Parliament to vote on ‘new era’ regional funds

11 July 2012, EurActiv

The European Parliament’s regional committee is holding a vote today (11 July) on legislation that some MEPs say will bring cohesion funds into “a new era” and jump-start negotiations with member states over the EU’s next budget for 2014-2020.

Cohesion policy will be first on the negotiation table with the EU heads of states in the European Council, which is expected to reach an agreement on the EU’s 2014-2020 budget by the end of the year.

The €336 billion cohesion funds is likely to be pulled from all directions, since it represents one of the biggest envelopes in the EU’s next seven-year budget, worth one trillion euros.

But this time, the negotiation cannot centre on the “old politics”, according Dutch Christian-Democrat MEP Lambert van Nistelrooij, who drafted, on behalf of he European Parliament, the general regulation governing how EU funds will be allocated.

Not only for the poor

“We talk about a new, modernised cohesion policy,” van Nistelrooij, said, “so you cannot split Europe in a part that is getting this money without having a vision on how to realise the 2020 targets in other regions”.

According to the Dutch MEP, the cohesion funds, which were initially created to help Europe’s less developed regions catch up with others, are expected to change focus in the next seven year period (2014-2020). They are not “just a tool meant to compensate poorer regions,” he insisted.

“If you say the cohesion policy is a policy for the poor, then you have missed the debate that has been going on for the past three years,” Nistelrooij said.

Constanze Krehl, a German socialist MEP who is co-drafting the Parliament’s position on cohesion funds with van Nistelrooij, agrees.

“We now start a new era,” Krehl told EurActiv in an interview. “Of course, [cohesion policy] gives poorer regions a chance for development, because it is an investment programme, but it is really more result-oriented, meaning that it is follows the Europe 2020 strategy”.

The budget is the EU’s main tool to achieve the bloc’s 2020 goals and requires a certain percentage of EU funds to be earmarked for projects that fall under a list of pre-agreed “thematic objectives”.

“It is not only necessary to save money in member states, but also to invest in a very intelligent way in the economy,” Krehl told EurActiv in an interview.

“Greece and Spain and more or less also Italy have never used their funds for investment in the economy. They have made more investment in consumption, also with the structural funds,” she said, adding that this played a part in deteriorating the financial situation in those countries.

Energy funds: Going for oil and gas networks?

Growth and jobs are not the only new focus of the Cohesion Policy. A certain amount of money from the Cohesion Fund has also been earmarked for environmental projects.

A minimum of 12% would be taken from the European Regional and Development Fund (ERDF) for this purpose. Also, developed and transition regions will have to use at least 20% of the ERDF for climate-friendly projects, whilst poorer regions will dedicate 6% of their applications to environmentally-friendly purposes.

But the debate over what kind of projects will fall under the 12% rule is still ongoing, with some MEPs pushing for oil and gas distribution networks to be included in there.

Polish MEP Jan Olbrycht, of the centre-right European People’s Party (EPP) suggested in his report improving energy efficiency and increasing energy security through the “construction and modernisation of electricity, natural gas and oil transmission and distribution networks, natural gas and oil storage infrastructure, as well as liquefied natural gas infrastructure.”

His Polish centre-right colleague, MEP Bogusław Sonik supports him, while Romanian MEPs Iosif Matula and Marian-Jean Marinescu also favour developing “distribution systems for natural gas” with ERDF money.

Green groups are outraged and worried that EU funds will be used to subsisidise the fossil fuel industry.

“The claim that subsidising fossil fuels through the ERDF will fight climate change is outrageous,” said Sebastian Godinot, an EU policy economist at WWF. “If these two compromise amendments are pushed through without change, the position of the Parliament’s Regional Committee will become more conservative than that of the Council,” he said.

“EU funds really don’t have to pay for “big oil” infrastructure, especially not under an objective that is supposed to reduce GHG emissions,” added Markus Trilling of Friends of the Earth Europe. “It is ridiculous to start building new gas pipelines from that money,” he said, adding that this could take up a significant amount of the 12% earmarked for climate projects under the ERDF.