Cause and Effect in European Politics and Law

MEPs: We have restored fairness in the allocation of the EU cohesion funds

Ralitsa Kovacheva, June 1, 2011

The Regional Development Committee in the European Parliament proposes the creation of a new, intermediate category of regions eligible to receive EU regional funds. After a proposal of the group of Socialists and Democrats, the majority of committee members voted in favour of the idea to the current criteria - GDP per capita below 75% of EU average (the poor regions) and GDP per capita below 90% of EU average (the more developed regions) - an additional intermediate category to be introduced.

The MEPs urged the European Commission to table a proposal how could the needs of regions with a GDP per capita between 75% and 90% of EU average be addressed, arguing that regions with the same GDP must be treated equally, regardless of their status in the past. Currently, regions that were once eligible to receive cohesion funds, continue to receive more funding than those who were not, although they have the same GDP.

According to Constanze Krehl MEP (S&D, Germany), the change is “fair, transparent, based on solidarity and justified” and 36 regions will benefit from it. The official press release of the Parliament shows that these are located mostly in France, Spain, Italy, Germany, Belgium and the UK.

The chairperson of the REGI Committee, Danuta Hubner (EPP, Poland), who is also a former EU commissioner for regional policy, told EurActiv she supported the idea because it would ensure equal treatment of the regions. She also said it would not require additional funding compared to the current budget of cohesion policy - about 50 billion euro per year.

However, EP rapporteur on the future of cohesion policy Markus Pieper (EPP, Germany) has a different view. He expressed surprise that his colleagues had supported the idea to create an intermediate category of regions, which had been rejected in his report for being “at odds with the tried and tested principles of EU cohesion policy”. He told EurActiv that “the introduction of a new 'intermediate' category could cost up to €20 billion over a seven-year period.” Mr Pieper commented that “a permanent intermediate category would lack any incentive for the funds to be spent efficiently on structural improvements”. According to him, the current phasing-out procedure for the regions that have made progress was proven and sufficient.

Anticipating the European Commission's proposal on the next multiannual financial framework (MFF), the Regional Development Committee has highlighted several key priorities for the future cohesion policy. MEPs call regional funds not to be fragmented in sectors such as environment, energy or transport, because it would “undermine the tried and tested principle of multi-level governance and jeopardise the regions' contribution to the achievement of EU 2020 objectives”.

The report drafted by Marcus Pieper states that projects financed by regional funds should have a “European added value”: to achieve long-term and measurable increase of the level of a region, while contributing to European objectives and only when this cannot happen without European support. “Only if European programmes are the original initiators of projects, thus contributing their added value, can a strong cohesion policy be justified. Otherwise, the EU is merely financing displacement effects via many bureaucratic detours.”

Given the need of transition to renewable energy sources, special attention is paid to the possibility “cohesion policy to make a greater contribution to the rapid development of renewables” and the Structural Funds to support investment in specific energy infrastructure. There is also a need to step up development of TEN (Trans-European Network) infrastructure and designated E-roads and to improve access to them, especially in border regions.

The rapporteur has especially highlighted the need to strengthen territorial cooperation on all EU internal borders and at all three levels of cooperation (cross-border, inter-regional and trans-national) and has called to increase the share of the structural funds for border regions from currently 2.5 percent to 7 percent. This means that if the total amount of the structural funds remains at the current levels, the funding for border regions should be increased from 7.8 billion euro (2007-2013) to 18 billion euro (2014-2020). "The increase is necessary because cross-border infrastructure needs to catch up,” Marcus Pieper explained.

In his report he has also recommended the maximum level of EU funding not to exceed 75%, “otherwise applications will be driven less by the case for the projects than by the prospect of the funding they can attract (money given arbitrarily)”.

According to the MEPs, “Regional policy under the EU's next long-term budget (2014-2020) should get at least as much funding as it does under the present one”. They believe the seven-year budget cycle should be maintained at least until 2020, noting the need for a more flexible and rapid response to exceptional events (like the financial crisis, the energy crisis or natural disasters). The REGI Committee also “reiterates its call for the Committee on Regional Development to be involved in and share responsibility” for the future formation of the European Neighbourhood and Partnership Instrument (ENPI) and the Instrument for Pre-Accession Assistance (IPA).

German Green MEP Elisabeth Schroedter expressed the disappointment of the group that “the key goal in the Europe 2020 strategy of a resource-efficient Europe received no support from the regional development committee. Huge infrastructure projects do not help regions to achieve sustainable stability”. Ms Schroedter explained that in the longer term it would be costly to the economies to face the risks of floods and drought, which many regions are exposed to, due to climate change. Greens have not supported the report and will table amendments hoping that they will be taken into account during the parliamentary debate on the document.

It will be discussed and voted during the so-called “mini-plenary” session in Brussels on 22 and 23 June, on the eve of the June European Council (24 June). The European Commission's proposal for a new regulation on the Structural Funds for 2014-2020 is expected in September.