MEPs warn against delay over funding

Date: 19/02/1998

By Rory Watson

EU-FUNDED programmes could be badly disrupted if reforms of the Union's regional and social policies are not agreed this year, the European Parliament warned this week.

The MEPs' caution comes as the European Commission is finalising its wide-ranging proposals for overhauling the various structural funds used to boost regional, social, agricultural and fisheries development in the Union.

The parliamentarians' concern is based on the experience of the early years of the existing structural fund programme, which began in 1994 and ends next year.

As governments and local authorities came to terms with that programme's new rules, the take-up of available EU funds in 1994 and 1995 fell to 75% and 81% respectively - considerably lower than in previous years.

According to a report by German Christian Democrat MEP Rolf Berend, this slow start means that 1.7 billion ecu of unused payments for different regional and social projects over the six years to 1999 will have accumulated by next year.

With Union governments unlikely to agree on a new structural fund package before next January, the Parliament is proposing a compromise under which the existing arrangements would be extended for a further year to ensure that the transition runs as smoothly as possible.

MEPs also specifically deplored the practice of handing any unspent EU funds back to national governments at the end of the multi-annual programme.

Instead, they recommended that the money should be distributed to those member states which had displayed their ability to use funds made available by the Union fully over the previous six years.

Berend says that while there may be many administrative, financial or macroeconomic reasons for the under-utilisation of EU funds, the existing structure of the Union's regional policy should take a share of the blame and should be revised as part of the current reforms.

In particular, he notes problems with the programme's planning period and criticises "significant delays in the adoption of the regulations, in the decision on eligible areas and in the allocation of appropriations" which marked the start of the package of projects launched in 1994.

The Commission's plans to simplify existing provisions for awarding regional and structural aid were welcomed by MEPs, although they said further administrative reforms were necessary. They recommended that "currently inflexible and very time-consuming" monitoring procedures be reviewed and suggested that, as a guarantee that funds were being correctly used, the Commission should have the power to impose fines.