Applicants suffer setback in bid for EU regional aid

Date: 02/03/2000

By Simon Taylor

EU GOVERNMENTS are challenging applicant countries' bids for regional development funding which would give them access to almost €40 billion from Union coffers over the next seven years.

The six leading candidates are hoping that their relative poverty compared with wealthy EU member states will make them eligible for the Union's most generous levels of funding. Even Cyprus, which is the most prosperous of the six, argues that its geographical position entitles it to aid money.

The applicants argue that they should be given access to 'Ojective 1' funding, which is aimed at narrowing the gap between the EU's richest and poorest regions, across the whole of their territories.

But the Commission has warned that they will have to draw up more detailed plans dividing their countries into regions and showing which are lagging behind in terms of economic development, in line with the rules governing the share-out of regional funds between existing member states.

But they are reluctant to draw up definitive plans at this stage amid fears this could deprive them of cash they might otherwise be entitled to from the structural funds, which will account for almost a third of the Union's spending by 2006, once they join the bloc.

Securing regional aid funding is a highly sensitive political issue in the candidate countries because it is seen as a test of their governments' EU credentials and as the highest-profile financial reward for the painful political and economic sacrifices needed to prepare for accession.

There are fears, for example, that urban areas of Prague and Budapest could be denied Objective 1 status, making them ineligible for funding targeted at areas where economic output is less than 75% of the EU average.

But Union officials argue that with a more nuanced approach, parts of these conurbations could qualify for aid money and are stressing the need for applicants to draw up detailed maps now. "Classification needs to be done, together with Eurostat," said one, although he sought to reassure applicant countries that they would not be locked into disadvantageous schemes by stressing that these maps could be changed at a later stage.

The candidate countries are anxious to start negotiations on the allocation of structural fund money within a few months, but Commission officials are warning that this issue will have to be resolved first.

In a separate development, the Commission will next week tell the six applicants which were invited to join membership negotiations at last December's Helsinki summit which topics will be covered in the first round of talks beginning in April.

The most advanced countries such as Malta, Slovakia and Latvia are expected to start negotiations in eight areas, while Romania and Bulgaria are likely to be limited to five. The subjects chosen will be those considered least problematic for the applicants such as education and training, culture and audio-visual policy, and science and research.

EU governments are challenging EU applicant countries' bids for regional development funding which would give them access to almost €40 billion from Union coffers over the next seven years.