How to spend it: EU regional aid
Few Greeks would be too finicky about Europeans bearing gifts. Despite scientific research questioning the good of European Union regional aid programs, the largess of the people in Brussels has always been a powerful magnet for potential candidates and one of the strongest cards of Euro-enthusiasts at home. The typical glee over the transforming effect of EU checks was on display this weekend on the Aegean island of Andros, as politicians and pundits met to discuss the past and future of «structural» and «cohesion» funds (as they are known in Brussels’ jargon). «Greece has greatly benefited over the past 25 years,» the EU’s acting head in Athens, Ierotheos Papadopoulos, told a well-attended conference organized by Euronem, a non-profit group seeking to promote public awareness of EU-related affairs. In terms of figures, the benefits are indisputable. According to EU data, Greece has so far received some 70 billion euros in structural funds. But the impact on the ground is much harder to measure. The European Commission claims that regional aid has narrowed disparities in income and employment across the Union. According to the fourth report on economic and social cohesion that was adopted by the Commission last month, European cohesion programs between 2000 and 2006 helped raise Greece’s gross domestic product by 2.8 percent. By 2015, GDP in the main recipient states is projected to be 5 to 10 percent higher than without the EU handouts – an intervention that is also expected to result in an extra 2 million jobs. Wasteful habits Skeptics, however, argue that the rise in income per person in Greece, Spain and Portugal over the past 10 years hardly proves the case for regional aid. Structural aid, as many Greek officials admit off the record, is counterproductive for it results in corruption, economic dependence, mismanagement (allocation of funds lies with the national governments) and market distortion. A more reliable statistic, critics of the EU handouts say, is the yawning gap between the richer and poorer regions of a country – and that figure demonstrates that barrel-loads of EU money have in most cases made no difference, or worse, have left needy regions worse off than they were before. Again, defenders of structural aid argue that depressed regions would be in worse shape were it not for Brussels’s generosity. «Greece’s more depressed regions no longer rank among Europe’s poorest,» said Yiannis Kokkalas, deputy director of the European Parliament office in Athens. Thanks to a series of EU-subsidized infrastructure projects, including the new airport, the Athens metro line, port improvements and various highways across the country, Euro-skepticism in Greece remains at relatively low levels. But that could change as the entry of the far poorer East European countries is gradually turning the tap off on that EU money. «The funds are a sign of European solidarity,» Papadopoulos stressed. But all the platitudes about European solidarity would soon be missed if Greeks were the ones to foot the bill. Regional support programs, infrastructure projects in particular, absorb one-third of the EU budget. The problem is that about half of that money goes into the pockets of the wealthier lot. Worse, only a small segment of the budget is invested in promoting the goals of the much-hyped Lisbon strategy of 2000 which was supposed to make Europe «the most competitive and dynamic knowledge-based economy in the world» by 2010. Lisbon blues According to Papadopoulos, the financial package for 2007-2013 agreed upon in December 2005 foresaw a 200-billion-euro investment in Lisbon agenda-related projects, such as innovation and research and development (R&D). Critics say that amount is too small to reverse Europe’s waning performance in these sectors vis-a-vis global competitors such as the United States, Japan and Korea. Emerging challenges like increased global competition, environmental strain, soaring energy prices and demographic imbalances threaten to drag the bloc further down unless painful reform measures are taken. In a sign of hope, the EU overcame perennial French objections and in 2008 will, for the first time, spend more on growth and employment than agriculture. After pressure from Britain, it was agreed that the budget be subject to review next year. But that’s not the only unfinished business. For PASOK’s European Deputy Stavros Lambrinidis, reviving the European Constitution, currently in limbo after its massive rejection in French and Dutch referendums, is necessary to move the EU forward. «The EU can no longer fit into the suit it made 50 years ago,» he said.
