Commission increases cohesion funding for south, slashes support for Eastern Europe

EPA-EFE/JULIEN WARNAND

European Union flags fly near the seat of the European Commission at the Berlaymont building in Brussels, Belgium, 05 May 2018.

Commission increases cohesion funding for south, slashes support for Eastern Europe


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The European Commission on May 29 presented its proposal to increase spending to the Member States most affected by the ongoing economic and migrant crisis and in areas where youth unemployment remains high,  but, critically, the EU’s poorer regions in Eastern Europe will see their funds drastically cut.

According to the EU executive’s plan, steep cuts in cohesion support for Poland and Hungary – two countries that have been at loggerheads with Brussels over issues that include rule-of-law and human rights – will see their EU funding cut by nearly 25% in 2021-2027.  Other Eastern European nations that have relied on EU funds to fuel strong economic growth in recent years will also see their subsidies cut due to the fact that their economies have grown faster in recent years, while also overcoming the global financial crisis better than other EU Member States.

“This is the natural consequence of getting richer is a gradual decrease in cohesion policy support. This is a fact and, in the end, is a good sign,” the EU Commissioner for Regional Policy Corina Crețu said from Strasbourg.

The first Multi-Annual Financial Framework (MFF) budget after Brexit will increase to €1.1 trillion as the Commission shifts from supporting the countries of the former Eastern Bloc to positions itself to meet  goals first articulated in the 2014-2020 budget, which include funds for innovative and smart economic transformation; a greener, low-carbon Europe; mobile and regional ICT connectivity; implementing the European Pillar of Social Rights; as well as sustainable and integrated development of urban, rural, and coastal areas through local initiatives.

A total of €72.7 billion overall draft budget of €373 billion would be allocated to Poland, the highest share among EU states. But that represents a reduction from the €82.1 billion committed to Warsaw in the current seven-year budget period. Hungary would also see its regional funds drop to €20.2 billion from €23 billion.

Angered by the new proposal Polish Prime Minister Mateusz Morawiecki said his government would oppose the proposal. Poland’s neighbour Lithuania, which would also see a big cut, said it was “not acceptable”.

For the 2021-2027 MFF, the Commission altered the methodology of calculation to help boost funding for the Member States that still have sky-high unemployment rates, including Greece, Italy, and Spain. European Union funds for Italy’s poorest regions would increase to €43.4 billion euros from €35.1 billion. Spain will see an increase to €38.3 billion from €31.2 billion and Greece to €21.6 billion from €17.3 billion.

The Commission is also keen to actively support both Italy and Greece – who equally share the burden of being both the entry points and hosts for most migrants flowing into the EU from the Middle East, Central Asia, and Africa – a fact that has not gone unnoticed by the Commission who has had to battle with right-wing populist governments in Eastern European, led by Poland and Hungary, who have steadfastly refused to host refugees under an EU relocation plan.

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