‘No link’ between EU funding and job losses

EU funding for a Polish factory was not given to a company relocating electrical production from Germany, the European commission said on Thursday.

Brussels officials are investigating media reports that EU funding was a factor in the decision of Swedish company Electrolux to close a Nuremberg factory and move production to Poland.

The reports have fuelled fears that bosses could pocket EU regional cash that is supposed to benefit Europe’s poorest areas in order to shift production to low wage countries.

But European regional policy commissioner Danuta Hübner told journalists that ongoing investigations had already confirmed that EU funding was not involved in setting up the Polish plant.

“We are checking the current situation. We checked in Poland, there were no funds involved in the Electrolux investment,” she said.

“We are also checking on the German side and the probability is we will come to the conclusion that there were no funds involved in the case of this company.”

Some capitals, MEPs and trade unions are worried that EU funds for poor regions are part of government sweeteners for companies to relocate to low wage areas.

Media headlines have driven public fears that taxpayers money could be funding a haemorrhage of jobs from old EU countries, such as Germany, to new low wage eastern European member states, such as Poland.

Hübner has instructed her regional officials to investigate press claims and, to date, no evidence of EU funding for re-localisation has emerged.

“We have not had a case, so far, in the commission of this kind of situation where funds were used in the case of a company that then delocalised.”

“We are taking every case reported very seriously,” she said.

The only cases the commission are aware of are instances where funding was reimbursed after original proposals, on which bids had been based, were changed

The commissioner – a Pole – stresses that factors, such as the working of Europe’s single market, are the most powerful forces driving business decisions.

“There is no direct link between the movement of jobs in and outside the EU and structural funds,” she said. “There is no link and there is a preventative mechanism.”

Provisions in regulations set out an obligation to maintain any investment funded by the EU for five years – but the rules are policed by national capitals not Brussels.

The commission has asked for the time limit to be increased to seven years but national governments have blocked the move.

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