Rhein on Energy and Climate

Regional policy is about to become the EU`s major European policy area, measured by the volume of expenditures. By 2013 its annual expenditures are set to exceed those from agricultural policy, which had been the undisputed queen of EU spending for the past 50 years.

It is therefore timely to have a closer look at the way its functioning, benefits and shortcomings when the EU starts preparing the for the financial perspectives for 2014-2020.

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The cornerstones of EU regional policy have been laid as early as 1973 after the first enlargement. Since then procedures have become more sophisticated.,cohesion fund But the fundamental approach has not changed. Regional policy aims at greater cohesion among the EU. To that end, the EU participates sin financing developing projects in regions with per capita incomes below <75 percent of the EU average, without much control from Brussels.

For the time after 2014, the Commission wants to focus on income disparity among between member states rather than regions, leaving it up to member states to look after their less well-off regions.

Such an approach would essentially limit regional funding to the new member states in Central Europe, most of which are anyhow too tiny for dividing them into regions with different levels of prosperity is a rather artificial exercise.

It would also the facilitate the elaboration of optimal country optimal strategies for catching up with the rest of the EU, rather than than managing being lost in mostly tiny projects without strategic impact.

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Such reform ideas are bound to encounter violent opposition from a large spectrum of vested interests, which have massively benefited from regional policy during the past 40 years. But the debate is overdue.

The entry into force of the Lisbon Treaty is the ideal moment for reviewing old habits and traditions and adapting EU expenditures to a newan and increasingly hostile external environment., in which Member states are likely to will also become more reticent increasingly reticent to transfer tax receipts for projects to the EU with dubious added value. Subsidising regional projects and large-scale farming no longer seem to fit into the future environment. EU financing should focus much more areas like research, education and energy.common research and external development policy should become much more important for future EU financing.

The EU will need to have a thorough debate on these issues before finalising its 2014its 2014-20 Financial Perspectives.

We can expect ferocious debates in 2010 and 2011.

Brussels, 09.11.09 Eberhard Rhein

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