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Rich regions don’t want EU enlargement

The topic of EU enlargement is worrying the rich member states of the union. They assume that the admission of new members will result in a reduction of cohesion funds, but the European Commission has said that it is too early to talk about money, according to Euractiv.

EU Cohesion Policy accounts for more than a third of the total EU budget. It is the EU’s main instrument for helping poorer regions, although rich regions are also eligible for funding, but in smaller amounts.

For the period from 2021 to 2027, €426bn is allocated for EU cohesion policy, supplemented by €776bn from the recovery fund set up after the COVID-19 pandemic. However, amid discussions about the possible accession of financially weak countries such as Ukraine and Moldova, EU member states have expressed concern that this could mean less money for richer regions. Isolde Ries, head of the German delegation at the European Committee of the Regions (CoR), told Euractiv:

If more countries come in and the funds are not increased, then everyone gets less. While regions in richer countries could see their funding cut, “that’s not possible at all. “We do have richer states in Germany, but we also have a divide,” Ries said, adding that her own region, Saarland, was a “very poor state that cannot be equated with a region like Munich or Hamburg or Frankfurt.

While Hamburg’s GDP per capita is 191 per cent of the EU average, Saarland’s GDP per capita is still 102 per cent of the EU average, placing it in the second richest category according to Eurostat.

At a meeting in Brussels this week, regional representatives from other richer countries also voiced their concerns. Frida Nilsson, CoR member from Sweden, said at a panel discussion on Tuesday (10 October):

It’s going to be difficult. Funding from cohesion policy is important for the cities and regions all over Europe.

Emma Blain, a member of the CoR from Ireland, agreed:

When people are asked to contribute more and to get less, there is always going to be an element of discontent. We need to be prepared for that,” she said, adding that Irish politicians should communicate “what we get and have gotten over our 50 years of (EU) membership”.

Regional leaders are almost unanimous that the fund should be allocated to all regions. The latest flash Eurobarometer on Cohesion Policy Awareness also shows that 63% of citizens want the EU to invest in all its regions, regardless of their wealth. Cécile Gallien, president of the French delegation at the CoR, told Euractiv:

The European Union must continue to help the regions of France (…) we need to bring more European resources.

Gallienne believes that money should be allocated to all rural areas of the EU to preserve nature, fund the energy transition and stimulate economic activity.

Poorer EU member states are in solidarity with this view. Hungary‘s regional representative to the EU, Kata Tütto, states that member states dependent on cohesion funds will not accept redistribution and additional funds should be sought to finance the new countries’ cohesion funds. She also says that it would be unfair to cut funds from member states. She said, arguing that enlargement must be ‘mutually beneficial’ for everyone:

I don’t think Hungary and other countries would say yes to that [less funding] because we opened up our markets, there has been a huge brain drain in the past.

As enlargement negotiations become more serious, an internal EU study seen by Euractiv has revealed the impact potential accession could have on EU funds such as cohesion policy and the Common Agricultural Policy (CAP).

The potential accession of agricultural country Ukraine to the bloc has already sparked heated discussions about future CAP funding, with calls to move away from farm-size-based payments to a more targeted approach. If Ukraine joins the EU, it may receive about €61bn over seven years, leaving other countries with less funding.

Asked by Euractiv about possible funding cuts, EU Commissioner for Cohesion and Reforms, Elisa Ferreira, pushed the brakes, arguing that there were other, more urgent debates about the future of cohesion policy. Ferreira admitted:

There are so many elements that will determine this enlargement that, for the time being, I think this should not take the place of a needed discussion. And the needed discussion is, in fact, are we doing everything we can with the available instruments and the policy we have?

EU diplomats believe that the commissioned study will forecast current financial realities rather than those that candidate countries will be prepared for. One EU diplomat said:

The internal study surely an idea of what we will be up against – it’s good to run the numbers because it makes us realise now what we need to talk about in the reform debate,” but he added this should rather be seen as an “orientation paper only”.

A second EU diplomat noted:

The European Commission is doing navel-gazing with the paper that might reflect the current state of play, but realistically, when those countries are ready to join, some of them might be actually in a better situation than some of our current member states.

Some regional leaders point to the mutual benefits of expansion and are cautious about starting monetary negotiations. CoR President Vasco Cordeiro said:

It’s not about those who are going to receive and those who may stop receiving or receive a little less because it’s in everyone’s interest [enlargement].

Alin-Adrian Nica, head of the Romanian delegation, told Euractiv:

I don’t think we should think so selfishly. The enlargement of the EU is a must,” he said, adding that this could also boost the economy. “I don’t see a threat; I only see opportunities even for the less developed regions presently.”

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