EU states will lose out to new members, admits commission
The European Commission acknowledged today that EU member states are bound to lose regional aid to East European newcomers.
Commissioners added that now was not the time to talk money as Spain - the biggest beneficiary of the handouts - demands.
Discussing future aid for less well-off EU regions now ‘‘would be the wrong way’’ of bringing a dozen poorer neighbours into the club, Regional Affairs Commissioner Michel Barnier said in Brussels.
He said the debate about the future shape, size and recipients of aid for poorer regions must be delayed until at least 2004.
The Government in Madrid has been making the point that Spain, Portugal and Greece are bound to lose out to a dozen, much poorer newcomers although they still need financial help.
Barnier acknowledged this was a problem saying the 12 newcomers will increase the EU’s land mass by 34%, boost its population by 29% to about half a billion ‘‘but its gross domestic product will grow by only 5%.’’
Additionally, of the 105 million people in the applicant countries, ‘‘98 million are in regions where the gross domestic product is currently less than 75%’’ of the EU average, he said.
The EU currently funnels billions of euros in aid to areas with incomes below that 75% threshold. Spain pockets more than £34bn in various types of such aid - 63% of the total of a 2000-2006 aid programme.
It has threatened to block enlargement talks unless it is guaranteed handouts will not be cut after 2006. Germany and other countries reject that, as did Barnier at a conference on EU expansion issues.
Spain is threatening to scuttle the negotiations by vetoing a German demand for a seven year waiting period before East European workers can freely look for work in the 15 nation bloc.
Adding new members - perhaps as many as half a dozen in 2004 must not be held hostage to regional aid to be paid after 2006, Barnier said.
He suggested that a new financial package be worked out by 2004, saying, ‘‘Not only must the needs of the new member states be met, but the situation of the less-favoured regions of the present union must also be examined.’’
Regional aid is an EU success story which is why it has become a crucial part of the debate over the EU’s eastward expansion.
Regional subsidies have pushed Ireland once a poor backwater into the top layers of the EU’s wealth scale in less than a decade.
The EU has not set entry dates, but Cyprus, the Czech Republic, Estonia, Hungary, Malta and Poland hope to join by 2004.
Bulgaria, Latvia, Lithuania, Romania, Slovakia, and Slovenia are in a slower group. Negotiations with Turkey are not expected to start soon.
