ECONOMY

Commission proposal on funds for CSFIV seen to favor Greece

The European Commission announced yesterday, as expected, that four of Greece’s regions – Attica, Central Greece, western Macedonia and the southern Aegean – will have too high an average income to be included among the «Target 1» regions which are receive the bulk of funds available from the Community Support Framework (CSF) programs. However, in a decision that has already given rise to controversy, the Commission decided to propose that the bulk of aid under CSFIV be distributed among current members – mainly Greece, Portugal and Spain – rather than the even poorer Eastern European countries that will join on May 1. The spending plans covering 2007 to 2013 would see only 41.7 percent of a projected 336 billion euros in EU handouts go to the new members, while the current club of 15 countries would get a 51.7 percent share. «While most of the poorest regions are in the new member states, we still need to continue to help the regions in the 15 where the process of catching up is incomplete,» Michel Barnier, the EU’s commissioner responsible for regional policy, said. The proposal is expected to face a nasty ride as member governments and the new ones which join May 1 start debating the guidelines in the months ahead and any member government can veto the plans. Moreover, Barnier recommended that regions, such as Greece’s above-mentioned four, which will become too rich for major aid, be allowed «temporarily» to continue to enjoy such aid. For Greece, which can expect to receive upward of 26 billion euros from CSF III – the whole program, including state and private sector contributions involves programs worth 51 billion euros – this proposal, if adopted, would be a godsend. It was not clear when the temporary extension would be phased out, but Barnier said a further review of the rules would be taken in 2005, when EU governments have to agree on the new spending plans. The proposal suggests spending some 174 billion euros in the current 15-nation bloc, while the 10 new members, including Poland, Hungary, Estonia, Latvia, Czech Republic, Lithuania, Slovenia, Slovakia, Malta and Cyprus would get only 140 billion. This has angered countries like Germany, France, Britain and the Netherlands, all of which are calling for a slimmer EU budget in the years ahead as they battle overspending and slow economic growth at home. In a first reaction, the German Finance Ministry said in Berlin «there were considerable doubts» that the spending plans would match with member state demands on the budget. The Commission and the big budget contributors are also locked in a battle over the size of the overall EU budget, which the Commission wants to increase. Poorer current members like Greece, Portugal and Spain are backing the Commission proposal and are vehemently against losing out on the handouts they have enjoyed since joining in the 1980s. The importance of the Commission’s announcement was underscored by the fact that Anna Diamantopoulou, the Social Affairs Commissioner who has taken an unpaid leave to campaign in the March 7 national elections with the ruling Socialists, interrupted her campaign to be in Brussels. Some people, however, are not overoptimistic about Greece getting a big share of CSFIV after all the haggling is done. «The margin for a ‘national success’ through the negotiations is limited,» said New Democracy Euro MP Costis Hadjidakis. (Kathimerini, AP)