5 years ago

Regions & Cities 2018: A deep dive into the EU regional funds

  • Text
  • European
  • Regions
  • Funds
  • Cohesion
  • Cities
  • Regional
  • Countries
  • Euobserver
  • Funding
  • Eastern
The European Union has allocated around €350bn for the 2014-2020 period to cohesion policy – accounting for a full third of the EU budget. Only the EU's agriculture policy receives more.

Differing opinions on

Differing opinions on how to measure economic results of 'cohesion' From a purely economic point of view, it can be difficult to measure the effectiveness of cohesion policy. But - politically - it underpins a deal made during the 2004 accession of eastern member states. By Eszter Zalan Cohesion policy is one of the biggest chunks of the EU budget – and the subject of the fiercest haggling every seven years among EU leaders when they meet to agree on the numbers of the next budget. Funding between 2014-20 amounted to €351.8bn (almost a third of the entire EU budget), and a budget of €373bn is planned for 2021-2027, according to the EU commission's proposed new long-term budget. One reason it is one of the most contested EU policies is that net payers can see it as a burdensome tradition, rather than an investment in the future - while recipients argue it is a due compensation for opening their markets. The policy is laid out in the treaty, in which Cohesion policy projects in Romania Photo: European Parliament

Scotland's remote regions, like in the Highlands, have also profited from EU subsidies. But what is the long-lasting effect on the economy? Photo: Peter Teffer member states pledge to work on "reducing disparities between the levels of development of the various regions and the backwardness of the least-favoured regions or islands, including rural areas." "A heterogeneous, but integrated, market system requires tools to contain imbalances and prevent divergence," Laszlo Andor, a former EU commissioner for social affairs, told EUobserver. which EU funds don't play a part, and that it is also "crucial" in some regions of higher-income countries. However, the cohesion policy's effectiveness is regularly called into question, and net contributors often point to mismanagement or even corruption. One of the problems is that measuring cohesion policy only through economic growth can be very narrow. "Through cohesion policy, the community contributes to investment everywhere - but especially in countries and regions where incomes are lower and resources are thinner, and the vicious circle of underdevelopment is a real risk. Needless to say, to tackle such risks is in the interest of the whole EU," Andor argued. Andor said cohesion policy is working – but admitted it could function better. Nevertheless, some of the central and eastern European countries which have received billions of euros in the past 14 years have seen hefty economic growth. The commission said in its forecast last spring that Poland's economy is expected to grow by 4.3 percent this year and 3.7 percent next year. Hungary's economy is set to grow by 4 percent and 3.2 percent next year. The ex-commissioner said lower-income EU countries have very little public investment in Andor said Poland and Hungary would have been much less prosperous over the past 25 — REGIONS & CITIES 2018

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