Town and country battle for aid funds

Date: 29/05/1997

By Michael Mann and Rory Watson

A FIERCE turf battle between urban and rural interests is dogging the European Commission's efforts to agree proposals for a radical overhaul of the Union's regional and social programmes.

Plans now on the table would redraw the aid map and mean a drastic reduction in the number of programmes eligible for EU funds. The move is aimed at targeting future spending on areas of greatest need and at reducing bureaucratic red tape.

But there are deep divisions within the Commission over how to reconcile the conflicting needs of declining urban areas and struggling rural communities.

With the mid-July deadline for a decision drawing closer, officials are trying desperately to find a formula to satisfy both Regional Policy

Commissioner Monika Wulf-Mathies, who is arguing that urban areas should be given a bigger slice of the available funding, and Farm Commissioner Franz

Fischler, who is still pushing for an all-embracing rural policy.

“Both sides have good arguments, and it is a matter of finding a compromise to respect the legitimate expectations of country and urban regions,” said a senior official this week.

Wulf-Mathies is pressing for EU spending to be concentrated on areas in greatest need. At the moment, 50&percent; of the Union's population is eligible for aid. She is campaigning to reduce this to 35&percent;, but Fischler fears this could further squeeze funds for rural communities.

The Farm Commissioner tried to set the tone of the debate last November by promoting the Cork Declaration on future EU rural policy. But this has run into stiff resistance from some within the Commission, from powerful member states including Germany and France, and from the farming lobby itself.

Whether additional money will be available for rural programmes will also depend on the Commission's ability to persuade EU governments to reform key areas of farm policy, amid indications that the Union faces a return to the 'bad old days' of food mountains.

Both sides agree, however, that regions which have successfully used EU aid to bring their economic performance above a certain threshold should now be taken off the eligibility list.

But in a move designed to head off opposition from member states, this would not happen overnight. Instead, the aid would be gradually phased out when the present arrangements end in 1999. Officials say the planned changes in existing eligibility rules would affect France, the Netherlands, Italy, Portugal, Ireland and the UK in particular.

The reforms are part of the Commission's Agenda 2000 package due to be outlined in mid-July, which will set out the institution's plans for future EU spending into the next century.

It will include annual regional and social structural fund spending of some 34.6 billion ecu from 2000 onwards as the Union continues its efforts to help its poorer regions and prepares for enlargement.

Once the Commission has finalised its proposals, EU leaders will be asked to approve them at December's Luxembourg summit.

There is growing consensus that the seven 'objectives' which now determine how Union regional and social funds are allocated should be reduced to three. These would cover regions whose economic performance is lagging far behind the EU average, areas with special development needs and training programmes to tackle unemployment.

Equally, the growing number of EU-funded initiatives would be cut from 14 to three, focusing on cross-border cooperation between regions in different member states; promoting equality of opportunity and training; and encouraging specific territorial programmes for rural, fishing and urban communities.

Despite their differences, Commissioners are united in agreeing that future

EU expenditure must remain at existing levels even with the challenge of enlargement, ignoring calls from Spain and Greece for funding to be increased.