The (no)sense of appealing EU subsidies

by | Jul 8, 2009 | Business Experiences

EU logoToday I read it again. Poland has so much money available to subsidize foreign investors. All kind of meetings are being organized to make that businesses request for subsidies to invest in local development. For quite some time we are trying to find a way to get access to these subsidies, but for an SME company like ours it is just too much hassle.

The Polish Information and Foreign Investment Agency (PAIiIZ) still has about PLN 2bn (€0.45bn) worth of state-aid money at its disposal to support foreign direct investment projects in the remainder of the year. (Source: PMR)

Only 15% of the major investments over 2007-2013 has been spent. It’s fact that Poland could really use these investments, but for some reasons businesses just don’t dare or manage. What is going wrong?

Time is money

Applying for subsidy is a long way to go. A lot of documents have to be filled. Generating a good idea won’t be the issue for many business owners, but describing it according to the EU needs is a different kind of job. And once the get the subsidy, the idea is not current anymore …. or has been implemented already.

For a normal company it is hardly possible to succeed this phase. Some time ago a subsidy professional told the audience: “After the third application you will start to understand how the process works”. Then I gave up.

Focus on corporate or SME market?

Because of this bureaucracy only the big companies will favor of these subsidies. They can afford to put some dedicated people on it. Currently you can already notice what happens with those big companies who managed to get subsidy. After the obligatory period they leave the country to profit from different subsidies somewhere else.

Wouldn’t it be better to support the SME market? The engine of the future economy. To achieve this there are EU programs especially focusing on the SME market, but I am afraid that these programs hardly manages to reach them. At least I don’t manage to find the access to the subisidies.

Paper work

Once you are the lucky one who manages to acquire some subsidy the job ain’t over. To be honest, then the hardest job starts. You have to commit to many obligations. There is just too much administration and too many rules to run a healthy business based on EU subsidies.

During several “investors” meetings in the past weeks we were able to exchange thoughts with other business owners. Due to the obligations most of the businesses confirmed that they were not going to apply for subsidy. Just because it feels like you are hanging yourself.

Own investments

Of course those subsidies are very appealing. Who does not want to get money for his good idea? But fortunately that is not enough. You will have to invest yourself as well. In my opinion this is probably the best part of the subsidy rules.

Just too hard to get

In my opinion the purpose of the EU subsidies is great. They aim to develop countries who can use the support. I am only afraid that they are not used in the best way. Especially the accessibility of subsidies for the SME market should be increased in my opinion.

Feel free to inform me if missed some important information. I would love to discuss this issue. If you have any ideas feel free to share or to contact me.

3 Comments

  1. sginter

    AFAIK those difficulties are specific to Poland – EU does not care that much about bureaucracy, this are polish clerks ensuring justification for their existence.

    Reply
  2. PetersOpinion

    Thanks for the reply, but I am not sure about your remark. I notice similar issues in other countries. These subsidies look nice, but the administration is enormous. Partly this is due to previous abuse I guess, but this means that we are all being punished.

    Reply
  3. PetersOpinion

    Thanks for the reply, but I am not sure about your remark. I notice similar issues in other countries. These subsidies look nice, but the administration is enormous. Partly this is due to previous abuse I guess, but this means that we are all being punished.

    Reply

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