Spain: a tactical error? The European Commission has embarked on one of the most difficult and delicate issues that the EU will have to deal with in the coming years: that of Community funding of regions lagging behind in development, peripheral or isolated. The "second report on economic and social cohesion" covers more than the funding of the Structural Funds, but risks, by its very name, being perceived as a study, an analysis, whereas it is much more: it is at the same time a document of exceptional political and financial scope, as the Commissioner responsible, Michel Barnier, has placed on the table elements that will be at the centre of the next set of negotiations on the Union's future financial perspectives, valid for the period 2007-2013. Yet:
- the sheer size of the amounts at stake is impressive. Structural expenditure covers close to 35% of the Community budget; for the future, it is a question of some 45 billion euro a year.
- for the first time, a Commission document has been drawn up for "a Union of 27 members", i.e., based on the hypothesis of the twelve countries joining with which enlargement negotiations are already underway.
Indeed, negotiations began in Nice, when the majority rule was not introduced for structural policy due to Spain's refusal. Spain, the main beneficiary of structural funding until 2006, thus began its battle to conserve, as far as possible, its current advantages. Did it assess the risk properly? With the unanimity rule, any Member State will be able to block a distribution of credits that seem to it excessively favourable to another Member State, given the new situation created by enlargement. Are not sound negotiations, drawing on solidarity, preferable and, in the end, more effective than the veto, that remains at the disposal of all? Candidate countries that manage to join in 2004 will also have this right of veto…
Three groups of countries. With this report and with his address before the European Parliament on 31 January, Michel Barnier rejected the wait-and-see policy: "I'm not waiting for 2005 to speak the truth". Economic and social cohesion has progressed since the current policy was applied, in 1988: the disparities between Member States have lessened; the per capita income in the three least prosperous countries - Greece, Spain and Portugal - corresponded to 68% of the Community average in 1988, it stood at 79% in 1999 and all points towards it having further progressed last year. But the gap that has narrowed between the fifteen over the years is again to widen, and how!, with the future accessions. The Union's population and surface area will grow by a third, whereas its gross domestic product will only increase by 5%. According to the Commission's calculations, in eight of the expected twelve new members, average per capita income is 40% of the Community average, or half that of the three least prosperous countries of the present Union. In half a century of history, the Community has never known such disparities. The enlarged EU will be made up of three distinct groups:
- a first group made up of twelve of the current fifteen EU countries;
- a second group comprising Spain, Portugal and Greece, plus the Czech Republic, Slovenia, Cyprus and Malta, whose per capital income is around 80% of the Community average;
- a third group comprising the other eight candidate countries.
Calculations need rectifying? At first sight, the conclusion is clear: most of the EU's efforts will have to be targeted at the third group. These eight countries draw the EU's average income downwards, with as result that several regions in which the average income does not amount to 75% of the Community average (and, because of that, entering the list of regions "lagging behind"), will exceed this average by the automatic effect of the new accessions. And the EU's population considered as "lagging behind in development", who today receive most of the funding, will be cut by half. But within the current Member States there are "those close to poverty"; although the gap between countries has narrowed, the gap between regions has tended to widen. It is not by chance that the first debate in the European Parliament on this issue especially revolved around the need to continue to assist certain regions effectively (in the three least prosperous countries, but also in southern Italy and certain Eastern German Laender) and the requirement not to brutally cut off aid in regions that will be removed from the list.
We shall attempt to draw some conclusions from this impending revolution tomorrow. (F.R.)