By now everyone knows to expect the nearly one billion euros of exceptional external assistance that Estonia will receive from the Recovery and Resilience Facility in the years 2021–2026. The objectives and targets of this financial support have been agreed in the Recovery and Resilience Plan. The recovery plan, in turn, constitutes the supplement to the national strategy “Estonia 2035” that determines the reforms to be implemented and the investments to be made with the extraordinary external assistance of the Facility.
The specific grants to be awarded from the Facility are still being finalised, but the general conditions they must meet are already known. Ministries are in the final days of an inter-ministerial coordination round for the draft Government Regulation on “The organisation of the implementation of the Recovery and Resilience Plan and the general conditions for the provision of grants.” Interest groups are no longer being consulted. All those who participated in drafting Estonia 2035 and the recovery plan are, however, well aware of how weak the voice of individual interest groups remained even in that supposedly all-encompassing and inclusive consultation process.
It is therefore deeply alarming that the plan foresees holding enterprises that receive Facility grants financially liable for all changes made to the Recovery and Resilience Plan. Specifically, the draft regulation provides that if the state withdraws from any objective, reform, or investment in the recovery plan, this is to be treated as a breach on the part of the grant recipient. And as with such breaches, the support allocated to the project is to be recovered — proportionately to the extent of the breach, but also retroactively, within a period of five years. If, at the time of the recovery plan amendment, grant payments for the project are still being made, these are to be suspended and the funding decision revoked.
It is said that one must borrow wisely — but one must also lend wisely. The same applies to the use of EU funds. Entrepreneurs are capable of assessing their own risks and accordingly apply for grants prudently. But grants must also be awarded prudently. The grant recipient has absolutely no possibility of participating in the revision of the Recovery and Resilience Plan. That falls solely within the sphere of responsibility of the ministries accountable for the recovery plan, the coordinating and auditing bodies, and the implementing entities. It is understandable that, in the process of converting a nearly one-billion-euro aid package into grants, it may become necessary to revisit some of the original objectives. But what does a grant recipient have to do with that? Under no circumstances can the grant recipient be held liable for such changes, nor bear the risk of having support clawed back five years after project completion because a spreadsheet was updated in the meantime.
The draft is not yet a regulation, so the game is not yet lost. But the stakes are extraordinarily high, and consequently so is the responsibility of all organisations mandated and invited to represent businesses. The regulation’s authors have made their proposals. The choice is now yours. If enterprises that have received Facility grants are in future required to repay support, know that today you are making the wrong choice.
This article was published on 24 October 2021 in Eesti Päevaleht. Anu Kull: riigi plaan tekitab õudu – viis aastat ootamist, ega mõni ametnik Exceli tabelit muuda — Eesti Päevaleht (delfi.ee)