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State to consider how to manage EU funds

Feb 22, 2006
Staff and wire reports

VILNIUS - The government was poised to resolve its latest crisis 's this one involving who exactly should manage some 5.8 billion euros in EU development funds over the next few years 's at its meeting this week.

Two options were to be considered: allowing the Finance Ministry to maintain control over the funds, or appointing three separate ministries and letting the Finance Ministry coordinate.

The president and prime minister have spoken in favor of concentrating responsibility in the Finance Ministry, but the Labor Party, the largest group in Parliament and the country's most popular party, wants to divvy up the spoils. The Laborites are also demanding that a new ministry be set up to help manage the funds, if even peripherally.

The debate has crystallized differences in the Cabinet on how billions of euros from the EU treasure chest should be handled in the next budget period (2007 's 2013). It is also the latest row within a coalition that has been plagued by scandal and bitterness from the moment it was formed at the end of 2004.

"We say that the current arrangement, when the Finance Ministry is the sole managing authority, is the optimum one and should be taken as a basis," Finance Minister Zigmantas Balcytis, a Social Democrat, told reporters after a Cabinet sitting on Feb. 20.

Economy Minister Kestutis Dauksys, a member of the Labor Party, said that it was important to ensure that procedures did not take six or eight months to complete and that the EU money was absorbed as efficiently as possible.

"Whether we have one managing authority or three, any option would be good provided that all these problems are solved. The existing mechanism is not very good. That's why we are discussing how to improve it," he said.

Dauksys added that the Cabinet should make a decision on the issue at its next meeting.

But the balance seemed to be in favor of those who want to focus control in the Finance Ministry.

Foreign Minister Antanas Valionis, a member of the Social Liberals, said the Finance Ministry should control the distribution of EU funds. "We speak for a transparent and efficient mechanism, which would provide maximum benefits to the state. So we support the first scheme drafted by the Finance Ministry, which nominates itself as the main institution administering the funds," Valionis told the Baltic News Service.

At the same time, he added that it was necessary "to strengthen administrative capacities of other ministries to ensure transparent and clear use of EU funds."

Indeed, the standoff has received such coverage in the Lithuania press, both before and after the national holiday (State Restoration Day), that NGOs felt obliged to pipe in. Thirty one public organizations have urged President Valdas Adamkus to use his legal powers to ensure that financial assistance from the European Union is used for the nation's overall benefit.

In the statement handed to Adamkus on Feb. 21, the organizations said Lithuanians had not been provided with a critical analysis about the current use of EU structural funds, or goals and tasks for the use of EU assistance in the 2007-2013 period.

Civil Society Institute director Dalius Kuolys, who was present at the meeting, said that society was witnessing another tussle between the Laborites and Social Democrats, who are chaired by Prime Minister Algirdas Brazauskas.

"We know that the main arena of the skirmish is as follows 's they are battling over who will control the distribution of money. But society has not been told about planned recipients of the money, goals and pursued vision of Lithuania, as well as the scheme of allocating funds," said Kuolys.

The letter also notes that the Financial Crime Investigation Service is not capable of preventing possible abuses in the distribution and use of EU structural assistance because the service's chief is directly subordinate to the interior minister, which is a political appointment.

At the meeting, representatives of public organizations informed the president about the forum, which is scheduled for the second half of March and intends to cover the use and goals of EU funds.

Adamkus stressed the necessity of Lithuania's transparent use of EU funds, the president's spokesperson said. He feels that funds should be concentrated on structural reforms, especially those in the fields of education, science and management, and integrating Lithuania's energy and transport systems into European markets.
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