Committee of the Regions
COR/04/53
Brussels, 17 June 2004
Barrot rejects regional policy based on “handouts and charity”
The Committee of the Regions has joined forces with the European Commission to send a tough message to Member States who have called for savage cutbacks to the EU budget, warning that they risk totally undermining the future of regional policy in the Union.
Addressing the CoR’s 16-17 June plenary session on the eve of the EU summit in Brussels, Regional Policy Commissioner Jacques Barrot warned that Europe stood at a “crossroads”, with a choice between retaining a strong cohesion policy or one stripped down to “handouts and charity”.
Responding to a call from former CoR president Jos Chabert (BE-EPP) for the Commission to “stick to its guns” on its financial proposals for the next 2007-2013 budgetary period, Barrot pledged that it would stand up to those pressing for the EU budget to be capped.
“The Commission will stick to its promises,” he said, but he acknowledged that it would have to put forward “weighty arguments” to support its case.
Chabert, minister for public works, transport and health policy in the Brussels regional government, stressed that cohesion policy had been a “resounding success” over the past two decades and that the Commission should reject any “unacceptable compromises”.
His view was echoed across the CoR’s political spectrum. Michel Delebarre (FR-PES) said that the Commission’s proposed budget, based on an average 1.14% of the Union’s gross national income, should be the “bare minimum”. Any reduction would be a “catastrophe and the death-knell for our policies,” added the Dunkirk mayor and former government minister.
Flo Clucas (UK-ELDR) argued that the 1% budget cap demanded by Germany, France, Britain, the Netherlands, Sweden and Austria would “build in failure” for future cohesion policy. “That would be inevitable,” added the Liverpool city councillor. José Maria Muñoa Ganuza (ES-EA), the Basque Country President’s delegate for external relations, said that retaining an effective regional policy was “a matter of justice”.
Earlier, on the sidelines of the plenary, MEP Poul Nyrup Rasmussen, the PES President and former prime minister of Denmark, also spoke out against cutting the budget. “We’re not that poor that we cannot allow ourselves to spend more than 1% to make life better for ordinary people,” he told Socialist members of the Committee.
The united stance on the issue was underlined when the CoR plenary adopted an opinion backing the Commission’s third report on economic and social cohesion, which proposes earmarking a total of €336.3 billion for cohesion policy over the next budgetary period.
The opinion, drawn up by Michael Schneider (EPP), representative of the German Land of Saxony-Anhalt to the federal government, and Vito d’Ambrosio (IT-PES), President of the Marche region in Italy, broadly welcomes the Commission’s plans to establish a more straightforward, transparent process for delivering help to the regions that need it most.
But it also makes a number of key recommendations, including:
–Greater flexibility in determining which regions are eligible for state aid
–Regional and local authorities to be given more responsibility for identifying and implementing cohesion policy measures
–A clearer definition of the criteria required for urban areas to apply for support
–More financial help for people living in rural areas.
The opinion calls for so-called “statistical effect” regions - those which will drop out of the top priority “Convergence” category due to the reduction in average EU GDP per capita resulting from enlargement – to be eligible for state aid. Some 17 regions with a combined population of 19 million stand to lose out if there is no change of position on this.
In addition, the CoR wants “natural effect” regions - those which would have exceeded the Convergence category threshold of 75% GDP per capita without enlargement taking place - to be eligible for state aid for a transitional period.
Barrot said he recognised Committee members had “legitimate worries about the awkward dovetailing between regional policy and state aid”. He said he had discussed the matter with Competition Commissioner Mario Monti, who had told him he was “concerned the process should be smooth”.
The Commission is due to adopt its legislative package for cohesion policy on 14 July and Barrot thanked the Committee rapporteurs for an opinion which he said would be a “precious support” in its argument for a realistic EU budget.
- CoR President Peter Straub opened the Committee’s new headquarters at 101 Rue Belliard in Brussels on 16 June.
Background
EU cohesion policy is the second largest slice of Union expenditure after the Common Agricultural Policy. The €336.3 billion budget proposed for the years 2007-2013 represents 0.41% of the Union’s gross national income and just over a third of the Community’s projected total expenditure of €929 billion.
A 1% cap on the EU budget would result in total expenditure being reduced by €113.6 billion over the seven-year period.
Despite a 20% rise in the EU population following enlargement (from 380 million in EU15 to 454 million in EU25), total GNP has increased by only 5% and average GDP per capita has fallen by 12.5%. The number of people living in so-called "lagging" regions has soared from 84 million to 123 million.
Despite relatively high growth rates in the new Member States (1.5% higher than the average of the EU-15), it will take decades before these countries reach the Community average of the enlarged EU. According to current forecasts, only Slovenia, Hungary and the CzechRepublic will be in a position to exceed the 75% level of the Community GDP average by 2017.
State aid
The rules governing state aid are covered by Article 87 of the Treaty establishing the European Community. This states that the following may be considered to be compatible with the common market: under Article 87(3)(a), “aid to promote the economic development of areas where the standard of living is abnormally low or where there is serious underemployment”; and, under Article 87(3)(c), “aid to facilitate the development of certain economic activities or of certain economic areas, where such aid does not adversely affect trading conditions to an extent contrary to the common interest”.
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