European Commission on Bulgaria: It is difficult for civil society organizations to get EU funding through state agencies

In its 2023 Rule of Law Report, the European Commission draws attention to the flawed interpretation of EU law in Bulgaria, which results in limited access to funding for CSOs:

Stakeholders reported that it is difficult for CSOs to obtain EU funding (through state agencies dealing with EU funds) as they are considered commercial entities and the state applies the same restrictions on state aid as for private companies receiving EU funding. ^[1]

What is actually the problem ? In order to protect competition in the markets of the Member States, as well as in the common market of the EU, the so-called de minimis regime has been introduced, which puts a limit on the amount of state aid that a person can receive. Naturally, this regime should be applied to public grant funding for activities of an economic nature. However, practice shows that in Bulgaria operational programs place entire schemes under the state aid regime and accordingly apply the de minimis rule (up to €200,000 over 3 years) without distinguishing whether they are funding typical civic initiatives, non-profit in nature. This hampers initiatives to support civic participation, policy sense-making and reform through civil dialogue.

This problem has existed for more than 10 years. Back in 2014, the European Commission's Civic Engagement Project was launched. BCNL prepared a detailed legal analysis of the application of the de minimis rule and its flawed application by the Bulgarian administration:

The practice of grant funding schemes, which finance non-profit activities, mainly of NGOs, is a widespread form of support with public resources from the state or the EU. The rationale for these is that when non-economic/non-profit activity is supported, it supports the development of important and significant public causes and initiatives that add value to the development of society and the solution of public problems. In this case, it is not the protection of free competition that is the more important element, but the transparency of the use of public funds, the effectiveness (in order to achieve the set objectives) and the efficiency of the initiatives.^[2]

In 2017, at the initiative of civil society organisations, the question of the application of de minimis was also discussed at a meeting at the Council of Ministers of the Central Coordination Unit, managing authorities, certifying and auditing bodies of the operational programs, co-financed by the European Structural Funds, and the social partners In 2023, civil society organizations raised this issue with the OECD Mission and the EC^[3] , the Commissioners Dalli and Jourova^[4] , to the Monitoring Committees of the  OPENID, the Programme Education, OPHRD, Partnership Agreement, Good Governance, etc. has also been referred to a number of governments and specific ministers since 2014. However, still the flawed interpretation of the rule continues. We therefore hope that within this Government this problem will finally be resolved.