Subsidy figures under scrutiny

Date: 12/09/1996

COMMISSION officials are winning their fight with national governments to whittle down the number of areas in Europe that can claim regional aid.

But they are probably losing the battle to cut the overall amount of subsidy payments.

This year, 47&percent; of the EU's population lives in areas which could claim regional aid status. Under EU rules, governments can give more generous subsidies in these areas.

The total confirms a gentle decline in the coverage of regional aid and should, in theory, mean that aid is being targeted more accurately at those areas where it is most needed.

The Commission reviews regional eligibility under a rolling programme as past clearances come up for renewal. This year, Luxembourg was scrutinised. Next year, it will be the turn of Denmark, parts of Italy and Germany.

However, reductions in the coverage of regional aid do not mean that the overall amount of government aid is on a downward slope.

Although no figures for national state aid to the manufacturing sector have been released since 1992, officials believe that was the year when the previous slow decrease in national subsidies came to a halt.

“Between 1980 and 1992, the amount of national aid tended to decrease. It is too early to say whether it has risen since then, but it certainly has not fallen,” said one official.

When new figures are released at the end of this year, they are expect to confirm that the overall figure has risen since 1992, boosted by a series of headline-grabbing steel restructuring cases in the mid-1990s, especially in Italy and Germany.

They are also expected to confirm that Germany was the EU's biggest spender of state aid in 1994, as it was in 1992. France, too, could well creep up the league table in future years when the massive payouts to Crédit Lyonnais and Air France begin to have an impact on the statistics.

That will once again underline the incongruous message contained in the 1992 figures that the EU's richest countries are spending more on subsidies than the poorest - an uncomfortable fact for a Union which is supposed to be on a cohesion course.