Slovenia to Get €1.49bn in EU COVID Recovery Grants

By , 30 Jun 2022, 13:12 PM Politics
Slovenia to Get €1.49bn in EU COVID Recovery Grants Photo: euros This photo: (C) Lars Aronsson CC-by.1.0

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STA, 30 June 2022 - Slovenia will receive EUR 1.49 billion in grants from the EU post-Covid recovery mechanism, which is almost EUR 286 million less than the initial allocation, show recalculations by the European Commission. The lower amount is a result of more favourable economic trends in 2020 and 2021 than originally estimated.

Just shy of EUR 1.78 billion was first earmarked for Slovenia under the EUR 672.5 billion European Recovery and Resilience Mechanism that is part of the EUR 750 billion Recovery Fund.

The calculation of these funds was based mainly on the size of population, GDP per capita compared to the EU average, and the average unemployment rate in 2015-2019 in relation to the EU average.

In addition to these criteria, the calculation for the allocation of 30% of the final amount also took into account the fall in GDP in real terms in 2020 and the overall real terms decline in economic activity in 2020-2021.

Regarding this segment, the regulation took into account the Commission's autumn 2020 economic forecast, but also provided for new recalculations for EU member states based on final data. The deadline for publishing the new figures was today.

In the Covid year 2020, Slovenia recorded a decline of "merely 4.2%" in GDP, and a 8.1% growth in 2021. Meanwhile, Brussels forecast in November 2020 that Slovenia would suffer a 7.1% GDP decrease and a 5.1% growth in 2021.

The actual situation was thus significantly better, and since the Slovenian economy fared better during the Covid crisis, with increased public spending and government stimulus measures, the country will now receive less in recovery grants.

Up to EUR 3.2 billion in loans are available to Slovenia in addition to these grants as part of the mechanism, under which the Commission borrows on behalf of member states and then allocates the funds to them, either through loans or grants. This ceiling is calculated as 6.8% of gross national income in 2019.

Same as other member states, Slovenia prepared the National Recovery and Resilience Plan based on this mechanism. The roadmap was approved at EU level a year ago, and the country envisaged EUR 2.5 billion to fund programmes and projects, including the entire quota of the grants allocated and EUR 705 million in loans.

Due to a lower grant allocation, the country will now have to make up the gap with loans. Even before the latest developments, the new government coalition said that it will strive to make use of the entire spectrum of possible funds through changes to the national plan. It has until the end of August 2023 to amend the plan.

Slovenia already received EUR 231 million in advance funding from the Commission for the implementation of the recovery plan last September, and is expected to apply for the first instalment of the grants of just over EUR 57 million by the end of this month.

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