Older European regions set to face ‘devastating’ aid cuts

Date: 30/09/04

THE coastal and peripheral regions of Europe are sailing into battle. The Conference of Peripheral Maritime Regions (CPMR), representing 149 regional authorities from 27 countries, has set a collision course to confront those national governments that want to reduce the cap on spending limits on the EU's budget for 2007-13.

If the six member states (the UK, Germany, France, the Netherlands, Sweden and Austria) get their way, the EU's budget would be capped at 1% of the Union's gross national income (GNI).

The current legal limit is 1.24% and the outgoing European Commission of Romano Prodi has proposed a limit of 1.14% for 2007-13.

If a 1% limit is finally implemented, Europe's peripheral regions fear that the livelihoods of their communities will be the first in the firing line.

When 250 representatives from Europe's maritime and peripheral regions met in Norway for their annual general assembly last week, their message was clear: "Leave regional funds alone."

Under proposals put forward by the then European commissioner for regional affairs, Michel Barnier, the amount spent on regions would rise by 30% to l336 billion over seven years from 2007.

But Xavier Gizard, secretary- general of CPMR, says fears are growing that if the six net contributor nations are successful during budget negotiations over the next 12 months or so, the Commission will have no choice but to cut regional funds, which currently account for about one-third of the EU budget.

"That would have a devastating effect on our regions, many of which are already suffering. They would receive even less if the budget is capped," he says. "It would, in effect, spell the end of regional policy."

The three-day conference heard that it was unlikely to be regions from the EU's ten newest members which will suffer from cuts to the budget, but those from older member states.

The vast bulk (78%) of the l336bn allocated for Europe's 300 regions in structural funds will go to Objective 1 regions, that is, the most under- developed and economically deprived areas.

In July, the Commission proposed that, in 2007-13, aid should be more concentrated on the Objective 1 regions.

As most of the regions in the ten new member states qualify for Objective 1 status because their gross domestic product (GDP) is below 75% of the Community average, they are almost guaranteed support.

But only 18% of the cash is earmarked for Objective 2 regions, which are those identified as needing revitalizing, whether because they have outdated industries or particular rural or urban problems or because they have a dependency on declining fisheries.

Many of the peripheral and maritime regions would traditionally have fallen into this category.

There are about 200 and, though they may be better off than Objective 1 regions, many are still struggling economically.

The region of Päijät-Häme in Finland, 100 kilometres north of Helsinki, is one example.

At 13%, it has the highest unemployment rate in southern Finland and lower-than-average educational levels.

The size of Flanders but with a population of just 200,000, the region currently receives €41 per person per year from EU coffers.

Between now and 2007, it will receive €22 million of EU cash to be spent, among other things, on developing new technology and educational projects.

Its regional council executive director, Esa Halme, estimates that, if EU regional aid is cut, 2,000 local jobs will be axed along with hundreds of local projects.

"Much of the development work we are currently engaged in and, indeed, all EU-funded projects would have to end so, clearly, it would have a major impact on my region," he said at the CPMR conference.

It is not just far-flung, under-populated regions that are getting anxious about future funding. CPMR and Tuscany Region President Claudio Martini says any budget cuts will have a "disastrous" effect on his region.

"Ours is a relatively wealthy region but there are pockets of real deprivation with a declining industrial sector and high unemployment," he said.

"Our ability to effectively tackle these and other issues will be seriously damaged if the budget is cut."

His comments were echoed by Nathalie Mandaron, a representative from Nord Pas de Calais, who said any reduction in funding would plunge her region into "crisis".

While the CPMR's discussions focused on EU funding and policies, its membership is not limited to EU states. Its scope stretches from Norway to Greece, the Canary Islands to the Ukraine.

This year's assembly was held in Stavanger, the self-proclaimed oil and gas capital of Norway.

Stavanger has been granted the status, along with Liverpool, of European Capital of Culture in 2008.

Europe's peripheral regions are fervently hoping that, by then, their current fears will long since have been allayed and they will have secured their share of EU funding, expenses and allowances.

At its meeting taking place in Stavanger, Norway, from 22-24 September 2004, the Conference of Peripheral Maritime Regions (CPMR), which represents 149 regional authorities from 27 countries, announced that it would confront those national governments that want to reduce the cap on spending limits on the EU's budget for 2007-13.

Conference of Peripheral Maritime Regions of Europe: Homepage http://www.cpmr.org/

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