A lost opportunity

Between 2000 and 2006, through the use of structural fund spending, Sicily had a fantastic opportunity to improve beyond recognition the quality of life of the people living there and to narrow the gap with the other regions of Italy and the rest of the EU.

With nearly €9bn, Sicily could have modernised its antiquated railway lines, improved roads and motorways, designed and built a new airport in Piana di Catania with a view to benefiting from a future Euromed free trade area, creating many new jobs. It could also have spent the money on improving health services or supporting companies. In short, it was a golden opportunity.

In reality, however, the results are very disappointing. The local authorities have failed utterly to use structural funds to boost the socio-economic situation of the island.

Those of us who had hoped for change and improvements have been sorely disappointed. Sicily remains one of the 10 poorest regions in Europe, with a GDP per capita of less than 75 per cent of the European average and a very strong dependence on hand-outs from the national government. (In the last 30 years, imports have been twice the level of exports.)

The island also suffers from a shrinking population – the level of occupation is just 34 per cent – and levels of juvenile delinquency that are among the highest on the continent.

One of the reasons why structural funds have not contributed to an improvement in the socio-economic situation of the entire Euro-Mediterranean region as a whole is the failure to conclude any concrete development plans. Let’s take as an example the management of European social funds.

To cite perhaps the most striking case of money being wasted, the region proposed some 8000 training courses during the 2000-2006 programming period, and most of them had little or no impact on the labour market in the island. What was missing was the development element – the result of so many courses was that people signed up not to learn a new trade but in the hope of finding short-term employment.

Furthermore, many of the measures permitted in areas that could be of potential benefit to regional development, such as training, scientific research, innovation and technology, support for small and medium-sized enterprises, improvements to transport and urban infrastructure, ports, airports and railways, remained entirely unused.

Another reason for the failure of structural funds to contribute to an improvement in economic growth on the island is the poor execution of many of the projects. The vast majority of the programmed work was subject to ridiculous delays, as an independent report noted.

There were many reasons for this: inadequately qualified staff, for example, or when staff did have the right qualifications, they were often working in areas where they had little or no direct expertise. And setting a three-year timeframe for EU funding was simply not long enough to attract private investment as well.
Political meddling in the way the money is spent is another reason for the failure to put the funds to good use.

In Sicily, the regional assessor has total control over where and how the money is spent. He decides who will sit on the evaluation committees that assess whether projects are worthy of funding, and the way in which this assessment is carried out is often far too subjective, and is not subject to any public consultation.

There is clearly a problem of administrative transparency here, a lack of democratic control that would normally guarantee that the projects chosen for funding would actually work well.

As if this poor management were not enough, the level of waste and fraud in Sicily is also high: companies and training courses that do not exist, forged documentation, individuals using structural fund money to finance their professional exams, and so on.

What is worse is that half the cases of improper use of funds took place at the Guardi di Finanza, the body that handles the payments; in other words, the fraud was discovered after the money had been paid or was in the process of being paid. In Sicily alone, some €38m in misspent structural funds must be recovered. According to a judicial investigation, controls on how the money is being spent are nonexistent – the person who decides where to spend the money is also the same person who is supposed to be making sure that the money is being properly spent.

And once the money has been allocated, there are very few checks during the duration of the project to ensure that it is being correctly spent – and what checks there are tend to be based on documentation supplied by the project managers rather than on first-hand evidence taken during site visits.

In short, structural fund spending in Sicily has not led to local economic development or job creation. The emphasis has been on ensuring that all the money is spent, rather than on making sure that it is allocated to the right kind of project. Sicily will receive even more structural fund cash under the 2007-2013 programme than in the previous period.

But this is really the last golden opportunity for the money to be put to good use. From 2014, Brussels wants to focus structural fund spending on the poor regions in the new member states. By then Sicily will, on paper at least, be classified as a richer region. And that will be very sad indeed.

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