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Study says richer nations also benefit from cohesion funds

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Published 06 March 2012

Germany benefits greatly from the EU's regional policy in Central and East European nations through increased commerce, says a study commissioned by Poland that also says French companies are benefiting.

Polish Regional Development Minister Elżbieta Bieńkowska presented the soon-to-be- published study that attempts to end disputes between rich and poor countries over structural funds.

​The two-year study by the Institute for Structural Research and the firm Raytech finds that cohesion policy in Central and Eastern Europe benefits Western companies. It claims that for every euro invested by France to finance regional policy in Poland, Hungary, Slovakia or the Czech Republic, there is a boost in French exports of 20 cents.

For Germany the benefits are even greater: the country has boosts in exports equal to twice what it spends on structural funds in these four countries.

French construction companies benefit from building sites co-financed by the EU. Between 2004 and 2009, the extra economic activity generated by regional policy in the Visegrád countries represented 5% of the French construction sector's exports, the study says.

Struggle over the budget

Wealthier countries, whose contributions to the EU budget are greater than what they receive  in European aid, have pushed to stop any growth to the community's budget after 2014. The European Commission's budget proposals for 2014-2020 would notably see a decline in spending relative to GDP. The French government, which has a strong preference for agricultural subsidies, has said it is ready to reduce regional spending.

Between 2007 and 2013 the four Central European countries should receive €130 billion from regional policy, of which over half will go to Poland. This represents a significant financial stake for these countries that are also keen to show the benefits to net contributors to the EU budget.

The start to the negotiations over the future of cohesion funds has been difficult, with one analyst saying they were in "pre-crisis mode". The EU Danish presidency has decided to focus its attention on discussions of the 2014-2020 budget, leaving it to its successor - Cyprus - to handle any structural fund reforms.

"Wealthy regions also have needs," said Bieńkowska, who added that she was surprised by the Danish government's leadership on the matter.

When Warsaw held the rotating presidency in the second half of 2011, it has sought to "first discuss the objectives of cohesion policy" in order to then provide it with the necessary budget. Copenhagen has made the opposite choice, a move Bieńkowska calls "a contradiction".

EurActiv.com
Background: 

​The European Commission presented on 29 June 2011 its proposals for the EU's next seven-year budget for 2014-2020 – the so-called Multi-Annual Financial Framework.

The Commission proposed raising the next budget to €1.025 billion, up from the current €976 billion. This represents a 4.8% increase, which is beyond the average 2% inflation recorded in the last decade.

The regional policy (or cohesion policy) of the European Union has the overall goal of promoting economic prosperity and social cohesion throughout the 27 members and their 271 regions.

Within the current financial framework (2007-2013), the budget for regional policy amounts to €347 billion, nearly one-third of the overall EU budget.

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