Brussels, 05/02/2013 (Agence Europe) - With two days to go to the second round of discussions on the 2014-2020 Multiannual Financial Framework (MFF), a report by Roland Berger Strategy Consultants (RBSC) warns against reducing cohesion policy funds to Greece. It argues that if the amount of funding is unchanged, the risk of payment default by Greece would be reduced and the chances of a successful structural adjustment programme would be increased.
According to the Greek prime minister, Antonis Samaras, the initial proposal sets the allocation for his country at €11.2 billion and the compromise proposal from the president of the European Council, Herman Van Rompuy, sets it at around €14 billion - even in the best scenario, a significant reduction in to the €20.4 billion in spending for the 2007-2013 period, appears to becoming more likely to Greece.
According to RBSC, a reduction in cohesion funds to Greece would reduce job creation by 64,000 units. Without sufficient growth, Greece may fail to bring its debt on to a viable trajectory to repay its debts in time, warns the organisation. It also said that funding of €20.4 billion would allow Greek debt to be cut by 3.8-5.2 percentage points by 2020.
RBSC is also critical of the methodology (based on the economic over the 2007-2009 period) used to calculate what cohesion funds should be allocated. The recession gripping Greece since 2010 is therefore not being taken into account. This is an argument that has already been put forward by Samaras during November's European Summit on the MFF (see EUROPE 10737). At the time, he stated that “we hope that our envelope will be bigger under the terms of the negotiations” than the initial proposal, “but nothing is in the bag yet”. European trade unions also intend to exert their whole weight to defend structural funds for co-funding social policies. (EL/transl.fl)