ECONOMY

Debate on CSFIV will affect amount of EU aid to Greece

Brussels – The European Commission yesterday took its first step toward implementing a fourth Community Support Framework (CSFIV) of aid to the neediest countries and regions for infrastructure projects. CSFIV is going to start in 2006, when CSFIII officially terminates – although payments will still flow to EU members for a couple of years or so. If it manages to absorb all funds available, Greece will have implemented projects worth a total of 51 billion euros. This latter figure includes contributions from the EU, the State and private financing. The initial debate was more over the philosophical underpinnings of CSFIV than any concrete measures (and money). The focus for the debate was provided by a working paper by the Commission president himself, Romano Prodi. The main point of the paper was that «Target 1» regions (the neediest ones, which, until 2006, includes the whole of Greece) should continue to receive aid in a similar manner but that there should be a radical overhaul of the aid system to «Targets 2 and 3,» especially «Target 2.» This category includes areas hit by the closure of industries or generally hit by economic and social problems. The definition has been generous enough so far as to include, for example, areas of Paris off the tourist map. Cost-cutting seen Prodi’s report, according to sources, leaned heavily to the views of the «liberal» group of the Commission, spearheaded by Internal Market Commissioner Frits Bolkestein, a Dutch liberal, and Budget Commissioner Michaele Schreyer, a German Green. This group wants the current «non-productive» system of project financing to be overhauled by a much more targeted system of «investments» that would promote specific growth and competitiveness targets. Another factor that will affect the amounts handed over by CSFIV is that the system of reimbursements, used only in favor of the UK until now, will be extended to Germany and the Netherlands. This means that there will be a ceiling to their contributions to the common budget. As in the case of the Common Agricultural Policy (CAP), the Commission wants to cut the costs of regional aid, which, together with CAP, takes up 70 percent of the EU budget. Given that it can do no more to cut CAP costs until 2013, it will now shift its cost-cutting to regional aid. The dangers of upgrade These cuts, as we said before, will not affect Target 1 regions. however, some of Greece’s regions may find themselves upgraded out of Target 1 status by 2006, especially if the needs of the new members are taken into account. Once again, the debate will shape up like this: Germany, the Netherlands and the UK will call for the deepest cuts possible, while Spain and France, with the aid of southern countries, will seek to maintain aid at the same level. The final outcome? Who knows, but the debate is sure to be interesting.