Regional budget talks locked in ‘pre-crisis period’

1 March 2012, EurActiv

Negotiations on the role regional funds will play in the EU’s next multi-annual budget are stagnating because talks are taking place in the context of the pre-crisis period, Fabian Zuleeg of the European Policy Centre told EurActiv in an interview.

As EU member states call for more flexibility in spending EU funds, little progress has been made on negotiations over the next EU budget for the 2014-2020 period.

Meanwhile, some experts claim there is a need for a more united EU vision when it comes to distributing funds.

At the last European summit in January, German Chancellor Angela Merkel said “richer” member states, the net contributors to the EU budget, were willing to give financially distressed countries a second chance to use unspent EU money before it is returned to national coffers.

Zuleeg agreed and said the next EU budget should not be tied to the old models anymore. “There will be more flexibility in reusing the money that can be recycled. If that can be implemented I think it is a significant change because it does change the way the funds work,” he said, stressing there is a change in mood and attitude.

The EPC analyst, who has closely followed behind-the-scene talks on the EU’s 2014-2020 budget, worries, however, that the current budget proposals are suitable only for a pre-crisis period.

The current regional funding system is too much focused on addressing the long-term structural problems of poorer countries, he said. “I don’t think we are doing enough to address the immediate and difficult environment which the crisis has created,” Zuleeg said.

Cohesion funds have traditionally helped bridge the development gap between rich and poorer regions, but the current economic crisis has hit the well-off states more than the less developed ones, he said.

The economic storm of the past years has revealed the fact that Europe has “a very interdependent economy”, Zuleeg said.

“There are certain cases where the EU can reduce the amount of money, given that there has been a significant improvement in Central and Eastern Europe”.

Money could be also be drawn from sectoral budgets like agriculture. “It’s very dangerous to pick out a particular sector and support it; this is not how we run our economies,” Zuleeg said, criticising the current system.

To read the interview in full, please click here.
Positions:

Markus Trilling, regional policy expert for Friends of the Earth Europe and CEE Bankwatch, said: “EU funds from Cohesion Policy spent in a sustainable manner in those countries in economic difficulties is the best way to exit the crisis: green EU funds increase competitiveness of economies, reduce production and material costs, reduce energy costs and energy import dependency, plus they create long-term jobs and establish a local economic cycle which is more resilient towards external jobs.

“You can’t use EU funds as cash box to satisfy any financial need. The Lisbon Treaty together with EU 2020 set extremely clear targets and purposes for the EU Cohesion Policy, and looking at the overall volume of EU money, the whole MFF, it is absurd to think that redirecting of EU money could bring the big change at member-state level.”