Don’t touch my money: Rich regions concerned by perspective of EU enlargement

Wealthier European Union regions are concerned that enlargement could result in a reduction in cohesion funds, but the European Commission said it is still too early to start talking about money. 

EU cohesion policy, about one-third of the overall EU budget, is the EU’s main instrument to help poorer regions catch up with richer ones, although richer regions are also eligible for funding, although in smaller sums. 

In the current seven-year budget period from 2021 to 2027, €426 billion is dedicated to the EU’s cohesion policy, topped up with an additional €776 billion from the recovery fund set up after the COVID-19 pandemic hit.

But as discussions about future EU enlargement continue, which could see several financially weaker countries, such as Ukraine or Moldova, join the bloc, concerns rise that this could mean less money for richer regions.

“If more countries come in and the funds are not increased, then everyone gets less,” Isolde Ries, head of the German delegation at the European Committee of the Regions (CoR), told Euractiv.

While regions in richer countries could see their funding cut, “that’s not possible at all,” Ries said, instead calling to increase the overall sum for cohesion policy.

“We do have richer states in Germany, but we also have a divide,” Ries said, adding that her own region, Saarland, was a “very poor state that cannot be equated with a region like Munich or Hamburg or Frankfurt.”

While Hamburg has a GDP per capita of 191% of the EU average, Saarland still has a per-capita GDP of 102% of the EU average, falling into the second-richest category in the Eurostat classification.

As regional leaders met in Brussels this week to discuss the future of the bloc’s cohesion policy, regional representatives from other richer countries voiced their concerns, too.

“It’s going to be difficult,” Frida Nilsson, CoR member from Sweden, said at a panel discussion on Tuesday (10 October), adding that funding from cohesion policy “is important for the cities and regions all over Europe”.

“When people are asked to contribute more and to get less, there is always going to be an element of discontent,” Emma Blain, a member of the CoR from Ireland, agreed.

“We need to be prepared for that,” she said, adding that Irish politicians should communicate “what we get and have gotten over our 50 years of (EU) membership”.

The general feeling among regional leaders is that the European Commission should allocate funding to all regions. The latest flash Eurobarometer on cohesion policy awareness also shows that 63% of citizens want the EU to invest in all its regions, regardless of wealth. 

“The European Union must continue to help the regions of France (…) we need to bring more European resources,” Cécile Gallien, president of the French delegation at the CoR, told Euractiv. 

According to Gallien, all rural areas need EU money to preserve nature, fund the energy transition, and promote economic activity. 

These sentiments are shared by poorer European regions, too. According to the Hungarian regional representative in the CoR Kata Tüttő, member states dependent on cohesion funds would not agree to a redistribution, and the discussion should focus instead on finding additional money to finance new countries’ cohesion funds. 

She also pointed out that decreasing funds from member states would be unfair.

“I don’t think Hungary and other countries would say yes to that [less funding] because we opened up our markets, there has been a huge brain drain in the past,” she said, arguing that enlargement must be ‘mutually beneficial’ for everyone. 

Don’t say money

As enlargement talks become more serious, an EU internal study, seen by Euractiv, showed the impact that a potential accession could have on EU funds, such as the cohesion policy and the Common Agricultural Policy (CAP).

On agricultural subsidies, the potential of agricultural giant Ukraine joining the bloc has already sparked a debate on the future of CAP funding, with calls to move away from the payments based on farm sizes towards a more targeted approach.

On cohesion policy, too, EU enlargement would have a severe impact with up to €61 billion going to Ukraine over seven years, leaving less money for other countries. 

Asked by Euractiv about possible funding cuts, EU Commissioner for Cohesion and Reforms, Elisa Ferreira, pushed the brakes, arguing that there are other, more urgent debates about the future of cohesion policy. 

“There are so many elements that will determine this enlargement that, for the time being, I think this should not take the place of a needed discussion,” Ferreira admitted. 

“And the needed discussion is, in fact, are we doing everything we can with the available instruments and the policy we have?” she added.

EU diplomats asked by Euractiv, have pointed to the fact that the commissioned study would be misleading, as it would be a projection of current financial realities rather than those once the EU candidate countries are ready to join.

“The internal study surely an idea of what we will be up against – it’s good to run the numbers because it makes us realise now what we need to talk about in the reform debate,” one EU diplomat said, but added this should rather be seen as an “orientation paper only”.

“The European Commission is doing navel-gazing with the paper that might reflect the current state of play, but realistically, when those countries are ready to join, some of them might be actually in a better situation than some of our current member states,” a second EU diplomat suggested.

Some regional leaders are also cautious about starting money talks, pointing out that enlargement is mutually beneficial. 

“It’s not about those who are going to receive and those who may stop receiving or receive a little less because it’s in everyone’s interest [enlargement],” CoR President Vasco Cordeiro said. 

“I don’t think we should think so selfishly”, Alin-Adrian Nica, head of the Romanian delegation, told Euractiv. 

“The enlargement of the EU is a must,” he said, adding that this could also boost the economy. “I don’t see a threat; I only see opportunities even for the less developed regions presently,” Nica said.

[Edited by Alexandra Brzozowski, Alice Taylor]

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