Compromise in sight over regional funding budget

Date: 12/04/01

By Simon Taylor

MEPs are edging towards a compromise deal with EU governments over plans to reschedule more than €6 billion in unspent regional funds over the next five years.

During intense negotiations two weeks ago, Euro MPs failed to reach a deal with member states on how to spread out the money over the remaining time in the current budgeting period.

But EU diplomats this week expressed confidence that a compromise could be reached in the coming weeks that would prevent the money being wasted.

"If everything goes well, we should have an agreement by Easter," said one budget official who acknowledged that a deal would in all likelihood take longer than that.

EU diplomats said the eventual agreement would earmark the largest share of the money, around €3.5 billion, for the first part of the remaining five years' budgeting period.

This involves spending on economically disadvantaged regions while funds for areas in transition and fishing regions will be targeted on the latter half of the period.

MEPs are holding last-ditch negotiations with the member states and the Commission on April to try and thrash out a deal ahead of the 1 May deadline.

But the emerging compromise has created new problems because the phasing of allocations could mean Greece losing around €3 billion.

Finance ministry officials blamed the Parliament for not realising the implications of its demands on one of the four biggest beneficiaries of the EU regional development aid.

"The problem is that the EP took a decision without knowing the consequences of it," said one.

MEPs have been locked in a battle with EU governments and the European Commission over how to use the money, which was originally due to be spent last year but was not paid out because of member states' delays in devising specific projects in time.

Members states and the Commission want to front-load the unspent funds in the first half of the remaining budget period, arguing that this would guarantee the money is spent in time.

But MEPs on the assembly's budget committee have accused the Union's wealthier member states of trying to avoid paying out money they pledged to spend under the 1999 agreement struck by EU leaders in Berlin.

They argue that by insisting the money should be allocated quickly member states that did not have their national programmes ready in time could avoid spending the funds.

Spanish Socialist MEP and EP vice-president Joan Colom i Naval said: "There is not the willingness to fulfil the political commitments of Berlin but rather to make savings."

MEPs are edging towards a compromise deal with EU governments over plans to reschedule more than €6 billion in unspent regional funds over the next five years.