THE EURO HONEYMOON IS OVER. SO WHATS NEXT?
knows whether a project is legitimate or worse, whether the figures presented
to complete the criteria, example number of new jobs created, is genuine
or pie in the sky.
The Euro zone has a
few days left before the original currencies of the respective countries
are firmly and truly buried. Most, if not all of my Spanish neighbours,
have completely forgotten about the peseta. The shop attendants are totally
fluent in handling the currency, and price tags have now switched places.
Values of goods are in large Euro numbers. The peseta has gone forever.
Admittedly, a certain increase in pricing has taken place during the rounding
up rather than rounding down - period from one currency to the
other. But apart from minor oddballs such as my local drugstores
automatic weighing machine (which now costs 50 Euro cents a shot instead
of 25 pesetas!) most housewives are happy with the Euro shopping basket
pricing. So. What happens next? What will be the next major European Union
Britains future entry? Nah! Too insignificant. Common European taxation
laws and other financial issues? Far too complicated. How about the future
European expansion. Now that is a major issue! Were talking about
another ten* new countries representing an increase of more that 80 million
inhabitants that are waiting at the gates. Not all are up to the standards
of living of the present fifteen** yet are eager to become part of this
great new venture nicknamed by some as the Super Europe. This
may sound grand on paper, but what are or will be the major issues on
entry and more important, how will they affect the elder member
states? No better place to start than to take a look at the present and
future distribution of European funds for the less wealthy regions when
this new lot join.
What the hell are the European funds anyway? What are they for? How are
they structured and managed? By whom? How much money are we talking about?
Who controls and audits the accounts? At first glance it seems like a
big slush fund that sits in Brussels whereby money comes in from the rich
members and is handed out to the poorer ones. Now and again the various
European Finance ministers get together and argue about how they are distributed.
They sign a few papers and back to business as usual. To be honest, Im
sure most European citizens, other than those directly affected havent
a clue how the system works. Thanks to old faithful Internet, I decided
to investigate how all this money is manipulated and what I discovered
was amazing, to say the least! Hampton Court maze is a straight path compared
to the EU Funding system. But lets get down to the basics.
Enter ERDF, better known as The European Regional Development
Many moons ago, the European Union agreed that any region below the average
percentage of GDP per capita within the EU was eligible to funds from
the ERDF. In other words, based on a European average of 100%, any area
within the Union that was below this mean had access to European money.
Pretty simple at face value, but Pandoras box in practice. As bureaucrats
would have it, and similar to the ten commandments whereby thousands of
laws were developed, a myriad of European funding schemes were introduced.
As a brief explanation, the ERDF is broken up into different programs
a. Objective 1. Underdeveloped regions (Ireland, Spain, Greece and Portugal).
b. Objective 2. Re-conversion of backward sectors of industry. (Example:
c. Interreg. This is an interesting one that deals with cross border development
such as Spain and Portugal.
d. Urban. Assistance in the rebuilding of Ye olde European towns.
And finally we come to the Cohesion funds. These are the ERDFs distant
cousin that complements Objective 1 regions and are directly related to
funds for environment and communications infrastructure. But who decides
and subsequently keeps an eye on all this money flow?
To quote the gurus, the financial management of the Structural Funds
has been largely decentralised. Member States are required to set up Managing
Authorities which have the responsibility of running the programmes agreed
with the Commission.
What this means in practice is that the responsibility for the request
for funding is handed down to the local authorities, such as town councils,
who then submit their programs to a regional government (Spain is a classic
example with its 17 autonomous regions) and after blind approval
from the central government, receive the go ahead from the EU Commission.
Over the years, thousands of projects have been submitted from town councils
throughout Europe, specially in Objective 1 regions such as Spain, ranging
from the building of highways and cleansing of filthy rivers to the restoration
of dilapidated old buildings into contemporary art museums. There is no
doubt that tremendous progress has taken place to build up Europe economically
speaking, but what about the underlying objective of the funds in the
Galicia in Spain, for example has been receiving European funding ever
since it was available. It belongs to Objective 1, is an Interrig area
and yet, at this moment in time, is still at 65% of the EU mean of GDP
per inhabitant. Ireland, at the other end of the spectrum, is also an
Objective 1 region and has prospered way beyond expectations. Why the
difference? Is the Commission not keeping a proper eye on investments?
Is the answer in the Commissions own words: A very large number
of bodies actually implement the thousands of individual projects financed
under the different measures in each structural fund programme?
In other words, who knows whether a project is legitimate or worse, whether
the figures presented to complete the criteria, example number of new
jobs created, is genuine or pie in the sky. As stated previously,
there are many cooks that may be spoiling the broth. No doubt that fiddling
has taken place and is probably still going on and that the Commissions
auditing will improve as EU consolidates itself into a solid political
and economic block. So what about the newcomers in a few years time?
They will all be seeking funds to raise their economic standards to the
level of the present members so that they can compete on equal commercial
footing. Will the rich countries have to increase their contribution?
How about the regions that are still underdeveloped and considered Objective
1, will they continue to be subsidised? There is a row going on at the
moment between the EU and the new applicants based on the immediate subsidies
that will be made available to cover agricultural policies. This is but
a mere entry stumbling block. The long term issue will always revert back
to the age old evil money, yours and mine as European taxpayers
who have to subsidise all these new guys. No problem if it raises the
standard of living of the underdeveloped regions, but thumbs down if it
goes into the pockets of corrupt politicians!
* Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta,
Poland, Slovakia and Slovenia.
** Britain, France, Spain, Netherlands, Germany, Denmark, Belgium, Sweden,
Finland, Luxembourg, Portugal, Italy, Ireland, Greece and Austria.
© James Skinner. 2002.
Jose Cela: the master of prose
James Skinner reviews the writer's life
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