima 

Finance. 
Ministry 
http://www.mfin.hr/hr/drzavni-proracun-arhiva 

State 

of 

budget 

archives: 

49683-s=1&d-49683-p=1&d-49683-o=2 

48 

 
 
http://www.pisrs.si/Pis.web/pregledPredpisa?id=ZAKO2053  

Development of Adriatic Islands 

ID  HR18 

Country  Republic of Croatia 

Region(s) affected 

Islands 

Time horizon  Continuous 

Objectives and Scope 

Improvement and development of local communities on islands by 
increasing  the  quality  and  availability  of  utilities,  educational, 
health,  social,  cultural,  sport,  entrepreneurial,  tourist  and  other 
public  services,  along  with  systemic  support  in  environmental 
protection  and  applications  of  energy  efficiency  and  renewable 
energy sources.  

Overview  Target  groups  are  local  and  regional  administration  units  with  a 
jurisdiction  which  includes  inhabited,  partially  inhabited  and 
uninhabited  Croatian  islands,  as  well  as  Pelješac  peninsula.  The 
measure  is  funded  from  the  Ministries’  budget  under  an  item 
“Sustainable development of Adriatic islands”. 

The purpose is to provide support to infrastructural projects in the 
island area, i.e. small capital projects and encompass construction, 
reconstruction, renovation and adaptation of utility, social, public, 
entrepreneurial and/or tourist infrastructure in the island area, as 
well as projects for environmental protection, energy efficiency and 
renewable energy sources. 

Type of policy category   Sector Development and Targeted Investment 

Urbanisation and Connectivity 

Type of policy instrument  Sector Development and Targeted Investment 

Transport infrastructure 

Energy infrastructure 

Type of funding  Grants, public procurements 

Budget and expenditures  Budget 2014-2019: €14.9 million 

Governance  Responsible institution: Ministry of Regional Development and 

EU Funds (MRDEUF) 

Funding: National 

Design: National 

Implementation: National 

Policy implementation 
and policy mix 

N/A 

Relevant ESIF measures 
(if any) 

N/A 

Impact: monitoring and 
evaluation 

N/A 

49 

 
 
 
Links  MRDEUF  (2018)  Island  development  Programme  2019.  Available 

at: Link  

Ministry 
Finance. 
http://www.mfin.hr/hr/drzavni-proracun-arhiva 

State 

of 

budget 

archives: 

Fund for financing capital projects of interest for islands 

ID  HR19 

Country  Republic of Croatia 

Region(s) affected 

Islands 

Time horizon  2003–2017 

Objectives and Scope  Providing assistance for financing capital projects of interest for the 

development of islands. 

Overview  A  share  of  income  tax  (16%  since  2015)  collected  by  a 
city/town/municipality  which  has  signed  a  treaty  of  mutual 
financing  of  capital  projects  of  interest  for  the  development  of 
islands, is allocated to a deposit accounts at HBOR, to be utilised 
for  provision  of  assistance  in  financing  capital  projects  on  the 
respective islands. 

Target users: cities/towns/municipalities on islands. 

Accumulation of funds have stopped on 1/1/2018, however, funds 
accumulated by 31/12/2017 are to be realised by the end of 2019. 

Rationale  A  share  of  income  tax  of  local  administration  units  located  on 
islands  is  accumulated  in  order  to  be  used  for  financing  capital 
projects of interest for the development of islands.   

Type of policy category   Regional development 

Type of policy instrument  Development of underdeveloped areas 

Type of funding  Grants 

Budget and expenditures  Budget for the period 2014-2017: €28.7 million 

2017: HRK 147.5m 

2016: HRK 145.0m 

2015: HRK 140.8m 

2014: HRK 91.8m 

Expenditures for the period 2014-2017: €23,11 million 

2017: HRK 58.6m 

2016: HRK 37.1m 

2015: HRK 38.5m 

2014: HRK 37.0m 

Annual accumulation and realisation of funds: 

50 

 
 
 
 
 
Accumulated 
(HRK) 

Realised (HRK) 

Number of 
projects 

87.827.885 

24.208.587 

45.631.200 

46.124.003 

46.950.254 

61.819.673 

56.067.253 

41.015.681 

51.470.910 

50.960.306 

50.023.299 

52.250.869 

45.195.792 

48.911.064 

42.480.734 

47.998.508 

40.098.265 

37.782.127 

38.311.673 

42.823.456 

40.986.192 

44.830.650 

45.520.133 

36.961.348 

85.968.770 

38.498.842 

42.686.954 

37.121.549 

39.626.560 

58.590.125 

20 

30 

28 

29 

23 

25 

22 

32 

24 

20 

20 

18 

25 

20 

30 

758.845.875 

669.896.789 

366 

2003 

2004 

2005 

2006 

2007 

2008 

2009 

2010 

2011 

2012 

2013 

2014 

2015 

2016 

2017 

Total 

Governance  Responsible institution: Ministry of Regional Development and 

EU Funds (MRDEUF) 

Funding: National 

Design: National 

Implementation: National 

Policy implementation 
and policy mix 

The  measure  was  implemented  on  the  basis  of  Act  on  financing 
local and regional administration units (OG 117/93, 69/97, 33/00, 
73/00, 127/00, 59/01, 107/01, 117/01, 150/02, 147/03, 132/06, 
26/07, 73/08, 25/12, 147/14, 100/15, 115/16), which was active 
until 1/1/2018.  

Relevant ESIF measures 
(if any) 

n/a 

Impact: monitoring and 
evaluation 

Total accumulated funds: HRK 758.8m 

Total realised funds: HRK 670.0m 

Total number of projects: 366 

Links  MRDEUF (2008) Island act implementation report 2017. Available 
at:  https://www.sabor.hr/sites/default/files/uploads/sabor/2019-
01-18/081539/IZVJESCE_UCINCI_OTOCI_2017.pdf 

51 

 
 
  
 
 
 
3 

THE CZECH REPUBLIC 

Country briefings 

National Policies addressing regional economic disparities – Czech Republic  

1. Background  

For  the  2014-2020  programming  period,  all 
regions in the Czech Republic, except for Prague, 
fell in the category of the Less Developed Regions. 
However,  in  terms  of  GDP  per  capita,  all  regions 
grow  and  converge  towards  the  EU  average.  For 
the upcoming programming period, three regions 
will be classified as “phasing” (75%-100% of the 
EU28  average),  while  Prague  maintains  its  prime 
position. Prague’s economic performance is pulling 
other  regions  upwards  with  it,  and  other  regions 
benefit  from  this  strong  position  of  the  capital. 
Prague’s growth is therefore welcome and seen by 
the government as a significant factor for regional 
development, rather than a factor contributing to 
widening regional disparities. 

Source: European Commission (2019). 

2. Architecture of national policies for addressing regional economic disparities 

Focus  

Regional  disparity  is  recognised  by  the  government  in  the  Czech  Republic  as  a  policy  issue, 
especially regarding the improvement of the position of the two border regions Usti and Karlovy 
Vary  which  grow  slower  than  the  other  regions.  However,  cohesion  within  the  country  has 
traditionally not been considered of the highest priority. 

Five measures financed by the national budget, in addition to the measures financed by the ESI 
Funds, have been identified addressing regional disparities during the period 2014-2020. Three of 
them support sector development and targeted investments, two the enhancement of the business 
environment and one urbanisation and connectivity. 

Design and governance  

The national strategy addressing regional disparities is set in the Strategy of Regional Development 
(see fiche CZ1). It has been designed by the Ministry  for Regional Development in cooperation 
with other ministries and is implemented by them as part of the ministries policy agendas under 
the coordination of the Ministry for Regional Development. The same ministry is responsible for 
the  coordination  of  the  Partnership  Agreement  with  the  EU  regarding  the  ESI  Funds.  Regional 
cohesion is, thus, predominantly discussed in the context of eligibility issues and priority setting. 

Relationship of national funding and support through the ESI Funds   

Policy addressing regional disparities in the Czech Republic is heavily dependent on the ESI Funds. 
According to a study of the Ministry for Regional Development5 the sectors and policy areas which 
were most dependent on the Structural Funds between 2007–2015 were the employment policy, 
subsidies for the private sector, R&D&I and protection of the environment. The reliance of those 
policy areas on the ESI Funds also remains in the current programming period. The priority is, to 
use ESI funding while the national budget contributes to the co-financing of the ESI Funds OPs 
and to interventions which are either not in line with the priorities of the Partnership Agreement 
or do not meet the eligibility criteria. Examples for this can be the operating cost of large research 
infrastructures, follow-up investments on R&D projects previously funded through the ESI Funds, 
loan guarantees or some investments in transport (see for more details below). 

5 Ministry for Regional Development (2017), Analysis: Public investment and EU funds 2007-2015. 

52 

 
 
 
 
The influence of the ESI Funds on the shaping of cohesion priorities and the allocation of funding 
will  increase  in  the  next  programming  period  as  the  national  co-financing  will,  most  likely, 
significantly increase. Henceforth, this might result in a shift of national funds that are now used 
for national programmes for co-financing. 

3. Overview of national policy measures addressing regional economic disparities  

Support for R&D and innovation in Less Developed Regions is among the main areas of national 
funding. During the period 2014-2020 it is expected that around €546 million are directed by the 
Ministry of Education, Youth and Sports, to grants for R&D programmes. One of the objectives of 
these programmes is to ensure the sustainability of several large research projects, funded in the 
2007-2013 period, predominantly from the ERDF. All these projects were linked to the regions, 
excluding Prague, which was not eligible to use the ERDF during the previous programming period 
(see fiche CZ2.1). 

Another area where the national funding complements the ESI funding is research infrastructure 
that is part of the Roadmap of Large Infrastructures for Research, Experimental Development and 
Innovation.  The  ESI  Funds  provide  funding  for  the  initial  investment  while  the  national  budget 
covers  the  operating  cost.  During  the  period  2016-2022,  the  Ministry  of  Education  will  provide 
around €380 million for the operating cost of the infrastructures covering all regions. Half of them 
are  located  in Prague.  The  capital  hosts  a  vast  majority  of  the  infrastructure  regarding 
humanities and  social  sciences,  while  the 
in  physical 
sciences (often  built  between  2007  and  2015  using  ERDF) are  generally  located  outside  of  the 
capital (see fiche CZ2.2) 

largest  research 

infrastructures 

In  the  area  of  SME  support,  the  Ministry  of  Industry  and  Trade  provides  loan  guarantees  for 
international  trade,  guarantees  for  social  businesses  and  guarantees  for  small  businesses. 
Although Prague is not explicitly excluded, it is deliberately disadvantaged by the eligibility criteria 
of the programme in favour of the other regions (see fiche CZ3.1).  

The Ministry of Industry and Trade supports commercial properties and infrastructures in economic 
zones. Although Prague is not excluded, it is expected that the majority of the funding is directed 
to the other regions due to the conditions of the programme (see fiche CZ4).  

The  development  of  the  railway  infrastructure  by  the  Investment  Plan  for  Railway  Transport 
Infrastructure (fiche CZ5.1) is another area were national and the ESI Funds are combined in order 
to achieve the necessary level of funding. Prague is not excluded, however, it received only a small 
share of the total funding. Out of the €200 million, planned to be invested in 2019, only €13.7 
million will be invested in Prague. In total for the whole country the national funding, including co-
financing amounts to €361.2 million, while the funding from the Cohesion fund will reach €225.3 
million and the contribution of the Connecting Europe Facility (CEF), €112.6 million. 

4. Classification of policies 

Title 

National programmes supporting research, 
development and innovation (CZ2.1) 

Type of 
funding 

Grants 

Roadmap of large Infrastructures for 
Research, Experimental Development and 
Innovation of the Czech Republic for the years 
2016–2022 (CZ2.2) 

Grants 

Policy 
category 

Policy 
instrument 

Funding and 
implementation 

R&D 
programmes 

Research 
infrastructures 

Sector 
Development 
and 
Targeted 
Investment 

Sector 
Development 
and 
Targeted 
Investment 

National 
funding, 
Designed and 
implemented 
at the regional 
level 

Funding, 
design and 
implementation 
at the national 
level 

Loan Guarantees (CZ3.1) 

Loan 
guarantees 

Business 
Environment 
and Trade 

Venture 
capital funds 
and other 
financial 
instruments  

Funding, 
design and 
implementation 
at the national 
level 

53 

 
 
 
 
 
 
The Programme supporting commercial 
properties and infrastructure, including the 
sub-programme called “Planning and 
development of economic zones” (CZ4) 

Grants 

Business 
Environment 
and Trade  

Special 
economic 
zones  

Sector 
Development 
and 
Targeted 
Investments 

The Investment Plan for Railway Transport 
Infrastructure (CZ5.1) 

Investment 
on 
infrastructure 

Urbanisation 
and 
Connectivity 

5. Main Sources 

Interviews 

Business 
development 
and 
innovation 
support to 
firms 

Transport 
infrastructure  

National 
funding, 
Designed and 
implemented 
at the regional 
level 

Funding, 
design and 
implementation 
at the national 
level 

  Frantisek Kubes, Ministry for Regional Development, Department for Regional Policy 
 
  David Skorna, Ministry for Regional Development, Department for Partnership Agreement, 

Jana Badova, Ministry of Finance, EU Affairs Department 

 

Evaluation and Strategies 
Jan Miča, Office of the Government of the Czech Republic, Head of Digital Coordination 
Unit 

Main documents and sources 

  Government of the Czech Republic, (2019): National Reform Programme Czech Republic, 
https://ec.europa.eu/info/publications/2019-european-semester-country-reports_en 
https://ec.europa.eu/info/sites/info/files/2019-european-semester-national-reform-
programme-czech-republic_cs.pdf   

  Ministry for Regional Development (2017) Analysis: Public investment and EU funds 

2007-2015 

  Ministry of Education, Youth and Sports web Page: http://www.msmt.cz/ 
  Ministry of Industry and Trade web Page: https://www.mpo.cz 
  Partnership agreement Czech Republic – 2014-2020, 

https://ec.europa.eu/info/publications/partnership-agreement-czech-republic-2014-
20_en  

Country fiches 

The Regional Development Strategy 

ID  CZ1 

Country  The Czech Republic 

Region(s) affected  All country 

Time horizon  2014 - 2020 

Objectives and Scope  The Strategy is the foundation strategic material in the area of 
regional development in the Czech Republic. It represents a tool 
for  the  regional  development  policy 
implementation  and 
regional 
coordination  of  other  public  policies  affecting 
development. The Strategy links together sectorial perspectives 
with territorial perspectives. 

54 

 
 
 
 
 
 
 
 
 
 
 
Overview  The Strategy provides a complex analytical picture of the trends 
and challenges related to regional development. Building on that, 
the  Strategy  proposes  a  vision,  set  of  priorities  and  specific 
measures (using biannual Action Plans). 

Rationale  This is a cornerstone national document for regional development 

and cohesion.    

Type of policy category   All 

Type of policy instrument  All 

Type of funding  A variety of types 

Budget and expenditures  Variety  of  sources:  national  budget,  EU  funding.  Various 
funded)  by  various 

implemented  (and 

measures  to  be 
government department and agencies 

Governance  Scenario 1 

Institution responsible: The Ministry for Regional Development 

Policy implementation and 
policy mix 

Upstream:  The  Partnership  Agreement  2014–2020,  Europe 
2020 Strategy 

Downstream: Too complex to map all the specific measures at 
this stage. 

Examples include: 

  The  Roadmap  of  Large  Infrastructures  for  Research, 
Experimental Development and Innovation of the Czech 
Republic for the years 2016–2022 

  The  national  programmes 

development  and 
schemes) 

innovation 

supporting 
(multiple 

research, 
individual 

  The  Programme  supporting  commercial  properties  and 
including  the  sub-programme  called 

infrastructure, 
“Planning and development of economic zones” 
“Loan Guarantees” 

 
  The Small and Medium Enterprises Support Strategy 
ESF  (European  Social  Fund),  ERDF  (Integrated  Regional 
Operational Programme), Cohesion Fund (Operation Programme 
Transport) and CEF, EMFF etc. 

Relevant ESIF measures (if 
any) 

Impact : monitoring and 
evaluation 

The Strategy is monitored and evaluation in the following ways: 

  Continuous  monitoring  of 

implementation 

through 

outputs and outcome indicators 

  Annual reporting 
  Multiannual evaluation   

Link  https://mmr.cz/getmedia/a9fc8be4-58a0-4137-9c6d-

f9a05466a115/SRR-2014-2020.pdf.aspx?ext=.pdf 

The National Policy for Research, Development and Innovation 

ID   CZ2  

Country   The Czech Republic  

55 

 
 
 
Region(s) affected   All country  

Time horizon   2016–2020  

Objectives and Scope  

  To improve the governance of the research, development 

and innovation system  

  To  implement  the  new  system  of  research  outputs 

assessment  

  To create a robust base for applied research  
  To  strengthen  research  and  innovation  activities  of 

businesses  

Overview  The document is the top strategic document at the national level 
which sets directions for R&D&I and is an umbrella strategy for 
any other relevant strategic documents of the Czech Republic.  

Rationale  Regional development is one of the areas tackled by the National 
Policy for Research, Development and Innovation. The document 
sets several measures  that  aim  at  utilising  potential  of  the 
regions of the Czech Republic in applied research.   

Type of policy category  Sector Development and Targeted Investment  

Type of policy instrument  Business development and innovation support to firms  

 R&D programmes  

Type of funding  No  specific  funding  allocated.  Funding  applies  to  individual 
measures  proposed  by  the strategy. Each  measure  is  funded 
differently. A combination of national budget and the ESI Funds 
could be expected.  

Budget and expenditures  N/A  

Governance  Scenario 1  

Institution responsible: The Office of the Government  

Policy implementation and 
policy mix 

Downstream:  difficult  to  describe  exhaustively  because  of  the 
large  number  of  specific  measures.  The  Roadmap  of  Large 
Research Infrastructures is one of the examples.   

Relevant ESIF measures (if 
any) 

ERDF and linkages to RIS3  

Impact: monitoring and 
evaluation 

The document considers the evaluation of the previous strategy 
(until 2015) and addresses some of the findings. Out of the total 
of 21 measures proposed in the 2009–2015 strategy, eight were 
fully implemented, or their implementation was in progress, 11 
were  implemented  partially  and  two  have  not  (yet)  been 
implemented.  

Link  http://www.czech-research.com/wp-

content/uploads/2016/09/NRDIP_2016-2020_eng.pdf 

National  programmes  supporting  research,  development  and  innovation  (multiple 
individual schemes) 

ID  CZ.2.1  

Country  The Czech Republic  

56 

 
 
 
Region(s) affected  All  country (with  the  exception  of Prague  for  some  of  the 

schemes)  

Time horizon  2014–not specified  

Objectives and Scope 

  To ensure sustainability of projects funded by the ERDF 

in 2007–2013  

  To support excellent projects that were not funded from 
received  high 
funding  schemes  yet 

international 
evaluation marks  
  To  provide  access 

to 

information 

resources 

for 

researchers  

Overview  These programmes provide programmatic funding for research, 
innovation  and  development  exclusively  from  the  national 
budget.  

Rationale  One  of  the  objectives  of  these  programmes  is  to  ensure 
sustainability  of  some  large  research  projects  funded  in  the 
2007–2013  period,  predominantly  from  the  ERDF.  This  means 
that most of these projects were linked to the regions, excluding 
the  capital  (Prague  was  not  eligible  to  use  the  ERDF  funding 
through  the  OPs,  except  for  its  own  OP,  which  was,  however, 
limited  in  budget). These  national  programmes  therefore  direct 
national budget funding predominantly to the regions.  

Type of policy category  Sector Development and Targeted Investment  

Type of policy instrument 

 R&D programmes  

Type of funding  Grants  

Budget and expenditures  National  budget:  Approximately  CZK  2  billion  per  annum  (€78 

million per annum)  

Governance  Scenario 3  

Institution responsible: The Ministry of Education, Youth and 
Sports  

Policy implementation and 
policy mix 

Upstream: The National Policy for Research, Development and 
Innovation 2016 - 2020  

Relevant ESIF measures (if 
any) 

ERDF and linkages to RIS3  

Impact: monitoring and 
evaluation 

This has not yet been evaluated.  

Link  http://www.msmt.cz/vyzkum-a-vyvoj-2/dotace-granty 

Roadmap  of  Large  Infrastructures  for  Research,  Experimental  Development  and 
Innovation of the Czech Republic for the years 2016-2022 

ID  CZ2.2  

Country  The Czech Republic  

Region(s) affected  All country  

57 

 
 
 
 
Time horizon  2016 - 2022  

Objectives and Scope 

of 

importance 

to the increasing 

In recent years, the Ministry of Education, Youth and Sports has 
responded 
research 
infrastructures  within 
the  European  Research  Area  and 
worldwide.  A  number  of  steps  have been taken to  help 
create a suitable  environment  for  the  construction,  operation, 
further  development,  financing  and  integration  of  the  large 
research 
Republic 
of 
into the international research infrastructures networks and legal 
entities – in order to reflect the research infrastructures as one 
of  the  key  elements  of  the  national  research  and  innovation 
ecosystem of the Czech Republic.  

infrastructures 

Czech 

the 

Overview  Research infrastructures create favourable environments, where 
individual  segments  of  the  knowledge  triangle  (education, 
research and industry) are efficiently interconnected, resulting in 
intensive interactions. The results achieved by using the research 
infrastructures  thus  stimulate  private  investments  in  R&D  and, 
consequently,  foster  the  leverage  effect.  In  this  way,  research 
infrastructures  contribute to  the  bloom  of  science  &  technology 
parks.  The  Roadmap  of  Large  Infrastructures  for  Research, 
Experimental Development and Innovation of the Czech Republic 
for the years 2016–2022 demonstrates how the Czech Republic 
is responding to the challenges and opportunities of engaging in 
the international research infrastructure sector.  

Rationale  Large  research  infrastructures  are  unique  facilities  of  high 
knowledge and technology expertise, which are operated based 
on open  access  policy  principles.  Host  institutions  operate  the 
large research infrastructures for all their potential users, coming 
both from research organisations and/or innovative enterprises. 
Large  research  infrastructures  enable  user  communities  to 
achieve cutting-edge results in fundamental and applied research 
and to develop state-of-the-art technologies with a high potential 
for application in innovative products and services of a high added 
value. The research infrastructures are located across the whole 
territory of the Czech Republic, and they therefore contribute to 
the  progressive  development  of  entire  economic  spheres  and 
(speaking in geographical terms) of urban areas at the level of 
regions and macro-regions.  

In  terms,  of  the  geographical  distribution  of  the  large  research 
infrastructures over the territory of the Czech Republic, roughly 
a half of them are located in Prague and the other half outside of 
Prague.  Prague  hosts  a  large  majority  of  the  infrastructures  in 
humanities  and  social  sciences,  whilst  the  largest  research 
infrastructures in physical sciences (often built between 2007 and 
2015  using  ERDF,  now  financed  from  the  national  budget)  are 
generally located outside of the capital.  

Type of policy category  Sector Development and Targeted Investment  

Type of policy instrument  R&D programmes  

Type of funding  Grants  

Budget and expenditures  The  national  budget  (via  the  budgetary  line  of  the  Ministry  of 

Education, Youth and Sports) funds all the operational costs.  

The ESI Funds (via specific calls from the Operational Programme 
Research,  Development  and  Education)  funds  the  investment 

58 

 
 
costs Approximately CZK 1.4 billion per annum, 54.4 million per 
annum (all national budget)  

Governance  Scenario 1 

Policy implementation and 
policy mix 

Institution responsible: The Ministry of Education, Youth and 
Sports  

Upstream:  

  The  National  Policy  for  Research,  Development  and 

Innovation 2016–2020  

  The  Innovation Strategy  of  the  Czech  Republic  2019  - 

2030  

Relevant ESIF measures (if 
any) 

N/A  

Impact: monitoring and 
evaluation 

Since  2014,  the  Ministry  of  Education,  Youth  and  Sports  has 
carried out a periodic and comprehensive international evaluation 
of  large  research  infrastructures  of  the  Czech  Republic.  The 
outputs  of  these  evaluation  procedures  are  provided  by  the 
Ministry of Education, Youth and Sports to the Government of the 
Czech Republic as an independent expert basis for the adoption 
of  informed  political  decisions  on  financing  large  research 
infrastructures  from  public  funds  of  the  Czech  Republic. 
Furthermore,  the  assessment  outputs  have  served  as  an 
independent expert basis for periodic updates of the Roadmap of 
Large  Research  Infrastructures  of  the  Czech  Republic  and  for 
decision-making on the support of the proposals of pan-European 
research infrastructures applying for the ESFRI Roadmap updates 
with the participation of the Czech Republic.  

Link  http://www.msmt.cz/vyzkum-a-vyvoj-2/dotace-granty 

Small and Medium Enterprises Support Strategy 

ID  CZ3  

Country  The Czech Republic  

Region(s) affected  All country  

Title  Small and Medium Enterprises Support Strategy  

Time horizon  2014 - 2020  

Objectives and Scope  The global objective of the Small and Medium Enterprises Support 
Strategy  2014–2020  includes  the  continuous  boosting  of 
competitiveness and of the economic performance of small and 
medium enterprises, based on quality business environment, on 
using and developing their innovation potential, knowledge and 
education (the upgrading of SMEs to the entrepreneurial activity 
based  on  the  competitive  advantage  of  innovation  and  the 
the 
advancement 
internationalisation arising from the EU internal market and from 
markets with good prospects in third countries, and on the overall 
reduction of the energy requirements of business.  

in  value  chains), 

to  a  higher 

level 

Overview  Four  strategic  priorities  have  been  defined  under  the  SME 
Strategy  2014+:  Cultivation  of  business  environment, 
development of consultancy services and education for business; 
Development  of  enterprise  based  on  support  for  research, 

59 

 
 
 
Rationale 

Type of policy category 

development  and  innovation,  including  the  innovation  and 
business  infrastructure;  Support  for  the  internationalisation  of 
SMEs;  and  Sustainable  energy  management  and  energy 
innovation development.   

   The 

programme 

economic 
directly 
cohesion because  some  of  the  proposed  measures 
explicitly focus on economically weaker regions.   

tackles 

   Business environment and trade  
   Sector Development and Targeted Investment  
   Skills and mobility  

Type of funding  Various types  

Budget and expenditures  Variety of sources: National budget, EU funding Not specified. 

Various measures will be funded by various government 
departments  

Governance  Scenario 1  

Policy implementation and 
policy mix 

Relevant ESIF measures (if 
any) 

Institution responsible: The Ministry of Industry and Trade  

Downstream: A number of individual measures have been 
proposed. One example is the Loan Guarantee programme for 
SMEs (see “CZ6 policy fiche”)  
Other examples of measures (2018-2019) related to regional 
cohesion include:  

   Supporting  participation  of  SMEs 

in international 

exhibitions and fairs (funded from the national budget)  
   Supporting SMEs in applying for EU funding (funded from 
the  national  budget),  to  be  undertaken  at  the  regional 
level  

   Promoting  apprenticeships  (funded  from  the  national 

budget)  

   Educational  courses  for  SMEs  focusing  on  Industry  4.0 

(funded from the national budget)  

ERDF, ESF  

But also communitarian programmes (e.g. COSME, H2020 – SME 

Instrument etc.)  

Impact: monitoring and 
evaluation 

This strategy has not yet been evaluated.  

Link  https://www.mpo.cz/assets/dokumenty/47605/54370/599917/

priloha001.pdf 

Planning and development of economic zones 

ID  CZ4  

Country  The Czech Republic  

Region(s) affected  All country (Prague is not excluded, 

but given the conditions of the programme, it is expected that it
 will be the regions where most of the funding will be aimed at)  

Time horizon  2005 - 2020  

60 

 
 
 
Objectives and Scope 

  To ensure sufficient supply of commercial properties and 

infrastructure  

  To improve quality of current commercial properties and 

infrastructure  

Overview  The programme aims at supporting sustainable development of 
the Czech Republic and improve conditions for implementing pro
jects in the area of manufacturing, strategic services and techno
logy centres, and therefore contribute to economic and 
regional development through improving competitiveness of the
 investment environment, especially in weaker and/or structural
ly affected regions.   

Rationale  The programme directly tackles economic cohesion through dev
eloping economic zones aiming at sustaining and/or improving l
ocal/regional development in order to ensure economic develop
ment, jobs, cohesion and regional competitiveness  

Type of policy category  Business environment and trade  

Sector Development and Targeted Investments  

Type of policy instrument  Special economic zones  

Business development and innovation support to firms  

Type of funding 

 Grants  

Budget and expenditures  A National budget: approximately CZK 0.7 billion per annum 

(27.2 million per annum)  

Governance  Scenario 3  

Institution responsible: The Ministry of Industry and Trade  

Policy implementation   

and policy mix 

N/A  

Relevant 
ESIF measures (if any) 

N/A  

Impact: monitoring and 
evaluation  

This programme has not yet been evaluated.  

Link   https://www.czechinvest.org/cz/Sluzby-pro-

municipality/Nemovitosti-pro-podnikatelske-ucely/Podpora-
prumyslovych-zon 

The Transport Policy of the Czech Republic 

ID  CZ5  

Country  The Czech Republic  

Region(s) affected  All country  

Title  The Transport Policy of the Czech Republic  

Time horizon  2014 - 2020  

Objectives and Scope  The main objective of the Transport Policy is: to create 

conditions for the development of high-quality transport system 
based on the utilization of technical, economic and technological 
properties of individual transport modes, on the principles of 
competition, having regard to its economic and social impact 
and the impact on the environment and public health.  

61 

 
 
 
Overview  The Transport Policy of the Czech Republic for 2014–2020 with 

prospect of 2050 is, just like the Transport Policy for 2005–
2013, based on a so-called transport-political cycle. The 
Transport Policy is a top-level strategic document of the 
Government of the Czech Republic for the transport sector and 
the Ministry of Transport is the institution responsible for its 
implementation. The document identifies the main challenges of 
the sector and proposes measures to tackle them.  

Rationale 

It is an important task of the Transport Policy to ensure 
comparable level of quality of the transport infrastructure in 
different regions. Particular attention is given to areas where 
insufficient density and capacity of roads or quality of the 
railway network directly limits the development of economic 
activity in the regions.   

Type of policy category  Urbanisation and Connectivity  

Type of policy instrument  Transport infrastructure  

Type of funding  Varius types  

Budget and expenditures  Variety of sources: national budget, EU funding   

Not specified. Various 
specific measures 
presented in the strategy 
will be funded by various 
funding sources  

Governance 

Institution responsible: The Ministry of Transport  

Scenario 3    

Policy implementation and 
policy mix 

Downstream: A number of specific measures, for example the 
Investment Plan for Railway Transport Infrastructure  

The Investment Plan for Railway Transport Infrastructure 

ID  CZ5.1  

Country  The Czech Republic  

Region(s) affected  All country  

Title  The Investment Plan for Railway Transport Infrastructure  

Time horizon  2019  

Objectives and Scope  The  main  objective  is  to  provide  a  detailed  planning  of  the 
investment activities into the railway transport infrastructure that 
are to be run across all regions of the Czech Republic in 2019.  

Overview  The annual investment plans describes all projects that are to be 
launched,  continued  and  finished  in  2019  to  modernise  railway 
infrastructure  in  the  Czech  Republic,  regardless  of  sources  of 
funding.   

Rationale  A  number  of  projects  for  2019  aim  at  providing  quicker,  more 
reliable and safer railway connection across various regions, and 

62 

 
 
 
 
between  regions  and  the  capital,  thus positively  contributing  to 
the regional development.   

Type of policy category  Urbanisation and Connectivity  

Type of policy instrument  Transport infrastructure  

Type of funding 

Investment on infrastructure  

Budget and expenditures  Variety of sources: national budget, EU funding  

National  budget –  State  Fund  of  Transport  Infrastructure:  CZK 
9.6  billion  (361.2  m),  including  co-financing  of European  Union 
funding  

Cohesion Fund (CF): CZK 5.8 billion (€225.3 million)  

Connecting  Europe  Facility  (CEF):  CZK  2.9  billion  (€112.6 
million)  

Other  sources,  including  from  other  national  budget  sections: 
CZK 7.8 billion (€303 million)  

Approximately  CZK 4.8  billion  (€186.1  million)  of  the  state 
budget funding in 2019 is targeted at regions outside of Prague.  

Approximately  CZK  354m  (€13.7  million)  of  the  state  budget 
funding in 2019 is targeted at Prague  

The  rest  of  the state  budget  funding is  targeted  at  the  whole 
territory of the Czech Republic   

Governance  Scenario 1 

Institution 
Administration (SŽDC) 

responsible: The 

Railway 

Infrastructure 

Policy implementation and 
policy mix 

Upstream: The Transport Policy of the Czech Republic  

Relevant ESIF measures (if 
any) 

ERDF (Integrated  Regional  Operational  Programme), Cohesion 
Fund (Operation  Programme  Transport)  and  CEF  (Connecting 
Europe Facility Programme)  

Impact: monitoring and 
evaluation 

This plan is monitored quarterly and updated accordingly.   

Link  https://www.szdc.cz/documents/50004227/50157876/plan-

investicni-vystavby-2019.pdf/a735a231-c86c-4061-8de9-
18873d58e3bc 

Case study 

National Programme supporting R&D&I – The Czech Republic (CZ)  

1.  Executive Summary 

This  case  study  presents  closer  some  of  the  National  Programmes  supporting  research, 
development and innovation (R&D&I) in the Czech Republic, namely the National Programmes of 
Sustainability I and II (NPS I and II, implemented by the Ministry of Education, Youth and Sports) 
and the programme Gamma/Sub-programme 2 (implemented by the Technology Agency of the 
Czech  Republic).  The  main  purpose  of  the  case  study  is  to  showcase  the  linkages  and 
complementarities with the ESI Funds and EU communitarian programme financing and how the 

63 

 
 
 
 
programmes contribute to regional cohesion in the Czech Republic. Although regional cohesion is 
recognised by the government departments in the Czech Republic as a policy issue, it does not 
feature  high  on  the  policy  agenda  of  the  current  government,  and  has  not  been,  traditionally, 
considered to be a high-priority issue. The Czech Republic is a relatively small a centralised country 
with a powerful national government, regional authorities with limited powers and local authorities 
(town  and  parish  councils)  with  some  degree  of  autonomy.  Therefore,  national-level  policies, 
despite  not  often  having  explicit  regional  focus,  remain  to  have  the  strongest  influence  at  the 
regional level.  

The main aim of the NPS I and NPS II programmes is a sustainable development of the centres of 
R&D&I  funded  from  the  ERDF  between  2007-2013  by  means  of  Czech  OP,  which  provides 
considerable  contribution  to  regional  development  (of  those  regions  where  the  centres  are 
located),  and  therefore  contributes  to  the  competitiveness  of  the  whole  country.  They  were 
designed to reflect the need to bridge a transition period for these centres after the ESI funding 
finished. The Sub-Programme 2 aims at generating synergies with Horizon 2020 and its successor 
Horizon Europe. Whilst the programme Gamma/Sub-programme 2 is yet to be fully rolled out, the 
NPS  I  and  NPS  II  have  already  started  to  show  signs  of  results  and  impact.  For  example,  all 
supported  organisations  have  managed  to  find  the  necessary  co-financing  from  a  variety  of 
sources, which was one of the conditions of providing the support from the state budget. This is a 
very good sign for the future sustainability, but also of the improving regional collaboration. The 
regional research centres have been encouraged to intensify their linkages with local businesses 
and form partnerships with them. 

2.  Background and Context 

For the 2014-2020 programming period, all regions in the Czech Republic, except for Prague, fell 
in the category of the least developed regions, because their GDP per capita was below 75% of 
the  EU28  average.  However,  this  has  gradually  changed  in  the  recent  years.  For  the  2021+ 
programming  period,  three  regions  will  be  classified  as  “phasing”  (75%-100%  of  the  EU28 
average),6 whilst Prague maintaining its prime position. What is more important, nevertheless, is 
the fact that all regions in the Czech Republic are converging towards the EU28 average, partly 
because of  the  general  economic  growth  that the  Czech  Republic has  been  enjoying  in  the  last 
several  years,  partly  because  of  the  centralised  government  and  partly  because  of  the  general 
decline of the EU28 average. This convergence towards the EU28 average is regarded as a very 
positive  trend,  although  some  regions  are  growing  faster  than  others.  As  the  interviewees 
highlight, some regions have their own specific issues, carry legacies from the past etc., and the 
government tries to address them individually. Prague’s long-term position has been well above 
100%  of  the  EU28  average,  making  it  one  of  the  Top10  most  developed  regions  in  the  EU. 
However,  the  prime  position  of  Prague  is  not  a  major  issue  for  regional  cohesion  in  the  Czech 
Republic.  

On the contrary, Prague’s economic performance is pulling other regions upwards with it and other 
regions benefit from this strong position of the capital. This is further enabled by the geographical 
proximity of the capital described above, so both businesses and citizens benefit from Prague’s 
public services, business and job opportunities and/or innovation ideas, whilst still keeping strong 
ties to their home regions. Prague’s growth is therefore welcome and seen by the government as 
an important positive factor for regional development, rather than a factor contributing to widening 
regional disparities. Although each region adopts its own Regional Development Programme, 

 because  of  the  relatively  limited  competencies  of  regional  authorities,  they  can  autonomously 
implement these programmes only to some extent. Therefore, national-level policies, despite not 
often having explicit regional focus, remain to have the strongest influence at the regional level. 

3.  Description of the policy measure 

The main aim of the NPS I and NPS II programmes is a sustainable development of the centres of 
R&D&I  funded  from  the  ERDF  between  2007-2013  by  means  of  Czech  OP,  which  provides 
considerable  contribution  to  regional  development  (of  those  regions  where  the  centres  are 
located),  and  therefore  contributes  to  the  competitiveness  of  the  whole  country. 7 They  were 
designed to reflect the need to bridge a transition period for these centres after the ESI funding 

6 Interviews with the Ministry of Regional Development and the Ministry of Finance. 
7 The Ministry of Education, Youth and Sports (2012) The guidance for applicants to the National Programmes 
of Sustainability. 

64 

 
 
 
finished. 8 Both  programmes  are  open  for  applicants  from  any  region  of  the  Czech  Republic. 
However, there are limitations in terms of the profile of applicants. Only a research organisation, 
as  defined  by  the  law  Nr.  130/2002  Coll.  and  by  Regulation  of  the  European  Commission  Nr. 
800/2008, which was built between 2007-2015, could be supported from this programme. Given 
that a vast majority of these centres were built outside of Prague (because the main ERDF OP did 
not allow applicants from Prague to apply, Prague had its own, but much smaller ERDF OP), most 
of the applicants were expected (and this also happened in reality) to come from the regions, other 
than Prague, i.e. much poorer regions. The programme supports exclusively multiannual projects, 
up  to  five-year  long  (so  that  it  can  be  effective  in  terms  helping  the  research  centres  become 
sustainable). 

4.  Policy Implementation 

The NPS I and NPS II programmes were designed and implemented by the Ministry of Education, 
Youth and Sports, Department for Higher Education Institutions and Research support and it acts 
as  “the  provider  of  support”,  as  recognised  by  the  law  Nr.  130/2002  Coll. 9 The  department 
publishes  calls  for  proposals,  provides  secretariat  to the peer  reviewers,  publishes  guidance  for 
applicants and for the grant holders, monitors progress and is responsible for on-site checks, as 
well as for financial management of the programmes. The overall budget allocation for NPS I and 
NPS II is provided in the table below. In matters related to both programmes, the Minister and the 
Ministry officers take advice from the Programme Committee. This is an advisory panel composed 
of nominees by HEIs, Academy of Sciences and businesses and industries. Therefore, there is a 
good  level  of  involvement  of  stakeholders  in  the  process  of  implementation.10 The  committee 
provides  recommendations  on  which  project  proposals  should  be  selected  for  funding  (with 
assistance  of  individual  external  peer-reviewers)  and  it  undertakes  final  reviews  of  all  projects 
(again  with  assistance  of  individual  peer-reviewers).  This  coordination  and  cooperation 
mechanisms are prescribed by law and are almost identical for all support providers.  

5.  Performance 

Whilst  the  NPSs  programmes  have  been  ongoing  for  several  years  now,  the  Gamma/Sub-
programme  2  initiative  has  only  been  through  one  call  for  proposals,  therefore  more  time  is 
necessary for results to come. For NPS I and NPS II, it was anticipated at the beginning of the 
programme that it would support, in total, approximately 50 research centres (40 out of which 
were  expected  to  be  regional  R&D&I  centres)  across  the  whole  of  the  country  and  help  them 
become sustainable and therefore support their regional role by means of promoting cooperation 
with local businesses and industries and knowledge transfer.11 In addition, it was expected that 
the programme positively contributes to internationalisation of the research centres by means of 
researchers’ mobility and cooperation on joint research projects.  

For the NPS I and NPS II, results produced by the projects are regularly monitored and evaluated. 
This is done in cooperation with the programme committee. Annually, the Ministry undertake a 
review of each project. There is also a continuous monitoring system required from project teams 
to design and adopt, to make sure that each project is on track vis-à-vis its schedule. There are a 
number  of  indicators  that  are  used  for  monitoring  of  the  performance  of  each  project,  such  as 
scientific  outputs,  international  collaboration,  collaboration  with  other  research  organisations. 
Furthermore, for some indicators, applicants are not allowed to have zero values in their proposals. 
Therefore, although the projects are meant to significantly contribute to improvements of research 
organisations in many areas, the applicant has to prove that their organisation has already gained 
some prior experience in these areas. Furthermore, the Ministry undertakes ex-post evaluations 
of each project, which builds on the final report submitted by the project team, in cooperation with 
the programme committee and external experts.  

8 The Government of the Czech Republic made a pledge to the European Commission when the biggest 
research centres were asking for the support from ERDF that it would make sure they are sustainable after 
the end of the ERDF funding. 
9 Law Nr. 130/2002 Coll., on public support of research, experimental development and innovation, Art. 21. 
10 Stakeholders were also involved in the design stage of the programmes by means of reviewing initial 
proposals, participating in round tables and via the Council for R&D&I which has to give approval to all 
programmes which use public support for R&D&I and which is composed of representatives of stakeholder 
organisations. 
11 Ministry of Education, Youth and Sports (2012) Proposal for Establishing National Programmes of 
Sustainability. 

65 

 
 
 
As for the NPS I and NPS II, reduction of regional disparities is not an explicit goal of either of the 
two  programmes.  However,  it  is  among  the  main  aim  of  the  programmes  to  “considerably 
contribute  to  regional  development”.  This  is  achieved  by  encouraging  the  supported  regional 
research centres to intensify their linkages with local businesses and form partnerships with them. 
Furthermore, both national programmes are directly targeted at ensuring sustainability of some 
large  and  regional  research  projects  funded  in  the  2007–2013  period,  predominantly  from  the 
ERDF (Operational Programme Research and Development for Innovation). Given that the largest 
research projects (including some of the large infrastructures) developed with the support of ERDF 
OPs 2007-2013 were mostly located outside of Prague (i.e. in relatively poorer regions), which are 
now being partially (the project have to find part of their funding elsewhere, which is a condition 
for  receiving  funding  from  the  state  budget)  funded  from  the  state  budget,  the  national 
programmes  help  to  reduce  regional  disparities.  However,  as  explained  partially  in  the  context 
section above, Prague, as a very rich region, is not excluded from the NPS I and NPS II, unlike in 
most of the ERDF-funded OPs 2007-2013 (Prague had its own ERDF-funded programme in that 
period but with a relatively small budget and limited priorities). Given that in the Czech Republic, 
Prague is seen (and this was confirmed by interviews with the Ministry of Finance and the Ministry 
for Regional Development) as “pulling” factor for the other regions. 

There are multiple providers of national support for R&D&I and alongside them, the ESI Funds OPs 
also  operate  in  the  Czech  Republic  in  the  area  or  R&D&I.  On  top  of  this,  Czech  research 
organisations have access to international R&D&I support initiatives, such as EU communitarian 
programmes. Therefore, a certain level of coordination between the various providers is necessary 
in order to make sure overlaps between various initiatives are non-existent or at least minimalised.  
The NPS I and NPS II programmes are complementary to the existing initiatives because they, to 
a large extent, help bridge the transitionary period into which the research centres entered after 
the end of the 2007-2013 funding period (i.e. post 2015). Therefore, there is a very good level of 
complementarity in the 2014-2020. For the period 2021+, this remains unclear because the OPs 
are yet to be finalised. Furthermore, neither NPS I nor NPS II would have existed if it had not been 
for ESI Funds because they were both created as reflection of the follow-up plans discussed after 
the end of the programming period 2007–2013. At the same time, national stakeholders in R&D&I 
heavily encourage research organisations (and individual researchers and research teams) to be 
as active as possible in the EU communitarian programmes, such as the future Horizon Europe 
programme. 

6.  Strengths and Weaknesses 

  There is a requirement in the rules of the NPS I and NPS II that applicants have to find a 
half  of  the  necessary  funding  from  other  sources.  This  requirement  motivates  them  to 
engage  in  further  collaboration  and  form  partnerships  across  regions  and  even 
internationally.  
It supports excellent projects that were successful in international competition. It therefore 
rewards internationally recognised excellence, it is an initiative which supports innovation 
in SMEs, which is crucial for any knowledge-based economy. 

 

  Priorities  of  Cabinet  ministers  tend  to  change  relatively  quickly,  not  fully  taking  into 
account  that  a  large  number  of  strategic  steps  require  a  longer  period  to  achieve  any 
impact. 

7.  Transferable Lessons 

  Flexibility of national funding, as opposed to the ESI Funds and other non-national funding 
initiatives. This case study shows that national funding initiatives provide a larger degree 
of the necessary flexibility, as opposed to, the ESI Funds. This flexibility has two levels: a) 
national programmes usually need a shorter time from identification of a need in society 
to implementation of intervention and b) owners of national programmes usually have a 
higher degree of discretion in terms of topics and focus of intervention.  

  Uncertainty  around  the  national  public  spending  on  R&D&I  after  2021,  the  new 
programming  period  is  likely  to  bring  a  lower  amount  of  EU  funding  in  general,  higher 
ratios of national co-financing and therefore significantly higher pressures on the national 
budget. This, ultimately, can mean a lower amount of available national funding to address 
flexibly priorities, such as those that subject to the case study. 

66 

 
 
 
 
 
4  HUNGARY 

Country briefings 

National Policies addressing regional economic disparities – Hungary (HU)  

1.  Background  

Hungary is divided into 19 NUTS 3 counties plus 
Budapest and seven statistical NUTS 2 regions. 
It  has  to  be  pointed  out  that  the  2012  public 
administration reform abolished the regional and 
micro-regional  development  councils,  making 
the  elected  county  level  the  main  territorial 
actor.  

Central  Hungary  and  especially  Budapest  have 
more than twice the GDP per capita compared to 
the  other  six  regions  benefiting  from  growth-
enhancing  agglomeration  effects.  Another 
disparity  is  apparent  in  Western  and  Central 
Transdanubia. This part is more developed than 
the  Eastern  part  thanks  to  strong  inward 
investment.  For  the  2014-2020  programming 
period, all regions despite Central Hungary were 
classified as Less Developed Regions. 

Source: European Commission (2019). 

While  there  is  strong  economic  development  in  Central  Hungary,  there  are  a  large  number  of 
peripheral,  lagging  and  poorly  accessible  sub-regions  and  settlements  within  the  region.  The 
performance  indicators  of  these  sub-regions  are  similar  to  those  of  Hungary's  least  developed 
regions. 

2.  Architecture of national policies for addressing regional economic disparities 

Focus  

The  aim  of  national  policy  on  regional  disparities  is  to  put  the  country  on  the  path  of  growth, 
reducing territorial inequalities, and to achieve a more balanced territorial development. Narrowing 
the gap between the development level of Hungary and the EU’s average is among the objectives 
of  the  Szechenyi  2020  national  development  plan.  Hungary  does  not  have  an  explicit  policy  to 
reduce  disparities  in  terms  of  economic  development  between  Central  Hungary  and  other 
Hungarian regions. The disparities within the regions, at the NUTS 3 level are considered to be 
more  important.  The  differences  are  rather  structural  and  are  a  result  of  25  years  of  lagging 
behind. For instance, large cities such as Debrecen or Gyor are developed but some micro-regions 
close  to  the  border  or  even  within  the  Central  Hungarian  region  are  disadvantaged  and  need 
targeted funding. 

Design and governance  

In Hungary, spatial development planning is stipulated in the so-called National Development and 
Territorial Development Concept (OFTK). The latest OFTK was issued in 2014 and is supposed to 
last till 2030. The OFTK aims to create coherence between sectoral and territorial plans and make 
the country's development policy, spatial planning, and the resulting regulation a coherent, unified 
system, with unified action.   

Within Hungary, the NUTS 3 counties and the cities with county rights that have set up their own 
regional  development  concepts  and  programmes,  to  co-ordinate  investments  across  sectors. 
Counties are also responsible for integrating territorial investment, in parallel with those developed 
by the largest cities. 

67 

 
 
Similar to other countries, Hungary has a National Rural Development Strategy (2012-20), which 
is managed by the Ministry of Agriculture. The strategy explores the development challenges of 
agriculture, rural development, the food sector and keeps an eye on environmental protection.12 

3.  Relationship of national funding and funding through the ESI Funds 

National  policies  addressing  regional  disparities  are  mostly  implemented  through  the  ERDF 
programme  which  happens  particularly  through  the  Territorial  and  Municipality  Development 
Programme  (TOP)  and  the  Hungarian  Countryside  Development  Programme.  Hungary  has 
committed itself to implement a strong economic recovery programme for the 2014-2020 period, 
hence, it will spend 60% of the EU funds and co-financing available in this period on economic 
development. 

Nationally  funded  regional  development  programmes  aim  at  reducing  regional  or  territorial 
disparities  within  the  country.  Nationally  funded  sectoral  programmes  usually  do  not  have  an 
explicit  regional  or  territorial  character,  although  some  measures  have  indirect  implications  for 
regional development. There are some recent strategies with a regional character. For instance, 
the new SME government strategy (designed by the Ministry for Innovation and Technology) has 
a relevant spatial aspect, is however still to be finalised. 

4.  Overview of national policy measures addressing regional economic disparities  

Policy  measures  that  aim  at  enhancing  regional  development  outside  of  Central  Hungary  are 
related to urban development, investment promotion, R&D, and employment support. 

The Modern Cities Programme (fiche HU1) is Hungary's largest local development programme. In 
this context, towns with county rights (outside of Budapest) receive support for objectives such 
as transport, industrial parks, education, sport, innovation and tourism. Within this programme, 
cities can come up with a comprehensive development plan to modernise their cities. This is to be 
financed through a mix of national funding but can also include EU funding. Until the beginning of 
2019, €1,250 million have been allocated to projects.   

The  large  projects  of  the  Hungarian  Investment  Promotion  Agency  (HIPA)  (fiche  HU2)  aim  at 
increasing economic development and employment in the Northern and Eastern part of the country 
and at balancing the development of Central Hungary and Western Transdanubia. The projects are 
funded  by  the  HIPA,  which  is  the  national  investment  promotion  organisation  governed  by  the 
Ministry of Foreign Affairs and Trade. In 2018, HIPA conducted 98 positive investment decisions 
and  projects.  As  a  result  of  these  investment  projects,  it  is  expected  that  approximately  €4,0 
million will be invested in the coming years, and approximately 17,000 new jobs are going to be 
created.   

The National Research, Development and Innovation Office (NRDIO) runs the National RDI Fund 
which is mostly dedicated to support research and innovation irrespectively of the location of the 
applicant.  There  are  no  explicit  instruments  that  target  Less  Developed  Regions  in  the  current 
period  (the  regional  innovation  support  programme  that  included  a  range  of  measures  for 
universities and regional companies has been stopped in 2013). Nevertheless, there are measures 
implicitly  affecting  the  countryside.  These  include  the  recently  launched  University  Innovation 
Ecosystem (fiche HU3) and the Open Innovation measures (fiche (HU4). The University Innovation 
Ecosystem with a budget of €4.6 million aims to support the development and effective operation 
of result-oriented university innovation ecosystems. The programme supports the development of 
an ecosystem promoting the commercialisation of R&D results of higher education institutions and 
technology transfer to companies. This measure is a follow-up to the regional knowledge centre 
measure and helps regional universities to create innovation partnerships with local companies. 
The measure ‘Open Innovation’ with a total budget of €5 million, finances large companies based 
in  the  country  to  perform  small-scale  R&D&I  projects  carried  out  by  SMEs  and  start-ups. 
Beneficiaries are companies with production facilities. Since the manufacturing sites are outside 
of Budapest, this measure is expected to have a positive impact on the economic development of 
regions. 

In  the  area  of  employment  support,  the  Ministry  of  Finance  launched  the  Employment  Support 
Programme (fiche HU5) with tenders published in 2017 and 2018 with a total budget of 15 billion 
Euro.  This  should  promote  job  creation  and  retention  for  micro,  small  and  medium-sized 

12 OECD (2019), Economic Surveys - Hungary 2019. 

68 

 
 
 
enterprises. It is expected that this measure will create new jobs, particularly in SMEs. Due to the 
nature of the investment, the impact of this measure is expected to be the greatest in the regions 
outside Budapest. 

5.  Classification of policy measures 

Title 

Type of funding 

Policy category 

Policy instrument 

Funding and 
implementation 

Modern Cities Programme 
(HU1) 

Budgetary 
transfers 
Grants 
Public 
procurements 

Sector 
Development 
and Targeted 
Investment  

Research 
infrastructures 

Industrial parks and 
other business 
infrastructures 

Clusters, centres of 
excellence and 
technology centres 

Funding at 
national level, 
design and 
implementation 
at the local level 

Urbanisation 
and Connectivity 

Transport 
infrastructures  

Skills and 
Mobility 

Educational 
infrastructures, 
universities 

Large Projects Hungarian 
Investment Promotion 
Agency (HIPA) (HU2) 

Loans, tax 
incentives 

Business 
Environment 
and Trade 

Investment promotion, 
Tax incentives 

Sector 
Development 
and Targeted 
Investment 

Sector 
Development 
and Targeted 
Investment 

Sector 
Development 
and Targeted 
Investment 

Skills and 
Mobility 

Commercialisation of 
research and 
technology transfer 

Business development 
and innovation support 
to firms 

Business development 
and innovation support 
to firms 

Business development 
and innovation support 
to firms 

Labour market training 

University Innovation 
Ecosystem (HU3) 

Grants 

Open Innovation (HU4) 

Grants 

Employment support 
programme (HU5) 

Grants 

6.  Main Sources 

Interviews 

Funding, design 
and 
implementation 
at the national 
level 

Funding, design 
at the national 
level, 
implementation 
at the national 
level 

Funding, design 
at the national 
level, 
implementation 
at the national 
level 

Funding, design 
and 
implementation 
at the national 
level 

  Laszlo Szilagyi, Ministry of Innovation and Technology 
  Dr István Szabó and Dr Ádám Mészáros, National Research, Development and Innovation 

Office 

  Gabor Veress, Gabor Horvath, Zsuzsa Forgacs, Ministry of Finance 

Main documents and sources:  

  Government of Hungary, (2019): National Reform Programme Hungary, 

https://ec.europa.eu/info/sites/info/files/2019-european-semester-national-reform-
programme-hungary_hu.pdf   

  OECD (2019), OECD Economic Surveys, Hungary 2019National Development and 
Territorial Development Concept, https://regionalispolitika.kormany.hu/nemzeti-
fejlesztes-2030-orszagos-fejlesztesi-es-teruletfejlesztesi-koncepcio  

69 

 
 
 
 
 
 
 
 
 
 
  Operational programmes, Szechenyi 2020 Plan, https://www.palyazat.gov.hu 
  https://nkfih.gov.hu OECD (2019), OECD Economic Surveys, Hungary 2019 
  Partnership Agreement Hungary 2014-2020, 

https://www.palyazat.gov.hu/szechenyi_2020  

Country fiches 

Modern Cities Programme  

ID  HU1 

Country   Hungary  

Time horizon   2015–2025  

Region(s) 
affected  

Cities with county rights (all Hungarian regions/counties)  

Objectives and 
Scope  

The objective is to foster the economic and infrastructural development and 
modernisation of cities with county rights in Hungary. (Budapest is not 
included)  

Overview          

The Modern Cities Programme is Hungary's largest local development 
programme, thanks to which towns with county rights 
receive support supported by the Hungarian Government for objectives 
such as transport, industrial parks, education, sport, innovation and 
tourism. Prime Minister Viktor Orbán announced this programme at the 
beginning of 2015, visiting the 23 cities with county rights. Within this 
programme cities can come up with a comprehensive development plan to 
modernise their cities. This plan is then to be financed by a mix of national 
funding but also including other EU etc funding.  

Institutions responsible include:  

  Hungarian Treasury  
  Government Commission responsible for local development   
  City governments  
  An example for the type of projects financed under this programme in 

the case of Debrecen:  

Infrastructure investment of the innovation centre  

  Development of the University of Debrecen  
 
  Development of the Debrecen train station   
  Modernisation of the Theatre  
  Development of an international school   
 
  Development of the city airport  

Investment into the South Industrial Park  

Rationale   The rationale behind the policy is to support the balanced               

development of cities with country rights across all Hungarian regions.  

Type of policy 
category   

Type of policy 
instrument  

Sector Development and Targeted Investment  

Urbanisation and connectivity 

Skills and mobility 

Research Infrastructures 

Industrial parks and other business infrastructures 

70 

 
 
 
 
 
 
Clusters, centres of excellence and technology centres 

Transport infrastructures  

Educational infrastructures, Universities 

Type of funding   Grants, budgetary transfers, public procurements 

Budget and 
expenditures  

So far approx. €1250 million allocated 

Governance   Design: level of cities (city governments prepare their plans and              

submit ideas)  

Implementation: level of cities  

Finance: national government  

Policy 
implementation 
and policy mix  

In case of a policy fiche, the downstream Policy measures/financing 
schemes/initiatives launched under the specific policy (strategy/policy or 
fiscal/budgetary transfers) are mentioned and links to the relevant fiches 
are established  

In case of a measure fiche the upstream policy is mentioned and a link to 
the policy is established   

Target group intended (and unintended) beneficiaries of the policy actions  

Additional aspects as identified during the research  

Relevant ESIF 
measures  

N/A 

Impact: 
monitoring and 
evaluation  

N/A 

Link 

Interview and news items  

https://hirlevel.egov.hu/tag/modern-varosok-program/   

https://www.portfolio.hu/cimke/modern%20v%C3%A1rosok%20program   

Large projects of the Hungarian Investment Promotion Agency (HIPA)  

ID  HU2 

Country   Hungary  

Time horizon   2014 -  

Region(s) affected   North Hungary, Northern Great Plain, South Great Plain  

Objectives and Scope   The  objective  of  the  large  projects  of  HIPA  is  to  increase 
creation. In 
economic  development  and  employment 
2018, HIPA  conducted  98 positive 
investment  decisions 
and projects. As a result of these investment projects, more 
than  EUR  4311m  will  be  invested  in  the  coming  years,  and 
17,024  new  jobs  will  be  created  in  Hungary. HIPA  has  an 
objective  to  promote  investments  to  be  realised  in  the 
Northern and Eastern part of the country in order to increase 
investments and job creation.  

Overview   HIPA  –  Hungarian  Investment  Promotion  Agency, Hungarian 
Investment Promotion Agency (HIPA) is a national investment 
promotion  organisation  governed  by  the  Ministry  of  Foreign 

71 

 
 
 
 
Affairs and Trade. It provides management consulting services 
to interested companies free of charge in an end-to-end, one-
stop-shop  service  model,  supporting  them  in  selecting  a 
business  location,  providing  tailor  made incentive  offers  and 
information on state aid issues. Besides this, HIPA also aims 
to  link  the  potential  financial  and  strategic  investors  with 
Hungarian  projects  in  need  of  investment,  handling  a 
continuously growing database.  

Rationale   Foreign  direct 

investment  promotion 
contributes  to  the  creation  of  new  jobs  and  new  economic 
activities that increase economic growth.  

investment  and 

Type of policy category    Business environment and trade  

Type of policy instrument  

Investment promotion  

Type of funding   Tax incentives, loans  

Budget and expenditures   N/A  

Governance   Design: national government and HIPA  

Implementation: HIPA, national level  

Finance: national government  

Policy implementation and 
policy mix  

N/A 

Relevant ESIF measures   N/A 

Impact: monitoring and 
evaluation  

N/A 

Link  N/A 

University Innovation Ecosystems  

ID  HU3 

Country   Hungary  

Time horizon   2019 - 2021  

Region(s) affected   Both  Budapest  and  the  countryside  is  addressed  with  this 
measure,  but  the  initiative  will  have  a  strong  impact  on  the 
innovation  potential  of  counties with  universities where 
actually this impact is expected to be more substantial  

Objectives and Scope   The  National  Research,  Development  and  Innovation Office 
launched  this  call  with  the  objective to  support  the 
development  and  effective  operation  of  result-oriented 
university innovation ecosystems.   

Overview   Commercialisation  of  R&D  results  of  higher  education 
institutions by companies is facilitated by the entrepreneurial 
approach  developed  by  teachers,  researchers  and  students, 
by the institutional-level management of technology transfer 
and innovation. 

Specific goals:  

  Establishing  a  relationship  based  on  mutual  benefits 

between universities and business.  

72 

 
 
 
  Displaying 

the 

infrastructural 
competences  of  the  institutions  as  a  transparent 
service.  

intellectual  and 

  Establishing  a  one-stop-shop  for  businesses  as 

universities as networked nodes.  
technology-based 

  Encouraging 

transfer 

and 

innovation management in institutions.  

  Enhancing 

entrepreneurial  mindsets 

among 

educators, researchers and students.  

  Commercialisation of institutional RDI results through 

corporate collaboration.  

Applications can be submitted by Hungarian state-recognised 
higher education institutions:  

  State universities  
  Universities of applied sciences  
  599  GFO  code  universities  with  the  legal  status  of  a 

legal person founded by the Hungarian State.  

Rationale   The National Research and Development Office does not have 
a  cohesion  goal  but  instead  its  primarily  objective  is  to 
increase  the  innovativeness  of  companies  (especially  SMEs) 
irrespectively  where  they  are.  The  share  of  companies  and 
especially  SMEs  that  innovate  is  very  low  in  Hungary  and 
needs  to  be  addressed.  The  reason  why  companies  do  not 
innovate is because they do not see reasons for innovation.   

Type of policy category    Sector Development and Targeted Investments 

Type of policy instrument   Commercialisation of research and technology transfer 

Business development and innovation support to firms 

Type of funding   Grant  

Budget and expenditures   €4.68  million  (they  expect  around  12-24  projects  with  a 

project budget of around €300.000 each)  

Governance   Finance: national government,  

Design:  national  government  in  close  consultation  with  the 
counties,  universities  and  local  innovation  actors  (e.g. a 
country  innovation  roadshow  has  been  organised  where  the 
draft of the upcoming calls have been consulted)  

Implementation:  National  Research,  Development  and 
Innovation Office. university  

Policy implementation and 
policy mix  

N/A 

Relevant ESIF measures   N/A 

Impact: monitoring and 
evaluation  

N/A 

Link   N/A 

73 

 
 
 
 
 
 
Open Innovation 

ID  HU4 

Country   Hungary  

Title   Open Innovation  

Time horizon   2019 - 2021  

Region(s) affected   Both  Budapest  and  the  countryside  is  addressed  with  this 
measure, but the nature of the call is such that it will have a 
strong  impact  on  the  innovation  potential  of  counties  where 
large companies have their production units   

Objectives and Scope   The  objective  of  this  measure  is  to support  innovation  in 

SMEs.   

Overview   The measure finances the demand of large companies in the 
country for small-scale R&D&I projects that should be carried 
the creation  of 
out  by SMEs,  start-ups and 
marketable products, services.  

result 

in 

Rationale   The National Research and Development Office does not have 
a  cohesion  goal  but  instead  its  primarily  objective  is  to 
increase  the  innovativeness  of  companies  (especially  SMEs) 
irrespectively  where  they  are.  The  share  of  companies  and 
especially  SMEs  that  innovate  is  very  low  in  Hungary  and 
needs  to  be  addressed.  The  reason  why  companies  do  not 
innovate is because they do not see reasons for innovation.   

Since the centres of large companies and production facilities 
are  usually  outside  of  the  Central  Hungarian  region,  the 
measure  expects  to  affect  the  countryside  the  most 
extensively.  

Type of policy category    Sectoral Development and Targeted Investments  

Type of policy instrument   Business development and innovation support to firms  

Type of funding   Grant  

Budget and expenditures   €5 million (with a project budget of between 40 - 400k each)  

Governance   Finance: national government   

Design:  national  government  in  close  consultation  with  the 
counties,  universities  and  local  innovation  actors  (e.g. a 
country  innovation  roadshow  has  been  organised  where  the 
draft of the upcoming calls have been consulted)  

Implementation:  National  Research,  Development  and 
Innovation Office.  

Policy implementation and 
policy mix  

N/A 

Relevant ESIF measures   N/A 

Impact: monitoring and 
evaluation  

N/A 

Source   N/A 

74 

 
 
 
 
Employment Support Programme 

ID  HU5 

Country   Hungary  

Title   2017-2018  

Time horizon   2018-2019  

Region(s) affected  

Objectives and 
Scope  

In  the  first  phase  of  the  programme,  the  counties:  Hajdú-Bihar, 
Szabolcs-Szatmár-Bereg  and  Borsod-Abaúj-Zemplén  have  been 
targeted.  In  the  second  phase  the  programme  has  been  extended  to 
Nógrádra, Heves and Jász-Nagykun-Szolnok. 

The  Ministry  of  Finance  launched  this  programme  in  2017  in  order  to 
promote job creation, foster the labour market entry of unemployed and 
public employed and support their uptake by micro, small and medium-
sized enterprises. The aim is also to enable labour offices to offer better 
support for career starters, mothers with young children, public workers 
and job seekers. The ministry strives to help strengthen the relationship 
between employment offices and companies. 

Overview   The programme builds on three pillars: 

those  who  leave  public  employment  may  benefit  from  a  placement 
benefit if they have a successful open market position, 

it is possible to employ a professional assistant at a workplace by taking 
over a part of the wage cost, 

Rationale   The  government  treats  the  situation  of  SMEs  as  a  priority,  as  these 
companies  can  be  further  strengthened  with  the  help  of  technological 
developments, the targeted use of EU and domestic subsidies and their 
competitiveness. As he said, the substantial support for SMEs is essential 
for  the  continued  recovery  of  the  Hungarian  economy,  as  high-value-
added  products  require  a  high  level  of  technology  that  can  gradually 
improve their export ability. With the help of the central program, SMEs 
can, among other things, acquire new assets, machines, but the subsidy 
amount  can  also  be  used  for  real  estate  purchase  or  rentals,  said  the 
head of the ministry. 

Type of policy 
category   

Type of policy 
instrument  

  Sector  Development  and  Targeted 

Investment  

Skills and Mobility 

  Business  development  and  innovation 

support to firms  

Labour market training 

Type of funding   Grants 

Budget and 
expenditures  

Governance  

€15 million (2018)  

It  is  the  Hungarian  Government  and  the 
Ministry  of  Finance  that  is  responsible  for  the 
implementation of this measure. 

Funding: national level   

Design: national level  

Implementation: regional level  

75 

 
 
Policy 
implementation and 
policy mix  

N/A 

Relevant ESIF 
measures  

N/A 

Impact: monitoring 
and evaluation  

N/A 

Source  

Interview 

https://nfsz.munka.hu/Lapok/programok/palyazatok/koszf_vers_p.aspx  

Case study 

Modern Cities Programme – Hungary (HU) 

1.  Executive Summary 

The  Modern  Cities  Programme  is  Hungary's  largest  local  development  programme.  Cities  with 
county rights receive support from the Hungarian Government for objectives such as transport, 
industrial  parks,  education,  sport,  innovation  and  tourism.  The  implementation  is  based  on  a 
cooperation agreement concluded with the cities. Although it is the cities except for Budapest that 
have been supported by this measure, there is no other preferential treatment among the regions 
for instance the Eastern part of the country over the West. The programme started in 2015 and 
all investments are expected to be implemented by 2025. From 2015 to the end of August 2019, 
the indicative need for financial resources to implement the programme amounted to 12 billion 
Euro.  Most  of  the  developments  are  financed  from  domestic  sources  (76%)  and  a  smaller  part 
(24%) from EU sources. One of the main goals of the programme (besides transport infrastructure) 
is to develop the local economy and support job-creating investments. The aim is to strengthen 
industrial parks, improve the quality of the workforce and foster business creation. In view of the 
achievement  of  these  complex  goals,  the  establishment  of  industrial  parks  is  a  priority  of  the 
programme. 

Currently, the programme contains 269 projects, out of which 103 had been implemented. The 
vast majority of the projects are planned to be completed by 2025. For all projects, preparatory 
work  has  been  started  and,  in  many  cases,  construction  and  implementation  is  under  way.  On 
average, 10-15 new projects per city have been launched. The support is a substantial financial 
contribution to the development of the cities. The projects implemented through the programme 
are well suited to the cities’ strategic directions, serving economic and social development. The 
measure is considered to be a bottom-up initiative that helps connecting the local development 
ideas to the government’s planning and economic strategy. 

2.  Background and Context 

Hungary is divided into 19 NUTS 3 counties plus Budapest and seven statistical NUTS 2 regions. 
It  has  to  be  pointed  out  that  the  2012  public  administration  reform  abolished  the  regional  and 
micro-regional development councils, making the elected county level the main territorial actor. 
Central Hungary and especially Budapest have more than twice the GDP per capita compared to 
the other six regions benefiting from growth-enhancing agglomeration effects. 

Another disparity is apparent in Western and Central Transdanubia. This part is more developed 
than  the  Eastern  part  thanks  to  strong  inward  investment.  For  the  2014-2020  programming 
period, all regions despite Central Hungary were classified as Less Developed Regions. While there 
is  strong  economic  development  in  Central  Hungary,  there  are  a  large  number  of  peripheral, 
lagging  and  poorly  accessible  sub-regions  and  settlements  within  the  region.  The  performance 
indicators of these sub-regions are similar to those of Hungary's least developed regions. 

Regional disparities were reinforced after the country joined the EU, however, after the crisis a 
diffused  growth  can  be  highlighted  which  means  that  the  strongest  regions  have  been  growing 
less than the country average (Capello et al, 2019). In Hungary, spatial development planning is 

76 

 
 
 
 
stipulated in the so-called National Development and Spatial Development Concept (OFTK). The 
latest OFTK was issued in 2014 and it has a time horizon till 2030. The OFTK aims to make the 
country's  development  policy,  spatial  planning,  and  the  resulting  regulation  a  coherent,  unified 
system, with unified action, effective and consistent measures for the dynamic development of the 
country, putting it on the path of growth, reducing territorial inequalities, and to achieve a more 
balanced  territorial development.  The  aim of  the  OFTK  is  to  create  coherence between  sectoral 
and  territorial  plans.  The  Government  is  committed  to  coordinate  national  development  and 
regional development concepts in a coherent framework in order to create a long and medium-
term spatial dimension between sectoral and territorial development policies and policy objectives.  

3.  Description of the Policy Measure 

The programme focuses on towns and cities with county rights (outside of Budapest) to support 
transport,  industrial  parks,  education,  sport,  innovation  and  tourism,  based  on  comprehensive 
development plans by the local actors. The Programmes cover sector development and targeted 
investments, urbanisation and connectivity and skills and mobility. Despite of the strong economic 
development  of  Central  Hungary,  there  are  a  large  number  of  peripheral,  lagging  and  poorly 
accessible sub-regions and settlements within that region, their performance indicators similar to 
those of Hungary's least developed regions. Funding is designed at national level; the design and 
implementation occurs at local level. 

The measure fits the National Development and Spatial Development Concept and is in line with 
the city strategies. The measure is complementary to the planned investments of the regional OP. 
Under a government decision, projects implemented under this programme must be funded from 
EU resources when they fit the regional OP, otherwise they need to be new development projects. 

4.  Implementation of the Policy Measure 

The  institutions  responsible  for  the implementation of  this  programme include  the  Office  of  the 
Prime Minister (Deputy State Secretary for the Coordination of the Development of Modern Cities 
and Villages), the Hungarian Treasury and the city governments. The implementation requires the 
cooperation  of  a  range  of  local  and  national  organisations  and  a  strong  alignment  between  the 
government and the major city halls on the countryside. Currently, the programme contains 269 
projects, out of which 103 had been implemented. The vast majority of the projects are planned 
to be completed by 2025. For all projects, preparatory work has been started and, in many cases, 
construction and implementation is under way. On average, 10-15 new projects per city have been 
launched. The types of projects that have been implemented in the framework of this programme 
differ from one city to another. As concluded in the cooperation agreement, the city, in consultation 
with  the  Government,  has  identified  the  investments  that  best  serve  its  modernisation. 
Nevertheless,  almost  all  cities  planned  to  implement  national  and  local  road  development, 
industrial  parks,  sports  infrastructure,  cultural  and  educational  programmes,  tourism  and  the 
improvement  of  the  urban  living  environment.  Some  cities  are  also  implementing  projects  to 
develop their healthcare facilities. 

5.  Performance 

There has been no assessment or evaluation of the policy measure and it is not known what the 
contribution of the measure is to reduce disparities. It is considered that the impact of the measure 
on  cities’  economies  is  secured  by  the  mere  scale  of  the  investments  and  the  large  amount  of 
resources  dedicated  to  their  implementation.  The  measure  fits  the  National  Development  and 
Spatial Development Concept and is in line with the city strategies. The measure is complementary 
to  the  planned  investments  of  the  regional  OP.  Under  a  government  decision,  projects 
implemented under this programme must be funded from EU resources when they fit the regional 
OP, otherwise they need to be new development projects. 

6.  Strengths and Weaknesses 

  The government support is a substantial financial contribution to the development of the 
cities.  The  projects  implemented  through  the  programme  are  well  suited  to  the  cities’ 
strategic directions, serving the development of the transport systems, strengthening the 
university’s R&D activities and the further development of the natural and built heritage. 
  The  measure  is  considered  to  be  a  bottom-up  initiative  that  helps  connecting  the  local 

 

development ideas to the government’s planning and economic strategy.  
It  takes  a  long  time  to  properly  prepare,  plan,  and  authorize  large-scale  infrastructure 
investments, but these are essential for quality. 

77 

 
 
 
  A  potential  risk  is  seen  in  the  subsequent  maintenance  of  the  facilities  financed  by  the 

programme and a long-term sustainability plan would be essential. 

7.  Transferable Lessons 

The transferable lessons include the model of cooperation between the national government and 
cities with country rights that are the main pillars of the economic development at the countryside. 
The measure offers a good practice how bottom-up local development can be fostered and how 
local ideas can be channelled into the overall national strategy. The measure is also an interesting 
case how national and EU funding can be efficiently combined. 

78 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5 

ITALY 

Country briefings 

National Policies addressing regional economic disparities – Italy (IT)  

1.  Background  

Italy is a country with significant regional economic 
disparities between the North and the South, which 
have increased over the last 16 years. The GDP per 
capita  of  Bolzano  which  experiences  a  productivity 
growth  of  0.2%  per  year,  is  153%  of  the  country 
average, while in Calabria with negative productivity 
growth  of  -1%  it  is  only  60%.    In  2017,  the  gross 
domestic  product  (GDP)  of  Mezzogiorno13 is  still  10 
points below the level of 2008, and the most recent 
data  even  indicates  a  marked  slowdown  in  growth, 
with  the  reopening  of  a  significant  dynamic  of 
divergence  between  areas.  In  November  2018,  the 
Association  of 
the  Industrial  Development  of 
Mezzogiorno (SVIMEZ) forecasted a GDP growth rate 
in 2018 of 1,3% in the Centre-North and 0.8 per cent 
in  the  South,  with  further  risks  of  a  "slowdown"  in 
2019.14 

The disparities are even higher with regards to social 
and  labour  market  indicators.  According  to  OECD 
data 15  Italy  has  the  highest  regional  disparities 
among  OECD  countries  in  unemployment  rates  and 
the  second  largest  in  terms  of  safety.16 Among  the 
regions  comprising  Mezzogiorno,  Campania,  Puglia,  Basilicata,  Calabria  and  Sicilia  are  Less 
Developed Regions while Abruzzo, Sardinia and Molise are Transition Regions. 

Source: European Commission (2019). 

2.  Architecture of national policies for addressing regional economic disparities 

Focus  

Italy has a strong history of policy addressing regional disparities that goes back even before the 
establishment of EU cohesion policy. The focus of the policy is to address the structural dualism of 
the economy between the North and the South (Mezzogiorno), an effort which absorbs more than 
80% of the national funding for regional disparities. Besides that, policy is aimed at addressing 
territorial  disparities  across  the  country.  Approximately  20%  of  the  funding  is  allocated  to  the 
Centre and North Italy on initiatives at the territorial level. 

In terms of focus, measures addressing regional disparities in the south have both a thematic and 
a  geographical  focus  with  programmes  addressing  either  specific  regions  or  specific  thematic 
priorities across all southern regions. In terms of sectors, the policies focus on existing strengths 
in areas such as aerospace, electronics, steel, chemicals, agri-industry and tourism. 

Design and governance  

Policy addressing regional disparities is in the responsibility of the Minister of the South (previously 
called Minister for Territorial Cohesion), and funding decisions are taken by the Inter-ministerial 
Committee on Economic Planning (CIPE). The implementation of the policies is the responsibility 

13 The Mezzogiorno is comprised by the NUTS 2 regions: Abruzzo, Apulia, Basilicata, Calabria, Campania, 
Molise, Sicily and Sardinia. 
14 Ministero dell’ Economia e delle Finanze (2019) Documento di Economia e Finanza 2019 
15 OECD (2018), Regions and Cities at a Glance 2018. 
16 The indicator used by OECD for safety, is the number of homicides per 100 000 people. 

79 

 
 
 
 
of  the  regional  governments  through  plans  and  programmes,  coordinated  centrally  by  the 
Department for Cohesion Policy and the Agency for the Development of Cohesion Policy. 

The policy is funded by two instruments, the National Development and Cohesion Fund (FSC)17 
and the Revolving Fund (Article 5 of Law 183/1987).  

  FSC is the main funding instrument and provides funding for the following programmes: 
  National Operational Plans approved by the Inter-ministerial Committee on Economic 

Planning (CIPE) 

  Priority plans and other CIPE allocations (launched prior to adoption of CIPE resolution 

no. 25/2016 on allocation of the fund);  

  Allocations under provisions of law to individual projects of national interest;  
  Development Pacts between the Government and regional governments and 

metropolitan areas (21 pacts already signed). 

The Revolving Fund provides funding to the Operational Complementary Programmes (see fiche 
IT5)18 aiming at the completion of interventions supported by Structural Funds during the 
previous programming period 2007-2013. Besides, it provides complementary (in addition to co-
financing) funding to projects financed by the ESI Funds. 

Overall, the financial resources allocated to addressing regional disparities, including all economic 
disparity objectives and types of regions, for the 2014-2020 cycle amount to 144.8 billion Euro. 
The national resources, including the co-financing to the ESI Funds, amounts to 98.05 billion Euro, 
compared  to  44.66  billion  Eurp  contributed  by  the  ESI  Funds.  Without  the  co-financing,  the 
national funding reaches 67.55 billion Euro.19  

Focusing  only  on  Mezzogiorno  and  including  all  cohesion  objectives,  the  total  national  funding, 
including  the  co-financing,  amounts  to  72.03  billion  Euro  while  the  ESI  Funds’  contribution  is 
€30.74 billion. The national funding for Mezzogiorno without the co-financing is 56.13 billion Euro 
out of which 35.4 billion Euro are directed to economic cohesion objectives.   

3.  Relationship of national funding and the support through the ESI Funds 

The design of national instruments and especially the FSC is quite similar to the instruments of 
the ESI Funds in terms of the architecture and their multiannual character. However, their focus 
is  mainly  on  infrastructure,  which  is  no  longer  supported  by  the  ESI  Funds,  and  less  on  soft 
measures. The FSC allows for higher funding intensities compared to the ESI Funds and is more 
flexible in terms of the planning and the milestones. 

The  Revolving  Fund  and  the  Operational  Complementary  Programme  are  meant  to  work 
complementary to the ESI Funds, either by continuing the funding from the previous programming 
period or by directing the funding to the projects funded through the ESI Funds in case the funding 
from the latter is not sufficient for the completion of the project. 

4.  Overview of national policy measures addressing regional economic disparities 

The National Operational Plans 2014-2020 are part of the broader policy mix which is financed by 
the National Fund for Cohesion and Development (FSC) (see fiche IT1). In terms of their thematic 
focus,  they  mirror  the  OPs  of  the  ESI  Funds  although  they  are  putting  emphasis  on  supporting 
infrastructures,  that  are  not  financed  by  the  ESI  Funds,  and  less  on  soft  measures.  The  NOPs 
finance large projects or investments of national interregional or regional importance.   

There are eight NOPs with a total budget of 25.8 billion Euro. However, only four of them, namely 
the NOPs Infrastructures, Environment, Entrepreneurship and Competition and Agriculture, with a 
budget  of  the  23.6  billion Euro,  support  activities  with  economic  regional  disparities  objectives. 
Although they are national in scope, 80% of the budget is directed to Mezzogiorno and the rest of 
it to the Central and Northern Italy. Until the end of 2018, only 3.4 billion Euro were spent. 

17 Fondo Sviluppo e Coesione (FSC). 
18 Programmi Operativi Complementari (POC). 
19 https://opencoesione.gov.it/en/risorse_2014_2020/. 

80 

 
 
 
 
Pacts for Development (fiche IT2.1) are agreements between the regional authorities (President 
of the Regions or Mayors) and the Government in accordance with the Masterplan of the South 
(fiche IT2) which is a plan for the development of the regions in the south of Italy to close the gap 
with the Centre-North. The focus of the plan is on strengthening the southern economy in areas 
such  as  aerospace,  electronics,  steel,  chemicals,  agri-industry  and  tourism.  The  Pacts  for 
Development  are  the  result  of  a  dialogue  between  the  government  and  the  regional 
administrations/metropolitan  cities  of  the  South  of  Italy,  which  led  to  the  preparation  of  16 
interinstitutional agreements through which initiatives for the alleviation of economic, social and 
territorial disparity are implemented. Eight are agreements with the Regions and seven with the 
Metropolitan Cities, to which the Institutional Development Contract (CIS) of Taranto (Puglia) was 
added. The total budget for the period 2014-2020 is 13.4 billion Euro of which only 0.197 billion 
Euro have been spent. 

The South Enterprise Fund (fiche IT3) has been created in 2017 to support SMEs in the Regions 
of Abruzzo, Basilicata, Calabria, Campania, Molise, Puglia, Sardinia and Sicily. It has a duration of 
twelve years and has been financed with €150 million by the FSC. The fund provides equity funding 
and loans to SMEs operating in the above regions.  

Stay in the South (Resto al Sud) (fiche IT4) supports the establishment of new companies in the 
south of Italy aiming at computing the increasing brain drain mainly observed among the younger 
population. The measure provides working capital and finances the purchase of machinery, plant 
and  equipment,  computer  programmes  and ICT  services,  as  well  as  the necessary  construction 
work.  The  total  budget  of  the  programme  amounts  to  1.25  billion  Euro.  Until  the  end  of  2018, 
2195 applications had been approved absorbing funding of €68.3 million and leveraging private 
investments of €77.2 million.    

The  Complementary  Operational  Programs  (POC)  (fiche  IT5)  work  complementary  to  the  ESI 
Funds,  aiming  at  ensuring  the  completion  of  projects  started  in  the  2007-2013  programming 
period  and  on  providing  additional  funding  (in  addition  to  co-financing)  to  projects  and 
programmes financed by the ESI Funds in the current programming period. In total nine POC with 
relevant  economic  regional  objectives  addressing  disparities  have  been  identified.  Six  of  them 
have a thematic focus covering the regions of Mezzogiorno (Calabria, Campania, Siciliana). The 
programmes provide grants and cover a very broad spectrum of objectives. POCs are funded by 
the Revolving Fund (Article 5 of Law 183/1987) by 8.8 billion Euro, out of which 8.5 billion Euro 
are directed to programmes with an economic cohesion objective. 

5.  Classification of policies 

Title 

Type of funding 

Policy category 

Policy instrument 

Funding and 
implementation 

Business 
Environment 
and Trade 

Investment promotion 
Venture capital and 
other financial 
instruments 

National Operational Plans 
2014-2020 (IT1) 

Grants, 
financial 
engineering 

Sector 
Development 
and Targeted 
Investment 

Urbanisation 
and Connectivity 

Business development 
and innovation support 
to firms   

Research infrastructure 

Industrial parks and 
other business 
infrastructures 

Transport 
infrastructure 

Digital infrastructures 

Pact for Development 
(IT2.1) 

Grants 

All policy 
categories 

All policy instruments 

Funding at the 
national level 
Designed in 
cooperation 
between the 
Government and 
the Region 
and Implemented 
at the regional 
level 

Funded at the 
national level 
Design in 
cooperation of 
national and 
regional 
authorities 

81 

 
 
 
 
 
 
 
 
South Enterprise Fund (IT3) 

Equity funding 
and loans 

Business 
Environment 
and Trade 

Venture capital funds 
and other financial 
instruments 

Stay in the South (IT4) 

Loans 

Business 
Environment 
and Trade 

Sector 
Development 
and Targeted 
Investment 

Investment promotion 

Various types 

Complementary Operational 
Programs (IT5) 

Grants 

Urbanisation 
and Connectivity 

Transport 
infrastructures 

Skills and 
Mobility 

New skills development 

Mobility of researchers 

6.  Main Sources 

Interviews 

Implementation 
by regions 

Funded, designed 
and implemented 
at the national 
level 

Funded, designed 
and implemented 
at the national 
level 

Funding and 
design at the 
national level, 
implementation 
at national and 
regional level 

  Michele D’Ercole, from the Agency for Territorial Cohesion 
  Paola Casavola, from the Department for Cohesion Policy of the Presidency of the 

Council of Ministers 

  Stefano Mangogna, from the Ministry of Economics and Finance 

Main documents and sources 

  Government of Italy, (2019): National Reform Programme Italy, 

https://ec.europa.eu/info/sites/info/files/2019-european-semester-national-reform-
programme-latvia_en.pdf  

  OECD (2018), Regions and Cities at a Glance 2018. 
  Ministero dell’ Economia e delle Finanze (2019) Documento di Economia e Finanza 2019 
  https://opencoesione.gov.it/en/risorse_2014_2020/ 
  Additional sources can be found in Annex 2 with the individual policy fiches. 
  Partnership Agreement Italy 2014-2020, 

https://ec.europa.eu/info/publications/partnership-agreement-italy-2014-20_en  

Country fiches 

FSC 2014-2020: Programmi Operativi Nazionali (National Operational Plans) 

ID  IT1 

Country  Italy 

Time horizon  2014-2020 

Region(s) affected  80%  of  their  budget  is  directed  to  Mezzogiorno  and  20%  to  the 

Centre and North. 

Objectives and Scope  The objective of the operational plans is to restore the economic and 
social balance between the different areas of the country. Divided in 
thematic  areas,  the  operational  plans  aim  at  financing  strategic 

82 

 
 
 
 
 
 
 
 
projects,  both 
infrastructural  and 
interregional and regional importance.  

intangible,  of  national, 

Overview  There are eight operational plans, each one supporting one thematic 
area mirroring an OP of the ESI Funds.  Four of them are supporting 
areas with economic cohesion objectives. 

The  Plans  finance  large  projects  or  investments  articulated  in 
individual interventions that are functionally connected. 

Rationale  The  measure  is  part  of  a  bigger  framework  of  policies  for  the 
development and growth of Southern Italy, financed by the national 
Fund for Cohesion and Development (FSC). 

Type of policy category  

Type of policy 
instrument 

  Business environment and trade 
  Sector  Development  and  Targeted 

Investment 

  Urbanisation and Connectivity 
 
  Venture capital and other financial 

Investment promotion 

instruments 

  Business 

development 

and 

innovation support to firms   

  Research infrastructures 
 

Industrial parks and other business 
infrastructures 

  Transport infrastructure 
  Digital infrastructures 
Type of funding  Grants, financial engineering 

Budget and 
expenditures 

Total  budget  approved  by  CIPE  25.8  billion  Euro,  where  the 
budget related only to economic cohesion policies amounts to 23.6 
billion Euro and it is distributed as follows: 

Thematic Areas 

Infrastructure 

Environment 

Entrepreneurship 
Competition 

Budgeted 
(billion 
Euro)  

Spent 
until  2018 
(billion 
Euro) 

17.9 

2.8 

and 

2.5 

1.9 

0.8 

0.7 

Agriculture 

0.4 

0.02 

Governance  Combination of Scenario 1 and 2: 

The plans were drawn up in accordance with the provisions contained 
in  the  resolution  of  the  Interministerial  Committee  for  Economic 
Planning (CIPE) of 10 August 2016 and with the indications provided 
by  the  Presidency  of  the  Council  of  Ministers  -  Department  for 
Cohesion Policies, and with the related guidelines made available by 
the Agency for Territorial Cohesion. The CIPE is responsible for the 
allocation by national thematic areas and the subsequent approval 
of the individual Operational Plans through its own deliberations, as 
well as, on the basis of the findings on the actual implementation of 
the Operational Plans, the power to provide for a different allocation 
of the budget between the national thematic areas, the reshaping of 
the  annual  spending  quotas  for  each  area  and  the  revocation  of 

83 

 
 
 
allocations  due  to  the  impossibility  of  occurrence,  failure  to  meet 
deadlines  or  non-compliance.  Depending  on  the  plan,  the  central 
administration  is  assigned  to  the  relevant  ministry  (Ministry  of 
Infrastructure and Transport for the Infrastructure Plan, Ministry of 
Environment  for  the  Environment  Plan,  Ministry  of  Economic 
Development  for  the  Entrepreneurship  and  Competition  Plan, 
Ministry of Agricultural, Food and Forestry Policies for the Agriculture 
Plan). Depending on the type of measure, the final implementation 
is  either  in  the  hand  of  the  ministry,  central  administration  or 
regional administration. 

Refers to the Cohesion and Development Fund (FSC). 

Reference to the ESI Funds’ measures with similar objective 

Policy implementation 
and policy mix 

Relevant ESIF measures 
(if any) 

Impact: monitoring and 
evaluation 

Reports available – open data available online: 
https://opencoesione.gov.it/en/  

Links  Act on financing local and regional administration units (OG 

127/17). Available at: https://www.zakon.hr/z/411/Zakon-o-
financiranju-jedinica-lokalne-i-podru%C4%8Dne-(regionalne)-
samouprave 

Ministry of Finance. State budget archives: 
http://www.mfin.hr/hr/drzavni-proracun-arhiva 

Masterplan for the South 

ID  IT2 

Country  Italy 

Title  Masterplan for the South 

Time horizon  2014-2020 

Region(s) affected  Abruzzo,  Molise,  Campania,  Basilicata,  Puglia,  Calabria,  Sicilia, 
Sardegna, Lazio, Lombardia (plus municipalities of Firenze, Genova 
and Venezia) 

Objectives and Scope  The Masterplan for the South has been designed to reverse the trend 
and close the gap with the Centre-North starting from the strengths 
and  vitality  of  the  southern  economic  fabric  in  areas  such  as 
aerospace, electronics, steel, chemicals, Agri-industry, tourism. 

The  scope  of  the  policy  is  to  allow  the  southern  excellences  to 
become  true  diffusers  of  entrepreneurship  and  employment  skills, 
attractors  of  production  chains  that  give  life  to  a  recovery  and  a 
transformation of the entire economy of the South.  

Overview  The Masterplan for the South, drawn up by the Government during 
2015,  is  the  political  document  that  builds  the  framework  within 
which  the  operational  choices  that  make  up  the  16  pacts  for  the 
South  are  placed:  8  with  the  Regions  and  7  with  the  Metropolitan 
Cities, to which is added the Institutional Contract for Development 
(CIS) of Taranto. 

84 

 
 
 
 
 
Rationale  The  Masterplan  for  the  South  starts  from  the  strengths  of  the 
southern  economic  fabric  to  enhance  the  ability  to  spread 
entrepreneurship  and  work  skills  and  to  promote  the  activation  of 
production chains independently vital. 

Type of policy category   All 

Type of policy 
instrument 

All 

Type of funding  Projects funded 

Budget and 
expenditures 

Funding provided by FSC 

Budget for the period: 14.4 billion Euro 

Expenditures since 2014: 276.7 million Euro  

Governance  Institution responsible: Presidency of the Council of Ministers 

Scenario 3: Funding at the national level by FSC. The Government 
set  up  the  State-Regions  Control  Room  of  the  Development  and 
Cohesion Fund, which will have to allocate resources in such a way 
as to maximise synergies with the European Structural Funds. The 
Control  Room  makes  use  of  the  Department  for  Cohesion  Policies 
and the Agency for Territorial Cohesion, whose process of completion 
has  recently  been  completed.  The  Control  Room,  the  Department 
and the Agency work with the central administrations and with those 
of regional and local authorities to boost administrative action and 
to  remove  procedural  obstacles  and  speed  up  authorisation 
processes. 

Policy implementation 
and policy mix 

Framework measure for the action Pacts for the South (IT2.1) 

Relevant ESIF measures 
(if any) 

The policy has been designed to follow the measures scheme of the 
ESI Funds 

Impact: monitoring and 
evaluation 

Reports available – open data available online  

Links  https://opencoesione.gov.it/en/ 

Patti per lo Sviluppo (Pacts for Development) 

ID 

IT2.1 

Country 

Italy 

Time horizon  2014-2020 

Region(s) affected  Abruzzo,  Molise,  Campania,  Basilicata,  Puglia,  Calabria,  Sicilia, 

Sardegna 

Objectives and Scope  The Pacts for Development - signed by the President of the Council 
or the delegated authority for cohesion and by the President of the 
region  or  mayors  of  the  metropolitan  cities  in  2016  -  represent  a 
new  instrument  of  interinstitutional  territorial  cooperation  for  the 
South of Italy.  

Their  objective  is  to  close  the  gap  with  the  Centre-North  starting 
from  the  strengths  and  vitality  of  the  southern  economic  fabric  in 

85 

 
 
 
 
areas such as aerospace, electronics, steel, chemicals, Agri-industry, 
tourism. 

Overview  Based on the indications provided by the Masterplan for the South, 

each Pact defines: 

1.  the  vision  that  the  Region  or  City  has  of  its  future  and  that  it 
shares  with  the  Government  (areas  of 
industrialization  or 
reindustrialization,  reclamation  and  environmental  protection, 
agriculture and agri-food industry, tourism and cultural attractions, 
services and logistics, infrastructure and services of public utility); 

2.  recognition  of  the  tools  and  resources  available  (interaction 
between PON and  POR, central intervention with the Development 
and  Cohesion  Fund,  Programme  Agreements  between 
the 
local 
institutions 
businesses, other tools available to Invitalia); 

involved  and  Development  Contracts  with 

3. the priority actions and the timing of implementation; 

4.  the  governance  of  the  process  (administrative  streamlining, 
definition  of  reciprocal  (e.g.  identification  of  a  clear  person 
responsible for the implementation of the Plan). 

the 

Government 

Rationale  The  Pacts  for  Development  are  the  result  of  an  intense  dialogue 
between 
regional 
administrations/metropolitan cities of the South of Italy, which has 
led  to  the  preparation  of  16  interinstitutional  agreements  through 
which  initiatives  for  the  development  of  economic,  social  and 
territorial cohesion are implemented. 8 are the agreements with the 
Regions  and  7  with  the  Metropolitan  Cities,  to  which  is  added  the 
Institutional Development Contract (CIS) of Taranto (Puglia). 

and 

the 

Type of policy category   All 

Type of policy 
instrument 

All 

Type of funding  Grants 

Budget and 
expenditures 

Funding by FSC 

Budget for the period 2014-2020: 13.4 billion Euro, distributed 
as follows:  

Budget distribution by administration 

Abruzzo 

753.40 € 

Basilicata 

565.20 € 

Calabria 

1,198.70 € 

Reggio Calabria 

133.00 € 

Campania 

2,780.20 € 

Napoli 

308.00 € 

86 

 
 
 
Molise 

Puglia 

Bari 

378.00 € 

2,071.50 € 

230.00 € 

Sardegna 

1,509.60 € 

Cagliari 

168.00 € 

Sicilia 

2,320.40 € 

Catania 

332.00 € 

Messina 

332.00 € 

Palermo 

332.00 € 

Total 

13,412.00 € 

Expenditures since 2014: €197 million  

Governance  Institution responsible: Presidency of the Council of Ministers  

Mix Scenario 2 and 3: Funding is national (FSC),  

The regional authorities define the strategic dimensions and priority 
actions  for  the  development  of  their  own  territory  based  on  the 
Masterplan  of  the  South  which  has  been  designed  by  the 
Government;  

Implementation is at the regional or city level. 

Policy implementation 
and policy mix 

Part of the policy measure "Masterplan for the South", the Pacts for 
Development represent the 80% of the funds allocated for territorial 
development  in  less  developed  regions  by  the  Development  and 
Cohesion Fund (FSC) in 2014-2020. 

Beneficiaries  are  the 
municipalities. 

less  developed  regions  and  the  city 

Relevant ESIF measures 
(if any) 

These  measures  have  been  constructed  following  the  same 
reasoning of the European Structural and Investment Funds (ESI) - 
hence focusing on less developed regions according to the definition 
used in the ESI (less than 75% of the regional GDP per capita) 

Impact: monitoring and 
evaluation 

Reports available – open data available online: 
https://opencoesione.gov.it/en/  

Link  https://opencoesione.gov.it/en/ 

87 

 
 
 
 
 
 
 
Equalising decentralised functions 

ID 

IT3 

Country 

Italy 

Time horizon  2018-2030 

Region(s) affected 

 Abruzzo,  Basilicata,  Calabria,  Campania,  Molise,  Puglia,  Sardegna 
and Sicilia 

Objectives and Scope  Fondo  Imprese  Sud  aims  to  accelerate  the  competitiveness  and 
growth  of  SMEs  in  the  South,  including  through  mergers  and 
acquisitions.  

Overview  Fondo Imprese Sud was established in order to support the economic 
and productive fabric of the Regions of Abruzzo, Basilicata, Calabria, 
Campania, Molise, Puglia, Sardinia and Sicily. It has a duration of 12 
years and provides for an initial allocation of €150 million, from the 
resources relating to the year 2017 of the Fund for Development and 
Cohesion 2014-2020. 

In  addition  to  development  capital,  the  measure  provides 
entrepreneurs  with  skills  in  terms  of  governance,  extraordinary 
finance,  M&A  operations,  management  of  the  generational 
transition,  contributing  to  the  most  appropriate  transformation  to 
support the path of growth. 

Rationale  The  fund  is  aimed  at  supporting  the  growth  in  size  of  SMEs  with 
registered offices and production activities in the regions of southern 
Italy. 

Type of policy category   Business environment and trade 

Type of policy 
instrument 

Venture capital funds and other financial instruments 

Skills and mobility 

Type of funding  Equity funding and loans 

New skills development 

Total budget: €150 million 

Budget and 
expenditures 

Governance  Institution responsible: Invitalia (National Agency for Investment 

Attraction and Enterprise Development). 

Scenario  1:  Funding  by  FSC.  The  management  of  the  Fund  is 
entrusted to the National Agency for the Attraction of Investments 
and Business Development Spa - Invitalia, which may also avail itself 
of  Banca  del  Mezzogiorno.  The  initial  resources  of  the  Fund  (€150 
million)  have  been  credited  to  special  accounts  opened  with  the 
State  Treasury.  The  Fund  is  managed  in  accordance  with  the 
procedures set out in the relevant Regulation, approved on 6 April 
2018  by  resolution  of  the  Board  of  Directors  of  Invitalia.  The 
management  of  the  Fund,  which  is  fully  independent  and  profit-
oriented, is entrusted to an asset management company ("Invitalia 
Ventures SGR" S.p.A). 

Policy implementation 
and policy mix 

The instrument has been established by the 2018 Stability Law and 
managed  by  Invitalia  Ventures,  the  asset  management  company 
controlled by Invitalia. 

Relevant ESIF measures 
(if any) 

Reference to the ESI Funds (similar objectives) 

88 

 
 
Impact: monitoring and 
evaluation 

Reports available – open data available online 

Link 

 https://opencoesione.gov.it/en/ 

Resto al Sud (Stay in the South) 

ID 

IT4 

Country 

Italy 

Time horizon  2014-2020 

Region(s) affected 

 Abruzzo,  Basilicata,  Calabria,  Campania,  Molise,  Puglia,  Sardegna 
and Sicilia 

Objectives and Scope  Resto al Sud aims at encouraging the creation of new businesses in 
the  South  of  Italy  in  order  to  address  the  increasing  brain  drain 
observed mainly among the younger population.    

Overview  The measure, in its original design, was intended for young people 
under  36  and  open  to  all  productive  sectors  except  for  trade, 
agriculture  and  the  liberal  professions.  Recently,  with  the  Budget 
Law 2019, the number of potential beneficiaries was expanded with 
the extension of the age limit up to 45 years and the opening to the 
sector of the liberal professions.  

The new business initiatives, which are the subject of the subsidies, 
must  have  their  legal  and  operational  headquarters  in  one  of  the 
following  regions:  Abruzzo,  Basilicata,  Calabria,  Campania,  Molise, 
Puglia,  Sardinia  and  Sicily.  The  measure  finances  the  purchase  of 
machinery,  plant  and  equipment,  computer  programmes  and  ICT 
services,  as  well  as  works  to  adapt  and  restructure  the  place  of 
business  (up  to  a  maximum  of  30  per  cent  of  the  approved 
expenditure programme) and working capital expenditure (up to a 
maximum of 20 per cent of the approved expenditure programme). 

Rationale 

It  is  a  measure  promoted  by  the  Ministry  of  the  South  in 
collaboration with Invitalia, to encourage the establishment of new 
activities, managed by young people, in the regions of the South. 

Type of policy category   Business environment and trade 

Type of policy 
instrument 

Investment promotion 

Type of funding  Loans 

Budget and 
expenditures 

Total budget of 1.25 billion Euro. 

As  at  31  December  2018,  there  were  8,258  applications  being 
completed  on  the  dedicated  platform  and  5,591  applications 
submitted,  for  a  total  amount  of  investments  planned  of  €369.25 
million. Among these, 2.195 applications were approved, for a total 
amount of approved spending programmes of €145.52 million and 
subsidies of €68.31 million. The average investment per application 
was €66.000, with an average grant per application of €31.000. 

Governance  Institution responsible: Invitalia (National Agency for Investment 

Attraction and Enterprise Development) 

Scenario 1: Funding by FSC, Implementation by Invitalia 

89 

 
 
 
 
Policy implementation 
and policy mix 

The  measure  is  part  of  a  bigger  framework  of  policies  for  the 
development and growth of Southern Italy, financed by the national 
Fund  for  Cohesion  and  Development  (FSC).  It  refers  to  the  policy 
FSC 2014-2020 Young Entrepreneurs in the South. 

Relevant ESIF measures 
(if any) 

Reference to the ESI Funds (similar objectives) 

Impact: monitoring and 
evaluation 

Reports available – open data available online: 
https://opencoesione.gov.it/en/  

Links  https://opencoesione.gov.it/en/ 

Programmi Operativi Complementari (Complementary Operational Programme) 

ID 

IT5 

Country 

Italy 

Title  POC – Programmi Operativi Complementari  

Time horizon  2014-2020 

Region(s) affected  All  the  interventions  concern  mainly  the  regions  of  the  Mezzogiorno 

(less developed and in transition, according to the EU definition). 

Objectives and Scope  The  Complementary  Operational  Programmes  (Programmi  Operativi 
Complementari  -  POC)  aim  at  ensuring  the  completion  of  projects 
started in the 2007-2013 cycle and at supporting new initiatives in the 
2014-2020 period in cases the funding from ESI Funds is not sufficient. 

Overview  The programme is the successor of the Piani di Azione e Coesione.   

Rationale 

It provides funding to regional and national administrations, intended 
to: 

   allow the completion of interventions supported by Structural 
Funds during the previous programming period 2007-2013,  
   provide  additional  funding  (in  addition  to  co-financing)  to 
projects and programmes financed by ESI Funds in the current 
programming period.  

In the context of regional cohesion policy for the 2014-2020 cycle, in 
addition to the programmes financed by the European Structural and 
Investment Funds and the national resources established for their co-
financing  (Revolving  Fund  -  Law  No  183  of  1987,  Article  5),  a 
complementary Action and Cohesion Programme has been envisaged. 
This programme, which is based on the experience of the 2007-2013 
programming  cycle  with  the  Piani  di  Azione  e  Coesione  (PAC), 
introduces  a  new 
family  of  OPs,  known  as  complementary 
programmes. 

Type of policy 
category  

Type of policy 
instrument 

   Sector Development and targeted Investment 
   Urbanisation and Connectivity 
   Skills and mobility 
   Business development and innovation support to firms 
   Research Infrastructures,  
   R&D Programmes 
  
Industrial parks and other business infrastructures 
   Clusters, centres of excellence and technology centres 

90 

 
 
 
 
   Transport infrastructures 
  
 New skills development 
   Mobility of researchers 

Type of funding  Grants 

Budget and 
expenditures 

POCs are funded by the Revolving Fund (Article 5 of Law 183/1987) 
by  8.8  billion  Euro,  out  of  which  8.5  billion  Euro  are  directed  to 
programmes with an economic cohesion objective as follows: 

Programme 
Description 

Type 

Responsible 
body 

Budget 

POC 
Infrastrutture 
e Reti 

POC 
National 

MIT  –  Ministry  of 
Infrastructures 
and Transport 

670,448,000  

POC 
Metropolitane 

Città 

POC 
National 

POC  Cultura  e 
Sviluppo 

POC 
National 

POC  Ricerca  e 
Innovazione 

POC 
National 

POC Imprese e 
Competitività 

POC 
National 

Agenzia  per 
Coesione 
Territoriale 

la 

MIBACT – Ministry 
Cultural 
of 
Heritage 
and 
Activities 

MIUR – Ministry of 
Education, 
Universities 
Research 

and 

MISE – Ministry of 
Economic 
Development 

206,012,000  

133,623,000  

412,000,000  

696,250,000  

POC 
Governance 
dei  Sistemi  di 
Gestione 
e 
Controllo 

POC 
National 

MEF  –  Ministry  of 
and 
Economy 
Finance 

142,227,944  

POC  Regione 
Calabria 

POC 
Regional 

Regione Calabria 

720,000,000  

POC  Regione 
Campania 

POC 
Regional 

Regione Campania 

1,236,210,000  

POC  Regione 
Siciliana 

POC 
Regional 

Regione Siciliana 

780,219,000  

In  addition,  POC  also  supports  programmes  with  social  cohesion 
objective with 0.32 billion Euro. 

The resources used by the POC comes from the resources previously 
allocated  to  the  co-financing  of  the  Structural  Funds  during  the 
previous period, and they finally have not been used due to lower that 
planned overall spending.  

Governance  Institution  responsible:  CIPE  -  Interministerial  Committee  on 

Economic Planning. 

Mix of scenarios 1 and 2: National funding by the Revolving Fund. 
Design  by  CIPE  according  to  the  Resolution  10  of  2015,  which 
established that all the tasks of programming and reprogramming the 
resources  of  the  POC  14-20  are  the  responsibility  of  the  CIPE. 

91 

 
 
                       
                       
                       
                       
                       
                       
                       
                   
                       
 
Policy implementation 
and policy mix 

Implementation  by  national  or  regional  bodies  according  to  the 
different  programmes  (related  ministries  for  the  thematic  POCs, 
regional administrations for the regional POCs). 

The  programme  is  divided  into  11  Complementary  Operational 
Programmes  (8  of  which  are  national,  and  3  are  managed  by  the 
central  and  regional  administrations),  plus  additional  6  programmes 
that  are  meant  to  complete  the  interventions  started  in  the 
programming period of 2007-2013. 

Relevant ESIF 
measures  

The  rules  of  eligibility  and  operation  are  closer  to  those  of  the 
Structural Funds compared to their predecessors (PACs), and there is 
a perfect interchangeability also in the structure of the programmes 
for  axes  and  investment  themes.  (Reference  to  FESR  and  European 
Social Fund) 

Impact: monitoring 
and evaluation 

Reports available – open data available online: 
https://opencoesione.gov.it/en/  

Links  https://opencoesione.gov.it/en/ 

Case study 

Complementary Operational Programmes – Italy (IT)  

1.  Executive Summary 

The Complementary Operational Programmes (POCs) are a national financial instrument, created 
in  the  previous  programming  period  as  a  manoeuvre  to  accelerate  the  implementation  of 
programmes co-financed by the Structural Funds 2007-2013 and strengthen the effectiveness of 
interventions, in a framework of enhanced cooperation with the European Commission. The POCs 
are financed by a share of the resources of the Revolving Fund, which totals approximately 7.4 
billion Euro and have the objective of ensuring the completion of the actions started in the 2007-
2013 cycle and to launch new ones for the period 2014-2020. These interventions, foreseen in the 
framework  of  Action  and  Cohesion  Programmes,  concern  until  now  exclusively  the  Regions  of 
Calabria, Campania and Sicily, and the central administrations holding the following national OPs: 
Governance,  Inclusion,  Legality,  Metropolitan  Cities,  Research  and  Innovation,  Culture, 
Infrastructures and Networks, Businesses and Competitiveness. 

2.  Background and Context 

At the end of 2011, the state of implementation of the Structural Funds for payments was rather 
low compared to the previous 2000-2006 programming period, accounting for around 18% of the 
total contribution. Under the Convergence objective, the state of implementation of the regional 
operational programmes (PORs) for Campania and Sicily using resources from the European Social 
Fund  (ESF),  the  Abruzzo  region  (both  the  ESF  and  the  European  Regional  Development  Fund  - 
ERDF), as well as the national operational programme (PON) 'Research and competitiveness' and 
the  interregional  operational  programme  (POIN)  'Cultural,  natural  and  tourism  attractors'  were 
particularly behind schedule compared with the objectives set. 

For  this  reason,  the  Cohesion  and  Action  Plan  was  adopted  in  November  2011  with  the  aim  of 
accelerating the implementation of programmes co-financed by the Structural Funds 2007-2013 
and strengthening the effectiveness of interventions. The Plan has intervened to consolidate a path 
already begun with the adoption of the CIPE resolution no. 1 of 2011, for the acceleration and  

reprogramming of resources allocated to under-utilised areas - both national areas of an additional 
nature of the Fund for Development and Cohesion and those defined by the EU Structural Funds - 
through  the  setting  of  targets  for  commitment  and  expenditure  certified  to  the  European 
Commission. If the targets, taken individually, are not achieved, the amount to be reprogrammed 
for  other  programmes  will  be  quantified,  while  respecting,  as  far  as  compatible,  the  territorial 

92 

 
 
 
 
destination constraint. The Cohesion and Action plan continued in the programming period 2014-
2020 with the “Complementary Operational Programmes”. 

3.  Description of the Policy Measure 

In light of previous experience with delays in the use of EU resources and the risk of not being 
able to benefit from it because of the so-called automatic decommitment to which Structural Funds 
are subject, the law of stability 201420 has provided that the national co-financing resources can 
also contribute to the financing of complementary interventions with respect to the programs co-
financed by the Structural Funds, included in the strategic programming defined in the Partnership 
Agreement. The resources of the Revolving Fund, made available as a result of the adoption of EU 
OPs with a lower national co-financing rate than as programmed (50% for POR and 45% for PON), 
can be therefore transferred outside the operational programmes themselves, in favour of defined 
interventions, precisely, complementary to the programming of the Structural Funds 2014-2020. 
These interventions are called Complementary operational programmes (POCs). 

The POCs are regulated by CIPE Resolution no. 10 of 201521, and have been designed - together 
with the EU - to help public administrations holding European structural funds to make the best 
use of national funding dedicated to them and avoid waste of resources. For this reason, the POCs 
move in parallel with the European OPs, having also the same eligibility criteria for expenditure 
and the same management and control system. 

4.  Policy Implementation 

The  implementation  structure  depends  on  the  corresponding  EU  programme:  if  it  is  a  regional 
programme, the choice of whether or not to make a complementary programme and how to do 
so, is left to the region in its capacity as the managing authority (MA) of the EU programme. If, 
on the other hand, it is a centrally managed programme, it will be the MA for that programme - 
hence the ministry of reference - which will decide whether or not to initiate the procedure. Once 
the procedure has been initiated by the central or regional administrations, the CIPE formalises 
the  creation  of  the  complementary  programme  and  establishes  the  thematic  objectives  and 
investment priorities, defines the structure of the interventions to be carried out. However, the 
detailed design of each individual programme is left to the administration that manages it. Once 
the resources are allocated by the CIPE to the complementary programmes, in accordance with 
the  budgetary  resources  available,  the  budget  management  is  rather  streamlined.  Like  the  EU 
programmes, the complementary programmes are essentially "reimbursable", with a pre-financing 
of up to 20% of the intervention cost. Then up to 90% in interim payments are made, but only 
after reporting. 

The  different  actors  are  coordinated  by  two  main  governmental  bodies:  the  Cohesion  Policy 
Department of the Presidency of Ministers, which has overall responsibility for both EU and national 
programming, and the Agency for Territorial Cohesion, which has the task of accompanying all the 
administrations  -  regional  and  central  -  in  the  implementation  of  both  EU  and  complementary 
programmes.  Apart  from  the  appropriate  national  coordination,  the  monitoring  of  the 
implementation of the POCs shall be carried out by the same Committee set up at national level 
to monitor and accompany the implementation of the EIS Programmes 2014-2020. 

5.  Performance 

Many of these programmes have a structure based on thematic objectives, axes and investment 
priorities,  with  indicators and  targets  that  reflect  Community  programmes,  so  as  to  pursue  the 
same lines of action and the same strategic orientations envisaged by the European Union. The 
management and control structure are also the same as that of the Community programmes: the 
control unit that checks the expenditure of the complementary programmes is the same as that 
of the Community programmes. The POCs are adopted by resolution of the CIPE, after consultation 
with the State-Regions Conference, on the proposal of the central administration which has the 
coordination of the reference SIE Funds, together with the Regions concerned and in agreement 
with  the  Ministry  of  Economy  and  Finance.  The  measure  itself  has  been  created  in  order  to 
complement the resources allocated to the country by the EU cohesion policies. 

20 Law no. 147/2013, art. 1, par. 242. 
21 http://ricerca-delibere.programmazioneeconomica.gov.it/media/docs/2015/E150010.pdf. 

93 

 
 
 
6.  Strengths and Weaknesses 

For this reason, their main advantage is the flexibility on the time of the intervention, since there 
is no risk to incur in a decommitment of resources because of the time limits as for the Structural 
Funds.  Overcoming  the  delays  in  the  use  of  the  resources  of  the  European  Structural  Funds 
allocated to Italy. The risk of overburdening the administrations responsible of the programmes, 
since  the  POCs  of  the  programming  period  2014-2020  started  when  the  previous  programmes 
(2007-2013) were still in the process of being implemented. 

7.  Transferable Lessons 

The  Complementary  Operational  Programmes  represent  a  good  example  of  re-enforced 
collaboration  with  the  EU  and  at  the  same  time  a  structured  attempt  to  speeding  up  and 
maximising the effects of cohesion policies on the territory. In fact, the use, through the POCs, of 
part of the co-financing resources for the financing of actions and interventions foreseen in the 
POC  itself,  prevents  the  decommitment  of  EU  resources  not  used  under  the  EU  OPs,  which 
otherwise would have generated a double negative effect, with the corresponding part of national 
co-financing that would also have been lost. Another important result of the POCs has been to turn 
the attention from resources (inputs) to the results (outputs), focusing on the achievement of the 
pre-established cohesion policy objectives. 

94 

 
 
6 

POLAND 

Country briefings 

National Policies addressing regional economic disparities – Poland (PL)  

1. Background  

Poland is divided into 16 NUTS 2 regions and 72 NUTS 3 
subregions.  Among  the  NUTS  2  regions,  only  the  capital 
region  Mazowieckie  is  regarded  as  a  More  Developed 
Region,22 while the other 15 are Less Developed Regions.  

Poland has the fourth highest regional economic disparities 
among  all  OECD  countries.23 Mazowieckie,  the  wealthiest  
region, is at the 19th position in EU28 based on the GDP 
per capita in PPS (151 compared to  EU28=100) while the 
Least  Developed  Region  Lubelskie    is  among the  regions 
with the lowest GDP per capita in EU28 (48 compared to 
EU28=100)  followed  by  two  more  regions  Warmińsko-
Mazurskie  and  Podkarpackie  (49). 24  In 
terms  of 
productivity, Greater Poland recorded the highest growth 
of 4.5% per year over the period 2000-2016, thus it closes 
the  gap  with  the  Polish  frontier  Mazovia.  In  contrast, 
Swietokrzyskie recorded the lowest productivity growth at 
1.2% per year.25     

Source: European Commission (2019). 

2. Architecture of national policies for addressing regional economic disparities 

Focus  

Addressing  regional  disparities  is  an  essential  element  of  the  national  development  policy  of 
Poland.  According  to  the  policy  documents  and  the  interviews,  the  objectives  of  regional 
development  are,  on  the  one  hand,  to  increase  cohesion  in  the  social,  economic  and  spatial 
dimension by pursuing sustainable development using the specific potential of individual territories 
and, on the other hand, to strengthen the regional competitive advantage. Regarding the cohesion 
dimension, eastern Poland, Silesia and other economically weaker regions are focused upon. In 
the context of regional competitive advantage, the emphasis is put on innovation and the synergies 
between national and regional specialisations.   

In addition to the ESI Funds, three additional measures, financed solely by the national budget, 
have been identified and are further discussed in section 3. Two of them focus on mobilising private 
investments and the third one on ensuring budgetary transfers to less wealthy regions. 

Design and governance  

The "Strategy for Responsible Development until 2020" is the main policy document for regional 
and policy addressing also regional disparities. Currently, a new policy document, the "National 
Strategy  for  Regional  Development  2030"  which  is  under  consultation,  develops  further  the 
regional dimensions of the national strategy and it is also expected to mobilise additional national 
funding in the coming years.  

The emphasis on interventions at the territorial level has increased the complexity of governance 
compared to previous programming periods. At the national level, addressing regional disparities 
is in the responsibility of the Ministry of Infrastructure and Development, which coordinates with 
the sectoral ministries. At the regional level, the Voivodeships (NUTS 2) sign territorial contracts 

22 GDP per capita >= 90% of EU-27 average. 
23 OECD (2018), Regions and Cities at a Glance 2018 – POLAND. 
24 Eurostat (2019), GDP per capita in 281 EU regions. News release 34/2019. 
25 OECD (2018), Regions and Cities at a Glance 2018 – POLAND. 

95 

 
 
 
 
with the central government. The contracts define the objectives and priority projects of significant 
importance  for  the  country's  development  and  the  Voivodeship,  for  which  both  parties  declare 
cooperation  in  the  implementation  within  the  available  funds,  including  the  ESI  Funds.  For 
interventions addressing counties or municipality the respective local authorities are involved.  

Relationship of national funding and support through the ESI Funds 

Currently,  the  policy  addressing  regional  disparities  is  dominated  by  the  ESI  Funds,  while  the 
national  funding  focuses  more  on  attracting  private  investments.  The  regional  differentiation  is 
done mainly on the basis of unemployment indicators and not on GDP per capita. Because of the 
importance  of  other  levels  of  regional  governance,  some  of  the  funding  adressing  regional 
disparities  has  the  form  of  budgetary  transfers  to  counties  or  municipalities  which  have  the 
responsibility to design and implement their own policies. 

It is expected that the introduction of the new “National Strategy for Regional Development 2030” 
will mobilise additional national funding for the support of the economically weakest regions.   

3. Overview of national policy measures addressing regional economic disparities 

All measures financed by the national budget are horizontal, providing some additional benefits or 
more favourable conditions if the supported activity is located in regions satisfying specific criteria.  

Two of the measures aim at attracting investments. The first one, the Programme for supporting 
investments of major importance to the Polish economy for years 2011-2023 (fiche PL1) aims at 
attracting  big  investments  which  generate  a  substantial  amount  of  jobs,  namely  investments 
above 750 million PLN (€176 million), expected to be creating a minimum of 200 new jobs or 500 
million PLN (€117 million) and 500 new jobs. The measure is horizontal covering all the regions of 
the country. However, the support is not granted to investment projects located in districts where 
the unemployment rate is lower than 75% of the country average. Additional points are given for 
investing in Eastern Poland. Support is provided to companies planning investments in the priority 
sectors  automotive,  electronics  and  household  appliances,  aviation,  biotechnology,  food 
processing,  modern  services  and  (R&D).  The  second  measure  is  a  combination  of  two 
interventions. The Act on  Support for new investments, which was introduced in 2018 replaces 
the older Special Economic Zones (fiche PL2). The later will remain active for existing investments 
until  2026,  while  the  former  will  apply  to  all  new  investments  after  2018.  While  the  Special 
Economic  Zones  offers  tax  reliefs  to  companies  established  with  their  boundaries,  the  new  Act 
provides  tax  reliefs  for  investments  to  all  regions.  However,  the  rate  of  the  tax  relief  and  the 
duration of the relief varies according to the unemployment rate in the area of establishment. 

The final identified measure is the Act on Income of local self-government units (fiche PL3) which 
redistribute revenues earned by the regions, to regions with low tax income per capita. The budget 
transferred can be used by the regions for projects the improve the economy and social cohesion 
in the area, or the quality of life of the citizens. 

4. Classification of policy measures 

Title 

Programme for 
supporting investments 
of major importance to 
the Polish economy for 
years 2011-2023 (PL1) 

Type 
funding 

Grants 

of 

Policy category 

Policy instrument 

Sector Development 
and Targeted 
Investment 

Business development 
and innovation support 
to firms 

Act on Support for new 
investments and Special 
Economic Zones (PL2) 

Tax exception 

Business 
Environment and 
Trade 

Special economic zones 

Tax incentives 

The Act on Income of 
local self-government 
units (PL3) 

Budgetary 
transfer 

Various types 

Various types 

Funding and 
implementation 

Funding, design 
and 
implementation 
at the national 
level 

Funding, design 
and 
implementation 
at the national 
level 

Funding at 
national level, 
Design and 
implementation 
at regional level 

96 

 
 
 
 
 
 
5. Main Sources 

Interviews  

  Ewa  Malik-Kapler,  Head  of  Unit,  Regional  Policy,  Department  of  Development  Strategy, 

Ministry of Investment and Development  

  Łukasz Gałczyński, Deputy Director, Department of Investment Development, Ministry of 

Entrepreneurship and Technology 

Main documents and sources 

  Government 

of 

Poland, 

(2019): 

National 

Reform 

Programme 

Poland, 

https://ec.europa.eu/info/sites/info/files/2019-european-semester-national-reform-
programme-poland_en.pdf  

  National Strategy for Regional Development 2030 
  Additional sources can be found in Annex 2 with the individual policy fiches. 
  OECD (2018), Regions and Cities at a Glance 2018 – POLAND  
  Partnership 
Poland 

agreement 

2014-2020 

https://ec.europa.eu/info/publications/partnership-agreement-poland-2014-20_en  

  Strategy for Responsible Development until 2020 

Country fiches 

Programme for supporting investments of major importance to the Polish economy for 
years 2011-2023 

ID  PL1 

Country  Poland 

Region(s) affected  This measure is horizontal covering all the regions of the country. 
It  should  be  however  noted  that  the  support  is  not  granted  to 
investment projects located in districts where the unemployment 
rate is lower than 75% of the country average. Additional points 
are given for location in Eastern Poland. 

Time horizon  2011-2023 

Objectives and Scope  Governmental  grants  are  provided  for  supporting  investments  of 
major  importance  to  the  Polish  economy  for  years  2011-2023 
(further  as  the  Programme),  adopted  by  the  Council  of  Ministers 
on July 5, 2011. 

Support is provided in the form of a grant based on an agreement 
concluded between the Minister of Economy and the investor. The 
agreement  lays  down  conditions  for  the  payment  of  the  grant, 
which  is  paid  proportionately  to  the  degree  of  fulfilling  investor’s 
commitments. 

Support can be applied for by companies planning investments in 
the following priority sectors: 

   automotive sector, 
   electronic and household appliances sector, 
   aviation sector, 

97 

 
 
 
 
 
 
 
   biotechnology sector, 
  
food processing sector, 
   modern services sector, 
  

(R&D). 

Support can also be applied for companies planning manufacturing 
investments in other sectors if a project’s minimum eligible costs 
are 750 million PLN (€176 million) and minimum 200 new jobs or 
500  m  PLN  (€117  million)  and  500  new  jobs  (significant 
investments). 

Overview  The  Programme  provides  support  for  investments  under  the  two 

following categories: 

1. Support for creation of new jobs (employment grant) plus 
20% for location in Eastern Poland 

The amount of employment grant depends, among others, on: 

1) in case of manufacturing projects: 

location, 

the number of new jobs created, 

the percentage of employees with higher education, 

  
  
  
  
   sector, 
   attractiveness  of  the  products  on  the  international 

investment expenditures, 

markets; 

2) in case of services projects: 

the number of new jobs created, 

the percentage of employees with higher education, 

  
  
  
   complexity of processes provided by the company. 

location, 

2. Support for new investment (investment grant) plus 20% 
for location in Eastern Poland 

   The amount of investment grant depends, among others, 

on: 

  
  
  

the number of new jobs created, 

investment outlays per employee, 

location. 

Rationale  Support  to  companies  planning  investments  in  the  identified 
priority  sectors.  The  amount  of  employment  /  investment  grant 
depends, among others, on location (Eastern Poland).   

Type of policy category   Sector Development and Targeted investment 

Type of policy instrument  Business development and innovation support to firms 

Type of funding  Grants 

Budget and expenditures  N/A 

Governance  Scenario  1:  The  operator  of  the  Programme  and  the  authority 

granting state aid is the Minister of Economy.  

The  Polish  Information  &  Foreign  Investment  Agency  (Polska 
Agencja  Informacji  i  Inwestycji  Zagranicznych  S.A.  -  PAIiIZ)  is 
responsible  for  preparing  and  providing  the  Interministerial 
Committee  for  Investments  of  Major  Importance  to  the 
Polish Economy (hereinafter referred to as the Committee) with 

98 

 
 
the dossier of investment projects and for preparing all documents 
required  to  carry  out  the  entire  procedure  of  providing  financial 
support. 

Policy implementation 
and policy mix 

N/A 

Relevant ESIF measures 
(if any) 

N/A 

Impact: monitoring and 
evaluation 

N/A 

Link  https://www.paih.gov.pl/en 

Act on Support for new investments and Special Economic Zones 

ID  PL2 

Country  Poland 

Region(s) affected  Prior to the Act on Supporting new investments which entered into 
force  in  June  2018,  Special  Economic  Zones  (SEZ)  had  been 
established in highly industrial regions often based on the existing 
infrastructure of traditional sectors. After 2018, the criteria for tax 
breaks rates and the period for the tax breaks are set in the new 
Act, and they differentiate based on the unemployment rate in the 
Powiat (second-level unit of local government and administration) 
where the investment will be located. 

Time horizon  Special Economic Zones till 2026 

Act on Support for new investments 2018 – on going 

Objectives and Scope  The  Act  of  10  May  2018  amends  the  instruments  of  corporate 
income tax (CIT) and the personal income tax (PIT) reliefs. While 
tax reliefs where available only for companies established in SEZs, 
with the new Act  the tax relief are now available across the entire 
territory of Poland, for companies carrying out new investments, 
on  publicly  as  well  as  privately  owned  properties.  However,  the 
currently biding SEZ permits, already granted to investors within 
the old SEZs shall remain in force until 2026.  

The  main  objective  of  the  recent  Act  is  to  support  the  growth  of 
private investments which will lead to: 

   Development of innovative areas of economic activity;  
   Creation of new and stable workplaces for highly qualified 

personnel; 

   Development of new technical and technological solutions 

and their application in the economy; 

  

Increase  of  the  competitiveness  of  production  and 
services;  

   Development of export; and 
  

Inhibiting the growth of regional differences. 

 The Act also aims to link the support mechanism with the goals of 
the Strategy for Responsible Development until 2020.  

Special  Economic  Zones  (SEZ)  are  administratively  separated 
areas  in  Poland,  where  business  operations  are  carried  out  on 
special and preferential terms. The key incentive is an exemption 

99 

 
 
 
from  income  tax  as  the  form  of  public  aid  for  investors  locating 
their projects in SEZ. There are currently 14 SEZ in Poland. Each 
zone consists of several to several sub-zones located throughout 
Poland. 

The legislator decided on not repealing the law on SEZ. The validity 
of  two  acts  will  make  a  clear  division  into  investments  that  will 
benefit from existing support until 2026 as part of permits issued 
under the Act on SEZ, and completely new investments that will be 
able to benefit from support based on the new law, from its entry 
into force. 

Overview 

In the light of the provisions on regional public aid, the definition 
of a new investment reads as follows: 

   Establishment of new enterprise; 
  

Increase  of  the  production  capacity  of  an  existing 
enterprise; 

   Diversification  of  the  production  through  introduction  of 
products  which  previously  were  not  manufactured  in  the 
enterprise; and 

   Fundamental  change  in  the  production  process  of  the 

existing enterprise. 

If  the  investment  is  located  in  the  capital  region  (Mazowieckie), 
only  an  investment  in  favour  of  new  economic  activity  shall  be 
considered a new investment. 

According  to  the  new  regulations,  the  following  enterprises  are 
eligible for public aid in the form of tax exemptions: 

   all  enterprises in the  sector  of  traditional  industries,  with 
the  exception  of  enterprises  producing,  i.e.:  explosives, 
alcohol, tobacco products, steel, or companies operating in 
the  energy  generation  and  distribution  sector;  wholesale 
and retail trade, facilities and construction works, services 
related  to  accommodation  and  catering  services,  and 
running  game  centres.  Companies  from  the  metallurgy, 
iron  and  steel  sectors,  the  coal  sector,  and  the  transport 
sector are not eligible for support under the EU regulations. 
   selected  enterprises  from  the  business  services  sector 
(BSS)  providing  IT  services,  R&D  in  the  areas  of  natural 
and technical sciences, auditing and bookkeeping services, 
accounting (excluding tax declarations), technical research 
and  analysis  services,  call  centres,  architectural  and 
engineering services. 

The  maximum  amount of  state  aid  in  the  form  of  CIT  or  PIT  tax 
relief is determined on the basis of the regional aid map for 2014-
2020  (representing  the  percentage  of  costs  eligible  for  regional 
aid), e.g.: Mazowieckie voivodeship 35%; 10%; and Warsaw 10%; 
with  up  to  50%  in  the  following  four  regions:  Warminsko-
Mazurskie, Podlaskie, Lubelskie, and Podkarpackie. Also, the period 
for which the decision on support is issued shall depend on public 
aid  intensity  in  a  given  area.  This  period  is  the  same  for  all 
companies, regardless of the type of economic activity conducted 
and  the  size  of  the  company.  As  shown  in  the  figure  below,  the 
decision on support shall be issued for a definite period, not shorter 
than 10 years and not longer than 15 years.   

100 

 
 
 
The decision on support is issued for the implementation of a new 
investment  meeting  certain  quantitative  and  qualitative  criteria. 
Quantitative criteria (minimum amount of eligible costs) depend on 
the  unemployment  rate  in  the  districts  /  Powiats  in  which  the 
investment  shall  be  implemented  (the  higher  the  unemployment 
rate, the lower the required costs) and the size of the enterprise. 
Preferences  are  also  granted  to  entrepreneurs  conducting  R&D 
activities and in the sector of business services sector. Qualitative 
criteria are divided into the two main categories, i.e.: sustainable 
economic  development  (compliance  with  the  current  national 
development  policy,  where  Poland  may  gain  a  competitive 
advantage – investments in certain sectors, export oriented sales, 
R&D  activity,  size  of  enterprise,  national  key  cluster  /  business 
services sector) and sustainable social development (low negative 
impact  on  environment,  investment  location,  support  in  gaining 
additional  education,  care  for  employees,  creating  high  quality 
jobs). 

Rationale  The  new  provisions  introduced  by  the  Act  on  Supporting  new 
investments are a response to the need to adapt the rules and the 
mode  of  supporting  new  investments  to  the  changing  socio-
economic  realities.  The  changes  also  aim  to  align  the  support 
mechanism  with  the  Strategy  for  Responsible  Development  until 
2020. One of the assumed effects of the Strategy implementation 
is  sustainable  economic  development  and  territorial  balanced 
development. 

Income  tax  relief  is  a  consistently  popular  instrument  among 
entrepreneurs, and it is also offered in countries with which Poland 
competes for new investment projects. Reducing tax burdens is a 
clear incentive for starting new investment projects or expanding 
existing business operations. 

Type of policy category   Business environment and trade 

101 

 
 
 
Type of policy instrument  Special economic zones 

Tax incentives 

Type of funding  Tax exemption 

Budget and expenditures  Since  the  beginning  of  its  operation  in  1994,  Special  Economic 
Zones  have  attracted  investments  worth  nearly  112  billion  PLN 
which  represents  26.08  billion  Euro.  Enterprises  operating  within 
SEZ  created  some  332  thousand  jobs.  According  to  the  latest 
available  data  (end  2016),  it  is  estimated  that  some  2,263 
entrepreneurs currently have permits issued to operate in SEZ. 

Governance  Funded,  designed  and  implemented  at  the  national  level.  It  is 
responsibility of the Ministry of Entrepreneurship and Technology.  

Policy implementation 
and policy mix 

Strategy for Responsible Development until 2020 

Relevant ESIF measures 
(if any) 

N/A 

Impact: monitoring and 
evaluation 

For further information see above ‘Budget and expenditures’ 

Link  Act  of  10th  May  2018  on  Support  for  new  investments  (Dz.  U. 
2018poz.  1662),  Act  of  20th  October  1994  on  Special  Economic 
Zones (Dz. U. 1994 Nr 123 poz. 600), https://www.paih.gov.pl/en 

The Act on Income of local self-government units 

ID  PL3 

Country  Poland 

Region(s) affected  This measure is horizontal covering all the regions of the country. 
The Act introduced a compensation system in order to reallocate 
money the economically weakest self-government units. 

Time horizon  2003-ongoing 

Objectives and Scope  The Act of 13 November 2003 on Income of local self-government 
units determines sources of funding of local governments as well 
as principles concerning general subsidies and targeted grants.  

The Act introduced a system of payments to the state budget by 
all levels of territorial government. The large income disparities of 
local  government  units  required  the  necessity  of  introducing  the 
obligation  to  make  payments  not only  by  communes  but  also  by 
Powiats and voivodeships. The system of making payments by the 
territorial  self-government  units  is used  in  other  European  Union 
Member  States  (e.g.  Germany,  Denmark,  Sweden  and  France). 
Funds  from  payments  to  the  budget  of  the  state  are  then  re-
disbursed for the purpose of local government units. Also, income 
from participation in personal income taxes and corporate income 
taxes will constitute a supplementary part of own revenues of local 
governments.  

102 

 
 
 
 
 
 
 
Sources of income of local government units were divided into own 
income,  general  subsidies,  earmarked  grants  from  the  state 
budget. 

In summary, the main objectives of the Act are to ensure: 

   Further decentralisation of public tasks and resources, thus 
increasing the share of local governments in administering 
public funds; 

   The  increase  in  the  economic  responsibility  of  local 
government units by increasing the share of own revenues 
in general financial resources; 

   Establishing stronger links taking into account the financial 
situation  of  self-government  units  with  the  economic 
situation at the central level; 

   Expanding  the  possibilities  of  absorption  of  EU  funds  by 
increasing the flow of resources and making the principles 
of  financial  management  of  the  single-local  government 
unit more flexible; and 

   Creating instruments to support entrepreneurship and the 

flow of highly qualified human capital. 
Overview  One of the sources of income of territorial self-government units 

will be a general subsidy which consists of the following parts: 

1.  The  equalizing  part  of  the  general  subsidy:  Due  to  the 
large  diversity  of 
in  communes,  Powiats  and 
voivodeships,  a  compensation  system  was  introduced  to 
protect the economically weakest units. 

income 

2.  The balancing part of the general subsidy: This part of the 
subsidy  will  be  granted  to  communes  and  Powiat  in  order  to 
compensate  for  any  differences  in  income  due  to  the 
introduction of changes in the system of financing the tasks. 

3.  The regional part of the general subsidy: In voivodships, 
the regional part of the general subsidy was introduced taking 
into account macroeconomic factors. 

4.  The educational part of the general subsidy: the amount 

allocated for activities related to education.  

The calculation of the general subsidy for voivodeship is presented 
below as an example. 

The basic amount is obtained by the voivodship, in which the tax 
income per capita, hereinafter referred to as the "W index", is lower 
than the tax revenue for all voivodeships, hereinafter referred to 
as the "Ww index". 

The “Ww index” is calculated by dividing the sum of tax revenues 
of all voivodeships obtained in the year preceding by the number 
of inhabitants of the country. 

The  amount  of  the  basic  amount  due  to  the  voivodeship  is 
determined  by  multiplying  the  number  constituting  72%  of  the 
difference  between  the  ratio  "Ww  index"  and  the  number  of 
inhabitants of the voivodship. 

The  supplementary  amount  is  obtained  by  the  voivodeship,  in 
which the “W index” is lower than 125% of the “Ww index” and the 
number of inhabitants does not exceed 3 million. 

103 

 
 
 
The amount of the supplementary amount due to the voivodship is 
calculated by multiplying the number constituting 9% of the “Ww 
index” by number of inhabitants determined for the voivodeships 
with specific criteria. 

Overall,  the  legislation  is  considered  to  be  highly  controversial 
among local self-government units and there had been attempts in 
the past to make modifications, advocating more rational and more 
effective use of funding.  

Rationale  The provisions of the Act are expected to strengthen the position 
of local governments by increasing their independence in managing 
the financial resources. 

Type of policy category   Urbanisation and Connectivity / Skills and mobility  

Type of policy instrument  Other (general subsidy to self-government units)  

Type of funding  Budgetary transfers 

Budget and expenditures  The  Index  W  for  Voivodeships  as  well  as  the  final  subvention 

amount for Voivodeships in 2019 are shown in the tables below.  

WK Voivodeship

02

04

06

08

10

dolnośląskie

kujawsko-pomorskie

lubelskie

lubuskie

łódzkie

12 małopolskie

14 mazowieckie

16

18

20

22

24

26

opolskie

podkarpackie

podlaskie

pomorskie

śląskie

świętokrzyskie

28 warmińsko-mazurskie

30 wielkopolskie

City

Wrocław

Toruń

Lublin

Zielona Góra

Łódź

Kraków

Warszawa

Opole

Rzeszów

Białystok

Gdańsk

Katowice

Kielce

Olsztyn

Poznań

32

zachodniopomorskie

Szczecin

Ww =

Source: Ministry of Finance (2019). 

Index W 2019

220,35

125,26

87,58

129,62

142,40

146,20

390,79

117,53

98,41

90,71

172,90

160,91

76,87

80,66

201,63

117,22

178,32

Governance  The  minister  competent  for  public  finances  is  overseeing  the 
implementation  of  the  Act.  The  decision  on  the  spending  of  the 
budget  and  the  management  of  the  spending  is  responsibility  of 
the regional authority which receives the budgetary transfers. 

Policy implementation 
and policy mix 

N/A 

Relevant ESIF measures 
(if any) 

N/A 

Impact: monitoring and 
evaluation 

N/A 

Link  Act of the 13th November 2003 on Income of local self-government 

units (Dz.U. z 2018 r. poz. 1530) 

104 

 
 
 
 
Case study 

Programme for supporting investment for the Polish economy – Poland (PL) 

1.  Executive Summary 

The  main  goal  of  the  programme  is  to  increase  the  innovativeness  and  competitiveness  of  the 
Polish economy with a particular focus on sectors classified by the OECD as high-tech sectors. As 
acknowledged in the programme documentation, these sectors generate the highest added value, 
most strongly contributing to the development of the economy and strengthening its competitive 
advantages.  It  was  also  acknowledged  that  most  global  FDI  flows  are  concentrated  in  these 
sectors. Recently, the Ministry has prepared the amendments to the programme. Following the 
inter-ministerial  consultation,  the  Council  of  Ministers  took  a  final  decision  on  1  October  2019 
adopting the changes to the programme.  

In general, the main challenges in relation to the current support for reducing territorial disparities 
were mainly due to: a relatively high number of programmes with various  criteria used during the 
selection process to promote less advanced territories; frequent changes in the programmes; and 
governance  (i.e.  sectoral  programmes  are  overseen  by  the  Voivode  –  a  representative  of  the 
central government at the local level, whereas the regional OPs of the ESI Funds are implemented 
by the managing authorities – Marshal Offices of the respective voivodeships).  

2.  Background and Context 

Launched in 2011, the programme was designed to stimulate FDI inflow to Poland. In the past, it 
complemented  Measure  4.5  ‘Support  for  investments  of  great  importance  for  the  economy’ 
implemented within the national Operational Programme of Innovative Economy 2007-2013 that 
was discontinued in the subsequent 2014-2020 programming period. 

The support provided in the framework of Special Economic Zones (SEZs) constitutes another form 
of support for companies. More recently, the Act on Supporting new investments which entered 
into force in June 2018 allows companies carrying out new investments located in any territory in 
Poland to be benefit from the tax relief and the eligible support is determined on the basis of the 
regional aid map for 2014-2020. The permits that had been granted to investors within the SEZs 
shall  remain  in  force  until  2026.  The  five  voivodeships,  comprising  Lubelskie,  Podkarpackie, 
Podlaskie, Świętokrzyskie and Warmińsko‐Mazurskie, are areas characterised by the lowest level 
of economic development in Poland and one of the lowest in the European Union. It is found that 
the problems affecting the socio-economic situation and development prospects of those regions 
are largely of a structural nature, being a consequence of historical circumstances. They are also 
further negatively reinforced by the effects of its peripheral location on the external border of the 
European Union, across which even less developed areas prevail.26 

In terms of entrepreneurship development, Eastern Poland clearly lags behind when compared to 
Polish standards. In 2011, there were only 36.3 active enterprises per 1,000 population in the five 
voivodeship in Eastern Poland. At the same time, the national average was majorly higher and 
reach  the  level of  46.3.  In  2011,  the  average  investment  per  enterprise  in  Eastern  Poland  was 
about PLN 69,000 (€15.750) companied to PLN 90.000 (€20.543) at the national level. It is also 
worthwhile mentioning in-depth diagnosis carried out as part of the preparation of the Strategy 
for  Responsible  Development  until  2020  by  the  team  led  by  Prof.  Przemysław  Śleszyński.  The 
analysis  identified  122  medium-size  towns  which  are  characterised  by  a  risk  of  losing  socio-
economic functions. 

3.  Description of the Policy Measure 

The  programme  is  one  of  the  instruments  enabling  support  for  investment  projects  in  Poland. 
Overall, the support can be granted to companies planning investments in: 

  Priority sectors (automotive, electronic and household appliances sector, aviation sector, 

biotechnology sector, food processing sector 

  All sectors (under special conditions). Support can also be granted to companies planning 
investments in other sectors than the priority sectors, provided that a project’s minimum 

26 Ministry of Regional Development (2014) Operational Programme Eastern Poland 2014-2020, version of 
16.12.2014. 

105 

 
 
 
 
 
eligible  cost  reach  a  certain  threshold,  notably  750  million  PLN  (€171.19  million)  and 
contribute to the creation of at least 200 new jobs or 500 million PLN (€114.13 million) 
and 500 new jobs. This category of investments is referred to as ‘significant investments’ 
or ‘key projects’. 
  Modern services sector 
  R&D sector 

This measure is horizontal covering all the regions of the country. It should be however noted that 
the  programme  does  not  provide  support  for  investments  in  poviats  (equivalent  to  a  county, 
district  or  prefecture  in  other  countries)  with  the  unemployment  rate  below  75%  of  national 
average with the following exceptions:  

 
 
 

Investments of major importance (i.e. ‘significant investments’ or ‘key projects’) 
Investments in the sector of modern services and R&D 
Investments undertaken in five regions (voivodeship) located in Eastern Poland, namely 
Warmińsko-Mazurskie, Podlaskie, Lubelskie, Świętokrzyskie, and Podkarpackie. 

Additionally the support is not provided for investments which already obtained the public funding 
(e.g. from the State budget, the ESI Funds, tax incentives in the Special Economic Zones) with 
some  clearly  defined  exceptions  one  of  which  is  that  the  value  of  funding  provided  within  the 
programme cannot exceed 3 million PLN (€684.790). It was not possible to verify the rationale for 
this  threshold  during  the  interviews  carried  out  in  the  framework  of  this  case  study.  It  is  most 
likely that this threshold had been established on the basis of the average value of funded projects 
by other programmes.  

Overall,  the  programme  aims  at  attracting  large  investors,  increasing  the  employment,  and 
providing  incentives  for  new  investments.  The  programme  provides  support  in  the  form  of 
employment  and  investment  grant.  Based  on  exchanges  with  the  MA  of  the  programme,  it  is 
interesting to note that similar instrument exists in other CEE Member States such as the Czech 
Republic, Slovakia and Hungary which are the typical benchmark countries for Poland. Concerning 
the support for the creation of new employment, the following types of interventions are eligible 
for funding: 

Investments in the priority sectors, which contribute to the creation of 250 new jobs and account 
for the minimum eligible cost of PLN 40 million (€9.13 million). 

  Significant  investments.  Investment  in  the  sector  of  modern  services,  which  contribute  to  the 
creation of at least 250 new jobs and the minimum investment in tangible assets for the amount 
of PLN 1.5 million (€342.395). Investments in R&D sector, which contribute to the creation of at 
least 35 new jobs for persons with the higher education and the minimum investment in tangible 
assets for the amount of PLN 1 million (€228.263). 

The programme also provides support in the form of grants for new investments. The following 
types of interventions are eligible for funding: 

Investments in the priority sectors, which contribute to the creation of 50 new jobs and account 
for the minimum eligible cost of PLN 160 million (€36.52 million). 

  Significant new  investments.  Investments in  R&D  sector,  which  contribute  to  the  creation  of  at 
least 35 new jobs for persons with the higher education and the minimum investment in tangible 
assets  for  the  amount  of  PLN  10  million  (€2.28  million).  To  take  into  account  the  diversified 
territorial level of socio-economic development, the location of investment is used as one of criteria 
during the selection process of applications. The investment location is defined on the basis of the 
unemployment rate in relation to the national average according to the latest data published by 
the Central Statistical Office on the day before submitting the investment application. This criterion 
is very important as the location of investment can account for maximum 30 out of 100 points in 
case of the employment grant and 15 out 45 points for the investment support.  
In addition, if the investment concerning the support for investment is located in one of the five 
voivodships of Eastern Poland the value of eligible support is subject to 5% increase. In case of 
the support for creation of new employment, the value of eligible cost is increased by 20%. The 

106 

 
 
 
 
 
 
 
newly  updated  programme  that  has  been  approval  by  the  Council  of  Ministers  will  continue 
providing  the  support  in  less  developed  areas  with  high  unemployment  rate  as  well  as  in 
voivodeships of Eastern Poland. In concrete terms, additional points for investments in areas with 
the  unemployment  rate  above  160%  of  the  national  average  or  if  located  in  one  of  the  122 
medium-size towns which are characterised by a risk of losing socio-economic functions identified 
in  the  analysis  by  Prof.  Przemysław  Śleszyński  (see  section  Background  and  context)  will  be 
awarded according to the new rules. 

4.  Policy Implementation 

The  responsibility  for  the  implementation  of  the  programme  lies  within  the  Ministry  of 
Entrepreneurship  and  Technology.  The  Minister  decides  on  the  support  related  to  the  new 
investments  that  are  recommended  by  Inter-ministerial  Team  for  Investments  of  Major 
Importance for the Polish Economy. 

The Team which is composed by the Secretary of State or Under-Secretary of State of relevant 
ministries (i.e. public finances, foreign affairs, transport, regional development, science, labour, 
agriculture,  communications,  water  management,  maritime  economy,  construction,  spatial 
planning,  development,  and  housing,  higher  education,  environment,  in  addition  to  a 
representative of the Chancellery of the Prime Minister and a representative of the President of 
the Office of Competition and Consumer Protection) is tasked with coordination of matters related 
to the implementation of the programme, including the assessment of applications for support and 
presenting recommendations to the minister competent for economy on providing support.  

The Polish Investment and Trade Agency is responsible for the direct contacts with the investors, 
whereas  the  Department  of  Investment  Development  at  the  Ministry  of  Entrepreneurship  and 
Technology  is  responsible  for  contractual  matters  and  is  overseeing  the  implementation  of  the 
programme. 

Further  streamlining  in  the  process  of  granting  the  support  will  take  place  on  the  basis  of  the 
recently introduced changes to the programme. In practice it means that the Polish Investment 
and  Trade  Agency  will  take-up  a  role  of  one-stop-shop  concerning  the  assessment  of  the 
investment applications according to our interview sources. Another change in the governance of 
the programme is a possibility of issuing opinions on the submitted applications on a circular basis 
which will eliminate a risk of the potential lack of quorum at the meetings of the Team. 

5.  Performance 

Since  the  launch  of  the  programme  76  contracts  have  been  concluded  between  the  Ministry  of 
Entrepreneurship and Technology and the respective investors for the total amount of PLN 979.23 
million  (€223.54  million)  which  represents  5.1%  of  the  total  investment  declared  by  the 
beneficiaries) of which PLN 814.28 million (€185,87 million) is provided in the form of investment 
grants and PLN 164.94 million (€37.65 million) to support the creation of employment. Based on 
the concluded contracts, the beneficiaries are expected to make investments for the total amount 
of 19.02 billion PLN (4.34 billion Euro) and create 28,737 new jobs, including 16,839 employees 
with a tertiary education degree. 

A more in-depth analysis of the monitoring data shows the extent to which the programme has 
provided  support  to  investors  for  locating  production  in  areas  at  risk  of  economic  and  social 
exclusion. Having in place the selection criteria concerning location used to promote investments 
in less favoured regions, one would have expected to find more investments located in the five 
voivodeships of Eastern Poland. According to the monitoring data there have been only 8 contracts 
concluded concerning the investments in Podkarpackie, Podlaskie Warmińsko-Mazurskie with no 
investments in the remaining voivodeships, namely Lubelskie, and Świętokrzyskie.  

Out  of  76  contracts  41  of  them  are  related  to  the  investments  located  in  large  cities,  namely 
Cracow,  Wroclaw,  Gdańsk,  Warsaw,  Łódź,  Katowice,  Bydgoszcz,  and  Poznań.  The  share  of 
investments in this group cities accounts for some 13% of the total value of signed contracts which 

107 

 
 
 
 
can be explained by the fact there was only one investment grant (in Wroclaw)  which typically 
require substantial financial resources and the remaining support was provided in the form of the 
employment grant. The data also reveals that the funding provided in the latter form has been 
mainly concentrated in large cities in the service sector, business process outsourcing, and R&D. 
It is also important to note that the employment to be created thanks to the investments which 
received public funding in a group of large cities accounts for 17,376 jobs which represents more 
than three-fifth of the employment to be created within the programme. 

In  general,  the  effectiveness  of  the  provided  support  is  positively  assessed  by  MA  of  the 
programme.  The  interview  with  the  representative  involved  in  the  implementation  of  the 
programme indicated that the results have exceeded the initially planned targets. It was also noted 
that the programme has had a positive influence and contributed to reducing the unemployment 
rate  (which  according  to  the  latest  available  data  as  at  the  end  of  August  2019  is  5.2%)27. 
According  to  the  data  obtained  from  the  MA  of  the  programme,  the  provided  support  since  its 
launch until the end of December 2017 has contributed to the creation of new jobs (in total 23,768 
including 4,887 in 2017) representing 156% obligations included in the contract for this period. It 
has also induced new investments which account for the total amount of 7.44 billion PLN and 1.49 
billion PLN in 2017 (respectively 1.69 billion Euro and 340.5 million Euro) which represents 190% 
of obligations included in the contract for this period. 

6.  Strengths and Weaknesses 

  The main strength identified by the research carried out within the Eurofund assignment 
was  that  the  programme  provided  a  reorientation  of  the  Polish  industry  and  services 
towards  eco-friendly  and  technologically  advanced  investments  that  improve  the 
competitiveness of the country's economy. This can be considered in line with the overall 
objective of the programme. 

 

It was found that the programme has managed to attract a relatively low interest among 
the Polish investors with the participation being estimated at only 11% of all applications. 
It  can  be  also  confirmed  on  the  basis  of  monitoring  data  that  all  of  the  investments 
supported by the programme are linked to companies with the headquarters abroad. 

 

It turned out that among the applications submitted by the Polish entrepreneurs applying 
for  support  during  the  period  2011-2015,  the  majority  of  investment  related  to  the 
development of IT solutions. It was also found that the level of required investment turned 
out to be too high for domestic entrepreneurs especially in the manufacturing sectors. 
  Thirdly,  the  selection  criteria  of  the  programme  do  not  take  into  consideration  some 
important aspects which are important for meeting its objective, such the establishment 
of  cooperation  between  foreign,  local  companies  and  scientific  research  and  higher 
education institutions. 

7.  Transferable Lessons 

  The return of public investments measured both in terms of the induced investments and 
the creation of new employment is very high.  The new investments will also contribute to 
the development of value chains in the respective sectors of the economy supported by 
the programme.  

  This case study shows that implementation of the programme has been efficient with the 
involvement of ministries in the selection process of applications submitted for funding. 
The newly adopted programme has introduced some changes to ensure even more swift 
implementation and streamline the control procedure. 

 

It is also found that promoting the location of investments in less developed areas can be 
challenging as the potential investor might be more willing to invest in large cities where 

27 See: 
https://stat.gov.pl/download/gfx/portalinformacyjny/pl/defaultaktualnosci/5473/2/85/1/stopa_bezrobocia_za
_sierpien_2019.xlsx 

108 

 
 
 
 
 
 
the socio-economic situations are more favourable and thus offer a better perspective of 
growth. 

  The newly updated programme introducing changes in the types of projects represents a 
shift from the standard investment and employment grants to more advanced forms of 
support. It is yet to be seen how the programme will complement the future instruments 
to be funded during the 2020+ programming period and contribute to reducing territorial 
disparities. 

109 

 
 
7 

PORTUGAL 

Country briefings 

National Policies addressing regional economic disparities – Portugal 

1.  Background  

Portugal  consists  of  seven  NUTS  2  regions.  Two  of  the 
regions  are  autonomous  island  regions.  The  Metropolitan 
Area of Lisbon and the Autonomous Regions of Madeira are 
regarded as More Developed Regions while Algarve at the 
south is a Transition Region. All other areas belong to the 
category of Less Developed Regions. However, due to the 
recent  crisis,  all  regions  apart  from  Lisbon  fell  under  the 
threshold GDP of 75% of the EU-28 average. According to 
the OECD Index of regional disparity in GDP per capita for 
201628, during the period 2000-2016 the reduction of the 
differences  between  the  Portuguese  regions  in  terms  of 
GDP per capita was the 3rd largest among OECD countries, 
giving Portugal the 4th lowest position in regional economic 
disparities among OECD countries in 2016. The reduction 
of the disparities was due to a fall in GDP per capita in the 
metropolitan  area  of  Lisbon  since  2010  and  moderate 
growth in the region of the North. 

2.  Architecture  of  national  policies  for  addressing 

regional economic disparities 

Focus  

Source: European Commission (2019). 

The ESI Funds remain the primary source of funding to address regional disparities. Therefore, the 
regional, urban and rural priorities are outlined in Portugal’s Partnership Agreement with the EU.  

Territorial  development  is  an  essential  element  of  regional  policy,  and  it  is  defined  in  the  sub-
regional  pacts  for  territorial  cohesion  and  development,  the  municipal  strategic  plans  for  urban 
development,  and  the  rural,  coastal  and  urban  local  development  initiatives.  The  main  strategic 
directions  have  been  set  in  the  National  Programme  for  Territorial  Planning  Policy  (PNPOT)  (see 
fiche PT1) approved in 2007. The programme was amended in 2018, and it will be the framework 
for the design of the next programming period. Regarding the territorial economic development, 
the new PNPOT focuses on knowledge, innovation and training. 

In addition to the measures financed by the ESI Funds, the national budget finances several of the 
measures  of  the  National  Programme  for  Territorial  Cohesion,  and  its  successor  the  Interior 
Valorisation Programme. Among the several national measures three have a regional orientation 
by  offering  more  incentives  to  businesses  (for  instance  providing  tax  incentives)  that  invest  in 
selected Less Developed Regions. 

Design and governance 

Portugal is the 6th most centralised country in the OECD regarding public spending, with the central 
government being responsible for the 88.2% of public expenditures.29 The Interior Valorisation Task 
Force under the Deputy Prime Minister is responsible for the design and implementation of the main 
national  instrument  addressing  regional  disparities  the  PNCT/PVI  (see  fiche  PT2)  in  collaboration 
with  the  thematic  ministries  and  the  regional  governance  bodies.  The  measures  providing  tax 
incentives are designed and implemented by the Ministry of Finance. 

28 OECD (2018), OECD Regions and Cities at a Glance 2018, OECD Publishing, 
Paris, https://doi.org/10.1787/reg_cit_glance-2018-en. and Eurostat 

29 OECD (2016), OECD Regional Outlook 2016: Productive regions for inclusive societies. 

110 

 
 
 
 
3.  Relationship of national funding and the support through the ESI Funds   

The ESI Funding is the predominant source of funding addressing regional disparities. The national 
budget supports mainly countrywide initiatives aiming at the convergence of the whole country to 
the EU average, and selected measures of the National Programme for Territorial Cohesion. Besides 
that, all tax incentives are financed by the national budget. 

4.  Overview of national policy measures addressing regional economic disparities 

The National Programme for Territorial Cohesion/Interior Valorisation Programme (PNCT/PVI) (fiche 
PT2)  supports  interventions  in  municipalities  and  parishes in every  Mainland  Portuguese  NUTS  2 
and  3  regions,  except  for  the  Lisbon  Metropolitan  Area  and  the  Oeste  NUTS  3.  The  programme 
identifies 164 inter-ministerial measures. The most relevant to reducing economic disparities is Axis 
2, which focuses on the competitiveness of the supported regions and Axis 4 on the connectivity of 
the territories. The two axes address a wide spectrum of measures including the improvement of 
the business environment, mobilising business investments, transport and digital networks, R&D 
and  innovation,  business  infrastructures,  educational  infrastructures,  development  of  human 
resources. Although the PNCT/PVI is a national programme, it also includes measures supported by 
the ESI Funds. The national budget also finances three tax regimes which provide various types of 
tax  incentives  to  companies  willing  to  invest  in  specific  regions.  The  Contractual  Benefits  to 
Productive  Investment  (fiche  PT3)  is  a  tax  benefit  scheme  for  business  investments  equal  to  or 
greater than €3 million. The benefits last for a period of up to ten years from the completion of the 
investment project. All regions can benefit; however, the regions with lower purchasing power than 
the country average are entitled to higher benefit rates.  The Tax Regime for Investment Support 
(RFAI) (fiche PT4) allows companies to deduct a percentage of the investment in non-current assets 
(tangible and intangible) from the calculated taxable income. The tax reduction rates for the Regions 
Center, Alentejo, Autonomous Region of the Azores and Autonomous Region of Madeira, is 25% for 
investment up to €10 million, and 10% for the surplus part. Investments in Algarve, Greater Lisbon 
and Setúbal Peninsula regions are subject to 10% tax reduction. The Installation of Companies in 
Interior Territories regime (fiche PT5) provides to SMEs a tax rate of 12.5% for the first 15,000 that 
are subject to tax when they established in one of the interior regions. 

5.  Classification of policies  

Title 

Type 
funding 

of 

Policy category 

Policy instrument 

Funding and implementation 

Business 
Environment and 
Trade  

National Programme 
for Territorial 
Cohesion / Interior 
Valorisation 
Programme 
(PNCT/PVI) (PT2) 

Sector 
Development and 
Targeted 
Investment  

Grants, loans, 
tax breaks 

Urbanisation and 
Connectivity  

Skills and 
Mobility  

111 

Venture capital 
funds and other 
financial 
instruments  

Tax incentives  

Investment 
promotion  

Business 
development and 
innovation support 
to firms  

R&D programmes  
Science and 
industrial parks  
Clusters, centres of 
excellence and 
technology centres  

Transport 
infrastructure,  
Digital 
infrastructures  

Life-long learning  
New skills 
development (e.g. 
digital skills)  

Labour market 
training  

Funding and design at the            
national level 
Implementation at the                   
national and regional level 

 
 
 
 
 
 
Tax breaks 

Tax breaks 

Tax breaks 

Business 
Environment and 
Trade  

Business 
Environment and 
Trade  

Business 
Environment and 
Trade  

Contractual Benefits 
to Productive 
Investment (PT3) 

Tax Regime for 
Investment Support 
(RFAI) (PT4) 

Installation of 
Companies in Interior 
Territories (PT5) 

6.  Main Sources 

Interviews 

Educational 
infrastructures, 
Universities  

Tax incentives  

Tax incentives  

Tax incentives  

Funding, design and          
implementation at the national         
level 

Funding, design and         
implementation at the national        
level 

Funding, design and         
implementation at the national       
level 

 

João Catarino, Secretary of State for the Valorisation of the Interior, Secretaria de Estado 
da Valorização do Interior   

  Sónia Ramalhinho, Directorate General of Local Authorities (DGAL), Ministry of Internal 

Administration  

Main documents and sources 

  Government of Italy, (2019): National Reform Programme Italy,  

https://ec.europa.eu/info/sites/info/files/2019-european-semester-national-reform-
programme-portugal_pt_0.pdf  

  National Programme for Territorial Planning Policy (PNPOT)  http://pnpot.dgterritorio.pt/    
  OECD (2018), OECD Regions and Cities at a Glance 2018, OECD Publishing, 

Paris, https://doi.org/10.1787/reg_cit_glance-2018-en.   

  OECD (2016), OECD Regional Outlook 2016: Productive regions for inclusive societies. 
  Ministero dell’ Economia e delle Finanze (2019) Documento di Economia e Finanza 2019 
  Partnership Agreement Portugal 2014-2020, 

https://ec.europa.eu/info/publications/partnership-agreement-portugal-2014-20_en  

Country fiches 

National Programme for Territorial Planning Policy (PNPOT) – (Programa Nacional 
de Política de Ordenamento do Território)  

ID  PT1 

Country  Portugal  

Region(s) affected  All regions  

Time horizon  The first PNPOT was approved in 2007. Its first amendment 
was  approved  in  2018.  The  PNPOT  is  the  basic  territorial 
development strategy. 

Objectives and Scope  The PNPOT contains strategic objectives, specific objectives 
and  measures  that  specify,  respectively,  the  direction 
outlined  in national territorial  planning  policy for  Portugal 
2025, the main lines of intervention to be developed to this 
that  will  enable 
end,  and, also, the  priority  actions 
of 
the strategic direction 
intervention. A recent update to 
to 
prepare a new action programme for 2030.  

the PNPOT aimed 

lines 

and 

Overview 

  PNPOT 

is 

the 

the land 
use management  system. It defines the objectives 
and strategic options for territorial development and 

instrument  of 

top 

112 

 
 
 
 
 
 
 
 
establishes the model of organisation of the national 
territory.  The  PNPOT  constitutes  the  reference 
framework  for  other  territorial  programs  and  plans 
and as a guiding tool for strategies with a territorial 
impact.  

  This  Programme  defines  five  strategic  territorial 
challenges at various levels of planning: to manage 
natural resources in a sustainable way; to promote a 
polycentric urban system; to promote inclusion and 
enhance  territorial  diversity;  to  strengthen  internal 
and external connectivity; and to promote territorial 
governance.  

  The  PNPOT  also  assumes  10  commitments  for  the 

territory:  

  To  strengthen  territorial  systems  according  to  their 

centralities;  

  To attract new inhabitants and manage demographic 

developments;  

  To adapt the territory and generate resilience;  
  To  decarbonize  by  accelerating  the  energy  and 

material transition;  

  To pay the services provided by natural capital:  
  To  expand  the  territorial  economic  base  with  more 

knowledge, innovation and training;  

  To  encourage  collaborative  processes to  strengthen 

a culture of the territory;  

  To  integrate  new  approaches  to  sustainability  into 

the land use management instruments;  

  To  guarantee  the  reduction  of  risk  exposure  in  the 

land use management instruments;  
  To  reinforce  territorial  efficiency 

management instruments.  

in 

land  use 

Rationale  The PNPOT Strategy, Territorial Model, Policy Measures and 
Guidelines are also the national territorial reference for the 
definition  of  sectorial  strategies  and  socio-economic 
development with expression in the territory, promoting the 
sectorial  articulation  and  orienting  the  territorialisation  of 
investment  and  strategic  and 
sectoral  option, public 
operational 
financing 
framework.  

definition for the next Community 

Type of policy category 

  Urbanisation and connectivity  

Type of policy 
instrument 

  Transport infrastructure  
  Digital infrastructure  

Type of funding  N/A 

Budget and expenditures  As  a  strategic  document,  PNPOT  is  implemented  by  other 
instruments  with  a  specific  budget  such  as  the  operational 
programs  of  the  ESI  Funds,  financing  regional,  urban, 
environment, 
and 
innovation, complemented by national funding. 

agriculture, 

transport, 

research 

Governance  Institution  responsible: Government  / Ministry  for  the 
Environment  and  Energy  Transition/Directorate-General  of 
the Territory  

Scenario 2  

Funding: National Level  

113 

 
 
Design: The design of the PNPOT amendment was based on 
a collaborative process developed in close coordination with 
the  Focal  Points.  The  different  ministries  were  invited  to 
frame their sectoral policies in the 15 Strategy Challenges of 
the Strategy. This exercise resulted in 50 policy measures.  

Implementation: National (Coordination 
Regional/ Local (Main Partners)  

Entities); 

PNPOT's  governance  structure  consists  of  operational, 
advisory  and  evaluation  bodies,  namely  the  Intersectoral 
Forum,  the  Observatory  for  Spatial  Planning  and  Urban 
Planning and of Advisory Boards and Committees.  

Policy implementation 
and policy mix 

N/A 

Relevant ESIF measures 
(if any) 

The OPs  of  the  ESI  Funds  are  in  line  with  the  territorial 
strategy defined in PNPOT, considering that these funds are 
identified  as  the  main source  of  financial  resources  to 
implement this national policy.  

Impact: monitoring and 
evaluation 

N/A 

Link  http://pnpot.dgterritorio.pt/  

National Programme for Territorial Cohesion / Interior Valorisation Programme 
(PNCT/PVI) – Programa Nacional de Coesão Territorial / Programa de 
Valorização do Interior 

ID  PT2 

Country   Portugal  

Region(s) affected   The Programme affects interior municipalities and parishes in 
every Mainland Portugal NUTS 2 and 3, except for the Lisbon 
Metropolitan  Area  and  the  Oeste  NUTS  2. The  territories 
covered  by  the  measures  of  the  PNCT  are  defined  by  the 
Resolution  of  the  Council  of  Ministers  no.  72/2016  (annex 
III). Within  the  scope  of  the  PNCT,  the  delimitation  of  the 
beneficiary territorial areas is established by the ministerial 
decree  (Resolution  of  the  Council  of  Ministers  no.  72/2016 
(annex  III)2. The territories affected,  although  coinciding 
with  the low-density territories  of  CIC  Resolution  No. 
55/2015, are now known as the Territories of the Interior.3  

Time horizon  Time  horizon:  2016-  18  as  PNCT;  Extended:  July  2018–

onwards as PVI  

Objectives and Scope   The  objective  of  the  programme  is  to  implement  territorial 
measures of  positive discrimination  and of  encouraging the 
development of low-density territories, aiming at settling the 
population,  reducing  regional  asymmetries,  cohesion  and 
territorial competitiveness.  

Overview   The PNCT, approved by the Council of Ministers on October 
20,  2016,  identifies 164 interministerial measures. Among 
these are the measures demonstrating the unique dimension 
of the PNCT, such as the shaping of a more favourable fiscal 
framework, the implementation of a Territory and Knowledge 
network, with a boost to the collaborative dimension between 
R&D  institutions  and  higher  education  and  vocational 

114 

 
 
 
education, the promotion of cross-border cooperation, on an 
annual basis, and support for higher education in regions of 
low population density, with a new political orientation that 
will favour economically disadvantaged students.  

The Measures are organized around five Intervention Axes, 
each with the following goals:  

social 

  Axis  1:  +  Cohesive –  To  build  systems  capable  of 
equity 
promoting 
territorial  equality,  promoting 
through greater 
better articulation  between  the  provision  of  urban 
and  rural  services  and  proposing  new  services 
networks 
inter-
scale visions, improving the life quality.  

intersectoral  and 

that  value 

inclusion 

and 

  Axis 2: + Competitive – To extend the development 
capabilities  of  the  interior  territories,  fostering  new 
strategies  for  valuing  its  resources,  assets  and 
agents, as well as the generation of higher levels of 
attractiveness,  affirming  and consolidating  a  new 
competitiveness.  

  Axis  3: +  Sustainable – To 

foster  geographic 
diversity  by  integrating  the  landscape,  the  natural 
and  cultural  heritage, for  the valorisation  of the 
mountain and border territories.  
  Axis  4: +  Connected –  To 

the 
connectivity  of  the interior territories,  facilitating 
their spaces, in order to foster relationships between 
coastal,  inland  and  border  regions  and  with  the 
diaspora, thus generating new forms of coordination 
and  organization  for  cohesion,  competitiveness  and 
sustainability.  

strengthen 

  Axis  5: +  Collaborative –  To  promote 

the 
inter-ministerial 
transversal aspect of 
leaderships and 
activities, valorising local 
disseminating 
institutional 
platforms 
co-operation, 
experimentation  and  implementation  of  policies  in 
favour  of 
territorial 
innovative  processes  of 
governance.  

building, 
and 

dialogue 

capacity 

for 

In 2018, the PNCT was revised. The new measures are listed 
in the Interior Valorisation Programme (PVI)  

Rationale   Portugal  has  a  persistent  trend  of  littoralisation,  which  has 
put  the  interior  regions  in  a  scenario  of  devitalisation, 
characterized  by  depopulation,  aging  and  impoverishment, 
leading to the loss of cohesion in these territories.   

Type of policy category   

Type of policy 
instrument  

This Programme results from a coordination effort between 
all  the  instruments  of  public  policy  designed  by  the 
Government and aimed at citizens and businesses.  

  Business environment and trade  
  Sector Development and Targeted Investment  
  Urbanisation and Connectivity  
  Skills and mobility  

  Venture 

capital 

funds 

and  other 

financial 

instruments  
  Tax incentives  
 
  Business  development  and  innovation  support  to 

Investment promotion  

firms  

115 

 
 
  R&D programmes  
  Science and industrial parks  
  Clusters,  centres  of  excellence  and  technology 

centres  

  Transport infrastructure  
  Digital infrastructures  
  Life-long learning  
  New skills development (e.g. digital skills)  
  Labour market training  
  Educational infrastructures, Universities  

Type of funding   The  164  measures  contemplate  different  types  of  funding, 

including grants, loans and tax exemptions  

Budget and 
expenditures  

a 

in 

presentation 

of 
In September 2018 , 
the Interior Valorisation  Programme  (the  revision  of  the 
National  Programme  for  Territorial  Cohesion), the  Deputy 
Prime Minister office claimed that more than 3.5 billion Euro 
being 
of 
implemented (including  both ESI  and  national 
funds), 
and 79% of the measures were already implemented.  

investment was 

approved 

and 

The  programming  documents  include  no  budget,  no  clear 
discrimination  of  ESI  and  national  funds (only  occasional 
references),  and 
financial 
implementation reports or evaluation studies.  

is  no  published 

there 

Although  the  Programme  was  assembled  by  the  Interior 
Valorisation  Task  Force (UMVI),  the  measures  are  being 
implemented under  several  ministries,  and 
is 
no systematic  account  of  budget  and  expenditure  data 
associated with this programme.  

there 

Governance   Institution  responsible: Deputy  Prime  Minister/Interior 
Valorisation  Task  Force  (UMVI  - Unidade de Missão para 
a Valorização do Interior) 

Scenario 1 and 2  

Funding: In  addition  to  national  funding,  some  of  the 
measures are co-financed by Community funds within some 
of the ERDF OPs.  

Design: Nacional  - Different  ministries,  depending  on  the 
thematic 
orientation. The 
programme identifies interministerial territorial development 
measures  that  result  from  the  articulation  of  the  action  of 
several  Ministries  and 
their  deconcentrated  services, 
including the work of all representatives of the UMVI Advisory 
Council, namely the partners in social consultation.  

Implementation: National/Regional/Local levels – Differen
t  ministries  and  different institutions,  depending  on  the 
measure,  in  articulation  with  the agents  present  in  the 
intermunicipal 
involving 
territory, 
institutions,  business 
communities,  higher  education 
associations, 
development 
and 
associations.  

authorities, 

companies 

local 

local 

Policy implementation 
and policy mix  

N/A 

116 

 
 
Relevant ESIF measures 
(if any)  

Given  the  broad  scope  of  this  Programme, essentially its 
objectives are like those  of  the ESI  funded Regional OPs of 
the  Norte,  Centro, Alentejo and  Algarve, and  the  Portugal-
Spain Cross-Border Cooperation Programme.   

It should be highlighted that the PNCT/PVI also encompasses 
several  measures  of  the  ESI  Funds, of  which  the  most 
relevant  are the  Pacts for  Territorial Development  and 
Cohesion, the Urban Development Strategic Plans, the Urban 
Renewal Action Plans, the Community Based Approaches to 
Incentive 
local 
Schemes.  

Development, and several Business 

Impact: monitoring and 
evaluation  

There is no systematic monitoring of the implementation of 
the measures, nor evaluation studies for the programme.  

Link   https://dre.pt/web/guest/pesquisa/-

/search/75796596/details/normal?l=1 

https://www.portugal.gov.pt/pt/gc21/comunicacao/docume
nto?i=apresentacao-do-programa-de-valorizacao-do-
interior 

Contract Tax Benefits to Productive Investment – Benefícios Fiscais contratuais ao 
Investimento Produtivo  

ID  PT3 

Country   Portugal  

Region(s) affected   All  regions  are  benefited  by  a  flat  rate  of  10%  credit  or 
exemption. The rate is increased in regions with per capita 
purchasing power lower than the country average. 

Time horizon  On going 

Objectives and Scope   The tax benefits regime is a contractual regime, with a period 
of validity of up to 10 years counted from the conclusion of 
the  investment  project,  for  investment  projects  whose 
relevant  applications  are  of  an  amount  equal  to  or  higher 
than €3.000.000. 

Investment projects must have their object comprised in the 
following economic activities:  

  Extractive industry and manufacturing industry;  
  Tourism;  
  Computer activities and services;  
  R&D and high technology intensity activities;  
 
technologies 

and audio-visual and 

Information 
multimedia production;  

  Shared service centre activities. 
be 

eligible, investment 
To 
projects must demonstrate technical, 
and 
financial viability, provide for the creation or maintenance of 
jobs,  and that  meet, at 
following 
conditions:  

least, one  of 

economic 

the 

  Be relevant  to  the  strategic  development  of  the 

national economy;  

  Be relevant for reducing regional asymmetries;  
  Contribute  to  boosting  technological innovation  and 

scientific research  

117 

 
 
 
 

Improve 
competitiveness and productive efficiency  

environment 

the 

or 

strengthen 

Overview   The  following  tax  benefits  may  be  granted  cumulatively  to 

investment projects: 

  Tax credit, determined based on the application of a 
percentage  between  10%  and  25%  of  the  relevant 
investments  of  the  investment  project  made,  to  be 
deducted from the amount of IRC collection; 

  Exemption or reduction of IMI, during the term of the 
contract, in relation to the buildings used within the 
scope of the investment project; 

  Exemption  or  reduction  of  IMT,  in  relation  to 
acquisitions  of  buildings  included  in  the  investment 
plan and made during the investment period; 

  Stamp  Duty  Exemption,  for  all  acts  or  contracts 
necessary  for  the  completion  of  the  investment 
project. 

The foreseen tax credit has the following limits: 

 

 

In the case of the creation of companies, the annual 
deduction may correspond to the total amount of tax 
collected in each tax period; 
In  the  case  of  projects  in  existing  companies,  the 
maximum  annual  deduction  may  not  exceed  the 
greater  of  25%  of  the  total  tax  benefit  granted  or 
50% of the collection determined in each tax period. 

Rationale   This  scheme  was  created  as a  regime  of  state  aid  with a 
regional  development purpose. In  the  context  of  their 
activity,  and  in  order  to  promote  competitiveness  and 
investment,  companies  can  benefit  from  tax  incentives  for 
productive 
tax benefit (individually  or 
jointly  with  other regional  State  aid  granted  to  the 
investment  or  investment  project  in  question)  encourages 
the  realization  of  the  projected  investment  in  the  region 
concerned to the detriment of another, as it compensates for 
the  disadvantages  and  net  costs  associated  with  their 
deployment in this region.  

investment. The 

Type of policy category    Business environment and trade  

Type of policy 
instrument  

Tax incentives  

Type of funding   Tax breaks 

Budget and 
expenditures  

Not available.  

Governance   Institution  responsible: Ministry  of  Finances  - Tributary 
(AT 
Funding:  National 

and 
– Autoridade Tributária e Aduaneira 
Level  

Authority 

Customs 

Design: National Level  

Implementation: National Level  

Policy implementation 
and policy mix  

This measure was implemented under a new Investment Tax 
Code  (Decreto-Lei  162/2014) approved  by  the  Portuguese 
Government  in  2014,  with  the  objective  of  intensifying 
investment support, promoting sustainable growth, creating 

118 

 
 
employment  and  contributing  to  the  strengthening  of  the 
capital of businesses.  

Relevant ESIF measures 
(if any)  

N/A  

Impact: monitoring and 
evaluation  

N/A 

Link   https://data.dre.pt/eli/port/94/2015/03/27/p/dre/en/html 

https://www.portaldosincentivos.pt/index.php/incentivos-
fiscais/beneficios-fiscais-contratuais-ao-investimento-
produtivo 

Tax 
de Apoio ao Investimento  

Regime 

for 

Investment 

Support (RFAI) 

– 

Regime 

Fiscal 

ID  PT4 

Country   Portugal  

Region(s) affected   All regions are eligible however there are differences in the 

incentive rate in favour of the less developed regions: 

 

 

the  case  of 

investments  made 

In 
the 
North, Center, Alentejo,  Autonomous  Region  of  the 
Azores  and  Autonomous  Region of  Madeira,  is 25% 
for  investment  up  to  €10  million,  and  10%  for  the 
surplus part;  
In  the  case  of  investments  in  the  Algarve,  Greater 
Lisbon and Setúbal Peninsula regions it is 10%    

in 

Time horizon  On going 

Objectives and Scope   The  Investment  Support  Tax  Regime  is  a  tax  benefit, 
according  to  the  Decree-Law  no.  162/2014  of  31  October, 
which  allows  companies  to  deduct  a  percentage  of  the 
investment  in  non-current  assets  (tangible  and  intangible) 
from the calculated taxable income. 

The tax benefits aim to promote and support investment in 
strategic  sectors  of  the  economy,  favouring  sustainable 
growth,  job  creation,  regional  development;  contribute  to 
strengthening the capital structure of companies; and attract 
to  Portugal  persons  who  carry  out  activities  of  high  added 
value or obtain income from intellectual property, industrial 
or know-how.  

The eligible beneficiaries are legal persons who carry out an 
activity in the following sectors:  

  Mining and quarrying;  
  Manufacturing industry;  
  Tourism;  
  Computer activities and services;  
  Scientific R&D activities;  
 

Information  technologies  and  audio-visual  and 
multimedia production;  

  Shared service centre activities.   
Overview   The overall amount of tax benefits is subject to the limits laid 

down in the regional aid national map.  

119 

 
 
 
Taxable persons are granted the following tax benefits:  

1-  Deduction  to  IRC6 collection  of  the  following  amounts  of 
the relevant applications:  

 

 

in 

the  case  of 

investments  made 

In 
the 
North, Center, Alentejo,  Autonomous  Region  of  the 
Azores and Autonomous Region of Madeira, 25% of 
the  relevant  applications,  for  investment  up  to  €10 
million and 10% of the relevant applications for the 
surplus part;   
In  the  case  of  investments  in  the  Algarve,  Greater 
Lisbon  and Setúbal Peninsula  regions,  10%  of  the 
relevant applications.  

2 - Exemption or reduction of IMI, IMT and Stamp Duty, in 
respect  of  buildings  used,  facts  or  acts  included  in  the 
investments that constitute relevant applications.  

Deduction limits:  

  Up to the competition of total IRC collection: in the 
case  of  investments  made  in  the  taxation  period  of 
the start of business and in the following two taxation 
periods,  except  when  the  company  results  from  a 
spin-off.  

Until the competition of 50% of the IRC collection: in all other 
cases.  

Rationale  

In its genesis, the RFAI was an instrument of countercyclical 
fiscal  policy  which,  through  the  promotion  of  business 
investment in certain regions and the creation of jobs, was 
intended  to  contribute  to  the  revitalization  of  the  national 
economy.  

Type of policy category    Business environment and trade  

Type of policy 
instrument  

Tax incentives  

Type of funding   Tax breaks 

Budget and 
expenditures  

N/A 

Governance   Institution  responsible:  Ministry  of  Finances  -  Tributary 
(AT 

Authority 

and 
– Autoridade Tributária e Aduaneira)  

Customs 

Funding: National Level  

Design: National Level  

Implementation: National Level  

Policy implementation 
and policy mix  

This measure was implemented under a new Investment Tax 
Code  (Decreto-Lei  162/2014)  approved  by  the  Portuguese 
Government  in  2014,  with  the  objective  of  intensifying 
investment support, promoting sustainable growth, creating 
employment  and  contributing  to  the  strengthening  of  the 
capital of businesses.  

Relevant ESIF measures 
(if any)  

N/A  

120 

 
 
Impact: monitoring and 
evaluation  

N/A 

Link   https://www.portaldosincentivos.pt/index.php/rfai  

Installation of Companies in Interior Territories – Instalação de Empresas em 
Territórios do Interior 

ID  PT5 

Country   Portugal  

Region(s) affected   Territories  of  the  Interior  namely  the low-density territories 

of CIC Resolution No. 55/2015.30  

Time horizon  2014–on going 

Objectives and Scope   This  scheme  aims  to  encourage  the  establishment  of 

companies in the interior territories  

Beneficiary entities: Companies that are qualified as micro, 
small  or  medium-sized  enterprises  and  which  carry  out, 
directly and primarily, an economic activity of an agricultural, 
commercial, industrial or service nature in the territories of 
the interior.   

Overview   The  scheme  provides  tax  benefits:  IRC  (Corporate  Income 
Tax)  rate  of  12.5% applicable  to  the  first  €15.000.  of  the 
taxable amount.  

The  tax  benefit  is  subject  to  the  applicable  European  rules 
on de minimis aid and, as a general rule, the amount of tax 
incentives and other non-fiscal incentives granted to a single 
undertaking  may  not  exceed  €  200,000.00,  for  a  period 
corresponding to three financial periods.  

Rationale   These tax benefits aim to promote and support investment in 
sectors  considered  strategic  of  the  economy,  favouring 
sustainable  growth,  job  creation,  regional  development; 
contribute 
the  capital  structure  of 
companies; and attract to Portugal natural persons who carry 
out  activities  of  high  added  value  or  obtain  income  from 
intellectual property, industrial or know-how.  

to  strengthening 

Type of policy category    Business environment and trade  

Type of policy 
instrument  

Tax incentives  

Type of funding   Tax breaks 

Budget and 
expenditures  

N/A 

Governance   Institution  responsible:  Ministry  of  Finances  -  Tributary 
(AT 

Authority 

and 
– Autoridade Tributária e Aduaneira)  

Customs 

Funding: National Level  

30 Low density territories that comprised of 165 municipalities and 73 parishes have been classified as 
Interior Territories by using using demographic, territorial and socio-economic indicators.   

121 

 
 
 
 
Design: National Level  

Implementation: National Level   

Policy implementation 
and policy mix  

This measure was implemented under a new Investment Tax 
Code  (Decreto-Lei  162/2014)  approved  by  the  Portuguese 
Government  in  2014,  with  the  objective  of  intensifying 
investment support, promoting sustainable growth, creating 
employment  and  contributing  to  the  strengthening  of  the 
capital of businesses.  

Relevant ESIF measures 
(if any)  

N/A  

Impact: monitoring and 
evaluation  

N/A 

Link   http://info.portaldasfinancas.gov.pt/pt/informacao_fiscal/codigos_t

ributarios/bf_rep/Pages/ebf-artigo-41-o-b.aspx 

122 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8 

ROMANIA 

Country briefings 

National Policies addressing regional economic disparities – Romania  

1.  Background  

joining 

For  the  2014-2020  programming  period,  all 
regions  in  Romania,  except  for  Bucharest-Ilfov, 
fell  in  the  category  of  the  Less  Developed 
Regions. Romania is gradually converging to the 
EU average, and all regions’ overall growth rate 
the  EU. 
has  been  positive  since 
Nevertheless,  the  regional  disparities  within 
Romania have been widening at the same time, 
especially between the capital region Bucharest-
Ilfov and the rest of the country. The former had 
a  GDP  per  capita  (PPS)  four  times  higher  than 
Romania’s least developed region (North-East) in 
2016.  Bucharest-Ilfov  ranks  highest  in  terms  of 
rates of investments attracted as a percentage of 
GDP  and  productivity  rates,  against  the  rest  of 
Romanian regions.   

Source: European Commission (2019). 

2.  Architecture of national policies for addressing regional economic disparities 

Focus  

The Romanian government recognises the need for more regional cohesion as a policy issue. 
However,  there  is  no  clear  policy  strategy  and  overarching  framework  to  tackle  regional 
disparities  at  the  national  level  beyond  the  Partnership  Agreement  and  the  ESI  Funding, 
which are regarded as the major sources of funding for this issue. As such, the Romanian 
government  has  not  published  a  Regional  Development  Strategy  for  2014-2020,  and  the 
National Strategy for Territorial Development 2035 is still to be approved by the Parliament, 
although the government has elaborated the proposal since 2014.   

Despite the lack of an overarching policy framework, the Romanian government allocates 
funding  to  three  specific  measures  financed  by  the  national  budget,  in  addition  to  the 
measures financed by the ESI Funds, to combat regional disparities and foster cohesion (see 
section 3). These are, namely, the National Programme for Local Development (PNDL), and 
two schemes for stimulating company investments and job creation in the regions. These 
measures are geared towards reducing disparities between Romanian regions, and do not 
particularly focus on reducing disparities to the EU; however, implicitly, they are expected 
to contribute to the latter goal.  

Design and governance  

The Ministry for EU Funding is responsible for the coordination of the Partnership Agreement 
with  the  ESI  Funds.  Regional  policy  combatting  disparities  is  predominantly  discussed  in 
relation  to  the  ESI  Funds  eligibility  and  priorities.  The  Ministry  for  Regional  Development 
and  Public  Administration  is  steering  the  implementation  of  the  National  Programme  for 
Local Development and of the Regional OP, while the Ministry of Finance is managing the 
schemes aimed at developing the regional economy through the support of companies. In 
general,  the  Romanian  budget  is  defined  on  an  annual  basis;  consequently,  the  national 
funding instruments may differ from one year to the other, due to changing priorities.  

3.  Relationship of national funding and support through the ESI Funds   

Regional disparity policy in Romania is almost relying entirely on the ESI Funds, which cover 
the  majority  of  sectors,  especially  in  terms  of  funding  of  significant  infrastructures,  R&I 
funding, private sector development or environment. In terms of policy addressing regional 
disparities, the national budget is primarily used for co-financing the ESI Funds. Aside from 
the three public schemes described above, further horizontal national funding programmes 

123 

 
 
are  available  for  SMEs,  support  to  different  priority  sectors,  internationalisation,  basic 
research  and  research  infrastructures,  social  programmes  but  without  any  differentiation 
between regions or regional targeting.  

In the case of the National Programme for Local Development (PNDL), there were no clear 
criteria  for  differentiating  eligible  costs  between  the  two  types  of  funds  (ESI  and  PNDL). 
Nevertheless, the national budget is set on an annual basis, while the EU funds are set on 
a multi-annual basis. This makes the yearly budget more volatile, allowing to be used for 
covering gaps in ESI funding that were not foreseen at the time of the initial programming.  

In general, the investments from the state budget cover expenses that are not eligible under 
EU funds. National ministries in charge of the different funding instruments coordinate to 
ensure the coherence of the investment priorities between the national and EU level funding. 

4.  Overview of national policy measures addressing regional economic disparities 

The measures financed solely by the national budget are presented below.  

The National Programme for Local Development (PNDL) (fiche RO1), is the most important 
national  instrument  for  the  support  of  municipalities,  aiming  at  reducing  both  social  and 
economic disparities among the regions. It provides budget transfers to municipalities for 
investments  on  improvements  of  local  public  infrastructure  (e.g.  roads,  schools, 
kindergartens). 

Three  programmes  provide  direct  support  to  companies.  The  most  important  one  is  the 
State Aid Scheme to stimulate investments with a significant impact on the economy (fiche 
RO3)  which  with  a  budget  of  €145  million  supports  substantial  investments  of  over  €1 
million. Although the programme covers the whole country, the support intensity increased 
from 10% in Bucharest to 35% in Ilfov county & West Region and 50% in the rest of the 
country. The second programme targeting companies is the State Aid Scheme to stimulate 
job creation (scheme RO2). The measure covers the salary costs for two years of new jobs 
created  by  investments  in  companies.  Although  the  main  objective  is  the  increase  in 
employment, the measure also has a direct economic impact due to the implementation of 
investments. Support of employment is also the objective of the StartUp Nation Romania 
(fiche  RO4),  supporting  the  creation  of  new  companies  by  disadvantaged  people, 
unemployed  and  young  graduates.  While  this  was  not  the  case  in  the  2017  calls,  the 
programme  now  gives  priority  to  applicants  stemming  from  areas  with  low  intensity  of 
companies per inhabitant. The ceiling used for the selection of projects practically excludes 
candidates from Bucharest and Cluj. 

In  addition  to  the  above,  the  Romanian  government  operates  several  other  programmes 
financed by the national budget aiming at fostering the competitiveness of enterprises or 
specific  sectors.  However,  they  are  horizontal  supporting  all  regions  including  the  capital 
region.    

Further schemes for fostering competitiveness financed by the national budget are under 
preparation, including the support to access funding for SMEs by offering state guarantees 
for  SMEs’  credit  lines  (SMEInvest  Romania  Programme);  and  the  set-up  of  a  Fund  for 
Development and Investments in infrastructure of the local municipalities and universities 
(ongoing in 2019), managed by the National Commission of Prognosis.  

In addition to national support, some local municipalities and counties have developed their 
ad-hoc  instruments  to  attract  investments  and  job  creation.  The  schemes  may  be 
implemented  through  direct  investment  support  to  companies  located  within  their 
territories. For example, in 2018, state aid was awarded to companies by four municipalities 
(Slanic Moldova, Ghimbav, Sura Mica and Vaslui). 

124 

 
 
5.  Classification of policies 

Title 

National programme for 
Local Development (PNDL) 
(RO1) 

State Aid Scheme to 
stimulate job creation 
(RO2) 

Type 
funding 

Budget 
transfers to 
local 
authorities  

Grants 

State Aid Scheme to 
stimulate investments with 
a major impact on the 
economy for the period of 
2014-2020 (RO3) 

Grants 

StartUp Nation Programme 
(RO4)  

Grants  

6.  Main Sources 

Interviews with: 

of 

Policy category 

Policy 
instrument 

Funding and 
implementation 

Urbanisation and 
Connectivity  

Transport 
infrastructure 

Sector 
Development 
and Targeted 
Investment  

Sector 
Development 
and Targeted 
Investment  

Sector 
Development 
and Targeted 
Investment 

Business 
development 
and 
innovation 
support to 
firms 

Business 
development 
and 
innovation 
support to 
firms  

Business 
development 
and 
innovation 
support 

Funding, at national 
level’ design and 
implementation at 
the regional level. 

Funding, design and 
implementation at 
the national level. 

Funding, design and 
implementation at 
the national level. 

Funding, design and 
implementation at 
the national level. 

Ioana Ciocoiu – Programming Department, Ministry of Funds 2014-2020 

 
  Nicoleta Georgescu – State Aid Department, Ministry of Finance 
  Alexandru Soare, Deputy General Director, General Direction for Regional 

Development and Infrastructure  

  Andreea Uncrop, Head of Office, Technical Direction, General Direction for Regional 

Development and Infrastructure 

Main documents and sources 

  Government of Romania, (2019): National Reform Programme Romania, 

2019 https://ec.europa.eu/info/sites/info/files/2019-european-semester-national-
reform-programme-romania_en.pdf  

  Partnership Agreement Romania 2014-2020, 

https://ec.europa.eu/info/publications/partnership-agreement-romania-2014-
20_en   

  Ministry of Finance, Romania, 2019: Fiscal-budgetary strategy for 2019-

2021, http://www.cdep.ro/pdfs/buget/2019/strategie/SFB_2019-2021.pdf 
  Ministry of Regional Development and Public Administration, Romania, 2019: 

Activity Report, oct. 2017- jan. 2019, 
https://www.mdrap.ro/userfiles/MDRAP_RAPORT_PS.pdf 

125 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Country fiches 

National Programme for Local Development (PNDL) 

ID  RΟ1 

Country  Romania   

Region(s) affected  All regions  targeted,  but with  differentiated  investment 
rates per counties (40  territorial  administrative  units  in 
Romania) depending on:   

 

 

 

 

(30%) Population of the county / total population 
of Romania   
(25%) Nr of towns and villages per county / total 
nr in Romania   
(10%) County’s  surface  / 
Romania  
(35%) Financial  capacity  of  the  county based  on 
the income  tax  in  Romania  /  income  tax  in  the 
county   

total  surface  of 

Time horizon  2013-2020 

Objectives and Scope  Supporting 

the  administrative-territorial  units 

for 
addressing  basic  economic  and  social  challenges  and 
improving 
for 
the  county 
investments.  It 
important  nationally 
funded programme for local development,  

the  attractiveness  of 

the  most 

is 

Overview  Provide funding for educational infrastructure, health and 
environment,  sports,  social  and  cultural  and  tourist, 
of 
administrative 
communication.   

the  means 

access 

and 

to 

Implemented  by  Ministry  of  Regional  Development  and 
Public Administration   

Rationale  Enhancing the local cities, towns, villages’ attractiveness 
and  living  conditions,  wellbeing  of  citizens  and  investor 
attractions 

Type of policy category  Urbanisation and connectivity   

Type of policy instrument  Transport infrastructure   

Type of funding  Budget transfers to local authorities   

Budget and expenditures  PNDL Phase I:  2013-2019 budget allocation of €3.7 billion 
–  out  of  which €2.7  billion  spent.    The  budget  refers  to 
both social and economic cohesion objectives  

PNDL  Phase  II:  2017-2020  budget  allocation  of €6.2 
billion – out of which €608 million spent in 2017-2018  

Governance  The Ministry of Regional Development owns the scheme – 

Direction for Regional Development and Infrastructure   

Policy implementation and 
policy mix 

Funding 
to 
investments   

local 

authorities 

for 

infrastructure 

Relevant ESIF measures (if 
any) 

The  Regional  OP  of  the  ESI  Funds  and  the  OP  for  Large 
Infrastructure are 
larger 
related, 
investment projects foreseen   

with 

but 

126 

 
 
Impact: monitoring and 
evaluation 

Under the program, a total of 11,093 financing contracts 
are  managed,  out  of  which  3,304  objectives  are 
completed.  In  Stage  I  (2013-2019),  objectives  are 
financed  (totalling  RON 17,800  million/  3.7 billion  Euro), 
of which RON 13,098 million / €2.7 billion (73.5% of the 
total allocated) have been spent so far.   

In  Stage  II  (2017-2020),  6,711  objectives  (totalling 
29,702  million RON  / €6.3 billion)  are  financed,  out  of 
which 2,814 million RON / €600 million (9.5% of the total 
allocated) have been spent so far.  

Link  https://www.slideshare.net/edezvoltare/programul-

national-de-dezvoltare-localapndl-etapa-a-iia   

State Aid Scheme to stimulate job creation 

ID  RO2 

Country  Romania   

Region(s) 
affected 

All  Romanian  regions  are  targeted,  but  with  a  different  intensity  of 
support, depending on their GDP’s distance from the EU average GDP.    

Time horizon  2014-2020 

Objectives and 
Scope 

The  measure  provides  support  to  companies  in  order  to  stimulate job 
creation in all sectors.   

Overview  Gov order nr 332/2014 2014-2020. Modified for 2018-2020   

The  scheme  finances  the  new  jobs  that  are  created  through  the 
investment, by covering salary costs (up to the medium gross salary) for 
a  period  of  2  years,  if  they  are  created  within  3  years  of  making  the 
investment;   

The jobs need to be maintained for a period of 5 years (in the case of 
large companies) or a period of 3 years (for SMEs).   

Target beneficiaries are both SMEs and larger enterprises  

Budget differentiated per development level of regions (calculated based 
on the distance from the EU average GDP), based on the EU specifications 
in the General Block Exemption Regulation (EU) N°651/2014 of 17 June 
2014:   

  For  investments  in  Bucharest:  subsidy  for  10%  of  eligible 

 

investment   
Ilfov county  &  West  Region:   subsidy  for  35%  of  eligible 
investment  

  Rest of country: subsidy for 50% of eligible investment    

Rationale  The  policy  is  part  of  the  government’s  policy  for  attracting  sustainable 
and  long-term investments  in  Romanian  regions,  but  no  clear  strategy 
has been mentioned as a backing for the measure.   

Type of policy 
category 

Type of policy 
instrument 

Sector development and targeted investments 

Business development and innovation support to firms 

Type of funding  Grants     

127 

 
 
 
Budget and 
expenditures 

Budget 2014- 2020: €600 million, with up to €100 million per year   

Governance  The Ministry of Finance Direction for State Aid coordinates the support 
scheme entirely, in coordination with other operational departments for 
payments, monitoring, financial control, treasury).   

At the moment of designing the scheme, it has been consulted with the 
Competition  Council,  Ministry  of  Regional  Development,  plus  also  the 
business  environment  and  the  Economic  and  Social  Committee.  The 
government approves the scheme.   

Policy 
implementation 
and policy mix 

N/A 

Relevant ESIF 
measures (if 
any) 

Impact: 
monitoring and 
evaluation 

There  were  no  projects  co-financed  from  EU  funds  among  the  ones 
supported under this scheme.   

The Ministry of EU Funds needs to also approve this scheme, to ensure 
that it is complementary and does not overlap with EU funding schemes.   

During the period 2014-2018, the scheme had the following results:   

  46 financing grants awarded  
  €84.33 million requested in eligible expenses  
  €40.45 million in awarded financing   
  6770 jobs created, out of which 2442 for unemployed persons  
  €138.87 million paid back in taxes by the companies who created 

the investment  

  Since  2014,  the  government  only  reimbursed  €5.2  million  in 
salary costs in the case of 58 requests filed by companies who 
created  the 
file  up  to  two 
reimbursement requests per year).  

investment (companies  can 

Link  http://discutii.mfinante.ro/static/10/Mfp/presa/transcrieri_declaratii/26-

06Prezentareschemadeajutordestatpentrusustinereainvestitiilor.pdf   

State Aid Scheme to stimulate investments with a major impact on the economy 
for the period of 2014-2020 

ID  RO3 

Country  Romania   

Region(s) 
affected 

All Romanian regions are  targeted, but with a different level of support 
awarded, depending on their GDP’s distance from the EU average GDP   

Time horizon  2014-2020 

Objectives 
and Scope 

The measure support major projects in companies in order to achieve: 

 

important  effects  on  the  economy,  in  fields  where  there  are 
opportunities for technology transfer   

  expansion  and  diversification  of  economic  activities  in  less 

developed regions   

  direction of investments in advanced technologies and innovative 

products that lead to creating highly qualified jobs   

128 

 
 
 
 
  a  multiplier  effect  in  the  economy,  through  mobilising  connected 
investments  and  developing  the  local  suppliers  of  products  and 
services   

All sectors are eligible for support   

Overview  State Aid Scheme to stimulate investments with a major impact on the 

economy (Gov order nr 807/2014) for the period of 2014-2020. 

Modified for 2018-2020. 

Intensity  of  support  is  differentiated  per  development  level  of  regions 
(calculated based on the region’s GDP distance from the EU average GDP), 
based  on  the  EU  specifications  in  the  General  Block  Exemption 
Regulation (EU) N°651/2014 of 17 June 2014:   

  For  investments  in  Bucharest:  subsidy  for covering 10%  of 

eligible costs in 2018-2020  

  For investments in Ilfov county & West Region:  subsidy for 35% 

of eligible investment  

  For  investments  in  rest  of  country:  subsidy  for  50%  of  eligible 

investment  

Target  beneficiaries are  both  SMEs  and  larger  enterprises;  initially,  a 
minimum  investment  level  was  requested  of  €10  million  in  order  to  be 
considered  to  receive  the  subsidy;  however,  a  modification  brought  in 
2018 lowered the investment threshold to €1 million, which made it easier 
for SMEs to apply.  

One further condition for awarding the scheme is that the forecast sum of 
the  taxes  the  company  pays  to  the  government  within  5  years  from 
receiving the state aid should exceed the state aid amount. Otherwise, the 
company is obliged to pay back the difference to the government  

Rationale  The policy is part of the government’s policy for attracting sustainable and 
long-term  investments  in  Romanian  regions,  but  no  clear  strategy  has 
been mentioned as a backing for the measure.   

Type of policy 
category 

Type of policy 
instrument 

Sector development and targeted investments 

Business development and innovation support to firms 

Type of 
funding 

Grants 

Budget and 
expenditures 

Budget 2014-2020 – annually approx. €145 million are budgeted for this 
scheme 

Rationale  The policy is part of the government’s policy for attracting sustainable and 
long-term  investments  in  Romanian  regions,  but  no  clear  strategy  has 
been mentioned as a backing for the measure.   

Governance  The  Ministry  of  Finance  Direction  for  State  Aid  coordinates  the  support 
scheme entirely, in coordination with other operational departments for 
payments, monitoring, financial control, treasury).   

At the moment of designing the scheme, it has been consulted with the 
Competition  Council,  Ministry  of  Regional  Development,  plus  also  the 
business  environment  and  the  Economic  and  Social  Committee. The 
government as a whole approves the scheme.   

129 

 
 
 
Policy 
implementati
on and policy 
mix 

Relevant ESIF 
measures (if 
any) 

Impact: 
monitoring 
and 
evaluation 

N/A  

There  were  no  projects  co-financed  from  EU  funds  among  the  ones 
supported under this scheme.   

The Ministry of EU Funds needs to also approve this scheme, to ensure 
that it is complementary and does not overlap with EU funding schemes.   

There  were 30  financing  agreements awarded  in  2014-2018,  based  on 
which:  

ca. €365 million in state aid awarded  

  €872 million eligible expenses  
 
  €84 million in commitments paid  
  7805 jobs created   

€410 million in taxes paid back from the companies who performed the 
investment  

Link 

 http://discutii.mfinante.ro/static/10/Mfp/presa/transcrieri_declaratii/26-
06Prezentareschemadeajutordestatpentrusustinereainvestitiilor.pdf   

http://discutii.mfinante.ro/static/10/Mfp/ajutordestat/Bilant_HG807_311
22018.pdf  

StartUp Nation 

ID  RO4 

Country  Romania   

Region(s) 
affected 

All regions;  the  2018-19  calls  penalise  applicants  from  the areas  with 
over 4 enterprises / 100 inhabitants. The limit affect primarily the cities 
of Bucharest and Cluj, due to the already high density of entrepreneurs. 

Time horizon  2018-2020 

Objectives and 
Scope 

Stimulating the establishment of new enterprises   

Creating jobs   

Facilitating  access  of  disadvantaged  persons,  unemployed  and  young 
graduates to the labour force   

Increasing the investments in new and innovative technologies   

Overview  The  measure  grants  de  minimis  support  of  up  to  200,000  RON 

(cca €42,000) to 10,000 SMEs annually  

Rationale  Support  the  creation  of  new  companies,  fostering  job  creation  and 
support  inclusion  of  disadvantaged  people,  unemployed  and  young 
graduates in the labour market.   

Type of policy 
category 

Type of policy 
instrument 

Sector development and targeted investments  

Business development and innovation support to firms   

130 

 
 
  
 
Type of funding  Grants  

Budget and 
expenditures 

N/A 

Rationale  Support  the  creation  of  new  companies,  fostering  job  creation  and 
support  inclusion  of  disadvantaged  people,  unemployed  and  young 
graduates in the labour market.   

Governance  The scheme is managed by the Ministry for the Business Environment 

and Entrepreneurship    

Policy 
implementation 
and policy mix 

N/A 

Relevant ESIF 
measures (if 
any) 

Impact: 
monitoring and 
evaluation 

ERDF Regional OP   

ERDF Competitiveness OP   

8,444 financing contracts signed in 2017  

17,717 new jobs were created, out of which 14,365 for disadvantaged 
people.   

the  Start-up Nation  2018 programme,  33,514  applicants 

For 
participated.  

Link  https://startupnation2018.aippimm.ro/ 

https://ec.europa.eu/info/sites/info/files/2019-european-semester-
national-reform-programme-romania_en.pdf  

Case study 

PNDL – Romania (RO) 

1.  Executive Summary 

The Romanian PNDL was setup in 2013 in order to cater to the local development needs of 
local authorities, i.e. beneficiaries, especially those that lack technical and financial capacity 
to  apply  for  EU  funding  or  for  those  which  have  ongoing  projects  form  other  defunct 
investment  programmes.  The  main  objective  of  the  programme  is  to  properly  equip  all 
administrative territorial units with the required technical and social infrastructure, in order 
to reduce inequalities and improve quality of life.  

The  PNDL  is  setup  through  Governmental  Emergency  Ordnance  and  lacks  a  general 
dedicated legal framework for its field of investment, as well as a long-term strategy. The 
main  implementation  body  is  the  Directorate  General  for  Regional  Development  and 
Infrastructure  of  the  Ministry  of  Regional  Development  and  Public  Administration.  Its 
responsibilities include general management of the programme, setting the annual budget 
and the selection of the project list.  

The programme promotes an attractive level of accessibility due to its lax framework and 
reduced bureaucracy, but this comes at the cost of lack of clarity in terms of prioritization 
of  investments  and  allocations,  and  reduced  control  over  implementation.  Moreover,  the 
increased attractivity of the programme can induce the crowding out of the more complex 
EU  funded  programmes.  Lastly,  the  programme  does  not  include  a  well-defined 
monitorization instrument or indicators, making it difficult to track progress along the way.  

Coordination  of 
investments  programmes,  especially  EU 
programmes, is prioritized and supported through guidelines drafted with the support of the 
World Bank. The practical implementation is, however, questionable in the light of available 

investments  with  other 

131 

 
 
 
data, as it is unclear what improvements have been made since the issue has been raised 
by the Court of Auditors.  

Whilst  general  implementation  of  the  PNDL  is  problematic  due  to  the  lack  of  adequate 
legislative  packages  and  transparency,  the  basic  approach  of  the  programme  must  be 
appreciated in a positive note. In theory, PDNL tries to counter balance the lack of EU funded 
investments  through  state  funded  ones  and  more  flexible  funding  criteria.  However,  in 
practice, lack of transparency and legal ambiguity make it difficult to control investments 
and evaluate their efficiency and role in reducing regional disparities. 

2.  Background and Context 

The National Local Development Programme (PNDL) is dubbed by the Ministry of Regional 
Development  and  Public  Administration  (MRDPA)  as  the  most  important  in-vestment 
programme for the financing of local development objectives. The programme appeared in 
a  post-crisis  context  and  economic  environment,  which  slowed  down  the  reduction  of 
regional disparities at national and EU level. Regional disparities have been a constant issue 
for Romanian governments, especially since EU accession. In addition, arge urban centres 
started to concentrate social and economic resources,  while other areas, especially rural, 
started to lag behind even further due to lack of technical and transport infrastructure and 
services of general interest. Even if not always mentioned, PNDL is not a novel approach, 
as until 2012 a similar programme was in place, the National Infrastructure Development 
Programme,  which  was  setup  in  2010.  The  two  are  very  similar  in  approaches  and 
investment  objectives,  e.g.  development  of  local  and  county  road  infrastructure,  sewage 
and wastewater treatment, fresh water supply networks.  

PNDL came into place as a support instrument for the Romanian regional development policy 
and  the  national  commitments  for  bringing  water  supply  and  wastewater  networks 
infrastructure up to European standards by 2017 and 2018 respectively. Moreover, the PNDL 
tries to prioritise an approach based on the argument put for-ward by the World Bank in the 
report  "Competitive  Cities"  (World  Bank,  2013),  which  in  short  emphasises  that,  at  local 
level, investment priorities differ from area to area based on the level of economic and social 
development.  This  means  that  in  less  developed  areas,  local  authorities  will  prioritise 
institutional  performance  in  terms  of  general  services  infrastructure,  while  in  more 
developed  areas  will  prioritise  links  in-between  neighbouring  areas  and  investments  in 
quality of life. In addition, considering that the Romanian administrative system is based on 
the principal of local autonomy, the PNDL actually emphasizes that it comes in support of 
local authorities by supporting these in making the investments by themselves. This way, 
at least at declarative level, the chosen investments are actually required at local level, and 
are not imposed by other regional or national programmes, which, as the PNDL reasoning 
note states, are not that well equipped for dealing with local investment priorities. 

3.  Description of Policy Measure 

PNDL was setup through the Government Emergency Ordinance (GEO) 28/2013. The legal 
package  also  included  the  reasoning  note  and  the  methodological  norms  for  the 
implementation  of  the  programme  (MRDPA  Ministry  Order  1851/2013).  PNDL  brings 
together  and  replaces  three  investment  programmes  that  were  implemented  by  MRDPA: 
The  infrastructure  programme  (1997);  The  Rural  Infrastructure  Development  Programme 
(2006); Multiannual Priority Programs for Water and the Environment (2006). 

The programme includes 3 sub-programmes: "The modernization of the Romanian village"; 
"The urban regeneration of cities and towns"; "County level infrastructure". Considering the 
variety of these programmes, the PNDL covers a large range of in-vestments covering water 
and  sewage  systems,  education,  health,  roads  and  bridges,  social  and  cultural 
infrastructure,  sports,  and  the  headquarters  of  local  authorities  and  their  subordinated 
institutions.  The programme allows for both new infrastructure as well as extensions of the 
existing one. Also, the investments can be new or ongoing at the time o application. 

There are several national strategies that touch upon local development and the re-duction 
of regional disparities, but none focus directly on these. The main programme that explicitly 
targets regional disparities is the EU funded Regional Operational Programme. The MRDPA 
and  its  Directorate  General  for  Regional  Development  and  Infrastructure  play  important 
roles  in  ensuring  the  implementation  of  development  measures.  The  MRDPA,  drafted  the 
National  Strategy  for  Territorial  Development,  which  should,  in  principle,  guide  national 

132 

 
 
investment programmes such as the PNDL. However, since its drafting and 2016 adoption 
by the Government, it has been stuck in the Parliamentary approval procedure. Hence, we 
can say that even though PNDL other investment programmes follow general guidelines set 
out by the strategy, in practice, PNDL is implemented outside of a strategic framework for 
local development.  

The programme's lead stakeholder is the MRDPA, as the Directorate General for Regional 
Development  and  Infrastructure  is  responsible  for  the  management  of  the  programme. 
Apart  from  MRDPA  and  local  authorities,  no  other  specific  implementation  bodies  can  be 
identified according to the programme design and methodological norms.  

The PNDL covers the whole territory of the country and all local authorities can apply for 
funding. The differentiating factor is given by the distribution of funds at county level which 
takes  into  consideration  different  demographic  and  administrative  criteria,  the  latter  of 
which are not very clearly described.  

The programme's budget results from the total sums allocated to each ministry from the 
state budget as agreed by the government. The amounts are approved by Parliament. The 
MRDPA  establishes  what  the  annual  budget  of  the  programme  is,  considering  the  total 
allocation for the programme, based on the multi-annual estimation for each funding round 
(See below PNDL timeframe). The total allocated sums for PNDL I, i.e. 2013-2019, is EUR 
3.7  billion,  while  the  total  allocated  sum  for  PNDL  II,  i.e.  2017-2020,  is  EUR  6.2  billion. 
Marking that the total programme budget doubled. 

4.  Policy Implementation 

PNDL  implementation  does  not  depend  on  a  pre-set  institutional  framework  of  actors  in 
charge of implementation. The lead stakeholder is the MRDPA, that is responsible for the 
management of the programme. As already mentioned, the MRDPA establish-es the annual 
budget of the programme considering the total allocation for the programme, based on the 
multi-annual  estimation  for  each  funding  round.  Administrative-territorial  units  or 
administrative-territorial units members of intercommunal development associations are the 
direct beneficiaries of the PNDL allocations. In this context we can consider the inhabitants 
of each local administration as target groups of the investments.  

It is worth mentioning that according to the PNDL guide, most of the responsibility for the 
implementation of the projects is left in the hand of the beneficiaries, while MRD-PA is in 
charge  of  the  monitorization  process.  However,  it  is  difficult  to  identify  any  dedicated 
instrument or indicators through which monitorization is being achieved. One interviewee 
actually  mentioned  that  there  are  no  progress  indicators  in  place,  the  only  indicators 
reported  to  MRDPA  being  the  expenses  sums  and  physical  measures  of  the  proposed 
investments,  e.g.  km  of  road,  meters  of  pipe,  build  areas,  and  in  some  cases  number  of 
beneficiaries. The aim being only the tracking of the proper spending of the funds. 

In terms of implementation and coordination structures it is difficult to establish how these 
are  designed  and  function.  MRDPA  reports  that  the  ministry  coordinates  with  the 
management  authorities  of  the  EU  funded  OPs.  In  addition,  with  support  from  the  World 
bank, the Government implemented the project "Coordination and efficient and transparent 
selection  of  EU  and  state-funded  infrastructure  projects  for  2014-2020  period",  which 
resulted in guides aimed to facilitate and improve project selection. However, interviews at 
local level pointed to the fact that there is no formal coordination framework, but PNDL is 
generally considered to be additional and complementary to the ESI Funds, but with a more 
flexible  framework.    One  of  the  reports  of  the  World  Bank  project  also  emphasizes  this 
flexible framework, but points to the risk of crowding out of EU funding, due to the laxer 
bureaucracy of the PNDL, which makes it more attractive for local authorities (World Bank, 
2015). 

According  to  the  PNDL  implementation  guide  published  by  the  MRDPA,  following  the 
establishment of the annual budget, MRDPA also establishes the financial allocation to each 
county, based on weighted calculation that includes: the population of the county, number 
of towns and villages, area of the county, the capacity of the administrative-territorial units 
to participate in investments with funds from their own local budgets. This type of approach 
raises some issues, as already stated by the Court of Auditors in 2015, because the definition 
of criteria like "financial capacity" is not well defined and open to interpretation.  

133 

 
 
It is worth noting that a change can be observed in terms of funding allocation be-tween 
PNDL I and II. As the World Bank already emphasized in their analysis in the 2013-2014 
time frame, there was no clear prioritisation if we look at funding distribution, as all counties 
received  similar  funding  amounts  ranging  from  EUR  5  to  5.7  million  (World  Bank,  2013). 
This was a different approach compared to the EU funded programmes, as the Regional OP, 
which prioritise less developed regions. However, the 2015-2019 PNDL I allocations show a 
much-varied pattern in terms of county level allocations, with amounts ranging from EUR 
30 million to EUR 177 million. In the case of PNDL II the total allocated sums for each county 
vary from EUR 77 million to EUR 197 million, a much more significant variation. The sums 
emphasize the significant increase of the total allocations but linking the allocated sums to 
the level of development is still problematic and open to scrutiny by the civil society (i.e. 
Expert Forum, a Romanian think tank analysed allocations at beneficiary level and identified 
allocation patterns that can be attributed to political affiliation. Expert Forum, 2016, 2018). 

Until 2015, after the annual budget was been established, the County Councils centralized 
the new and ongoing investment proposals from all administrative-territorial units and send 
these  to  the  MRDPA  for  approval.  From  2015,  GEO  28/2013  Article  9  states  that  the 
programme beneficiaries send their requests to the MRDPA directly. The latter analyses the 
list  form each  county  and  drafts  the  final list of  investments,  which  is  then  approved  my 
order of the Ministry. One of the main issues raised in this case by beneficiaries and third-
party experts, as well as the Court of Auditors, is that the process of project selection is not 
always  transparent.  Moreover,  in  some  cases,  especially  in  the  first  round  of  PNDL  I, 
allocations  were  marked  for  covering  arrears  from  previous  investment  programmes. 
Currently  the  project  selection  criteria  include  type  of  investment,  physical  status  of  the 
investment, date of the contract and served population. However, it is unclear how these 
criteria are weighted in the project selection process.  

The beneficiaries send all technical documentations, and these are analysed by the MRDPA. 
It must be noted that the documentation required for ongoing investments are much simpler 
than for new investments. After approval of the technical documentation, the MRDPA signs 
the multi-annual funding contract with the beneficiary.  The contracts are for  maximum 4 
years  (although  the  n+2  rule  is  often  applied),  considering  the  approved  commitment 
appropriations and budgetary commitments, but with-out annual planning of the budgetary 
commitments. The method of allocation raises the risk of transforming these expenses in 
arrears in the future years, as financial sustainability is difficult to guarantee considering the 
current economic situation and future budget forecasts.  

5.  Project implementation 

After  signing  the  contracts,  the  beneficiaries  start  the  public  acquisitions  process  for  the 
works  required.  Also,  the  beneficiaries  can  request  the  allocated  amounts  for  the 
implementation. MRDPA verifies the documents and if there are no clarifications re-quired 
they transfer the funds to the beneficiary. Within 30 days from allocation, the beneficiaries 
are required to justify the use of the funds.  

During the implementation process the beneficiaries are required to provide several reports 
regarding the state of the investment. However, these do not include progress indicators, 
but rather centralise expenses and allocation requests.  

At the end of the project the beneficiaries are required to provide the proof of receipt for 
the services and works provided by contractors to MRDPA and to ensure the quality of the 
investment, although the latter is not properly defined. In addition, they have to provide a 
general  data  sheet  regarding  the  project,  but  also  in  this  case  the  data  requested  only 
includes financial data regarding the allocation from PNDL and the finalization of the project 
(reports are attached to the norms as annexes). 

6.  Strengths and Weaknesses 

The main feature of the PNDL, its accessible framework of implementation, represents both 
a strength and a weakness. On one hand, the accessibility factor eases the implementation 
at  local  level,  especially  in  the  case  of  local  authorities  which  lack  the  knowledge  and 
technical capacity to access EU funding and/or the capacity to co-finance such projects. On 
the other hand, this also raises the risk of crowding out EU funding opportunities, which are 

134 

 
 
more technical and bureaucratic in their implementation and can become significantly less 
attractive for small local authorities.  

A  second  issue  is  the  lack  of  systematic  transparency  in  the  budget  allocation,  project 
selection  and  implementation  phases,  from  both  MRDPA  and  beneficiaries.  MRDPA,  uses 
criteria  that  is  not  very  well  defined,  e.g.  "financial  capacity",  and  which leaves  room  for 
interpretation. Also, in some cases project selection is difficult to justify, especially in 2014, 
e.g. when, as the Court of Auditors emphasized, sports centres were prioritized instead of 
water  supply  networks.  This  type  of  approach  raises  important  questions  regarding  the 
added value of the programme interventions towards reducing regional disparities.  

The  legal  framework  for  the  implementation  of  the  programme  represents  a  structural 
weakness for the long-term continuation of the programme. Because the there is no strategy 
and law for the field covered by the programme, the obligation of any acting Government 
to  continue  the  programme  is  debatable.  Also,  the  multi-annual  approach  based  on 
commitment appropriations raises issues of financial sustainability, considering that the sole 
finance source is the state budget, which can vary in size, increasing the risk of creating 
arrears for future local administration. 

The programme also lacks appropriate process, input and output indicators, required by any 
investment  programme  in  order  to  measure  the  level  of  achievement  of  objectives. 
Moreover,  the  existing  legal  framework  does  not  describe  a  proper  monitorization 
instrument,  which  was  also  confirmed  during  the  interviews  as  missing  and  need-ed  for 
proper implementation.  

Finally, even if efforts have been made in order to coordinate PNDL investments with EU 
funded  programmes,  the  programme  seems  to  be  missing  a  case-by-case  system  for 
checking the appropriateness of the PNDL instead of the ESI Funds. 

7.  Transferable Lessons 

An  important  aim  that  can  be  taken  away  from  this  case  study  is  that  of  fostering  local 
development by not letting endogenous financial and capacity limitations stand in the way 
of local investments. Specifically, local authorities lacking technical and financial capability 
to  access  EU  funds  for  development,  should  not  be  punished  by  lack  of  investment,  but 
could be assisted through complementary state-funded programmes. However, this requires 
significant  work  from  the  governmental  side  to  develop  the  required  strategic  and  legal 
frameworks for implementation, which in turn must allow for transparency and thus reduce 
the politicization risk of the process.  

Another  important  lesson  is  that  accessibility  is  key  in  both  implementation  and  gaining 
support from local authorities. But state-funded investment programmes criteria should not 
be discriminatory and so reduced that discourage the use of EU funded programmes, as this 
can raise questions about the correlation and complementarity with regional development 
objectives and Cohesion Policy. Moreover, deep integration and coordination with EU funded 
programmes is a necessary step, as it increases efficiency and reduces the risk of double 
financing. 

Lastly,  generality  and  ambiguity  in  the  formulation  of  an  investment  programme,  while 
encouraging and facilitating a wide range of investments, tends to reduce the level of impact 
through the diffusion of investments and lack of cohesiveness. In turn, this raises questions 
regarding the efficiency and efficacy of the programme in achieving its objectives. Ultimately 
this raises the issue of the appropriateness of the state-funded investments approach. 

135 

 
 
 
 
 
 
9 

SLOVAKIA 

Country briefings 

National Policies addressing regional economic disparities – Slovakia 

1. Background  

Slovakia  consists  of  four  NUTS  2  regions. 
The  Region of  Bratislava  is  the only  one  in 
the  category  of  More  Developed  Regions, 
while the other three belong to the category 
of Less Developed Regions.  

According  to  the  OECD  Index  of  regional 
disparity  in  GDP  per  capita  for  2016,31 for 
the  period  2000-2016  the  gap  in  the 
regional  GDP  per  capita  among  the  three 
less  developed  regions  and  Bratislava 
increased,  with  the  GDP  per  capita  in 
Bratislava  to  be  3.5  times  higher  than  in 
East Slovakia, the least developed region of 
the  country.  In  2016,  Slovakia  had  the  4th 
highest regional economic disparities among 
OECD countries. 

Source: European Commission 

2. Architecture of national policies for addressing regional economic disparities 

Focus  

National policy for reducing the economic disparities between the country and the EU is set 
in the Partnership Agreement of the current programming period and financed by the ESI 
Funds. This dimension is reflected in the National Strategy for Regional Development (fiche 
SK2), which relies on the ESI Funds to address both the disparities between Slovakia and 
the EU and the internal disparities among the regions. 

National policy focuses on the reduction of disparities between the regions. The reduction of 
regional disparities within the country is among the priorities of the Economic Policy Strategy 
2030  of  Slovakia,  which  puts  emphasis  on  national  investments  on  infrastructures  in  the 
regions that improve labour mobility and business environment.  

In total, four measures have been identified which are funded by the national budget. All of 
them  aim  at  addressing  internal  disparities.  Three  of  them  focus  on  urbanisation  and 
connectivity by financing transport, digital infrastructures and energy infrastructures. One 
focuses  on  the  development  of  skills  and  one  on  the  improvement  of  the  business 
environment.    

Design and governance 

The identified policies originate from different ministries, which have the responsibility for 
the design and funding. In most of the cases, the design and the funding of the measures 
is the responsibility of the Ministry of Economy while the implementation is the responsibility 
of  regional  or  local  authorities.  The  financial  measure  is  designed  and  financed  at  the 
national level and implemented by a national agency (SBA). 

Programmes with a territorial character such as the programme for the regeneration of rural 
areas are funded and overseen at the national level but are designed and implemented at 
the local level. 

31 OECD (2018), OECD Regions and Cities at a Glance 2018, OECD Publishing, 
Paris, https://doi.org/10.1787/reg_cit_glance-2018-en.  

136 

 
 
 
Relationship of national funding and support through the ESI Funds  

The  ESI  Funds  are  the  primary  source  of  funding  for  cohesion  policy  addressing  both 
dimensions,  namely  the  cohesion  between  the  country  and  the  EU  and  the  disparities 
between the regions. 

The  national budget provides  a  small  contribution  to  the  reduction  of  disparities  between 
the regions, by financing mainly transport and digital infrastructures. 

3. Overview of national policy measures addressing regional economic disparities 

The public interventions financed by national sources, with the exception of the investments 
on the railway, are relatively small in budget and distributed to a considerable number of 
small projects.  

The  Programme  for  Regional  Development  Support,  sub-programme  “Development  of 
Manufacturing and Services” (fiche SK1.1) supports local and regional authorities to finance 
the development and improvement of basic infrastructures which have a direct or indirect 
impact  on  the  economic  development  of  the  area,  such  as  the  upgrading  of  gas  and 
electricity infrastructure, roads,  building water treatment plants, conducting archaeological 
excavations etc. Although it is open for all regions, local and regional authorities in deprived 
areas (e.g. the unemployment rate in the district/region is one of the assessment criteria) 
have  a  priority.  As  an  indication  for  the  size  of  the  programme,  the  funding  for  2018 
amounted to €5 million.  

In the area of transport infrastructures, the Railways of the Slovak Republic invested €125.8 
million in 2018 for the modernisation of the Slovak railway infrastructure (fiche SK4) in all 
regions, except for Bratislava. Due to the size of the investment, additional funding from 
the ESI Funds and the Connecting Europe Facility was also used (€144 million and €5 million 
respectively). 

The  programme  for  the  regeneration  of  rural  areas  (fiche  SK3)  provides  funding 
opportunities for parishes, networks of parishes, microregions for interventions that improve 
the quality of the rural environment, developing green infrastructure and adopting measures 
to  mitigate  climate  change,  provide  environmental  education  and  awareness  raising 
activities.  Although  Bratislava  is  not  excluded,  the  region  of  the  capital  is  deliberately 
disadvantaged in favour of the other regions. The programme runs annually with individual 
projects not exceeding €8.000. 

The  Slovak  Business  Agency  runs  a  Microloan  Programme  (fiche  SK5)  for  SMEs  which 
provides loans ranging from €2.500 up to €50.000. The loan maturity ranges from 6 months 
to  4  years.  The  interest  rate  ranges  from  1.19%  to  9.03%.  Although  companies  from  all 
regions  are  eligible,  applicants  from  the  regions  with  higher  unemployment  rate  have  an 
advantage in the selection process.  

4. Classification of policies  

Title 

Type of funding 

Policy category 

Policy instrument 

The Programme for 
Regional Development 
Support, sub-programme 
“Development of 
Manufacturing and 
Services” (SK1.1) 

 The programme for the 
regeneration of rural 
areas (SK3) 

Modernisation of the 
Slovak Railway 
Infrastructure (SK4) 

Public 
procurements 

Urbanisation and 
Connectivity  

Transport 
infrastructure  

Digital 
infrastructure  

Energy infrastructure 

Grants, public 
procurements 

Urbanisation and 
Connectivity  

Digital 
infrastructures  

Grants 

Skills and 
Mobility  

New skills 
development  

Public 
procurement 

Urbanisation and 
Connectivity  

Transport 
infrastructure  

Microloan Programme 
(SK5) 

Loans 

Business 
Environment and 
Trade  

137 

Venture capital 
funds and other 

Funding 
implementation

and 

Design and funding at the 
national level 
Implementation at the 
regional or local level

Funding at the national 
level, design and 
implementation at the 
regional/local level

Funding at the national 
level, design and 
implementation at the 
regional/local level

Design, funding and 
implementation at the 
national level 

 
 
  
financial 
instruments   

5. Main Sources: 

Interviews with 

   Łuboš Littera, Director of the Department for Cohesion Policy, Office of the Deputy 

Prime Minister of the Slovak Republic for Investments and Informatisation 

   Antonia  Mayerova,  Director  of  Payments  Department,  Ministry  of  Finance  of  the 

  

Slovak Republic 
Juraj Cenker, Director of Department of structural and expenditure policies, Institute 
for Financial Policy of the Slovak Republic 

Main documents and sources 

   Government  of  Slovakia,  (2019):  National  Reform  Programme  Slovakia, 

https://ec.europa.eu/info/sites/info/files/2019-european-semester-national-
reform-programme-slovakia_sk.pdf  

   Government  of  Slovakia  (2018),  The  Economic  Policy  Strategy  of  the  Slovak 
Republic until 2030, https://www.economy.gov.sk/uploads/files/wRKb2ncO.pdf  
   Government of Slovakia (2018), The National Strategy for Regional Development of 

the Slovak Republic http://www.mpsr.sk/mvrrfiles/003994a.pdf   

   OECD  (2018), OECD  Regions  and  Cities  at  a  Glance  2018,  OECD  Publishing, 

Paris, https://doi.org/10.1787/reg_cit_glance-2018-en.   

   OECD  (2016),  OECD  Regional  Outlook  2016:  Productive  regions  for  inclusive 

societies. 
   Partnership 

Agreement 

Slovakia, 

https://ec.europa.eu/info/publications/partnership-agreement-slovakia-2014-
20_en 

Country fiches 

The Economic Policy Strategy of the Slovak Republic until 2030 

ID 

Country  

SK1 

Slovakia  

Region(s) affected  

 All country  

Time horizon 

2018-2030 

Objectives and Scope  

To determine  the  strategic  direction  of  the  economic  policy 
until  2030 and  therefore  allow  to  plan  the  economic 
development  more  independently  of  the  standard  political 
cycle and to provide a base material not only for the current 
government, but also for the successive ones.   

Overview  

The Strategy has seven main chapters:  

   Basic strategic goals of the economic policy  
   Analysis of the main global trends, including from the 

perspective of Slovakia  

   Economic potential of the regions  
   SWOT analysis  
   Outline of the main policy areas  
   Specific measures  

138 

 
 
 
 
 
 
Rationale  

   Progress monitoring  

Reducing  regional  disparities  and  regional  development  is 
one  of  the  key  areas  of  the  Strategy  (Key  Area  5). For 
example, the Strategy recognises the importance of national 
investments  into  transport  infrastructure  in  the  regions  to 
fuel  labour  mobility  and  improve  business  environment, 
including in relation to Slovakia as a transit country.   

Type of policy category   

Business environment and trade  

Sector Development and Targeted Investment  

Type of policy 
instrument  

Type of funding  

Budget and 
expenditures  

Rationale  

Urbanisation and Connectivity  

Skills and mobility  

The strategy covers all areas  

Variety  of  sources: A  mix  of  funding  sources: national 
budget, EU funding  

Not  specified.  Different  public  bodies  are  responsible  for 
implementation  of  different  measures, 
the 
responsibility for funding.    

including 

Reducing  regional  disparities  and  regional  development  is 
one  of  the  key  area  of  the  Strategy  (Key  Area  5). For 
example, the Strategy recognises the importance of national 
investments  into  transport  infrastructure  in  the  regions  to 
fuel  labour  mobility  and  improve  business  environment, 
including in relation to Slovakia as a transit country.   

Governance  

Institution  responsible:  The  overall  responsibility  is  with 
the Slovak Ministry of Economy  

Scenario 1  

Policy implementation 
and policy mix  

This  is  an  umbrella  national  strategy  so  assessing  the 
downstream  mix  of  measures  and  policies 
is  very 
difficult. Some  45  specific  measures  were  presented  in  the 
strategy.  

Relevant ESIF 
measures (if any)  

N/A  

Impact: monitoring and 
evaluation  

Not  evaluated  yet,  but  the  monitoring  system  is  using  the 
International  Human  Development  Index,  the  OECD  Better 
Life Index and a selection of Eurostat indicators, such as for 
the comparison of GDP per capita PPP  

Link  

https://www.economy.gov.sk/uploads/files/wRKb2ncO.pdf   

The  Programme 
“Development of Manufacturing and Services” 

for  Regional  Development  Support, 

sub-programme 

ID  SK1.1 

Country  Slovakia  

Region(s) affected  All  country,  however,  applicants  from  Bratislava  and  some 
other  advanced  regions  and  districts are disadvantaged  in 
project proposal assessment.   

139 

 
 
 
Time horizon  2018-2020 

Objectives and Scope  To  provide 

funding 

for  manufacturing  and  services 

development   

Overview  This is a programme implemented by the Slovak Ministry of 
Economy  and  funded  from  the  Slovak  National  budget.  It 
allows  local  and  regional  authorities  to  apply  for  national 
funding  for  their  development  projects,  such  as  building 
water treatment plants, roads, upgrading gas and electricity 
infrastructure, conducting archaeological excavations etc.   

Rationale  The programme addresses regional cohesion. In practice, the 
proposal  evaluation  criteria  are  set  up  in  a  way  that  they 
favour applicants (local authorities and regional authorities) 
based in deprived areas (e.g. the unemployment rate in the 
district  /  region  is  one  of  the  assessment  criteria).  The 
activities that could be funded from the programme clearly 
contribute to improving regional cohesion because they focus 
on building/upgrading the basic infrastructure.  

Type of policy category  Urbanisation and Connectivity  

Type of policy 
instrument 

Transport infrastructure  

Digital infrastructure  

Type of funding  Public procurement 

Budget and expenditures  2018: €5 million    

Governance  Institution  responsible:  The  overall  responsibility  is  with 

the Slovak Ministry of Economy  

Scenario 2  

Policy implementation 
and policy mix 

Upstream: The Economic Policy Strategy until 2030  

Relevant ESIF 
measures (if any) 

N/A  

Impact: monitoring and 
evaluation 

Not evaluated yet.  

Link  https://www.mhsr.sk/uploads/files/sIhCMhoV.pdf   

The National Strategy for Regional Development of the Slovak Republic 

ID  SK2 

Country   Slovakia  

Region(s) affected   All country  

Time horizon  2008 - 2030 

Objectives and Scope  To  determine  the  national  strategic  approach  towards 

regional development in the Slovak Republic  

To  identify  the  potential  of  all  regions  and  specify  the 
competitiveness within the national context  

140 

 
 
 
To  determine  developmental  goals  and  priorities  for  each 
region  

Overview  The  National  Strategy  for  Regional  Development  has  ten 

chapters:  

   Analysis  of  the  regional  development  by  industry 

sector  

   Main goals and priorities for regional development  
   The main strategic goal for 2020/2030  
   Supporting the priority axes  
   Strategic  goals  of  the  regions  to  reflect  the  Europe 

2020 Strategy  

Implementation of the Strategy  

   Forecast for the first years  
  
   Monitoring and evaluation  
   Funding  
   Schedule  

Rationale  The  National  Strategy  for  Regional  Development  of  the 
Slovak  Republic  provides  complex  information  on  the 
national approach to regional development. It is an umbrella 
identifying strengths and weaknesses of all Slovak  regions. 
It  is  aligned  to  the  Europe  2020  Strategy  and  to  the 
Partnership Agreement 2014 - 2020  

Type of policy category 

Type of policy 
instrument 

   Sector Development and Targeted Investment  
   Urbanisation and Connectivity  
   Skills and mobility  
   Basic business development and innovation support 

to firms  

   Transport infrastructure  
   Digital infrastructures  
   Life-long learning  
   New skills development (digital skills)  
   Labour market training  

Type of funding  Variety  of  sources: Mix  of  funding  sources,  with  the 
dominance of EU funding. The national budget to be used to 
funding only a minority of the proposed measures.  

Budget and expenditures  The  total  funding  allocation  is  not  specified.  There  are 
different  government  departments  responsible  for  the 
measures.  

Governance  Institution  responsible:  The  overall  responsibility  is  with 
the Office of the Deputy Prime Minister of the Slovak Republic 
for Investments and Informatisation  

Scenario 1  

Policy implementation 
and policy mix 

Upstream: The  Partnership  Agreement  2014–2020,  Europe 
2020  

Downstream:  Very  difficult  to  map  as  measures  have 
different owners across the Slovak Government. An example 
of  a  specific  measure  is  the  Support  for  Least-Developed 
Districts (SK2.1) 

Relevant ESIF 
measures (if any) 

N/A  

141 

 
 
Impact: monitoring and 
evaluation 

Not evaluated yet.  

Link  http://www.mpsr.sk/mvrrfiles/003994a.pdf   

The programme for the regeneration of rural areas  

ID  SK3 

Country   Slovakia  

Region(s) affected  

 All  country  (Bratislava  is  not  excluded,  but  given  the 
conditions  of  the  programme,  the  region  of  the  capital  is 
deliberately  disadvantaged  at  the  expense  of  the  other 
regions)  

Time horizon  2019 

Objectives and Scope   To create economic, organisational and expert environments 
for rural communities in order to allow them to develop their 
regions  

Overview   The  programme  (running  annually)  provides 

funding 
opportunities  for  parishes,  communities  of  parishes  and 
microregions in the following areas:  

   Quality of rural life environment  
   Green  infrastructure  and  adaption  measures  to 

mitigate climate change impacts  

   Environmental  education  and  awareness  raising 

activities  

Rationale   The  programme  indirectly  supports  reducing  of  territorial 
disparities  by  funding  bottom-up  projects  that  aim  at 
improving  living  conditions  for  rural  communities  and 
therefore at increasing attractiveness.   

Type of policy category    Urbanisation and Connectivity  

Skills and mobility  

Type of policy 
instrument  

Digital infrastructures  

New skills development  

Type of funding   Grants, public procurements 

Budget and 
expenditures  

specified,  however, 

Not 
the  available  programme 
documentation  does  not  suggest  a  large  funding  scheme, 
because  individual  projects’  budgets  could  be  €5.000 
(€8.000) at a maximum.   

Governance   Institution  responsible:  The  overall  responsibility  is  with 
the Slovak Agency for the Life Environment  

Policy implementation 
and policy mix  

Scenario 3  

Not available   

Relevant ESIF 
measures (if any)  

N/A  

142 

 
 
 
 
Impact: monitoring and 
evaluation  

Not evaluated yet  

Link   http://www.obnovadediny.sk/   

Modernisation of the Slovak Railway Infrastructure 

ID  SK4 

Country  Slovakia  

Region(s) affected  All country  

Time horizon  2018 

Objectives and Scope  The main objective is to provide a detailed overview of the 
investment activities into the railway transport infrastructure 
that were carried out across all regions of Slovakia in 2018.  

Overview  Description: The  annual  investment overview describes  all 
projects  that took  place  in 2018 to  modernise  railway 
infrastructure in the Czech Republic, regardless of sources of 
funding.  

Rationale  Most  of  the  infrastructure  projects  for  2018  targeted  the 
regions (not the capital of Bratislava) and aimed at providing 
quicker,  more  reliable  and  safer  railway  connection  across 
various  regions,  thus  positively  contributing  to  the  regional 
development.    

Type of policy category  Urbanisation and Connectivity  

Type of policy 
instrument 

Transport infrastructure  

Type of funding  Variety of sources: national budget, EU funding  

Budget and expenditures  National budget: €125.8 million  

Cohesion Fund / ERDF (through the Operational Programme 
Integrated Infrastructure): €144 million  

Connecting Europe Facility: €5.8 million  

Governance  Institution responsible: Railways of the Slovak Republic  

Policy implementation 
and policy mix 

Scenario 3  

Not identified  

Relevant ESIF 
measures (if any)  

N/A  

Impact: monitoring and 
evaluation  

Not evaluated yet.  

Link   https://www.zsr.sk/modernizacia-trati/plan-modernizacie/   

143 

 
 
 
 
 
 
The Microloan Programme 

ID  SK5 

Country  Slovakia  

Region(s) affected  All country, however, applicants from the regions with higher 
loan 

rate  have  an  advantage in 

the 

unemployment 
assessment   

Time horizon  1997–ongoing  (a  major  update  of  the  programme  happened 

in 2017)  

Objectives and Scope  The  Microloan  Programme  addresses  the  issue  of  access  of 

small entrepreneurs to capital and aims: 

Overview 

   To allow SME development  
   To increase the survival rate of SMEs  
   To positively contribute towards employment and job 

creation  

It has a revolving nature. The product "microloan" provided by 
the  SBA  is  unique  in  Slovakia  by  its  character.  SMEs  borrow 
from €2.500 up to € 50.000. The loan maturity ranges from 6 
months  to  4  years.  The  interest  rate  ranges  from  1.19%  to 
9.03%. 

Rationale  The programme tackles economic cohesion probably indirectly 
through providing advantageous conditions for obtaining micro 
loans for SMEs based in the regions with higher unemployment 
(the share of companies that have received the loans based in 
the  regions  with  a  high  unemployment  rate  has  not  been 
specified).   

Type of policy category  Business environment and trade  

Type of policy 
instrument 

Venture capital funds and other financial instruments   

Type of funding  Loan guarantees 

Budget and 
expenditures 

The total amount that could be provided in the form of loans 
has  not  been  specified,  but  the  individual  loans  range  from 
€2.500 to €50.000.  

Governance  Institution responsible: Slovak Business Agency (SBA)  

Scenario 1  

   Financed by the Ministry of Economy 
   Designed by the Ministry of Economy and the SBA 
  

Implemented by a private company 

Policy implementation 
and policy mix 

Not identified  

Relevant ESIF 
measures (if any) 

N/A  

Impact: monitoring and 
evaluation 

Not evaluated yet.  

Link  http://www.sbagency.sk/mikropozicky   

144 

 
 
 
10  SLOVENIA 

Country briefings 

National Policies addressing regional economic disparities – Slovenia (SI)  

1. Background  

In  2017,  Slovenia  achieved  85%  of  the  EU 
average of GNP per capita (in PPP). However, 
internally, there are still some of the regions 
in  Slovenia  at  NUTS  3  level,  where  the 
development level is considerably lower than 
the  national  average.  In  2017,  the  NUTS  2 
region Western Slovenia was 2% above the 
EU-28  average,  with  the  NUTS  3  regions 
Central  Slovenia  at  120%,  Coastal-  Karst 
region  at  87%,  Gorizia  at  78%  and  Upper 
Carniola at 76%. Eastern Slovenia was below 
the threshold at 70% of the average of EU-
28  with  the  NUTS  3  regions  South  East 
Slovenia  at  84%,  Savinja  at  78%,  Lower 
Sava at 71%, Drava 69%, Carinthia at 68%, 
Littoral  Inner  Carniola  at  61%,  Mura  57% 
and Central Sava at 45%. 

2.  Architecture  of  national  policies  for 
addressing regional economic disparities 

Source: European Commission (2019). 

Focus  

As it is stated in the Slovenian long-term Development Strategy, the goal of the country is 
to achieve a GNP per capita EU average by 2030. To reach this goal, the average rate of 
growth  of  the  Slovenian  economy  should  be  1.5  percentage  points  higher  than  the  one 
achieved  at  EU  level.  Therefore,  Slovenian  strategic  documents  and  the  ESI  Funds’ 
programming documents aim at faster and more coherent development of Slovenia. 

As the policy papers state, such development shall be achieved by lowering the development 
barriers,  promotion  of  synergies  between  sector  targets  and  spatial  planning  measures, 
coordination  of  a  sectoral  development  vision  with  the  municipalities  and  through  better 
management of development potentials at regional as well as municipality level. The spatial 
development should play a critical role in this policy during the next decades in supporting, 
on  the  one  hand,  the  internal  decrease  in  regional  disparities  of  the  country  and,  on  the 
other hand, development participation of Slovenia in the European area and macro-regional 
integration.    

Although regional policy covers all regions, the emphasis is given in the priority areas of: 

the least developed regions (NUTS 3); 

the border areas; 
the areas inhabited by the Hungarian and Italian national minorities.  

  
   municipalities with individual development problems; 
  
  
   For  the  period  2014-2020,  seven  measures  have  been  identified  each  one 
supporting  activities  across  several  policy  categories.  Five  measures  support 
activities  under  the  policy  categories  business  environment  and  trade,  sector 
development and targeted investments and skills and mobility, while two support 
urbanisation and connectivity.   

Design and governance  

The  overarching  strategy  for  the  development  of  Slovenia,  which  addresses  the  internal 
regional  disparities  and  the  convergence  with  the  EU  is  the  long-term  Development 
Strategy of Slovenia (2030) (see fiche SI1). The design of the strategy is the responsibility 

145 

 
 
of the Government Office for Development and EU Cohesion Policy. At the operational level, 
the  regional  disparities  are  addressed  by  the  ESI  Funds  OPs  and  the  special  Act  on  the 
Promotion of National Regional Development (NRD, OG RS, no. 20/11, 57/12 and 46/16) 
(see fiche SI4) designed in 2011 and updated in 2016. The Act is a Framework legislation, 
which  defines  the  coordination  between  the  State  and  municipalities  in  the  planning  and 
implementation  of  regional  development  activities  and  provides  the  scope  and  tools  for 
intervention.  The  Act  is  implemented  by  special  Decisions  issued  for  each  of  the  target 
regions. It also regulates the establishment of the Regional Development Fund (RDF) as the 
primary funding agency for regional development. The RDF and the implementation of the 
Act is the responsibility of the Ministry of Economic Development and Technology (MEDT). 
RDF distributes the funds through public calls annually. In some cases, the calls published 
also combine national and EU funds.  

In  addition  to  the  measures  launched  by  RDF,  MEDT  directly  regulates  and  manages 
interventions  that  support  border  problem  areas,  areas  with  high  unemployment,  ethnic 
minorities and direct budgetary transfers to municipalities. An example is the special Acts 
for  addressing  pressing  economic  disparities  and  high  unemployment  issues  in  specific 
regions (for more details, see section 3). 

Relationship of national funding and support through the ESI Funds 

Slovenia relies heavily on the ESI Funds to support both external and internal cohesion. The 
priority  axes  of  the  OPs  so  far  have  been  designed  with  this  objective  in  mind.  This  also 
means that the majority of measures and instruments to lower regional disparities are co-
financed by the ESI Funds.  

Only  a  tiny  part  of  selected  interventions  depends  on  national  funding,  and  these  are 
regulated  through  specific  legal  acts.  One  of  the  key  characteristics  of  these acts  is  their 
flexibility  in  terms  of  where  the  government  intervenes  and  in  what  amount  without 
requiring cumbersome administrative procedures. On the other hand, it is more challenging 
to plan in the long-run what type of measure will be adopted and where the government 
will  see  it  suitable  to  intervene.  The  national  funding  mainly  addresses  the  disparities 
between  regions  by  directing  funding  to  regions  with  high  unemployment,  those  facing 
pressing  developing  challenges  and  areas  with high intensity  of  ethnic  minorities.  Also,  a 
small  contribution  by  the  ESI  Funds  is  used  as  a  supplement  to  the  national  funding  in 
supporting the above activities.   

3. Overview of national policy measures addressing regional economic disparities 

The mission and resources of the Slovenian Regional Development Fund, which was initially 
etablished  in  1995,  were  redefined  by  the  National  Regional  Development  Act  and  was 
endowed with assets of €100 million from the national budget (see fiche SI4.1). The RDF 
grants loans with a favourable interest rate and a long payback period of up to 20 years. 
Only exceptionally, in cases of projects, located in the areas of the Hungarian and Italian 
national communities, the Fund supports investments, in addition to loans, through grants. 

During  the  current  programming  period  the  following  measures  were  supported  by  the 
national budget under the National Regional Development Act: 

   The  decision  for  interim  support  for  Pokolpje,  which  covers  municipalities  of 
Southern Slovenia (see fiche SI4.2). This was the first of this kind of measures as a 
response of the government to increasing unemployment in the region due to the 
bankruptcy of several large companies. The funding amounted to €35.2 million for 
the  period  2014-2020  supporting  investments  of  enterprises,  including  FDI,  the 
establishment  of  a  network  of  incubators  in  the  region  and  support  of  start-ups, 
support to the employment of older people who have lost jobs due to the closing of 
some major firms in the region during the crisis.   

   The decision for interim measures for the development of Maribor and surroundings 
(fiche SI4.3), aiming at reducing the high level of unemployment (see fiche SI4.1). 
During  the  period  2014-2020,  €47.6  million  was  allocated  to  the  region  from 
national funds (including the RDF and other national sources) and €2.4 million from 
the  ESI  Funds,  in  the  form  of  tax  breaks,  grants  or  subsidies  of  interest  rates  to 
support investments and R&D and innovation projects and retain employment.  

146 

 
 
   The  decision  for  interim  measures  for  the  development  of  Hrastnik,  Radeƒçe  and 
Trbovlje  (HRT)  (fiche  SI4.4).  The  support  was  aiming  to  combat  the  high 
unemployment mainly due to the closure of the Mine Trbovlje-Hrastnik. During the 
period  2014-2020,  €27  million  from  the  national  budget  and  €1.8  million  from 
European funds were allocated in the form of tax breaks and subsidies for supporting 
investments by companies, contributing to the social security cost of employees, or 
supporting new energy and transport infrastructures.  

   The  Slovenian  Coast  and  Eastern  part  of  Prekmurje  Areas  where  the  Italian  and 
Hungarian minorities live (fiche SI4.5) have been financed with €4 million from the 
RDF,  for  supporting  entrepreneurial  projects  and  activities  in  the  agriculture.  In 
addition, €1 million was provided by MEDT to support the preparation of projects to 
be submitted for funding under national or international schemes 

In  addition  to  the  NRD  Act,  two  more  Acts  contribute  with  national  funding  addressing 
regional disparities of Slovenia. The Act on Development Support for Pomurje Region (2010-
2019)  (fiche  SI2)  reimburses  employers’  social  security  contributions,  provides  tax 
incentives for investments, investments in agriculture, forestry and diversification to non- 
agricultural  activities.  The  majority  of  the  projects  are  financed  by  the  ESI  Funds  with 
approximately  €95.6  million  during  the  period  2014-2019,  while  the  National  budget 
contributed with €6.45 million (in addition to the co-financing of the ESI Funds). 

The  Act  Regulating  the  Gradual  Closure  of  the  Trbovlje-Hrastnik  Mine  and  the  Economic 
Development Restructuring of the Region (fiche SI3) provides support for the development 
of the devastated area. During the period 2014-2020, €18 million were provided from the 
national  budget  to  build  business  parks  for  hosting  start-ups,  as  well  as  for  various 
infrastructures  such  as  the  Internet,  to  make  the  region  more  attractive  for  business 
investment.     

4. Classification of policies 

Title 

Type 
funding 

of 

Policy category 

Policy instrument 

Act on Development 
Support for Pomurje 
Region (2010 – 2019) 
(SI2) 

Different type 
of subsidies, 
tax incentives 
& social 
contributions 
to potential 
investors 

Act Regulating the Gradual 
Closure of the Trbovlje-
Hrastnik Mine and the 
Economic Development 
Restructuring of the 
Region (SI3) 

Different type 
of subsidies 

Business 
Environment 
and Trade  

Skills and 
Mobility 

Tax incentives 
Investment 
promotion 

New skills 
development 

Sector 
Development 
and Targeted 
Investment  

Urbanisation 
and 
Connectivity 

Industrial parks and 
other business 
infrastructures 

Digital infrastructures 

Funding 
and 
implementation 

Funding and 
design at 
national level  
It is 
implemented 
either at 
national or 
regional/local 
level 

Funding, design 
and 
implementation 
at national level  

Slovenian Regional 
Development Fund (SI4.1) 

Loans with 
favourable 
interest rates 
and grants 

Business 
Environment 
and Trade 

Venture capital funds 
and other financial 
instruments 

Funding, design 
and 
implementation 
at national level  

Business 
Environment 
and Trade  

Investment 
promotion 

Decision for interim 
support for Pokolpje (OG 
26/11) (SI4.2) 

Various types 
of subsidies 
and subsidised 
credits 

Sector 
Development 
and Targeted 
Investment  

Business 
development and 
innovation support to 
firms 

Industrial Parks and 
other business 
infrastructures 

Funding, design 
and 
implementation 
at national level  

Skills and 
Mobility 

Life-long learning 

147 

 
 
 
 
 
 
 
 
 
Business 
Environment 
and Trade 

Tax incentives 
Investment 
promotion 

Decision for interim 
measures for the 
development of Maribor 
and surroundings (OG 
53/13) (SI4.3) 

Various types 
of subsidies 
and subsidised 
credits 
Tax incentives 

Sector 
Development 
and Targeted 
Investment 

Skills and 
Mobility 

Business 
Environment 
and Trade 

Sector 
Development 
and Targeted 
Investment 

Urbanisation 
and 
Connectivity 

Skills and 
Mobility 

Sector 
Development 
and Targeted 
Investments  

Skills and 
Mobility 

Decision for interim 
measures for the 
development of Hrastnik, 
Radeče and Trbovlje (HRT) 
(OG 63/2013) (SI4.4) 

Various types 
of subsidies, 
micro -credits 
and tax 
incentives 

Support for national 
minorities (SI4.5) 

Subsidised 
interest rate 

5. Main Sources 

Interviews 

Funding, design 
and 
implementation 
at national level  

Business 
development and 
innovation support to 
firms 
R&D programmes 

Life-long learning 

Tax incentives 
Investment 
promotion 

Business 
development and 
innovation support to 
firms 

Funding, design 
and 
implementation 
at national level  

Transport 
infrastructures 

Life-long learning 

Business 
development and 
innovation support to 
firms 

Labour market 
training,  
Life-long learning 

Funding, design 
and 
implementation 
at national level  

  
Igor Strmšnik, General Secretary of the MEDT Directorate for Regional Development 
   Tomaž  Boh,  Head  of  Directorate  for  Science,  Ministry  of  Education,  Science  and 

Sports.  
Irena Drmaž, Head of Directorate, Ministry of Finance, Directorate for Budget 

  

Main documents and sources 

   Government of Slovenia, (2019): National Reform Programme Slovenia, 

https://ec.europa.eu/info/sites/info/files/2019-european-semester-national-
reform-programme-slovenia_en.pdf  

   Government of Slovenia (2017), Slovenian Development Strategy 2030, 

http://www.vlada.si/fileadmin/dokumenti/si/projekti/2017/srs2030/en/Slovenia_2
030.pdf 

   MEDT  web  page  on  Regional  Policy:  http://www.mgrt.gov.si/en/  (more  info  is  on 

Slovenian site) 

   OP 2014-2020; http://www.eu-skladi.si/kohezija-do-2013/ostalo/op-final-en  
   Operativni  načrt  o  sodelovanju  ministrstev  pri  pripravi  regionalnih  razvojnih 
programov za obdobje 2021–2027 (Operational plan o cooperation of ministries in 
the  preparation  of  the  regional  development  programmes  for  the  period  2021-
2017), 2019, mimeo. 

   Partnership Agreement Slovenia 2014-2020, 

https://ec.europa.eu/info/publications/partnership-agreement-slovenia-2014-
20_en  

148 

 
 
 
 
 
 
 
 
 
 
 
 
 
   Regional Development Fund: Poslovno- finančni načrt 2018- 2019; 

http://www.regionalnisklad.si/o-nas/letna-porocila 

Country fiches 

Slovenian Development Strategy 

ID  SI1  

Country  Slovenia  

Region(s) 
affected 

The whole country  

Time horizon  2018-2030  

Objectives and 
Scope 

The idea of the document is to create a framework for the development 
of  the  Slovenian  economy  and  society.  As  such  it  is  a  declarative 
document,  however  the  adopted  acts,  documents  etc.  should  be  in  line 
with this document.   

Overview  This is the strategic document that defines the main characteristics of the 

development in the next 15 years.   

Rationale  The document is not strictly linked to regional issues since it is a strategic 
national  document.  However,  there  are  some  emphases  on  the  role  of 
leveraged regional development. On its p. 14 it states “However, in certain 
regions,  particularly  in  the  eastern  part  of  Slovenia,  obstacles  to 
development are significantly higher than the national average. Slovenia 
could  thus  achieve  faster  and  more  coordinated  development  through 
reducing obstacles to development, promoting synergies among sectoral 
targets  and  spatial  planning  measures,  and  better  management  of 
development potentials at the regional and local level.”  

Type of policy 
category 

N/A 

Type of policy 
instrument 

N/A 

Type of funding  N/A 

Budget and 
expenditures 

N/A 

Governance  National. The Government Office for Development and EU Cohesion Policy 

is in charge.  

Strategy  

Policy 
implementation 
and policy mix 

Relevant ESIF 
measures 

 N/A 

Impact: 
monitoring and 
evaluation 

The  Government  Institute  of  Macroeconomic  Analysis  and  Development 
(IMAD)  issues  on  a  yearly  basis  the  Development  Report,  which  is 
structured  according 
the  same 
indicators. Among the selected indicators, only indirectly some may reflect 

this  Strategy  and 

follows 

to 

149 

 
 
 
the  cohesion  issue  (level  of  poverty,  level  of  social  exclusion,  life 
expectancy), but they are monitored currently only at the national level.  

Links  http://www.vlada.si/en/projects/slovenian_development_strategy_2030/ 

Act on Development Support for Pomurje Region (2010 – 2019) 

ID  SI2  

Country  Slovenia  

Region(s) affected  Pomurje Region  

Time horizon  2010-2019  

Objectives and Scope  The main objectives are:  

   Promote the development of the Pomurje region in 
the  years  2010  to  2019 and  the  way  they  are 
financed.  

   Create  new  jobs  and  maintaining  existing  ones, 
establishing  a  development  infrastructure  and 
mitigating  the  consequences  of  the  economic  and 
financial crisis in the Pomurje region.  

Overview  Article  3  of  the  Act  defines  the  measures  that  should  be 

adopted to enhance the development of Pomurje:  

Measures that are supported by the Act:  

  

for 

   preparation  of  the  Programme  for  enhancing  the 
competitiveness of Pomurje region 2010–2019;  
incentives 
employment: the 
increasing 
employer  that  employs  a  worker  for  at  least  two 
years receives back all social transfers paid for this 
work  
tax incentives for 
in Pomurje: an 
entity  that  operates  in Pomurje can  use  the  tax 
subsidy  of  70%  of  the  invested  amount  for  the 
initial investments in firm's assets.  

investments 

  

   priority  treatment  of  programmes  and  projects 
from the Pomurje region when applying for funding 
from  national  programmes,  European  cohesion 
policy programmes and rural development policy in 
the areas of:  

the  establishment  of  an 
education centre,  

inter-company 

the  establishment  of  a  regional  economic 
centre,  

  

  

raising 

restructuring  and 

investments in 
the 
competitiveness of agriculture and forestry and the 
food  processing  industry  and  diversification  into 
non-agricultural  activities; Financed  by  the  ESI 
Funds (85/15)  
in 
investment 
infrastructure. Financed by ESIF (85/15)  

drinking 

water 

Rationale  Pomurje is by far the least developed region in Slovenia and 
was also suffering significantly after the financial crisis with 
several  large  companies  closing (i.e.  garment  factory 

150 

 
 
 
 
 
 
Mura), resulting in a significant rise of unemployment. That 
is  why  the  Government  (2008–2011)  adopted  the  Act  on 
the Development Support for Pomurje Region in 2009. The 
initial  idea  was  to  have  an  Act  between  2010–2015,  but 
since then it was prolonged twice, and the last is till 2019.   

This was the first time since Slovenian independence that 
the  government  decided  to  intervene  in  such  a  fashion. 
Later,  a  more  general  Act  on  Promotion  of  Regional 
Development had been prepared, partly resulting from the 
experience with this Act.   

The  Act  specifies  that  in  defining  and  implementing  the 
development  support  measures,  the  following  long-term 
comparative  advantages  and  development  orientations  of 
the Pomurje region shall be taken into account:  

   geothermal  energy  and  other  renewable  energy 

sources,  

   sustainable and competitive agriculture,  
  

tourism.  

The implementation of the development support measures 
shall  also take  into  account the  specific  needs  of  the 
region's  ethnically  mixed  area,  in  particular  in  terms  of 
creating  the  economic  base  of  the  Hungarian  national 
community.  

intended 

to  promote 
under 

the  development  of 
Funds 
the Pomurje region 
not 
be approved/ used for the production of studies, expertise, 
expert bases and similar documentation, and for concluding 
consultative contracts. 

shall 

this 

Act 

Type of policy category 

Type of policy instrument 

   Business environment and trade;   
   Skills and mobility  
   Tax incentives;   
  
Investment promotion;   
   New skills development;   

Type of funding  Different type of subsidies, tax incentives & social 

contributions to potential investors.  

Budget and expenditures  The majority of the projects are financed by the ESI Funds 
in  addition  to  that  the  National  budget  contributed 
with €2.57  million  in  2016;  €3.88  million  in  2017  (not 
related to co-financing of ESIF)  

Governance  Primarily  Scenario  1,  to  a  minor  degree  also  Scenario 
and 
Regional 

2. Ministry 
Economic 
of 
Technology (MEDT), Directorate 
Development.  

Development 

for 

Policy mix 

Relevant ESIF measures 

In  addition  to  national  funding,  the  Act  envisages  also 
a priority  treatment for  the programmes  and  projects  in 
the Pomurje region  when  applying  for  funding  from  the 
European Cohesion Funds and European rural development 
implemented by  directly 
is 
policy  programmes.  This 
approving  regional  projects 
the priority  axes  of 
in 
the Operational programs by the MA. This is to be done in 
accordance  with  the  rules  of  the  Cohesion  Funds  and 

151 

 
 
  
additional  criteria  for  the  selection  of  projects  from 
the Pomurje region in public tenders.   

Financing approved through  the  ESI  Funds: 2016:  €37.3 
million and 2017: €58.3 million  

The region Pomurje is entitled to applying for the financing 
through the following EU Cohesion funds on priority basis:  

   Programme for Rural Development 2014-2020;  
   Operation Programme 2014-2020.  

the  progress,  which  only 

The measures are monitored on a yearly-basis. The report 
on 
the  projects 
implemented, is  adopted  by 
the  Government  and 
presented to the National Assembly.   

lists 

Impact: monitoring and 
evaluation 

Links  http://pisrs.si/Pis.web/pregledPredpisa?id=ZAKO5730 

Act Regulating the Gradual Closure of the Trbovlje-Hrastnik Mine and the Economic 
Development Restructuring of the Region 

ID  SI3  

Country  Slovenia  

Region(s) affected  Region Zasavje and close cities/Radeče, Litija   

Time Horizon  2000-2019  

Objectives and 
Scope 

The  idea  of  the  Act  is  to  regulate  the  closure  of  the Trbovlje-
Hrastnik Mine and to help the economic recovery of the region.   

Overview  The  measure  is  directed  to  the  closure  of Trbovlje-Hrastnik Mine 
and  to  develop  the  devastated  area  around. Resources  were 
provided  to  build  business  parks to  host start-ups,  as  well  as  for 
various infrastructure (like Internet) to make region more attractive 
for business investment.    

The revised measure from 2015 onwards addresses also  the issue 
of  social  benefits  for  the  people  whose  pensions  would  be  lower 
because of the closure of the Mine. The additional funds are to be 
given by the national budget.   

Rationale  The Act provides a legal basis for the financial support to the mine 
and  surrounding  municipalities  to  overcome  the  damages/ 
economic and social costs caused by the closure of the mine. It also 
presents a basis for paying for the damages to local farmers.   

Type of policy 
category 

Type of policy 
instrument 

   Sector Development and Targeted Investment   
   Urbanisation and connectivity   

Industrial parks and other business infrastructures  

  
   Digital infrastructures  

Type of funding  Different type of subsidies, as well as social transfers.  

Budget and 
expenditures 

Finance for  this  are  coming  from  the  national  budget  and  from 
the resources of the Trbovlje-Hrastnik Mine.   

The amount varies from year to year, for 2018 it was €11 million 
(only national funds, not related to co-financing of the ESI Funds).  

152 

 
 
 
Governance  Scenario 

1.  Ministry 

of 

Economic  Development 

and 

Technology (MEDT)  

Policy 
implementation 
and policy mix 

N/A  

Relevant ESIF 
measures 

N/A 

Impact: monitoring 
and evaluation 

Yearly reports presented by the local RRAs to the Government.  

The  process  has  been  down-sized  during 
time  of 
strong budgetary austerity  measures.  In  2014,  the  funds  were 
increase and the implementation of the measure was prolonged to 
2021.   

the 

are 

effects 

some visible 

There 
project. 
In Hrastnik and Trbovlje they  launched  an  industrial  zone  where 
small  start-ups  had  their  opportunity  to  develop.  One  of  the 
success 
is a 
company Dewesoft that  caused  that  lots  of  engineers  are  now 
coming to Hrastnik.  

national 

even at 

stories 

level 

this 

the 

of 

Links  http://www.pisrs.si/Pis.web/pregledPredpisa?id=ZAKO3715&d-

49683-s=1&d-49683-p=1&d-49683-o=2 

http://www.pisrs.si/Pis.web/pregledPredpisa?id=ZAKO2053  

Act on the promotion of National Regional Development (NRD) 

ID  SI4  

Country  Slovenia  

Region(s) affected  Less developed regions  

Time horizon  Open-ended  

Objectives and Scope  The objective of  the  Act  is  to  provide  the  legal  basis  for  the 
establishment of  a system 
the 
development  of  Slovenian  regions and  also prepare  them  to 
apply  for  the  cohesion  funds. The  Act  is  a  basis  for  different 
decisions  to  intervene  where  government  detects  a  need  to 
provide additional support for a particular region.  

that  would  enhance 

The Act also presents the legal basis for the establishment of 
the  Regional  Development  Fund  as  the  main  funding  agency 
for regional development.  

Overview  The Development Act was adopted as a basis for the promotion 

of coherent national development. This Acts defines:  

   establishment  of a  public  fund,  financed  by  the 
national  budget, intended  for  promoting  balanced 
regional development and rural development;  

   procedures for special measures to be introduced for 

promotion of regional development;  

   provides the decision-making structure at the regional 
level (regional 
regional 
development 
development agencies) and the process of formulating 
of the regional development programme.  

councils, 

153 

 
 
 
Rationale  This  Act  is  a  general act  but presents  a  basis  for  different 
specific Decisions for the government intervention in the less 
developed or problem areas.  

Type of policy category 

Type of policy 
instrument 

   Business environment and trade   
   Sector Development and Targeted Investment   
   Skills and Mobility  
   Venture capital funds and other financial objectives  
   Tax incentives  
  
   Business  development  and  innovation  support  to 

Investment promotion  

firms  
Industrial Parks and other business infrastructures  

  
   Life-long learning.  

Type of funding  Different type of subsidies; guarantee schemes, tax incentive, 

venture capital, subsidised interest rates, loans.  

Budget and 
expenditures 

is 
The  Act  does  not  have  a specific budget.  There 
a budget of Regional Development Fund (see fiche SI4.1) and 
allocations to specific Decisions on interventions.   

Governance  Scenario 1  

Policy implementation 
and policy mix 

Ministry of Economic Development and Technology (MEDT)  

From  this  programme  six  sub-programmes  in  a  form  of 
fiches 
Decisions  were  adopted,  presented 
(Pokolpje,  Maribor  z okolico, Zasavje, Pomurje,  territories 
where Italian and Hungarian minorities live, territories where 
Roma citizens live)  

in  separate 

Relevant ESIF 
measures 

Only with regard to some of the calls, issued by the Fund for 
Regional Development, some measures of the ESI Funds may 
be relevant.  

Impact: monitoring and 
evaluation 

The Regional Development Fund provides a biannually report 
on conducted activities.   

Links  https://www.uradni-list.si/glasilo-uradni-list-

rs/vsebina/2011-01-0820?sop=2011-01-0820 

http://www.pisrs.si/Pis.web/pregledPredpisa?id=ZAKO5801  

Slovenian Regional Development Fund 

ID  SI4.1  

Country  Slovenia  

Region(s) affected  All of the regions specified in the NRD  

Time horizon  1995–Open-ended 

Objectives and Scope  The  Regional  Development  Fund  was  created  to  provide  a 
stable  channel  of  resources 
for  support  of  regional 
development. Its task is to support various measures planned 
within  the  Act  on  Promotion  of  Regional  Development,  so  a 
broad  range  of  different  objectives  is  targeted  by  the  Fund 
(border  municipalities,  problem  municipalities,  those  with 
unemployment problems, with minority or Roma population). 

154 

 
 
 
Overview  Slovenian 

Regional 

Fund 
(http://www.regionalnisklad.si/)  was  established  in  1995 
under the Law, regulating the resources obtained from Law on 
Ownership Transformation of Companies (Official Gazette RS, 
no. 45/95, 34/96, 67/01 in 47/02).  

Development 

The  Fund  acts  as  one  of  the  key  institutions  of  regional 
development  policy.  It  operates  as  a  public  financial  fund, 
which is designed for a more sustainable achievement of public 
goals in regional development and rural development. 

As a primary form of incentive, the Fund grants loans with a 
favourable  interest  rate  and  a  long  maturity,  i.e.  payback 
periods  of  up  to  20  years.  Only  exceptionally,  in  cases  of 
projects,  located  in  the  areas  of  the  Hungarian  and  Italian 
national  communities,  the  Fund  supports  investments,  in 
addition to loans, also through grants, which are not available 
for other projects. 

Incentives are being granted by the Fund in the following fields 
of investment: 

   co-financing of initial entrepreneurial investments; 
   co-financing of local and regional infrastructure as well 
as  social  and  economic  infrastructure  owned  by 
municipalities; 

in 

   co-financing  of  projects 

field  of  rural 
development  and  support  for  projects  in  primary 
agricultural  production  as  well  as  projects  of 
processing, marketing and complementary activities; 
   co-financing  of  investment  projects  to  increase  the 
the  autochthonous  national 

the 

economic  basis  of 
communities; 

   co-financing of projects based on the implementation 
of emergency measures in regional development; 

Incentives  by  the  Fund  have  a  priority  focus  on  projects 
undertaken  by  investors  in  regions  with  a  high  development 
threat index. 

From  the  resources,  obtained  on  the  basis  of  the  above 
stipulated law, the Fund should receive: 

   11,5% for regional development and maintenance of 

rural population; 

   2,5%  for  economic  development  of  autochthonous 

national communities. 

Rationale  Provide a stable source of finance for the support of regional 

development.  

Type of policy category  Business environment and trade  

Type of policy 
instrument 

Venture capital funds and other financial instruments  

Type of funding  Loans with favourable interest rates and grants  

Budget and 
expenditures 

Currently, the Fund's assets are nearly €100 million. Bi-annual 
programme  (2018-2019)  of  different  incentives  amounts  to 
approx. €28 million. According to the documents of the Fund, 
the allocation is the following:  

   For  the  initial entrepreneurial investments  (various 
schemes) from the Fund's assets 8 million (€4 million 

155 

 
 
in  2018  and  4  million  in  2019)  and  from  the  central 
budget  €11.570 million of  which  €7.290  million  for 
2018  and  4.280 
for  promotion  of 
for  2019) 
development  investments  in  business  sector  in  less 
developed regions.  

   For the co-financing of local and regional infrastructure 
as well as social and economic infrastructure owned by 
municipalities, €12 million (€6 million for 2018 and €6 
million for 2019) from Fund's assets.  

   For  co-financing  of  projects  in  the  field  of  rural 
development  and  support  for  projects  in  primary 
agricultural  production  as  well  as  projects  of 
processing,  marketing  and  complementary  activities 
€18  million  (€9  million  for  2018  and  €9  million  for 
2019);  

   co-financing  of  investment  projects  to  increase  the 
economic  basis  of 
the  autochthonous  national 
communities  €4  million  (€2  million  for  2018  and  €2 
million for 2019).   

Governance  Scenario 1.  

Policy implementation 
and policy mix 

Ministry of Economic Development and Technology (MEDT)  

Support  to  business  entities  from  less  developed  regions, 
support  to  municipalities,  support  to  development  of  rural 
areas,  etc. Fund  runs  a  set  of  annual  calls  to  which  eligible 
business  entities  and  municipalities  can  apply.  The  less 
developed the region of the applicant, the lower is the interest 
rate of the loan provided to the recipient.  

Relevant ESIF 
measures (if any) 

The Fund itself is not part of any of the ESI Funds’ measures, 
but it is occasionally entrusted an implementation of a specific 
measure,  deriving  from  OP  (prepare  the  call,  carry  out 
selection process, monitor the implementation, etc.  

Impact: monitoring and 
evaluation 

Annual reports of the Fund are presented to the government, 
but no evaluation of its impact has been carried out so far.  

Links   http://www.regionalnisklad.si/  

Decision for interim support for Pokolpje (OG 26/11) 

ID  SI4.2 

Country  Slovenia 

Region(s) affected  Pokolpje (OG 26/11), which covers municipalities of Southern 
Slovenia  (Kočevje,  Kostel,  Osilnica,  Loški  Potok,  Črnomelj, 
Metlika in Semič).  

Time horizon  2011-2020 

Objectives and Scope  The main objective of the programme is to increase or at least 

retain the level of employment in the area. 

Overview  The following measures are supported:   

1.  Support  to  the  investment  of  enterprises  in  these 
municipalities, including FDI 

156 

 
 
 
2. Establishment of a network of incubators in the region and 
support of start-ups 

3. Support to the employment of older people who have lost 
jobs due to closing of some major firms in the region during 
the crisis 

4. Promotion and support for regional projects in Pokolpje. 

Type of policy category  Slovenia supports regions that have experienced depopulation 

and a high level of unemployment.   

Pokolpje is one of the least developed regions in Slovenia and 
people  migrate  from  Pokolpje,  usually  to  Ljubljana  or  Novo 
mesto. Also, there is a high level of unemployment, mainly due 
to the bankruptcy of some major enterprises during the crisis 
2008-2012.  Therefore,  additional  support 
to  potential 
investors aimed at making the region more attractive.     

   Business environment and trade  
   Sector Development and Targeted Investment  
   Skills and Mobility 
  
   Business development and innovation support to firms 
  
Industrial Parks and other business infrastructures 
   Life-long learning. 

Investment promotion 

Type of policy 
instrument 

Type of funding 

Budget and 
expenditures 

Various types of subsidies and subsidised credits  

Rationale  Plan for the period 2014–2020: €35.2 million, almost all from 

national budget (EU funds: €600.000 ). 

Governance  Scenario 1. Ministry of Economic Development and Technology 

(MEDT). 

Policy implementation 
and policy mix 

Relevant ESIF 
measures (if any) 

Based  on  the  NRD  (fiche  SI4),  the  Government  in  2011 
adopted  a  Decision  for  interim  support  for  Pokolpje  (OG 
26/11),  which  covers  municipalities  of  Southern  Slovenia 
(Kočevje,  Kostel,  Osilnica,  Loški  Potok,  Črnomelj,  Metlika  in 
Semič).  

Co-financing of subsidies for start-ups in amount of €600.000. 

Impact: monitoring and 
evaluation 

A  yearly  report  is  presented  to  the  Government.  So  far,  no 
substantial evaluation took place. 

Link  https://www.uradni-list.si/glasilo-uradni-list-

rs/vsebina/2011-01-0820?sop=2011-01-0820 

http://www.pisrs.si/Pis.web/pregledPredpisa?id=ZAKO5801 

http://www.mgrt.gov.si/si/delovna_podrocja/regionalni_razv
oj/regionalna_politika/problemsko_obmocje_pokolpje/ 

157 

 
 
 
 
 
 
Decision for interim measures for the development of Maribor and surroundings 
(OG 52/13) 

ID  SI4.3 

Country  Slovenia 

Region(s) affected  Maribor and surroundings (OG 53/13) that covers the following 
municipalities: Kungota, Hoče - Slivnica, MO Maribor, Pesnica, 
Podvelka,  Radlje  ob  Dravi,  Ribnica  na  Pohorju,  Ruše  and 
Selnica ob Dravi.  

Time horizon  2013–2020 

Objectives and Scope  The main objective of the programme is to increase or at least 

retain the level of employment in the area. 

Overview 

In order to achieve its objectives, the following measures has 
been adopted: 

1.  Retribution of contributions for social security to potential 

employers for the people they employed;  

2.  Tax subsidy for employment; 

3.  Tax subsidy for investments in Maribor or surroundings;  

4.  Subsidies for sustainable investments in Maribor area; 

5.  Subsidies of the interest rate for investment credits; 

6.  Support  for  the  R&D  projects  and  co-financing  of 

investments for new technology. 

Rationale  Maribor  was  before  independence  the  heart  of  the  industrial 
production of Slovenia. After 1991, most of the big enterprises 
in  Maribor  collapsed,  causing  a  high  level  of  unemployment. 
Different approaches have been made in the last 20 years to 
overcome the peril situation, but they gave poor results.  

Type of policy category 

Type of policy 
instrument 

   Business environment and trade 
   Sector Development and Targeted Investment 
   Skills and Mobility 
   Tax incentives 
  
   Business development and innovation support to firms 
   R&D programmes 
   Life-long learning 

Investment promotion 

Type of funding  Different  type  of  subsidies,  subsidised  credits  and  tax 

incentives. 

Budget and 
expenditures 

Period  2014–2020:  €50  million  (€47.6  million  from  national 
funds,  €2.4  million  from  European  funds).No  specific  break-
down is available for individual years. 

Governance  Scenario 1. Ministry of Economic Development and Technology 

(MEDT). 

Policy implementation 
and policy mix 

Based  on  the  NRD  (fiche  SI4)    the  Government  in  2013 
adopted a Decision for interim measures for the development 
of  Maribor  and  surroundings  (OG  53/13)  that  covers  the 
following municipalities: Kungota, Hoče - Slivnica, MO Maribor, 
Pesnica, Podvelka, Radlje ob Dravi, Ribnica na Pohorju, Ruše 
and Selnica ob Dravi. 

158 

 
 
Relevant ESIF 
measures 

Co-financing  of  subsidies  for  start-ups  in  amount  of  €2.4 
million. 

Impact: monitoring and 
evaluation 

A  yearly  report  is  presented  to  the  Government,  but  no 
evaluation was carried out up to now.  

Links  https://www.uradni-list.si/glasilo-uradni-list-

rs/vsebina/2011-01-0820?sop=2011-01-0820 

http://www.pisrs.si/Pis.web/pregledPredpisa?id=ZAKO5801 

http://www.mgrt.gov.si/si/delovna_podrocja/regionalni_razv
oj/regionalna_politika/problemsko_obmocje_maribor_s_sirso
_okolico/ 

Decision  for  interim  measures  for  the  development  of  Hrastnik,  Radeče  and 
Trbovlje (HRT) (OG 63/2013) 

ID  SI4.4 

Country  Slovenia 

Region(s) affected  Hrastnik, Radeče and Trbovlje (HRT).  

Time horizon  2013–2020 

Objectives and Scope  The main objective of the programme is to increase or at least 

retain the level of employment in the area. 

Overview  For achieving its objectives, the following measures have been 

adopted: 

1.  Retribution of contributions for social security; retribution 

of social contributions for the newly employed personnel 

2.  Tax subsidy for the additional employment of staff; 

3.  Tax subsidy for investments in the region;  

4.  Subsidies 

for 
countryside of the region; 

the  sustainable 

investments 

in 

the 

Rationale 

Type of policy category 

Type of policy 
instrument 

5.  Support  for  renovation  and  new  energy  and  transport 

infrastructure. 

In 2000, the Government decided to close the Mine Trbovlje-
Hrastnik.  This  caused  an  increased  unemployment  in  the 
region and this programme has been trying to restructure the 
local economy towards a more competitive one. See also the 
connected measure of Act Regulating the Gradual Closure of 
the  Trbovlje-Hrastnik  Mine  and  the  Economic  Development 
Restructuring of the Region (fiche SI3). 

   Business environment and trade 
   Sector Development and Targeted Investment 
   Urbanisation and connectivity 
   Skills and Mobility 
   Tax incentives 
  
   Business development and innovation support to firms 
   Transport infrastructures 
   Life-long learning 

Investment promotion 

159 

 
 
 
Type of funding  Various types of subsidies, micro credits and tax incentives. 

Budget and 
expenditures 

Period  2014–2020:  €29  million  (€27  million  from  national 
budget, €1.8 million from European funds). 

Governance  Scenario 1. Ministry of Economic Development and Technology 

(MEDT) 

Policy implementation 
and policy mix 

Based  on  the  NRD  (fiche  SI4)  the  Government  in  2013  (OG 
63/2013)  adopted  a  Decision  for  interim  measures  for  the 
development of Hrastnik, Radeče and Trbovlje (HRT). 

Relevant ESIF 
measures 

Co-financing  of  subsidies  for  start-ups  in  amount  of  €1.8 
million. 

Impact: monitoring and 
evaluation 

A  yearly  report  is  presented  to  the  Government,  but  no 
evaluation has been implemented so far.  

Links  https://www.uradni-list.si/glasilo-uradni-list-

rs/vsebina/2011-01-0820?sop=2011-01-0820 

http://www.pisrs.si/Pis.web/pregledPredpisa?id=ZAKO5801 

https://tinyurl.com/yxj97uv9  

Support to national minorities (NRD) 

ID  SI4.5 

Country  Slovenia 

Region(s) affected  The areas where the Italian and Hungarian minorities live i.e. 

Slovenian Coast and Eastern part of Prekmurje. 

Title horizon  Ongoing (no end envisaged) 

Objectives and Scope  Objective  is  to  develop  the  economic  basis  of  both  national 

minorities. 

Overview  The  Regional  Development  Fund  (RDF)  has  a  special  task 
according to NRD to disburse resources for programmes that 
are supporting the Coastal Italian Minority Association and the 
Pomurje  Hungarian  Minority  Association.  The  idea  of  this 
measure  is  to  support  entrepreneurial  projects  and activities 
in the agriculture in areas where the minorities live. 

On top of this, a smaller  amount is annually available in the 
budget of MEDT to support preparation of the projects to be 
submitted for funding nationally or internationally. 

Rationale  The  legal  framework  for  the  protection  of  minorities  is  the 
Slovenian  Constitution.  They  should  enjoy  preferential 
treatment so as to remain economically independent. With this 
in  mind,  the  Act  on  Promotion  of  Regional  development 
provides  that  2.5%  of  funds  received  from  the  privatisation 
processes are directed to the Regional Development Fund, with 
the  objective  to  provide  financial  sources  for  the  economic 
independence of two minorities. 

Type of policy category 

Type of policy 
instrument 

   Sector development and targeted investments  
   Skills and Mobility 
   Business  development  and  innovation  support  to 

firms,  

160 

 
 
 
   Labour market training,  
   Life-long learning. 

Type of funding  Subsidised interest rate 

Budget and 
expenditures 

1  million  directly  from  MEDT  (budget  for  2019);  €2  million 
(from RDF budget, 2019) and €2 million (RDF budget 2018). 

Governance  Scenario 1. Ministry of Economic Development and Technology 

(MEDT) 

Policy implementation 
and policy mix 

The RDF issues every year a call for project proposals from the 
two minorities for subsidised investment credits.    

Relevant ESIF 
measures 

None. 

Impact: monitoring and 
evaluation 

 The  Regional  Development  Fund  reports  yearly,  but  no 
specific evaluation took place so far.  

   Links 

https://www.uradni-list.si/glasilo-uradni-list-
rs/vsebina/2011-01-0820?sop=2011-01-0820 

http://www.pisrs.si/Pis.web/pregledPredpisa?id=ZAKO5801 

http://www.mgrt.gov.si/si/delovna_podrocja/regionalni_razv
oj/regionalna_politika/obmocja_kjer_zivita_madzarska_in_ita
lijanska_narodna_skupnost/ 

Case study 

Act Regulating the Gradual Closure of the THM and the Economic Development 
Restructuring of the Region – Slovenia (SI) 

1.  Executive Summary 

The case study covers two related measures,The Act Regulating Gradual Closure of Trbovlje 
Hrastnik  Mine  and  the  Economic  Development  Restructuring  of  the  Region,  2000-  2019 
(further in the  text  Act),  with  its  Programme  for  development  restructuring  of  the  region 
2000-2004  and  2004-2006  (Programme)  and  related  more  recent    Decision  for  interim 
measures for the development of Hrastnik, Radeče and Trbovlje (HRT) (OG 63/2013) 2013-
2020 (referred to as Decision 2013 further in text). 

The  Act  has  several  components,  besides  the  regulation  of  the  closing  procedures  (both 
technical and economic, related to closure of the company itself), the most important and 
unique  component  was  a  special  Programme  for  development  restructuring  of  the  region 
2000-2004 and 2004-2006. This part of the Act was succeeded in 2013 in part by a Decision 
for  interim  measures  for  the  development  of  Hrastnik,  Radeče  and  Trbovlje  (HRT)  (OG 
63/2013)  2013-2020  (referred  to  as  Decision  2013  further  in  text),  which  has  similar 
objectives as the Programme had: lower the development gap of the three municipalities 
with providing better opportunities for employment and by encouraging entrepreneurship in 
the region. 

The main objective of the measures was to provide alternative employment opportunities to 
the  people  who  directly  or  indirectly  lost  their  jobs  due  to  the  closure  of  the  mine.  The 
Implementation  Report  2007  states  that  the  subsidies  triggered  more  than  €  40  million 
private investments, lowering the unemployment from 13.9% to 11.9% already during the 
implementation  of  the  Programme  2000-  2006,  with  more  jobs  to  be  opened  in  years  to 
come. With the co-financing coming to a rather abrupt end, the full benefit was not achieved. 
Yet,  such  type  of  intervention  in  less  developed  regions  or  the  regions,  faced  by  sudden 
serious  crisis  is  at  present  a  key  element  of  Slovenian  national  regional  policy,  where 
additional financial assistance in selected cases is systematically provided by the national 

161 

 
 
 
government. Such intervention was initiated for the same region again in 2013 in the form 
described below. 

Decision for interim measures for the development of Hrastnik, Radeče and Trbovlje (HRT) 
(OG 63/2013) 2013-2020. The Decision 2013 has seven measures with several instruments 
and  combines  subsidies  in  the  form  of  grants  as  well  as  favourable  loans  to  be  repaid. 
Especially the later have so far not been taken up by local business, so the implementation 
of  some  measures/  instruments  is  slow  or  even  non-existent.  The  limited  success  of  the 
Decision 2013 in lowering the development gap has led the regional development agencies 
and local authorities to propose to the government a re-introduction of the Act/ Programme 
as it was during the period 2000-2006. 

2.  Background and Context 

The  region  of  Zasavje  (local  communities  of  Trbovlje,  Zagorje,  Hrastnik  and  adjoining 
communities  of  Litija  and  Radeče)  have  for  several  decades  depended  on  the  mines  of 
Trbovlje- Hrastnik. The region is among the smallest Slovenian Regions (at NUTS 3 Slovenia 
has  12  regions)  with  264  km2  and  approximately  45,000  people.  The  mine  provided  for 
employment of the region both directly and indirectly, with economic activities developed in 
support of the mine or on the basis of the mine’s output (thermal power plant). With men 
employed in the mines, the socialist development strategies favoured location of textile and 
light  manufacturing  industries,  providing  employment  for  women  in  the  region.  Thus  the 
region  was  an  industrial  stronghold  up  to  the  beginning  of  nineties,  when  one  by  one 
traditional industries started crumbling. The coal reserves were so low, that the running of 
the mine was no longer economically viable, so decision was reached to start with the closing 
procedure.  This  led  to  the  need  for  a  special  Act,  regulating  the  closure  of  the  mine  and 
allocation  of  state  funds  for  the  purpose.  As  part  of  the  Act,  a  Programme  for  economic 
restructuring was prepared and implemented during 2000- 2006. While the activities on the 
closure of the mines are still on-going, the Programme was stopped in 2007. 

The economic crisis of 2008-2010 in Slovenia hit different regions disproportionally. Zasavje 
suffered again from increased unemployment, significantly above Slovenian average at the 
time  (Slo  in  2013:  13.6%  of  labour  active  population  was  registered  at  the  Employment 
Agency, in the municipalities, covered by the Decision 2013, this rate was above 19%). This 
justified a special action in accordance with the Law on balanced regional development of 
2011. The region defined is somewhat different than in the Programme 2000-2006, since 
instead of town Zagorje the Decision includes Radeče, a municipality which suffered from 
the closure of the paper mill and a loss of approximately 250 jobs on this account. For a 
municipality with 4400 inhabitants, this was a significant loss. The economic indicators were 
so low to require special action by the government, which was first planned till 2016, and 
later prolonged till 2020. 

3.  Description of the Policy Measure 

Through the act, the government provides subsidies for the development of industrial parks 
to  host  start-ups  and  other  business  structures  to  increase  the  region’s  attractiveness  to 
business investment. The mine lies in the region of Central Sava, which has 45% of GNP / 
capita of the EU average. It covers the policy categories of sector development and targeted 
investment as well as urbanisation and connectivity. Covering a time horizon from 2000–
2019, the programme is funded, designed and implemented at national level. The Act has 
several components, besides the regulation of the closing procedures (both technical and 
economic,  related  to  closure  of  the  company  itself),  the  most  important  and  unique 
component  was  a  special  Programme  for  development  restructuring  of  the  region  2000-
2004 and 2004-2006. 

4.  Policy Implementation 

For the implementation of the Programme 2000- 2006, every yea, an annual programme 
was  prepared  by  the  Regional  Development  Centre  in  coordination  with  the  Ministry  of 
Economic  Development  and  approved  by  the  Government.  This  was  the  basis  for  the 
allocation  of  the  funds  from  the  central  budget.  The  Act  already  specified  the  basic 
allocations  of  resources  until  2006.  Annually,  between  €3.3  million  to  €3.5  million  were 
disbursed  for  the  three  measures  (Implementation  report  for  the  period  2001-2006, 
Regional  Centre  for  Development,  2007).  The  data  on  distributed  resources  show  that  in 
2001  88.9%  of  available  funds  were  distributed,  in 2002  97.6%,  in  2003  91.11,  in  2004 

162 

 
 
96.44, in 2005 96.01 and in 2006 80.87%. The distribution was lowest for the measure a) 
the development of possible locations for economic development, where according to the 
Implementation  report  only  81,58%  of  available  resources  were  used.  Even  so,  the  local 
communities were able to arrange for 310,474 m2 of business zones, where by the end of 
the programme more than 1000 new jobs were created. More successful was the second 
measure  of  establishment  of  infrastructure  for  promotion  of  entrepreneurship,  where 
92.30%  of  allocated  resources  were  spend.  A  detailed  list  in  the  Implementation  report 
shows that all together 635 new jobs were created during the Programme’s period and more 
were still planned, since not all investment projects had been completed by the date of the 
report.  

The measure three consisted of three instruments. 

   Human resource training and employment due to the restructuring of existing 

activities and introduction of new activities: 

o  Elaboration  of  human  resource  strategies  and  implementation  of 

projects in the area of human resource development 

o  Education and training of human resources in the enterprises 

   Scholarships 

   Promotion of the region as employment opportunity (from 2004 on). 

Altogether, 93.29% of the available resources were spend, with the lowest implementation 
in the segment of education and trainings (86.74%). Still, the enterprises reported that €2.4 
million  were  invested  in  education  and  trainings  of  employees,  of  which  €782.000  was 
subsidised through the Programme. The instrument covered 5,361 participants to various 
training  programmes  as  well  as  117  participants in  formal  education.  The  co-financing of 
elaboration of human resource strategies reached 91.91%, where a 30-50% of subsidy was 
available to enterprises. As many as 43 human resource strategies were prepared and 30 
projects in the area of human resource development were implemented during the observed 
period. Looking at the list of firms who applied for the subsidy, most of the major employers 
in the region participated. All of the resources allocated for the scholarships (€1.33 million) 
were  spend.  Scholarships  for  242  students  at  undergraduate  level  and  10  students  at 
graduate level were awarded.  

The  activities  under  the  Decision  2013-  2020,  were  initially  relatively  well-planned,  but 
without a fixed financial outlay, except for the instrument under measure a), aimed at the 
promotion  of  competitiveness.  The  responsibilities  for  the  implementation  of  different 
measures are under different line ministries/ agencies, so both planning and implementation 
is more complex, leading to delays and slow realisation of planned activities. 

5.  Performance 

Altogether, €29 million were made available so far (end 2018), of which 18 million are loans. 
The finance is provided by the Ministry of Economic Development and Technology, Slovenian 
Entrepreneurial Fund (with additional funds from ERDF) and SID bank, with each having a 
separate call for the particular instrument it co-finances. The last official report (2018) on 
the implementation is for 2016 and provides extensive evaluation as the background for the 
prolongation of the Decision. The figures gathered by the Regional Development Agency in 
spring 2019 show that the disbursement of the favourable loans and microcredits is very 
low  (investment  loans  32%  and  microcredits  at  19%  of  the  available  resources).  On  the 
other hand, much higher is the disbursement rate for the subsidies, where 92-98% of the 
available funds have been used. Local development agency and regional development centre 
act  only  as  informants  and  advisors  to  those  applying,  all  the  rest  was  done  at  a  higher 
level. Very little data is provided on the implementation of the measures not under MEDT. 
Slow implementation is not only the problem under measure one and its six instruments, it 
is the same at the level of measures. This is caused by complex coordination required by so 
many on board, as well as due to insufficient planning of the resources. Even after three 
years of the adoption of the Decision, some measures are still not in place.    

163 

 
 
6.  Strengths and Weaknesses 

  The  Programme 2000-  2006  was  timely  and  well-designed.  The  cooperation  between  the 
local  municipalities,  Regional  Centre  for  Development  and  the  Ministry  of  Economic 
Development  (the  unit  for  regional  development)  was  close  and  supportive  (see  the 
interviews for details). This meant that the measures and instruments were well- designed, 
appropriate and targeted the right issues. 

  While the basic concept of the Decision was copied from the Programme, the measures and 
instruments  were  not.  The  very  idea  that  a  special  Decision  needs  to  be  taken  to  help 
catching up of the Zasavje region, can be assessed as a positive move. The ambition was 
to upgrade the previous approach and provide more complex and comprehensive measures, 
addressing  not  just  the  competitiveness  of  the  region,  but  also  various  infrastructures 
(energy, transport, etc.) and combine various instruments for better effect 

  Due to changed policy approach, the Programme was discontinued just at the beginning of 
the overall economic crisis in Slovenia. This meant that the positive trends of restructuring 
of the region were stopped and the potential full benefits never materialised. Still, some of 
the  measures  helped  the  region  to  survive  the  economic  crisis  better  than  without  this 
Programme. 

  A key weakness of the Decision 2013-2020, pointed out during the interviews and in the 
mid-term  evaluation,  lies  precisely  in  what  was  to  be  its  strength:  complex,  holistic 
approach, addressing a whole spectrum of co-related issues. 

7.  Transferable Lessons 

  While there are other instruments, especially the ones included in the OPs, available to less 
developed regions, the dedicated programmes have proven to be successful in special cases, 
when targeted measures, specific to the needs of the NUTS 3 region are required. 

In the case of the Decision 2013- 2020, the measures present a mix of standard measures 
applied to any region in case of high unemployment and slow growth, which might be part 
of  the  reason,  why  the  dynamics  of  the  implementation  are  lower.  Only  some  of  the 
instruments  are  more  specifically  shaped  towards  the  needs  of  the  region  and  their 
municipalities. The lesson here may very well be that smaller, more specific and adjusted 
measures  would  have  more  and  quicker  impact  on  the  municipalities.  Also,  from  the 
interviews  it  was  felt  that  local  initiative  was  much  more  appreciated  during  the 
implementation of the Programme than it is under the Decision.  

In  fact,  the  municipalities,  included  in  the  Programme  2000-  2006,  are  preparing  a  new 
proposal to the government to reintroduce a special act on development support to Zasavje 
region.  Main  argument  is  that  the  region  is  losing  contact  with  others  and  falling  further 
behind: its current development level is at 52.4% of Slovenia’s average, the migration of 
young  people  is  increasing  (currently  52%  of  labour  force  from  Zasavje  works  in  other 
regions) and so is the number of employees (there is still a growth of number of enterprises 
from 1,699 in 2007 to 2,125 in 2014, but the number of employees fell from 9100 in 2007 
to  6148  in  2014).  A  new  Act,  providing  approximately  €60  million,  would  be  coordinated 
with the future OP 2021-2027.  

164 

 
 
 
 
11  SPAIN 

Country briefings 

National Policies addressing regional economic disparities – Spain 

1. Background  

Spain is made up of 17 autonomous communities and 
two  independent  cities,  with  varying  degrees  of 
autonomy in policymaking. 

According  to  the  OECD  Index  of  regional  disparity 
2016, 32  in  the  period  2000-2016  the  differences 
between  the  Spanish  regions  in  terms  of  GDP  per 
capita  remained  stable.  Comparing  with  other  30 
OECD  countries,  only  four  recorded  lower  regional 
economic disparities than Spain.  

The  Autonomous  Community  of  Extremadura,  with 
GDP  per  capita  58%  of  EU28  in  2017,  is  the  only 
region  in  the  country  falling  into  the  category  Less 
Developed Region. However, due to the recent crisis, 
GDP per capita of other regions has also fallen below 
the threshold of 75% of the EU-28 average, namely, 
Principato de Asturias (74%), Comunidad Valenciana 
(73%),  Región  de  Murcia  (69%),  Canarias  (69%), 
Castilla-La  Mancha  (66%),  the  Autonomous  City  of 
Ceuta (65%), Andalucía  (62%), the Autonomous City of Melilla (ES64). On the other side of the 
spectrum, the capital region of Madrid generated one-fourth of the GDP growth in Spain in the 
period  2000-2016  and  retained the highest  GDP  per  capita  amounting to  113%  of  the  EU28  in 
2017. Pais Vasco is close behind Madrid with 110%, Foral de Navara with 103% and Cataluña with 
100%.  

Source: European Commission (2019). 

2. Architecture of national policies for addressing regional economic disparities 

Focus  

The  reduction  of  economic  disparities  within  the  country  and  between  the  regions  and  the  EU 
average is among the priorities of the national and regional policy in Spain. The other thematic 
national  policies  do not  have  an  explicit  dimension  on  regional  disparities.  However,  they  often 
have regional implications such as the industrial policy aiming at the strengthening of the industry 
of  Spain  and  mitigating  the  effects  of  de-industrialisation.  Regarding  the  former  objective  the 
support provided to the manufacturing sector, aerospace and automotive industry included funding 
to advanced industrial regions with strong agglomerations of automotive and space industries (e.g. 
Madrid, Pais Basco and Cataluña) but also to less industrialised regions such as Andalusia (some 
automotive and aerospace production) or Extremadura (smaller scale manufacturing activities).    

The  main  instruments  addressing  regional  economic  disparities  in  Spain  are  the  Regional 
Incentives Programme, running under its current name since at least 1985, and the Inter-territorial 
Compensation  Fund.  Thematic  programmes  with  an  impact  on  the  economic  development  of 
specific regions are the Reindustrialisation programme (REINDUS), and the Framework for Action 
in Mining Communities (“Comarcas Mineras”). More information is provided below in section 3.   

32 OECD (2018), OECD Regions and Cities at a Glance 2018, OECD Publishing, 
Paris, https://doi.org/10.1787/reg_cit_glance-2018-en.  

165 

 
 
 
 
 
 
Design and governance 

Due  to  the  decentralised  nature  of  the  Spanish  state,  most  of  the  critical  policies  addressing 
regional development in Spain are executed at the regional level by the autonomous communities 
which  have  the  responsibility  of  regional  development.  This  limits  the  number  of  national 
programmes explicitly addressing regional economic disparities.  

At the national level, the Directorate General for Regional Incentives of the Ministry of Finance is 
responsible for regional policy. The programmes are designed and financed by the Ministry, while 
the implementation mostly occurs at the level of the autonomous communities. The latter provides 
advice to the companies regarding the participation, receives and pre-screens the applications and 
sends the preselected ones to the Ministry of Finance for the final selection. 

Among  the  thematic  ministries,  the  Ministry  of  Industry,  Commerce  and  Tourism  implement 
programmes with regional implications.  

Relationship of national funding and support through the ESI    

The  ESI  Funds  together  with  the  national  co-financing  are  the  biggest  source  of  funding  of  the 
entire  policy  addressing  regional  disparities.  However,  the  contribution  to  reducing  economic 
regional disparities of the nationally funded programmes addressing regional economic disparities 
is also substantial. The identified national contribution (without the national co-financing of ESI 
Funds  initiatives)  amounted  to  €15.9  billion.  However,  among  the  regions  with  GDP  per  capita 
below the EU average, only Extremadura receives substantial support as a Less Developed Region. 
Therefore,  the  national  ministries  and  especially  the  Ministry  of  Finance  and  the  Ministry  of 
Industry, Commerce and Tourism, intervene by providing support to regions facing development 
challenges. The former offers horizontal support to all type of companies in the lagging regions, 
while the latter supports regions with specific sectoral needs or de-industrialisation trends. 

3. Overview of national policy measures addressing regional economic disparities 

The  main  nationally  funded  programmes  with  a  clear  regional  dimension  are  the  Regional 
Incentives Programme and the Industrial Compensation Funds, both run by the Ministry of Finance. 
The  Regional  Incentives  Programme  (fiche  ES1)  provides  loans  with  preferential  terms  for  the 
establishment  of  new  businesses,  the  expansion  of  established  companies,  diversification  of 
activities,  or  improvements  of  infrastructures.  During  the  period  2014-2018,  €12.7  billion  were 
directed  to  all  regions  falling  behind  the  EU28  average  in  terms  of  GDP  per  capita  (all  regions 
except Madrid, Pais Vasco, Foral de Navara and Cataluña). The support to Extremadura amounted 
to  €341  million  (2.7%).  The  second  initiative  of  the  Ministry  of  Finance,  the  Interterritorial 
Compensation Funds (fiche ES2), finances via the Compensation Fund (fiche ES2.1) investments 
in Less Developed Regions, and the wealth and income creation in regions via the Complementary 
Fund  (fiche  ES2.2).  Both  funds  provide  loans  to  companies  in  favourable  terms  for  investment 
projects. The allocations to regions are the result of a complex calculation that takes into account 
the  production  costs  and  the  population  of  the  region,  among  others.    The  regions  that  are 
excluded from the support are Madrid, Pais Vasco, Foral de Navara, Cataluña and La Rioja. During 
the period 2014-2018, the Funds provided loans of €2.1 billion, while Extremadura received €128.9 
million (6%).  

The Ministry of Industry Commerce and Tourism run the Reindustrialisation and Strengthening of 
Industrial  Competitiveness  (REINDUS)  Programme  (fiche  ES3)  with  five  components  solely 
financed by the national budget. The REINDUS: Industrial investment (fiche ES3.1) provides loans 
to companies for the financing of industrial investments. Its overarching objective is to improve 
and expand the Spanish industrial and attract companies in Spain. Initially, all regions were eligible 
for  support.  Only  in  2019,  the  programme  introduced  criteria  that  give  priority  to  the  less 
industrialised regions. The budget for the period 2014-2018 amounted to €2 billion. The REINDUS: 
Industrial infrastructure (fiche ES3.2) provides loans for the relocation and setting up of industrial 
companies in particular industrial parks and free-trade zones. The programme was rather small, 
with a budget of €50 million. The REINDUS: Regional support (fiche ES3.3) with a budget of €269 
million,  aims  at  less  industrialised  regions.  Eligible  activities  are  the  setting  up  of  industrial 
companies,  relocation  of  industrial  companies  within  the  supported  regions  and  expansion  of 
existing industrial establishment. The REINDUS: Moved industry (fiche ES3.4) supports industrial 
sectors that have been affected by the migration of industry to other regions or other countries. 
Such sectors are the textile sector, clothes makers, shoemakers, toy makers, furniture makers, 
and leather product makers. The total budget amounts to €40 million. The REINDUS: Support to 
Selected Sectors (fiche ES3.5) with a budget of €746 million supports industries that require large 

166 

 
 
amounts  of  investments.  The  period  2014-2018  €23.5  million  were  directed  to  the  aerospace 
industry, €100 million to the automotive industry and €623 million to other manufacturing sectors.  

The  Framework  for  Action  for  Carbon  Mining  and  Mining  Communities  (fiche  ES4)  in  the  2013-
2018 provides support to regions with mining (several regions) or used to have coal mining activity 
(Asturias,  Aragón,  and  Castilla  y  León).  The  measure  contributed  to  the  reorganisation  of  the 
mining sector and mitigation of the impact of the closing of the coal mines during the period 2013-
2018. It provided grants to projects aiming at improving the productivity of the mining centres 
and close the less productive ones.  Productive. The overall financial contribution was €296 million. 

4. Classification of policies  

Title 

Type of 
funding 

Programme of Regional 
Incentives (ES1) 

Loans 

Interterritorial 
Compensation funds (ES2, 
ES2.1 and ES2.2) 

Loans 

REINDUS: Industrial 
investment (ES3.1) 

Loans 

REINDUS: Industrial 
infrastructure (ES3.2) 

Loans 

REINDUS: Regional 
support (ES3.3) 

Loans 

REINDUS: Moved 
industry support (ES3.4) 

Loans 

Framework for Action for 
Carbon Mining and 
Mining Communities in 
the 2013-2018 (ES4) 

Grants 

5. Main Sources: 

Interviews 

Policy category 

Policy instrument 

Funding and implementation

Business Environment 
and Trade 

Sector Development 
and Targeted 
Investment 

Investment support  

Business 
development and 
innovation support 
to firms 

Funding at the national level
Design at the National level
Implementation at the 
national level with 
cooperation of the regional 
governance 

Business Environment 
and Trade 

Investment support  

Sector Development 
and Targeted 
Investment 

Business 
development and 
innovation support 
to firms 

Business Environment 
and Trade 

Investment support  

Sector Development 
and Targeted 
Investment 

Business 
development and 
innovation support 
to firms 

Business Environment 
and Trade 

Special economic 
zones 

Sector Development 
and Targeted 
Investment 

Industrial parks and 
other industrial 
infrastructures 

Business Environment 
and Trade 

Investment support  

Sector Development 
and Targeted 
Investment 

Business 
development and 
innovation support 
to firms 

Business Environment 
and Trade 

Investment support  

Sector Development 
and Targeted 
Investment 

Sector Development 
and Targeted 
Investment 

Skills and Mobility 

Business 
development and 
innovation support 
to firms 

Business 
Development and 
innovation support 
to firms 

New skills 
development 

Funding at the national level
Design at the National level
Implementation at the 
national level with 
cooperation of the regional 
governance 

National Design and Funding, 
Regional/national 
implementation 

National Design and Funding, 
Regional/national 
implementation 

National Design and Funding, 
Regional/national 
implementation 

National Design and Funding, 
Regional/national 
implementation 

Funding and Design: national
Implementation: regional

   Carlos Ortega Camilo, Undersecretary for Regional Incentives, Ministry of Finance, 
   Alejandro Cros Bernabéu, Undersecretary for Sectoral Industrial Policies, Ministry of 

Industry, Trade, and Tourism 

167 

 
 
 
 
 
 
   Riesgo Alcaide, Director for Research, Development and Innovation, Ministry of Science, 

Innovations and Universities, 

Main documents 

   Government of Spain, (2019): National Reform Programme Spain 

https://ec.europa.eu/info/sites/info/files/2019-european-semester-national-reform-
programme-spain_es.pdf  

   OECD (2018), OECD Regions and Cities at a Glance 2018, OECD Publishing, 

Paris, https://doi.org/10.1787/reg_cit_glance-2018-en.  

   Partnership Agreement Spain 2014-2020, 

http://www.dgfc.sepg.minhafp.gob.es/sitios/dgfc/es-
ES/ipr/fcp1420/e/eea/Documents/Eval_Exante_AA_03_09_14.pdf  

Country fiches 

Regional incentives (Incentivos Regionales) 

ID  ES1 

Country  Spain 

Region(s) affected  All except Basque Country, Navarra, A. Community of Madrid and 

Catalonia 

Time horizon  1985-present 

Objectives and Scope  The  programme’s  objective 

is  to  alleviate 

interterritorial 

imbalances and it is targeting the following areas: 

   Promote development in less developed regions 
   Creation of employment and development  
   Consolidation of industry 
   Targeted  Sectors: 

transformative 

industries  and 

innovative touristic enterprises 

Overview  The programme provides a line of credit (loans) for the following 

purposes: 

   Support for the establishment of new businesses 
   Support for the expansion of an established business 
   Support for new business area in an existing company 
   Support for the improvement of infrastructure  

Loans begin at €900,000 and, therefore, are mostly targeted at 
larger projects from large corporations. Different conditions exist 
for smaller companies. 

Rationale  Through the correction of regional disparities, national cohesion 

in both economic and social terms is improved. 

Type of policy category   Business environment and trade 

Sector Development and Targeted Investment 

168 

 
 
 
 
 
 
Type of policy instrument 

Investment support  

Business development and innovation support to firms 

Type of funding  Loans per region: 

Budget and expenditures 

 Region 

2014 

2015 

2016 

2017 

2018 

Andalucia  

 235,397,548 

 139,547,177 

 844,258,061 

 653,248,367 

 922,816,839 

Aragón  

 64,460,866 

 20,877,171 

 170,731,999 

 141,492,381 

 82,192,707 

Principado 
de Asturias  

 22,393,691 

 59,915,062 

 27,389,904 

 20,625,831 

 33,711,585 

Canarias  

 362,122,339 

 125,733,229 

 215,863,072 

 487,387,805 

2,870,873,080 

Cantabria  

 17,622,014 

 922,150 

 17,159,258 

 0 

 52,248,757 

Castilla  -  La 
Mancha  

 112,182,216 

 25,881,131 

 22,140,014 

 162,839,997 

 439,140,981 

Castilla 
León  

y 

 290,725,588 

 41,409,182 

 349,593,093 

 197,428,412 

 30,895,601 

Extremadur
a  

 121,793,791 

 36,413,202 

 51,603,401 

 33,380,421 

 98,100,300 

Galicia  

 56,342,655 

 90,205,405 

 633,888,570 

 272,250,828 

 44,464,596 

Illes Balears  

La Rioja  

Región  de 
Murcia  

Comunitat 
Valencia  

 Total 

N/A 

N/A 

N/A 

N/A 

 20,622,579 

 45,672,175 

 0 

 4,026,801 

 0 

 60,648,880 

 345,661,844 

 79,334,821 

 26,644,229 

 128,348,454 

 174,559,019 

 79,799,577 

 81,146,956 

 191,256,274 

 56,667,817 

 664,432,615 

4,217,252,872 

 937,774,597 

 2,464,424,835 

 1,902,768,161   3,136,271,865 

Governance 

Institution Responsible: Ministry of Finance 

Scenario 1 and 2 

Funding/Design: National 

Policy implementation and 
policy mix 

Relevant ESIF measures (if 
any) 

Impact: monitoring and 
evaluation 

Implementational: Loans for less than €15 million are approved 
at  the  national  level,  with  participation  of  the  autonomous 
communities  in  the  decision  process.  Loans  for  amounts  above 
€15  million  are  decided  at  the  national  level  and  require  the 
approval  of  the  “Delegated  Commission  of  the  Government  for 
Economic  Affairs”  (similar  set-up  to  the  ministry  council  but 
reduced to the ministers relevant to economic affairs). 

No sub-measures for this policy. 

ERDF co-financing for small projects for SMEs. Must be requested 
by  SME  making  application,  if  desired.  No  ERFD  financing  for 
programme as a whole.  

for  more 

The “memorias anuales” (annual reports) calculate employment 
created  through  the  measures  for  each  autonomous  region. 
Reports are available for the past decade on an annual basis, and 
recent  years  on  a  quarterly  basis. 
also 
The  most  recent  report  highlights  that  particularly  under-
developed  regions  (Andalucía,  Canarias,  Murcia)  are  the  ones 
receiving  the  largest  share  of  funding  from  this  programme. 
Furthermore, under-developed regions tend to have the largest 

169 

 
 
 
 
 
average funding amount per project (e.g., Extremadura’s project 
average  is  €16.3  million;  largest  average  amount  in  Canarias, 
€23.2 million). The largest amount of jobs were also created in 
under-developed  regions:  the  largest  amount  of  jobs  were 
created in Canarias (865), followed by Castilla-La Mancha (380), 
and Andalucía (260). Extramadura placed 5th in job creation, with 
90 jobs created in 2018. 

Links  http://www.dgfc.sepg.hacienda.gob.es/sitios/dgfc/es-
ES/ipr/ir/ia/Paginas/MemoriasAnuales.aspx 

Interterritorial Compensation funds (Fondos de Compensación Interterritorial – FCI) 

ID  ES2 

Country  Spain 

Region(s) affected  All except A.C. of Madrid, Aragon, Catalonia, Navarra, La Rioja, 

Basque Country 

Time horizon  2001-2018 

Objectives and Scope  The objectives are: 

  

  

to  finance  investment  in  comparatively  less  developed 
territories 

to promote the creation of income and wealth 

Overview  The 

 Fondos  Compensación  Interterritorial 

financing 
instrument  of  the Autonomous  Communities  in  order  to  correct 
inter-territorial imbalances. 

is  a 

The programme finances via loans at under-market conditions a) 
investment projects b) the costs associated with the execution of 
these investment projects 

The amount of financing for each region each year is the result of 
a  complex  calculation  that  takes  into  account  production  costs 
and number of inhabitants, among others. 

Rational  The  loans  are  targeted  at  regions  with  lower  economic 

development exclusively. 

Type of policy category   Business environment and trade 

Sector Development and Targeted Investment 

Type of policy instrument 

Investment support  

Business development and innovation support to firms 

Type of funding  Loans 

Budget and expenditures  Figures in thousands of euros 

 Region 

2014 

2015 

2016 

2017 

2018 

Andalucia  

Principado 
Asturias  

de 

159,350 

160,471 

159,396 

160,341 

160,922 

 13,065 

 12,740 

 13,440 

 13,803 

 14,161 

Canarias  

 44,689 

 46,476 

 46,843 

 46,729 

 50,140 

170 

 
 
 
 
 
 
 
 
Cantabria  

 3,903 

 4,064 

 4,987 

 5,400 

 5,257 

Castilla 
Mancha  

-  La 

 37,715 

 37,066 

 33,145 

 34,069 

 35,005 

Castilla y León  

 20,885 

 18,588 

 19,519 

 19,351 

 18,765 

Extremadura  

 26,897 

 26,615 

 25,240 

 25,046 

 25,093 

Galicia  

 44,549 

 42,918 

 45,030 

 44,343 

 42,505 

Región 
Murcia  

de 

Comunitat 
Valencia  

Melilla 

Ceuta 

 Total 

 20,885 

 21,644 

 22,159 

 21,876 

 21,661 

 53,867 

 55,224 

 56,046 

 54,849 

 52,298 

 3,309 

 3,309 

 3,309 

 3,309 

 3,309 

 3,309 

 3,309 

 3,309 

 3,309 

 3,309 

432,430 

432,430 

432,430 

432,430 

432,430 

Fund 

2014 

2015 

2016 

2017 

2018

Compensatio
n fund 

Complement
ary fund 

 324,330 

 324,330 

 324,330 

 324,330 

 324,330

 108,099 

 108,099 

 108,099 

 108,099 

 108,099

 Total 

 432,430 

 432,430 

 432,430 

 432,430 

 432,430

Governance  Institution Responsible: Ministry of Finance 

Scenario 1 and 2:  

Funding/Design: national 

Implementation: national/regional 

Policy implementation and 
policy mix 

The policy implemented through two funds (sub-measures): 

   Compensation fund: destined to finance investment costs 

in less developed regions (fiche ES2.1) 

   Complementary  fund:  destined  to  finance  wealth  and 

income creation in regions (fiche ES.2) 

Relevant ESIF measures (if 
any) 

None. 

Impact: monitoring and 
evaluation 

N/A 

Link  http://www.dgfc.sepg.hacienda.gob.es/sitios/dgfc/es-

ES/ipr/oipr/fci/Paginas/inicio.aspx 

171 

 
 
 
 
 
 
 
 
 
 
 
 
 
Interterritorial compensation funds : Compensation fund 

ID  ES2.1 

Country  Spain 

Region(s) affected  All except A.C. of Madrid, Aragon, Catalonia, Navarra, La Rioja, 

Basque Country 

Time horizon  2001-present 

Objectives and Scope  The compensation fund of the FCI aims at financing investment 
expenses  in  comparatively  under-developed  territories.  The 
investments  must  target  the  creation  income  and  wealth 
creation, either directly or indirectly, in the benefited territory. 

Overview  The fund provides loans under better than market conditions. 

Rationale  The  fund  targets  the  compensation  of  differences  among  the 
territories in Spain through the creation of wealth and/or income 
opportunities. 

Type of policy category   Business environment and trade 

Sector Development and Targeted Investment 

Type of policy instrument  Business development and innovation support to firms 

Investment support 

Type of funding  Loans 

Budget and expenditures  Figures in thousands of euros 

 Region 

2014 

2015 

2016 

2017 

2018

Andalucia  

119,515 

120,356 

119,550 

 120,258 

 120,695

Principado 
Asturias  

de 

 9,799 

 9,555 

 10,080 

 10,252 

 10,621

Canarias  

 33,517 

 34,858 

 35,133 

 35,048 

 37,606

Cantabria  

 2,928 

 3,048 

 3,740 

 4,050 

 3,943

Castilla 
Mancha  

-  La 

 28,287 

 27,800 

 24,859 

 25,552 

 26,254

Castilla y León  

 15,664 

 13,941 

 14,640 

 14,513 

 14,074

Extremadura  

 20,173 

 19,961 

 18,931 

 18,785 

 18,820

Galicia  

 33,413 

 32,189 

 33,773 

 33,258 

 31,879

Región 
Murcia  

de 

Comunitat 
Valencia  

Melilla 

Ceuta 

 Total 

 15,664 

 16,233 

 16,619 

 16,407 

 16,246

 40,401 

 41,419 

 42,036 

 41,138 

 39,225

 2,482 

 2,482 

 2,482 

 2,482 

 2,482

 2,482 

 2,482 

 2,482 

 2,482 

 2,482

324,330 

324,330 

324,330 

 324,330 

 324,330

172 

 
 
 
 
 
 
 
 
 
 
Governance 

Institution Responsible: Ministry of Finance 

Scenario 1: 

   Funding/Design: national 
  

Implementation: national and regional 

Policy implementation and 
policy mix 

This measure is part of the Fondos Compensación Interterritorial 
(FCI) — Interterritorial compensation funds (ES2) 

Relevant ESIF measures (if 
any) 

None. 

Impact: monitoring and 
evaluation 

N/A 

Link  http://www.dgfc.sepg.hacienda.gob.es/sitios/dgfc/es-

ES/ipr/oipr/fci/Paginas/inicio.aspx 

Interterritorial compensation funds: Complementary fund 

ID  ES2.2 

Country  Spain 

Time horizon  2001-present 

Region(s) affected  All except A.C. of Madrid, Aragon, Catalonia, Navarra, La Rioja, 

Basque Country 

Objectives and Scope  The  complementary  fund  finances  investments  that  promote 
income  and  wealth  creation,  either  directly  or  indirectly,  in  the 
benefited territory.  

Overview  The  funding  is  delivered  as  loans  provided  under  better  than 

market conditions. 

Notwithstanding,  upon  request  of  the  benefited  territory, 
additional 
the  approved 
investments for a period of two years (maximum). 

financing  can  be  provided 

for 

Rationale  These  funds  target  the  compensation  of  differences  among  the 
territories in Spain through the creation of wealth and/or income 
opportunities. 

Type of policy category   Business environment and trade 

Sector Development and Targeted Investment 

Type of policy instrument  Business development and innovation support to firms 

Investment support 

Type of funding  Loans  

Budget and expenditures  Figures in thousands of euros 

 Region 

2014 

2015 

2016 

2017 

2018 

Andalucia  

 39,834 

 40,114 

 39,846 

 40,082 

 40,227 

Principado  de 
Asturias  

 3,266 

 3,184 

 3,359 

 3,450 

 3,540 

173 

 
 
 
 
Canarias  

 11,171 

 11,618 

 11,709 

 11,681 

 12,534 

Cantabria  

 975 

 1,015 

 1,246 

 1,350 

 1,314 

Castilla  -  La 
Mancha  

 9,428 

 9,265 

 8,285 

 8,516 

 8,750 

Castilla y León  

 5,221 

 4,646 

 4,879 

 4,837 

 4,690 

Extremadura  

 6,723 

 6,653 

 6,309 

 6,261 

 6,272 

Galicia  

 11,136 

 10,728 

 11,256 

 11,085 

 10,625 

Región 
Murcia  

de 

Comunitat 
Valencia  

 5,221 

 5,410 

 5,539 

 5,468 

 5,414 

 13,465 

 13,805 

 14,010 

 13,711 

 13,073 

Melilla 

 827 

 827 

 827 

 827 

 827 

Ceuta 

 Total 

 827 

 827 

 827 

 827 

 827 

 108,099 

 108,099 

 108,099   108,099 

 108,099 

Governance 

Institution Responsible: Ministry of Finance 

Scenario 1: 

   Funding/Design: national 
  

Implementation: national and regional 

Policy implementation and 
policy mix 

This measure is part of the Fondos Compensación Interterritorial 
(FCI) — Interterritorial compensation funds (ES2) 

Relevant ESIF measures (if 
any) 

None. 

Impact: monitoring and 
evaluation 

N/A 

Link  http://www.dgfc.sepg.hacienda.gob.es/sitios/dgfc/es-

ES/ipr/oipr/fci/Paginas/inicio.aspx 

Reindustrialisation  and  Strengthening  of  Industrial  Competitiveness  (REINDUS)  — 
Reindustrialización y Fortalecimiento de la Competitividad Industrial    

ID  ES3 

Country  Spain 

Region(s) affected  All  regions  and  particularly  under-industrialised  regions  (e.g., 
Comunidad Autónoma de Extremadura). 

Time horizon  2007-present.  

Objectives and Scope  The  programme’s  objective 

is 

to  strengthen 

industrial 

competitiveness and 

 sustainable  development,  particularly  through  the  renewal  or 
creation of industry.  

It focuses on disadvantaged areas, promoting investment in both 
industrial  infrastructure  and  business  initiatives.  It  also  focuses 
on creating a 4.0 industrial base in Spain.  

174 

 
 
 
 
Overview  The following elements of reindustrialisation are financeable via 

this programme:  

   creation of industrial establishments;  
   movement of industrial establishments within Spain;  
   expansion of existing industrial establishments. 

Starting  in  2019,  a  point system  was  implemented,  in  order  to 
favour  companies  from  under-industrialised  regions.  Before 
2019,  there  was  a  certain  level  of  competition,  particularly 
between companies from developed and underdeveloped regions, 
for the acquisition of these funds. 

Rationale 

Industry  is  considered  to  be  one  of  the  main  drivers  of  GDP 
growth. With this strategy and its measures, the ministry aims to 
stimulate 
therefore  support 
historically underdeveloped regions. 

industrial  development,  and 

Type of policy category  

Type of policy instrument 

   Business environment and trade;  
   Sector Development and targeted Investment;  
  
Investment promotion 
   Special Economic zones,  
   Business development and innovation support to firms,  
   Science and industrial parks 

Type of funding  Loans 

Budget and expenditures  No explicit budget for entire programme, but each measure has 

its own budget. 

Governance 

Institution Responsible: The Ministry of Industry, Commerce and 
Tourism 

Scenario 2:  

   National Design and Funding, regional 
   Regional implementation 

Policy implementation and 
policy mix 

Depending  on  the  year,  different  measures  were  implemented 
concurrently 

  

  
  

Industrial  investment  support,  general  (2014-2018) 
(ES3.1) 

Industrial infrastructure support (2014) (ES3.2) 

Industrial investment in particular regions (2014, 2017) 
(ES3.3) 

   Reindustrialization  programme  in  regions  with  moved 

industry (2014) (ES3.4) 

  

Industrial investment, by sector (2014, 2015) (ES 3.5) 

Relevant ESIF measures (if 
any) 

Projects within the Industrial Initiatives area may be co-financed 
by  community  funds,  within  some  of  the  OPs  of  the  European 
Regional  Development  Fund  (ERDF)  (in  addition  to  national 
funding). 

Impact: monitoring and 
evaluation 

N/A 

175 

 
 
Link  http://www.mincotur.gob.es/PortalAyudas/RCI/Paginas/Index.a

spx 

REINDUS : Industrial investment - Inversión industrial   

ID  ES3.1 

Country  Spain 

Time horizon  Current form since at least 2007 (consolidation of many different 

policies). New eligibility criteria from 2019  onwards 

Region(s) affected  2007-2019 All regions  

Starting  in  2019  new  criteria  are  set  giving  an  advantage  to 
under-industrialised  regions  (e.g.  Comunidad  Autónoma  de 
Extremadura).  

Objectives and Scope  The  aim  is  to  support  industrial  investments  mainly  but  not 
exclusively  in  under-industrialised  regions.  Its  overarching 
objective is to improve the Spanish industrial infrastructure. 

Overview  The measure provides loans for the following activities:  

   Setting up of new companies;  
   Attraction of companies to Spain;  
   Expansion of industrial capacity. 

Starting  in  2019,  a  point system  was  implemented,  in  order  to 
favour  companies  from  under-industrialised  regions.  Before 
2019,  there  was  a  certain  level  of  competition,  particularly 
between companies from developed and underdeveloped regions, 
for the acquisition of these funds. 

Rationale 

Industry  is  considered  to  be  one  of  the  main  drivers  of  GDP 
growth. With this strategy and its measures, the ministry aims to 
stimulate 
therefore  support 
historically underdeveloped regions. 

industrial  development,  and 

Type of policy category   Business environment and trade 

Sector Development and targeted Investment 

Type of policy instrument 

Investment promotion 

Business development and innovation support to firms 

Type of funding  Loans 

Budget and expenditures 

2014 

2015 

2016 

2017 

2018 

2019 

2020 

 84,702,513 

 408,725,760 

 569,762,322 

 606,368,488 

 400,000,000 

 N/A 

 N/A 

176 

 
 
 
 
Governance  Institution Responsible: The Ministry of Industry,  Commerce 

and Tourism 

Scenario 2: 

   National Design and Funding,  
   Regional/national implementation 

Policy implementation and 
policy mix 

This  measure  is  part  of  the  policy  mix  of  Reindustrialización  y 
Fortalecimiento de la Competitividad Industrial (REINDUS)  (ES3) 

Relevant ESIF measures (if 
any) 

Projects within the Industrial Initiatives area may be co-financed 
by community funds, within some of the operational programs of 
the European Regional Development Fund (ERDF)  (in addition to 
national funding). 

Impact: monitoring and 
evaluation 

N/A 

Link  http://www.mincotur.gob.es/PortalAyudas/RCI/Paginas/Index.a

spx 

REINDUS: Industrial infrastructure – Infraestructura industrial  

ID   ES3.2 

Country  Spain 

Region(s) affected  All  regions  and  particularly  under-industrialised  regions  (e.g., 
Comunidad Autónoma de Extremadura). 

Time horizon  2014 

Objectives and Scope  This  measure  aims  at 

improving  the  Spanish 

industrial 
infrastructure in order to meet the objectives of the government’s 
industrial  policy:  improved  competitiveness,  better  presence  in 
international  markets,  incorporation  of  advanced  technologies, 
and the creation of qualified employment. 

Overview  The measure focuses on the promotion of industrial infrastructure 
in particular industrial parks and free-trade zones. 

This was executed through the offering of below-market loans for 
the initiation of projects of this particular nature. 

Rationale 

Industry  is  considered  to  be  one  of  the  main  drivers  of  GDP 
growth. With this strategy and its measures, the ministry aims to 
stimulate 
therefore  support 
historically underdeveloped regions. 

industrial  development,  and 

Type of policy category   Business environment and trade 

Sector Development and targeted Investment 

Type of policy instrument  Special economic zones,  

Industrial parks and other industrial infrastructures 

Type of funding  Loans 

Budget and expenditures  2014:  €50 million 

Governance 

Institution Responsible: The Ministry of Industry, Commerce and 
Tourism 

177 

 
 
 
Scenario 2 

National Design and Funding, regional/national implementation 

   Ministry of Commerce, Industry and Tourism 

Policy implementation and 
policy mix 

This  measure  is  part  of  the  policy  mix  of  Reindustrialización  y 
Fortalecimiento de la Competitividad Industrial (REINDUS)  (ES3) 

Relevant ESIF measures (if 
any) 

None. 

Impact: monitoring and 
evaluation 

N/A 

Link  http://www.mincotur.gob.es/PortalAyudas/RCI/Paginas/Index.a

spx 

REINDUS: Regional support  

ID  ES3.3 

Country  Spain 

Region(s) affected  Less  industrialised  regions  (e.g.,  Comunidad  Autónoma  de 

Extremadura). 

Time Horizon  2014- ongoing 

Objectives and Scope  This REINDUS measure is open to all sectors in selected Spanish 

regions.  

This particular measure aims to compensate inequalities between 
the Spanish regions. The criteria for selection regions that receive 
this  additional  aid  are  described  as  those  in  which  particular 
circumstances  come  together  that  put  these  regions  at  a 
disadvantage in comparison to other Spanish regions.  

Overview  Below-market loans for companies that fit the call’s criteria 

The following elements of reindustrialisation are financeable via 
this programme: creation of industrial establishments; migration 
of industrial establishments within region; expansion of existing 
industrial establishment. 

The exact regions benefited by this programme are listed in the 
budget. 

Rationale 

Industry  is  considered  to  be  one  of  the  main  drivers  of  GDP 
growth. With this strategy and its measures, the ministry aims to 
stimulate 
therefore  support 
historically underdeveloped regions. 

industrial  development,  and 

Type of policy category   Business environment and trade  

Sector Development and targeted Investment 

Type of policy instrument 

Investment promotion 

Business development and innovation support to firms 

Type of funding  Total loans provided 2014-2018: €269 million 

Budget and expenditures 

 Region 

2014 

2015 

2016 

2017 

2018 

178 

 
 
 
Comarca de campo de Gibraltar  

26,287,590 

 N/A 

 N/A 

 N/A 

 N/A 

Comarcas  de  Ferrol,  Eume  y 
Ortegal 

45,711,030 

 N/A 

 N/A 

 N/A 

 N/A 

Provincias  de  Teruel,  Soria  y 
Jaén 

27,967,010 

 Márgen izquierda del Nervión 

 7,850,140 

 N/A 

 N/A 

 N/A 

 N/A 

Comunidad 
Canarias 

Comarca de Lorca 

Autónoma 

de 

 N/A 

 N/A 

 N/A 

 N/A 

14,844,230 

10,579,700 

 N/A 

 N/A 

 N/A 

 N/A 

Isla de El Hierro  

 0 

 N/A 

 N/A 

 N/A 

 N/A 

Extremadura  

Comarca Bahia de Cádiz  

12,225,590 

61,771,440 

 N/A 

 N/A 

 N/A 

 N/A 

 N/A 

 N/A 

 N/A 

 N/A 

Asturias  

 N/A 

 N/A 

 N/A 

 N/A 

61,771,4
40  

Governance  Institution Responsible: The Ministry of Industry, Commerce 

and Tourism 

Scenario 2 

National Design and Funding, regional/national implementation 

Policy implementation and 
policy mix 

This  measure  is  part  of  the  policy  mix  of  Reindustrialización  y 
Fortalecimiento de la Competitividad Industrial (REINDUS)   

Relevant ESIF measures (if 
any) 

None. 

Impact: monitoring and 
evaluation 

N/A 

Link  http://www.mincotur.gob.es/PortalAyudas/RCI/Paginas/Index.a

spx 

REINDUS:  Moved  industry  support  –  En  las  zonas  afectadas  por  procesos  de 
deslocalización   

ID  ES3.4 

Country  Spain 

Region(s) affected  All  regions  and  particularly  under-industrialised  regions  (e.g., 
Comunidad Autónoma de Extremadura). 

Time horizon  2014 

Objectives and Scope  This REINDUS measure is open to all regions in selected Spanish 

sectors. 

It supports sectors of the economy that may have been affected 
by  the  migration  of  industry  to  other  regions  and/or  countries. 
This measure aims to counter that by supporting the regeneration 
of local industry in these particular areas. 

Overview  Below-market loans for companies that fit the call’s criteria. 

179 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The following elements of reindustrialisation are financeable via 
industrial  establishments; 
this  programme:  creation  of 
movement of industrial establishments within region; expansion 
of existing industrial establishment. 

Eligible  economic  sectors:  the  textile  sector,  clothes  makers, 
shoemakers, toy makers, furniture makers, and leather product 
makers. 

Rationale 

Industry  is  considered  to  be  one  of  the  main  drivers  of  GDP 
growth. With this strategy and its measures, the ministry aims to 
stimulate 
therefore  support 
historically underdeveloped regions. 

industrial  development,  and 

Type of policy category   Business environment and trade  

Sector Development and targeted Investment 

Type of policy instrument 

Investment promotion 

Business development and innovation support to firms 

Type of funding  Loans 

Region(s) affected  All  regions  and  particularly  under-industrialised  regions  (e.g., 
Comunidad Autónoma de Extremadura). 

Budget and expenditures  2014:   €40.487.990 

Governance 

Institution Responsible: The Ministry of Industry, Commerce and 
Tourism 

Scenario 2 

National Design and Funding, regional/national implementation 

Policy implementation and 
policy mix 

This  measure  is  part  of  the  policy  mix  of  Reindustrialización  y 
Fortalecimiento de la Competitividad Industrial (REINDUS)   

Relevant ESIF measures (if 
any) 

None. 

Impact: monitoring and 
evaluation 

N/A 

Link  http://www.mincotur.gob.es/PortalAyudas/RCI/Paginas/Index.a

spx 

REINDUS: Select sector support – Ayudas por sector  

ID  ES3.5 

Country  Spain 

Region(s) affected  Both  the  less  developed  and  the  more  advanced  regions  are 

benefited due to the location of the industry. 

Aerospace is located in Madrid, Andalusia and País Vasco 

Title  REINDUS: ayudas por sector – selected sector support 

Time horizon  2014-2018 

Objectives and Scope  This REINDUS measure is open to all regions in selected Spanish 

sectors. 

180 

 
 
 
The measure of REINDUS aims to support industries that require 
large  amounts  of  financing,  e.g.  the  general  manufacturing 
industry, as well as the aerospace and automobile industry. Its 
objective is to support these sectors for the generation of a strong 
industrial economy in Spain and support employment creation. 

Overview  This measure supports industrial manufacturing (light to heavy), 

as well as the auto and aerospace industry, in particular. 

It offers below-market loans to projects that fit the call’s criteria. 

The following elements of reindustrialisation are financeable via 
this  programme:  creation  of 
industrial  establishments; 
movement of industrial establishments within region; expansion 
of existing industrial establishment. 

Location  of  aerospace  industry  (ICEX  (Spanish  Trade  & 
Investment Institute): 

   Madrid (49.4 percent of total sales) 
   Andalusia (21.7 percent) 
   Castilla La Mancha (12 percent) 
   Basque Country (9.9 percent) 
   Catalonia (1.4 percent) 
Location of automotive industry 

Source: ICEX (2014) Automotive industry in Spain 

Type of policy category   Sector Development and targeted Investment 

Type of policy instrument 

Investment support 

Business environment and trade 

Business development and innovation support to firms 

Type of funding  Loans 2014-2018:  

Budget and expenditures 

 Region 

2014 

2015 

2016 

2017 

2018 

Aerospace industry 

€ 23.460.680 

 N/A 

 N/A 

 N/A 

 N/A 

Manufacturing industry 

€ 275.000.000 

€ 348.460.680 

 N/A 

 N/A 

 N/A 

Auto industry 

€ 100.000.000 

 N/A 

 N/A 

 N/A 

 N/A 

181 

 
 
In  2015,  support  for  the  manufacturing  industry  included  €20 
million support for the aerospace industry and €20 million support 
for  the  motor  vehicle  industry  (particularly  for  vehicles  running 
on renewable energies). 

Rationale 

Industry  is  considered  to  be  one  of  the  main  drivers  of  GDP 
growth. With this strategy and its measures, the ministry aims to 
stimulate 
therefore  support 
historically underdeveloped regions. 

industrial  development,  and 

Governance 

Institution Responsible: The Ministry of Industry, Commerce and 
Tourism 

Scenario 2 

National Design and Funding, regional/national implementation 

Ministry of Commerce, Industry and Tourism 

Policy implementation and 
policy mix 

This  measure  is  part  of  the  policy  mix  of  Reindustrialización  y 
Fortalecimiento de la Competitividad Industrial (REINDUS)   

Relevant ESIF measures (if 
any) 

None. 

Impact: monitoring and 
evaluation 

N/A 

Link  http://www.mincotur.gob.es/PortalAyudas/RCI/Paginas/Index.a

spx 

Framework for Action for Carbon Mining and Mining Communities in the 2013-2018 – 
Marco de Actuación para la Minería del Carbón y las Comarcas Mineras en el Periodo 
2013-2018 

ID  ES4 

Country  Spain 

Region(s) affected  All  regions  with  mining  or  used  to  have  carbon  mining  activity 

(Extremadura is not included) 

Time horizon  2013-2018 

Objectives and Scope  The new 2013-2018 Action Framework aims at reorganising the 
coal mining sector and promote an alternative economy in mining 
areas.  Its  objectives  include  fostering  the  development  of 
business projects that generate employment and supporting the 
creation of appropriate infrastructure. 

Specific objectives: 

  

Improve productivity of mining centres or close those that 
cannot be productive 

   Economic reactivation of mining regions 
  

Improvement  of  environment  and  quality  of  life  in  these 
regions 

   Help Spain achieve energy sovereignty 

182 

 
 
 
 
 
Overview  This  measure  offers  grants  to  projects  that  aim  to  achieve  the 
specific  objectives  of  this  policy.  Projects  targeted  at  the 
development  of  mines  cannot  continue  after  2018,  as  per  EU 
regulation. 

Rationale  Regions  that  had  a  large  share  of  mining  activities  are  being 
supported  in  order  to  transform  their  industrial  structure  into 
more sustainable industries.  

Type of policy category  

Type of policy instrument 

   Sector Development and Targeted Investment 
   Skills and Mobility 
   Business Development and innovation support to firms 
   New skills development 

Type of funding  Grants 

Budget and expenditures  Total funding: €296 million 

Carbon 
Mining 
Programme 

Mining zones 
subsidy 

Mining 
communities 
(comarcas) 
subsidy (small 
investments) 

Total

2014 

 66,488,521 

N/A 

 1,250,000 

 67,738,521

2015 

 32,900,000 

 40,000,000 

 4,500,000 

 77,400,000

2016 

 25,300,000 

 40,000,000 

 5,000,000 

 70,300,000

2017 

 11,948,220 

 40,000,000 

 5,000,000 

 56,948,220

2018 

 5,716,030 

 12,900,000 

 5,000,000 

 23,616,030

Governance 

Institution responsible: Shared programme between the Ministry 
of Commerce, Industry and Tourism and the General Directorate 
of Energy and Mines 

Policy implementation and 
policy mix 

Scenario 2 

Funding and Design: national 

Implementation: regional 

The policy has the following measures: 

   Plant closing programme 
   Economic reshaping programme 
   Retraining benefits 
   Security improvement benefits 

Relevant ESIF measures (if 
any) 

None. 

Impact: monitoring and 
evaluation 

An evaluation was made in particular with regards to the closing 
of  carbon  mines  by  the  final  deadline  of  2018.  Evaluations  of 
other programmes are ongoing (internal-only documentation).  

Link  https://www.boe.es/buscar/doc.php?id=BOE-B-2019-23941 

183 

 
 
  
 
 
 
Case study 

Interterritorial Compensation Funds – Spain (ES) 

1.  Executive Summary 

The FCI is a policy in Spain that was conceived and is justified at the constitutional level. Its current 
implementation takes place through a 2001 law, which calls for the provision of investment grants 
to  Spain’s  less-developed  regions.  Since  its  inception  in  the  early  1980s,  it  has  gone  through 
several reforms, aligning it more closely to EU national cohesion objectives. The FCI’s governing 
law  clearly  outlines  the  distribution  of  funds,  based  on  the  amount  of  state  investment  at  the 
federal  level,  and  adjusted  to  the  socio-economic  reality  of  each  Spanish  autonomous 
communities. Autonomous communities (ACs) can use their funds for any investment project they 
choose, and can receive additional funding for operational costs associated with these investments. 
ACs can choose independently how they distribute the funds. ACs work together with the Ministry 
of Finance, which then publishes a list of funded projects in the State’s yearly budgets to assure 
transparency. Neither at the federal nor regional level are there indicators to measure the exact 
contribution of the funds to national cohesion. Accountability can, at a project level, be requested 
by  regional  auditing  authorities.  Investment  is  shown  to  be  spent,  across  all  ACs,  largely  on 
infrastructure projects and other projects related to the State’s service provision. Areas significant 
for  the  improvement  of  national  cohesion  (e.g.,  local  development  or  R&D)  or  not  targeted 
generally. While the policy represents an example of successful regional-federal cooperation, as 
well as of a transparent and holistic approach to national cohesion (at least in its distribution), it 
could  be  better-targeted  through  appropriate  indicators,  in  order  to  better  serve  its  intended 
purpose. Other suggestions for improvement include allowing for the co-financing of projects with 
these funds and EU funds, and aligning the policy more closely to EU national cohesion policies 
and standards. 

2.  Background and Context 

While Extremadura is the only region in Spain classified as a “Less Developed Region”, 9 to 10 
other  Autonomous  Communities  are  significant  behind  the  country’s  best  performing  CA,  as 
measured  by  GDP  (75-90%  of  GDP/capita)  of  the  EU-27  average  or  other  socio-economic 
indicators (e.g. Spain’s ICREG ranking). Due to this, Spain has spearheaded several initiatives to 
address this issue; this is most salient in the enshrining of the obligation of “solidarity” amongst 
Spanish regions in article 2 of the Spanish constitution. While the Interterritorial Compensation 
Fund (Fonda de Compensación Interterritorial or FCI for short) is one of the most clearly targeted 
instruments in this regard, its de facto purpose differs from this. Academics and interviewees have 
called into question the current relevance of the policy in regard to national cohesion for its usage 
for the regular investment activities of the CAs, as well as its steady funding decrease (in line with 
the shrinking pubic investment budgets of the Spanish state). 

In spite of this, according to our interviewee from the Ministry of Finance, the funds, in combination 
with other EU and non-EU-funded federal measures, have contributed to improving the situation 
of many of the less economically developed Spanish regions. Other intervention mechanisms at 
the federal level include more specific funding mechanisms for particular purposes (e.g., certain 
economic sectors) or measures that are directly aimed at private persons. Moreover, a large part 
of  the  schemes  to  boost  regional  competitiveness  and  social  development  come  from  the 
autonomous  communities  themselves,  in  line  with  Spain’s  policy  of  distributing  powers  at  the 
regional level. 

3.  Description of Policy Measure 

The  FCI  is  a  policy  that  is  outlined  at  the  constitutional  level  and  executed  through  law.  
Specifically,  article  138  of  the  Spanish  constitution  calls  for  the  establishment  of  a  “fair  and 
appropriate economic equilibrium among the parts of the Spanish territory, with special attention 
to  the  particular  circumstances  of  the  islands,”  in  response  to  the  aforementioned  article  2.  It 
stands out from other policies due to the long-term nature of the policy, as it will continue to exist 
as long as either a) article 138 remains unchanged and/or b) Law 22/2001 does not call for major 

184 

 
 
 
changes.  The  policy  is  further  specified  in  the  LOFCA,  or  the  Organic  Law  for  the  Financing  of 
Autonomous Communities.33 

The policy’s specific objective is to support the funding of investment projects that would allow for 
an increase in the income of the targeted regions. The policy’s secondary fund aims to support 
this  by  providing  funding  for  the  running  costs  of  these  investments.  It  targets  specifically  the 
Autonomous Communities (CAs). In an earlier iterance of the policy, which ran from 1984 to 1990, 
all CAs were eligible to be funded by this policy. In 1990, this was changed, in order for the policy 
to be brought more in line with EU policy regarding national cohesion. From this point on, only 
“Objective I” regions have been eligible under this programme.34 Law 22/2001 stipulates that the 
Compensation Fund will be equal to at least 22.5% of public investment for any given year, while 
the  Complementary  Fund  will  be  7.5%  of  public  investment.  In  addition  to  this,  0.471%  are 
earmarked for the Spanish exclaves of Ceuta and Melilla, and 0.3% for the island CAs. Together, 
the minimum legal size of both funds must be equal to 30.771% of public investment.  

The distribution amongst Spanish regions is determined by a number of factors. The Compensation 
Fund is distributed as follows: 87.5% in direct relation to the CA’s population; 1.6% in relation to 
the CA’s net migration numbers; 1% in direct proportion to unemployment; 3% in direct proportion 
to  the  CA’s  surface;  and  a  further  6.9% in proportion  to  the  settlement density  of  the  CA.  The 
funds are then further redistributed according to the income per capita of each CA. Law 22/2001 
defines the institutions responsible for the distribution of the funds of this policy. The autonomous 
communities  and  the  State  are  called  upon  to  decide  together  on  project  funding  within  the 
“Committee of Public Investment” (Comité de Inversiones Públicas).  

This Committee appears to not play a role in the de facto decision-making of the CA regarding 
which projects they finance.35 The CAs decide individually which projects to finance, and distribute 
funds accordingly. The Committee serves as a meeting point, in order for the CA to present their 
selected list of projects to be funded by the FCI. The approved list of projects is then sent to the 
Spanish higher courts for final drafting in the yearly budget plan. The law also calls for cooperation 
between  the  CA  government  and  local  entities/municipalities  in  the  establishment  of  projects, 
which seems to not occur de facto.36 

4.  Policy Implementation 

As outlined in the previous section, the Autonomous Communities are, ultimately, responsible for 
the usage of funds in the manner they see best for their interests. While the law does stipulate 
that  a  joint  federal  and  regional  committee  should  be  in  charge  of  considering  the  approval  of 
projects funded by this policy, in practice, the CAs are fully independent in how they spend the 
allocated funding. The committee serves as an organism to check for the technical correctness of 
the projects to be funded with the FCI by the Cas.  

An analysis from 2002-2011 of the areas in which the CAs spend their allocated funds revealed 
that there are 7 key areas of spending.37 Almost every autonomous community in any given year 
spent a large amount (at least 18% of total assigned funding) on “highways, freeways, and other 
main streets”. Other areas of spending are not as uniform across the CAs. For instance, Cantabria 
was found to spend over half of its allocated funds in projects for the “protection and improvement 
of  the  environment”,  while  all  other  CAs  spent,  at most,  14% of  their  funds  on  this.  Additional 
areas  of  significant  spending  are,  in  no  particular  order,  agriculture,  cattle,  and  fishing;  water; 
health care (the Canary Islands: >60%); housing; and other miscellaneous categories.  Significant 
areas for national cohesion receive little funding from the CAs: for instance, local development; 
industrial and artisanal areas; or R&D (research and development) have never received over 8% 

33 Spanish: Ley Orgánica de Financiación de las Comunidades Autónomas. 
See Government of Spain. Ley Orgánica 3/2009. Available at https://www.boe.es/buscar/doc.php?id=BOE-A-
2009-20374. 
34 Originally termed “Less Prosperous Regions” by the European Commission; now “Less Developed Region”. 
See European Commission, Obective 1. Available at 
https://ec.europa.eu/regional_policy/archive/objective1/index_en.htm. 
35 Leiceaga, et. al. (2013), EL FONDO DE COMPENSACIÓN INTERTERRITORIAL: ANÁLISIS Y PROPUESTAS 
PARA UNA REFORMA. Available at https://mpra.ub.uni-muenchen.de/51107/1/MPRA_paper_51107.pdf. 
36 Leiceaga, et. al. (2013), EL FONDO DE COMPENSACIÓN INTERTERRITORIAL: ANÁLISIS Y PROPUESTAS 
PARA UNA REFORMA. Available at https://mpra.ub.uni-muenchen.de/51107/1/MPRA_paper_51107.pdf. 
37 Leiceaga, et. al. (2013), EL FONDO DE COMPENSACIÓN INTERTERRITORIAL: ANÁLISIS Y PROPUESTAS 
PARA UNA REFORMA. Available at https://mpra.ub.uni-muenchen.de/51107/1/MPRA_paper_51107.pdf. 

185 

 
 
 
of funding from any CA (R&D has never received over 1% in the 9-year time period). Other areas 
that, at some point in this period have received funding from the autonomous communities are, 
in  no  particular  order,  railways;  ports;  other  means  of  transport;  telecommunications;  aid  to 
companies; tourism; culture; and education.  

Relevant stakeholders in the implementation of the policy at the ministerial level are the two units 
of the Ministry of Finance in charge of providing for the distribution and budgeting of the policy. 
In addition, the Committee of Public Investment, which meets once a year to decide on the funds, 
also plays a role in the distribution. Nonetheless, the law clearly stipulates the minimum amount 
to be given to the fund. Ministerial units can only provide for funding that goes above and beyond 
this set minimum. The receptors of this policy, the Autonomous Communities, are the most crucial 
stakeholders in this policy. They decide how and in which manner they will spend the funds — with 
the only condition that they be investment projects. 

5.  Performance 

In the case of Extremadura, our interviewee commented that the funds are integrated into projects 
that will have a high degree of success. The fund, which only accounts for a small percentage of 
available funding for investment in any given year, is integrated into the larger pool of funding for 
investment projects. It is provided to projects in need of investment. A list is prepared by the local 
government, which is then sent for approval by the Committee for Public Investment in the federal 
government. Funds allocated can also be reassigned to other projects throughout the course of 
the  year  with  relative  ease,  as  long  as  they  fit  the  budget  provided.  The  accountability  of  the 
allocation  of  funds  at  the  regional  level  is  the  responsibility  of  local  structures  set  up  for  this 
purpose. In the case of Extremadura, this is the Court of Auditors and the Extremaduran Assembly 
(parliamentary  body).  At  the  ministerial  level,  this  occurs  through  the  publication  of  funded 
projects in the yearly budget plan. There is no set of indicators to track performance, neither at 
the  ministerial  nor  regional  level,  for  this  policy.  The  funds  are  provided  as  non-repayable 
transfers, with an annual restocking. 

In the very beginning of the policy’s implementation, there was an intention to frame the policy 
into  the  EU’s  larger  Cohesion  Policy  framework.  In  particular,  it  was  aligned  to  the  EU’s 
classification  of  Spanish  regions  into  “least  prosperous  regions”  or  Objective  I  regions.  As  this 
definition changed due to the new members of the EU, Spain began using their own definition of 
eligible regions, as according to the EU definition, many economically disadvantaged regions would 
have  been  left  out  of  the  programme.  Currently,  Spain  provides  aid  to  any  region  below  the 
Spanish median income. 

6.  Strengths and Weaknesses 

   Clear outlining of the policy in law. The law states exactly how much to distribute each 
year,  to  whom,  and  in  what  way.  Interviewees  described  the  task  mostly  as  inputting 
numbers  given  from  the  statistics  office  into  a  premade  template.  The  law  and  its 
integrated distribution formulae account for socio-economic and demographic change, as 
well  as  the  geography  of  the  CAs.  The  funds  also  allow  for  the  payment  of  operational 
costs associated with investments. Transparency of the funds’ destination is guaranteed 
by law through the annual state budget. 

   From the point of view of the autonomous communities, funds can be easily assigned to 
projects in need of investment funding. Its approval and, if necessary, reassignment, is 
accomplished with relative ease in agreement with the Ministry of Finance.  

   A  main  weakness  of  calculating  the  budgets  of  this  fund  through  the  general  state 
investment is the -non-controllable- variation in the total number of funds available.  
   Neither  at  the  federal nor  at  the  regional  level  does  the  policy  provide  for  indicators  to 
track progress. The policy’s execution success remains solely in the hand of the CAs and 
how they decide to invest the funds.  This, in turn, has decreased the significance of the 
fund in achieving its stated purpose: improving national cohesion. 

7.  Transferable Lessons 

   At  the  ministerial  and  regional  level,  the  policy,  and,  in  particular,  its  “philosophy”  and 
clearly  set  socio-economic  distribution  requirements,  were  identified  by  interviewees  as 
policy  characteristics  that could  be  applied  to  other regions  or  countries.  Information is 
kept up to date by an involvement of the National Statistics Institute within the law. 

186 

 
 
 
 
 
  

It relies on a strong involvement of the CAs in identifying the projects and drafting this list 
for their approval every year. 

   At  the  regional  level,  improvement  when  transferring  could  be  made  by  allowing  co-

financing of projects through funds like these. 

   Furthermore, setting out measurable indicators for national cohesion remains a challenge 
for  this  policy,  as  identified  by  interviewees  and  academics.  Transferring  this  policy  to 
another region could be done in a more successful way by setting clear standards by which 
to measure progress in achieving national cohesion. 

187 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Getting in touch with the EU 

In person 

All over the European Union there are hundreds of Europe Direct information centres. You can find the address 
of the centre nearest you at: https://europa.eu/european-union/contact_en 

On the phone or by email 

Europe Direct is a service that answers your questions about the European Union. You can contact this service: 

– by freephone: 00 800 6 7 8 9 10 11 (certain operators may charge for these calls), 

– at the following standard number: +32 22999696 or  

– by email via: https://europa.eu/european-union/contact_en 

Finding information about the EU 

Online 

Information about the European Union in all the official languages of the EU is available on the Europa website 
at: https://europa.eu/european-union/index_en 

EU publications 

You  can  download  or  order  free  and  priced  EU  publications  at:  https://publications.europa.eu/en/publications. 
Multiple  copies  of  free  publications  may  be  obtained  by  contacting  Europe  Direct  or  your  local  information 
centre (see https://europa.eu/european-union/contact_en). 

EU law and related documents 

For  access  to  legal  information  from  the  EU,  including  all  EU  law  since  1952  in  all  the  official  language 
versions, go to EUR-Lex at: http://eur-lex.europa.eu 

Open data from the EU 

The EU Open Data Portal (http://data.europa.eu/euodp/en) provides access to datasets from the EU. Data can be 
downloaded and reused for free, for both commercial and non-commercial purposes. 

 
 
 
 
 
 
 
K
N
-
0
2
-
2
0
-
0
4
8
-
E
N
-
N

       ISBN: 978-92-76-10243-4