Anticipating Economic Challenges

Upon accession to the EU, new funding opportunities have emerged in the cultural sector (CS) of the Republic of Croatia. Considering the available funding opportunities, the question arises as to whether and to what extent CS stakeholders meet the requirements of EU funds and programs. Therefore, the purpose of this research is to identify the relationship between economic capacities and the potential of Croatian cultural sector concerning the successful application and implemen tation of EU-funded projects, in order to contribute to their competitiveness for the future program period. The research was conducted through field research on cultural institutions in the pre-pan demic period, during the end of 2019 and the beginning of 2020 which enabled avoiding distortions influenced by economic crises emerged as the result of pandemic and global inflation. Descriptive, factor and correlation analyses were used for data processing. The research found a positive cor relation between financial capacity and positive project application outcomes. It was confirmed that the lack of knowledge and experience of organizations in the CS is not affecting the number of project applications, but it is impacting their positive outcomes, highlighting the need to implement recommended measures to improve the situation in practice. Therefore, this paper contributes to the theory on the utilization of EU funds, the management of the CS, and to the strengthening of the absorptive capacity of organizations in pursuit of EU funding opportunities.