The Commission's plans for reforming EU aid plans for the regions has provoked strong opposition from areas likely to lose out. This month's EP News looks at the aims of the new approach and assesses reactions so far.
Commission President Jacques Santer and Regional Affairs Commissioner Monika Wulf-Mathies face tough negotiations in the months ahead if they are going to effect the most radical overhaul of regional aid programmes since the introduction of the fund in 1973. The fund was introduced after the accession of the UK and Ireland, to compensate the UK for the fact that it would not benefit much from the CAP. The new fund would provide financial assistance to promote regional development in poorer areas. In the early days it was strongly criticised by MEPs, who saw member states use it merely to pay for essentially national programmes rather than as additional expenditure on programmes of European priority.
Underspent
The fund rapidly expanded with the accession of poor countries such as Spain and Portugal. They made good use of extra financial assistance to improve basic infrastructure services such as roads, railways and water supplies. But in recent years the fund has been criticised for being slow and bureaucratic; many organisations could not even be bothered to apply for funding. Indeed in 1996, Ecu 10 billion was returned to the member states as it could not be spent. A report by MEPs revealed that the rundown coal and steel area of Belgium (Hainault) could only spend 17 per cent of its allocation. Now, the Commission has little choice but to trim spending all round, faced as it is with paying for enlargement through pre-accession funding of Ecu 46.8 billion for the countries of Eastern Europe for the years 2000 to 2006; and, on the other hand, a steadfast refusal by Finance Ministers to agree a substantial increase in the EU budget. The present limit of financing for the EU budget is 1.27 per cent of the Union's GNP.
The Commission is proposing a total regional fund of Ecu 218 billion for the seven year period starting from 2000. This represents a slight increase on the Ecu 175 billion allocated for the 1992-1999 period, which however largely excluded new member states Austria, Finland and Sweden. This time the aim is for better targeting of funds to the poorest regions, simplifying management procedures and improving efficiency. The Commission hopes that the new approach, whereby the bulk of the funding will go to the present Objective 1 priority regions with a GDP of less than 75 per cent of the EU average, will be more effective. But in order to cushion the blow and reduce the impact on the regions that do lose out, the Commission is proposing a four to six year transitional period, and a formula to ensure that no country would lose more than one third of existing support for the objective two category.
It has been a regular criticism by MEPs that too many decisions are taken at the centre in Brussels, remote from the regions concerned. The Commission is responding by proposing a "bottom-up" approach, involving organisations such as local authorities and pressure groups. It wants to restrict its role to strategic planning and allocating global funding to ensure that schemes are in line with EU agreed guidelines. The member states themselves should take on responsibility for implementing and managing programmes according to different circumstances. A single authority would be set up in each state which with a monitoring committee would be responsible for the selection of individual projects. Accountability would also be strengthened with the production of annual reports for each state and strict financial controls. The Commission would be allowed to intervene in cases of suspected fraud.
Streamlining regional aid
Objective 1: Regions whose GDP per head is less than 75 per cent of the EU average. Aid will be phased out over a six to seven year period to areas no longer entitled.
Objective 2: Aid to be targeted to areas facing industrial decline and structural change, rural areas suffering from depopulation, deprived urban zones, coastal towns dependent on fisheries. Unemployment is a key criteria in assessing areas to qualify.
Objective 3: European Social Fund with assistance going towards tackling high unemployment, combating poverty or helping those living on the margins, education and training, anticipating economic change, promoting opportunities for women.
Community Initiatives
Programmes designed to promote cross-border co-operation which have seen numerous developments linking projects on both sides of the Irish border. They have not generally proved popular elsewhere. The criteria for these programmes is to be reduced from 13 to just three:
cross-border plans to encourage balanced regional planning
rural development
a trans-national approach to tackle discrimination in the jobs market.
Agenda 2000 : Regional spending 2000-2006 (Bn Ecu)
2000
2004
2002
2003
2004
2005
2006
33.2
33
35.8
36.8
37.7
38.7
39.8
Agenda 2000 : Regional Spending 2000-2006 (Bn Ecu)
Regional programmes
Cohesion Fund
Enlargement
Total 286