The Hungarian Government plans to pay out 1,500 billion forints (EUR 5bn) to EU-funded projects in 2013 to help stimulate the economy, János Lázár, Minister of State heading the Prime Minister's Office announced.

Minister of State Lázár, who oversees EU funding, said responsibility for projects would be shifted to ministries from the National Development Agency (NFÜ) this year.

He said EU funding has become a lot more transparent over the past few years. The share of irregular spending of EU funds dropped to 18% in 2010 and to only 6% in 2011 he stated, as opposed to the 76% in 2009, under the government of Gordon Bajnai.

Hungary had already invited bids for 95% of funds allocated under the 2007-2013 EU financial framework, while 85% of funding has already been committed to approved projects.

He stated that 1,040 billion forints were paid out to projects last year, which is an 8-year record.

Committing 85% of a total of 8,200 billion forints of 7-year funding puts Hungary in a leading position, Minister of State Lázár said. The fact that Hungary has signed contracts regarding 65-70% of funded projects puts the country in the middle of the field compared to other member states. The 30% disbursement rate is considered average, though the Government plans to substantially improve this, he added.

To help solve problems related to stranded projects, which are often related to self-participation difficulties, the Government plans to allocate 50 billion forints this year after last year's 30 billion to help finance co-funded projects. The Ministry of National Development plans to review abandoned projects by February 15, and where necessary the state will realise projects itself and then return them to the original bidder for management. This is necessary in order to ensure that no money goes to waste, he said.

The new 2014-2020 financial framework will be run under a new institutional system, with the relevant ministries in charge of project management and tenders, Minister of State Lázár said. This will simplify the system and enhance transparency. Coordination will be handled by the Prime Minister's Office, he added.

It will be a central rule that 60% of funding must be spent on economic stimulus and the rest on building infrastructure. "Job creation will be in the foreground for everyone involved," the Minister of State pointed out.

(Prime Minister's Office)