By Daisy Ayliffe - 21st December 2005
Some of Europe's poorest regions will be hit changes to EU rules allowing government economic aid, according to new aid guidelines published on Wednesday.
Cuts will follow demands changes to guidelines allowing government subsidies following the entry of ten new members states last year.
The scheme specifies rules for the selection of regions eligible for state aid, defines the maximum permitted levels of assistance and new guidelines will apply from 2007 to 2013.
Under the current set up, 52.2 per cent of the EU-25 population lives in regions eligible for regional state aid.
Under the new scheme, the overall population coverage for regional state aid will be fixed at 43.1 per cent of the EU-25 population.
“This includes a safety net to ensure that no member state loses more than 50 per cent of its current entitlement,” the commission stressed in a statement on Wednesday.
Regions with less than 75 per cent of the EU-25 average per capita GDP (ie, disadvantaged) qualify for the highest rates of aid. These regions currently constitute almost a third of the EU-25 population.
But the commission says the blow will be softened by transitional arrangements until 2010 for those regions suffering the biggest reductions in aid rates.
EU regions losing eligibility altogether will receive support until 2008.
Competition Commissioner Neelie Kroes insists the guidelines strike a fair balance between the different interests of member states.
“I’m delighted that we’ve completed the review in time for member states to prepare their regional development strategies for 2007-2013,” she said in a statement.
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