Challenges Faced by Local Government Units in the Use of EU Funds

This article explores the main challenges faced by local government units in Croatia in the absorption of EU funds. The research is based on a thematic analysis of interviews conducted with local government representatives and business consultants from all regions of Croatia, ensuring comprehensive territorial coverage and capturing the heterogeneity of local governance experiences across municipalities and cities of varying sizes, development levels, and geographic locations. The study identifies four key challenges: limited human capacity, difficulties in ensuring financial sustainability, administrative complexity, and political influence. This paper contributes to the ongoing debate on the need for a comprehensive reform of the local self-government system in Croatia, advocating for territorial amalgamation as a means of strengthening local absorption capacity, seen as a prerequisite for the effective implementation of cohesion policy and balanced regional development.