Future EU regional policy – less funding for East Germany?

The German federal state of Brandenburg fears cuts in the next EU regional budget. [EPA/Ralf Hirschberger]

The EU budget for 2020 onward is not yet fixed but the German federal states already fear cuts in the funding for promotion of local projects. East Germany is especially concerned – a lot is at stake because many regions benefit greatly from EU subsidies. EURACTIV Germany reports.

More than 2,500 employees and 9,000 students roam around the Potsdam-Golm Science Park, located in the Berlin-Brandenburg metropolitan area, which is home to several research institutes and faculties.

The large-scale construction project was subsidised with around €60 million from EU funds – an example of one out of numerous projects in the state of Brandenburg, one of the German federal states that benefits the most from the European regional policy.

In the current funding period of 2014-2020, the country has received more than €1,2 billion from the European Social Fund (ESF) and the Regional Development Fund (RDF).

Cuts to regional funding will be modest, assures EU budget chief

There are no guarantees that EU Cohesion funds will not be cut in the next seven-year budget but the cuts will be “less than 10%, probably near 5%”, the EU’s Budget commissioner said on Thursday (22 March).

Whether this will remain so after 2020 is unclear. With the departure of Britain as a contributor, the next EU budget will be smaller – and the European cohesion policy funding is the second largest EU cost.

“If the British go, we have a problem, a gap that is about €12 or €13 billion per year. This is why cuts are necessary,” EU budget commissioner Günther Oettinger told the German television SWR. Estimates suggest a reduction in the rural development of around five to ten percent.

Regions could lose their funding status

The “new” federal states [the five re-established former East German states that acceded upon the German reunification] are particularly heavily dependent on the regional funds. There, many regions are “highly eligible” for funding.

The annual report of the Federal German Government on the state of German Unity shows that the economic gap between east and west is still significant. Accordingly, the GDP per capita in Eastern Germany is only 73.2% of that in Western Germany.

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In the current funding period, the state of Brandenburg has €845,6 million from the ERDF  available, which it can invest in research, support for small and medium-sized enterprises, and in carbon dioxide reduction.

Like many others, the state does not want to accept cuts from the structural fund. When the budget is restructured, the state could end up being “less eligible”.

“It is unacceptable that due to a statistical effect – caused by Brexit – Brandenburg will check out of the funding for transitional regions because Brexit does not make our tasks smaller,” said Brandenburg’s Minister-President Dietmar Woidke in February, in response to the Commission.

The EU executive is expected to present its proposal for the next multiannual financial framework (MFF) on 2 May.

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