Poorer regions prepare for battle over funding

Date: 08/01/1998

By Rory Watson

A FIERCE bout of lobbying by the EU's poorer regions is imminent as the European Commission puts the finishing touches to its overhaul of the multi-billion-ecu aid package to the Union's less-developed areas.

With pressure growing for regional assistance to be concentrated on the most deserving cases rather than spread more widely and thinly, a number of regions fear their days as beneficiaries may be numbered when the proposals - with their new eligibility criteria - appear towards the end of March.

"You have to be aware of how the proposals may affect you and that it is why it is important to lobby at both European and national levels and to make sure central government recognises the importance of regions," explained one lobbyist.

Despite the almost total lack of political guidance from last December's European summit in Luxembourg, the Commission is pressing ahead with its original plans for managing the EU's finances up to 2006 and reforming its regional and social funds. "We are working straight ahead on the assumptions we set out in the Agenda 2000 programme last July and are now involved in the nitty-gritty of the technical detail," confirmed one source.

The institution has already indicated that several regions which qualified for EU aid during the last structural fund negotiations in 1993 may not do so again because of their increased prosperity. But it has warned that Union assistance should be phased out gradually when the current programmes end in 1999.

Two main battlegrounds are emerging. The fiercest fight is likely to be among those regions in the midst of social and economic restructuring. In future, this so-called 'Objective 2' category of aid will cover not just zones of industrial decline as at present, but also run-down rural, urban and fisheries areas.

The new criteria are likely to be simpler, more transparent and more specific than the existing requirements and, as a result, more restrictive. Once they are accepted by EU governments, it will be up to the Commission to use them to draw up the list of regions eligible for funding.

The second category enjoys a higher political profile and is based on regions whose economies are underdeveloped and whose per capita gross domestic product is below 75% of the EU average. The Commission, supported by many member states, is expected to argue that this threshold for 'Objective 1' status should be strictly applied in future.

Such a rigid definition could lead to up to a dozen major regions losing their eligibility. But the final outcome will inevitably be subject to much political haggling, with governments determined to resist changes which would cut off their route to EU funds. With regional and social funding set to hit 210 billion ecu between 2000 and 2006, the stakes are high.

"People are already positioning themselves to find out what the criteria mean for their own areas. If you do not qualify for one or other of the regional objectives, then you will not be eligible for any grants," explained one senior official.