By Bruno Waterfield - 13th February 2004
“Long expected” and controversial proposals to shake up EU funds targeted at Europe’s poorest regions are to be published by the European Commission this week.
The move will be carefully watched in many European capitals – in both existing and new countries – ahead of EU enlargement on May 1.
‘Cohesion’ structural spending is focused on the EU’s poorest regions in a bid to redistribute economic and social development.
Current EU members are concerned that an influx of mainly East and Central European countries could see funds shift from their own poor regions to much poorer areas in the new Europe.
Some current European capitals back a realignment of EU regional money to focus on 'competition and growth' – funds that could benefit Europe’s rich west and as well as poor east.
Wednesday’s third ‘cohesion’ report will examine progress and make new proposals for funding over the seven years from 2006 following the publication of an EU budgetary plan on February 10.
EU regional policy chief Michel Barnier is expected to detail a splitting of funds between new and old Europe.
“The report will show how economic and social indicators have developed at regional level,” said a commission spokesman.
“This report contains as well political proposals for regional policy and structural funds for the period 2007 and 2013.”
“And in this respect will be also a very important follow up to the [budget] proposals put forward earlier this week.”
Tuesday’s ‘financial perspectives’ have already given, in general terms, hints to the shape of the EU’s review of ‘cohesion’ spending.
Expenditure commitments for “cohesion for growth and employment” in 2006 are set at 32 per cent of the EU’s budget – a proportion of the total that remains constant until 2014.
With a seven year boost to EU spending net ‘cohesion’ money is set to grow 32 per cent between 2006 and 2013, up €12.2 billion to €50.9bn in 2013.
But alongside real term cash increases to the ‘cohesion’ pot a new element of spending is emerging.
In 2006 funding to improve “competitiveness for growth and employment” amounts to seven per cent of spending commitments – a proportion that grows to 17 per cent by 2014.
This funding will not necessarily be targeted at the EU’s poorest and is set to soar €17bn nearly tripling from €8.8bn in 2006 to €25.8bn in 2013.
While competition cash will remain at half the total sum of ‘cohesion’ aid in 2013 the figures show a new shift from ‘solidarity’ to promoting growth.
Critics of the new approach will be watching closely to see to what extent commissioners take on controversial André Sapir proposals made last summer.
Sapir’s report, commissioned by Brussels chief Romano Prodi, split the EU executive with sweeping plans to reform regional policy, shifting money to projects aimed at boosting economic competitiveness.
Barnier attacked the study as “bad answers” to good questions.
The French commissioner was concerned that change could herald a shift to competition projects underming EU social and economic convergence.
And Wednesday’s report will reveal the extent to which modernisers, led by Prodi, have won the day.
The third ‘cohesion’ report will be published at the European Parliament at 3pm on February 18.
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