Room for improvement in use of regional funds, says Straub

By Martin Banks

Date: 27/01/05

THE man in charge of increasing the power of Europe's regions in the EU has admitted that regional aid could be used more effectively.

With debate over the future funding of regional aid intensifying, Peter Straub, president of the Committee of the Regions (CoR), conceded that there was "room for improvement" in the use of regional funds, which are meant to reduce disparities between rich and poor regions.

"Funding could be better targeted so that it meets the specific needs of a particular region," he said.

Straub wants regional aid to go directly to cities and regions, bypassing central governments because he feels they are "best placed" to manage the funds most efficiently.

The way such funding is handled varies from one member state to another, he said. He believes, however, that it would be more efficient for local and regional government to co-ordinate the spending of structural funds than the central government.

Straub, who is president of the regional parliament of Baden-Wüttemberg, one of the wealthiest regions in Germany, said that instead of being just a subsidy for economically deprived regions, regional funding should be an instrument for improving competitiveness and growth, two of the goals of the Lisbon Agenda.

"It is the regions which will trigger more economic development and, in doing so, help meet the objectives of the Lisbon Strategy," he said.

He expressed opposition to the idea, floated by the UK, of concentrating all regional aid in the new EU states.

"We should not take from the poor to give to the new," he said.

Straub, half-way through his two-year mandate as head of the EU advisory body which represents regional and local bodies, was speaking as protracted negotiations on the EU budget for the spending period 2007-13 enter a critical stage.

Structural funds account for about one-third of the whole EU budget and are the Union's second biggest area of spending after the Common Agricultural Policy.

The CoR fears that the €336 billion proposed by the European Commission for regional aid from 2007-13 will be slashed if the overall budget is cut.

Straub insisted that an "effective" regional policy was vital to foster the "huge potential" for economic growth across the Union in the wake of enlargement.

Nicolas Schmit, Luxembourg minister-delegate for foreign affairs and immigration, reiterated his country's intention to seal an agreement on the EU budget before the end of its six-month term holding the EU presidency.

"If we fail to tie up the financial perspectives in June, there's a risk of significant slippage right across the policy field," he said.

Any such delay would give the EU a "very negative image" in the eyes of the new member states, added Schmit.

He said the presidency was currently faced with three scenarios for cohesion spending: the Commission's proposed level of 336bn euro; the €275bn proposed by certain member states and a level of €200-230bn, backed by those countries pushing for payment appropriations not to exceed 1% of gross national income (GNI).

Schmit, who was addressing the CoR's leadership in Luxembourg last Friday (21 January), said the presidency wanted to maintain the Commission's proposals because "we see them as sound".

But he warned that a balanced deal would have to be struck on the overall budget between the 1% GNI level demanded by the so-called gang of six net contributors (UK, France, Germany, Netherlands, Austria and Sweden) and the 1.14% GNI figure proposed by the Commission.

Peter Straub, president of the Committee of the Regions (CoR), conceded that there was 'room for improvement' in the use of regional funds, which were meant to reduce disparities between rich and poor regions.