Latest news with #KataTüttő
Euronews
3 days ago
- Business
- Euronews
Will the EU budget turn cohesion policy into regional 'Hunger Games'?
The EU's proposed budget for 2028 until 2034 runs the risk of turning its cohesion policy into a competition for funding, as it would merge it with other major spending areas. There are now concerns over reduced local control and lack of support for disadvantaged regions. For decades, cohesion funds have helped reduce regional disparities across the EU, supporting everything from road construction and hospital upgrades to unemployment, training programmes and green initiatives. As one of the EU's most tangible policy tools, cohesion funding has delivered visible results in citizens' daily lives — but that may be about to change. This week, the European Commission unveiled its proposed EU long-term budget — the Multiannual Financial Framework (MFF) for 2028–2034 — which could fundamentally reshape how cohesion policy works, while also potentially marking the end of the system as we know it. Under the new proposal, cohesion policy would be absorbed into a single mega-fund, combining it with other major spending areas such as agriculture, rural development, migration and border control. The stated aim? Simplification. But critics warn this approach could ignite intense competition among regions, sectors and interest groups. 'Putting agriculture, migration, border control, and cohesion policy into one container will turn it into a 'Hunger Games',' said Kata Tüttő, President of the European Committee of the Regions, in an interview with Euronews. She warned that the new structure risks pitting farmers against city mayors, and those in need of agricultural support with those seeking unemployment support, for example. Fears of fragmentation and lost priorities Out of the total proposed €2 trillion budget, €865 billion would be allocated to this consolidated fund, which merges long-standing programs like the EU's Common Agricultural Policy, cohesion funds (accounting for two-thirds of the current EU budget) and the European Social Fund, which supports employment and education. The competition between different lines in the single fund has raised alarm bells among regional leaders, who fear cohesion funding may be deprioritised in the budget negotiations. According to the Commission, €450 billion of the merged fund would still go toward regional development, fisheries and rural areas. Additionally, the proposal includes a minimum allocation of €218 billion specifically earmarked for less developed regions, one of the three traditional pillars of cohesion funding — with the others being developing and developed regions. While this minimum allocation offers a safeguard for the EU's most disadvantaged areas, the remaining categories could face fluctuating support, as they are not ringfenced under the new plan. Centralisation vs. local engagement Beyond the battle for funding, critics have also voiced concerns regarding governance. The proposed delivery model marks a shift away from the EU's tradition of shared management with local and regional authorities. Tüttő sees the move as a clear case of centralisation: 'We will be kicked out from the design, the management and the creation parts of the policy. We will just become implementers, fighting for money,' she said. With many aspects of the proposal still unclear, the coming months will be critical. Local governments across the EU are calling for more involvement in the process — and potentially a rethinking of the proposal before the budget is finalised. 'This is a proposal from the European Commission — it is not the final step, but a starting point,' said Raffaele Fitto, Executive Vice-President for cohesion, while presenting the budget. He added, however, that the EU budget needs more flexibility to respond to evolving challenges.
Euractiv
5 days ago
- Business
- Euractiv
Cohesion crunch: Europe's regions brace for loss of catch-up funds
Commission plan sidelines regions from EU funding decisions. Euractiv is part of the Trust Project Nikolaus J. Kurmayer Euractiv Jul 16, 2025 06:00 4 min. read News Based on facts, either observed and verified directly by the reporter, or reported and verified from knowledgeable sources. Regional authorities are set to lose control over billions in EU funds, as the European Commission is set to dismantle a decade-old policy that gave them a direct role in shaping how cohesion money is spent. After receiving a third of the EU budget for decades, regional chiefs are in for a rough awakening. On Wednesday, the Commission will unveil the radical overhaul of the €300 billion-plus cohesion policy, originally designed to help poorer regions catch up. 'From behind the smoke of simplification and efficiency, a 'Big Ugly Bill' will emerge,' warned Kata Tüttő, the president of the EU's regional representation body, in early July. According to a draft law seen by Euractiv , t he policy will be reshaped in four ways that 'increasingly blur its fundamental principles,' Sabrina Repp, an S&D MEP from Germany who focuses on the catch-up funds, told reporters on Tuesday. What could change Capitals in charge. Regional authorities, currently allowed to negotiate directly with Brussels, would be de facto cut out of the decision-making process. Instead, regions would pitch projects to their respective national capital. Country-first allocations. Rather than distributing funds to the EU's 244 regions based on how far they lag behind the bloc's average, the catch-up funds will be assigned to countries based on their GDP average. Southern Italian regions, for example, are economically poorer than their northern counterparts, but they would receive less under the new rules because of Italy's overall GDP. New strategic priorities. An April review of the catch-up funds, which had hardly been spent up to that point, introduced a host of new priorities: defence, affordable housing, water resilience, energy, and Eastern border countries and cities – all of which compete with the original goal of boosting laggard regions. Big firms over SMEs. The review also stressed the need to stop supporting just small-and medium-sized enterprises (SMEs) in lieu of bolstering larger firms. "With the cake staying the same size, big firms stand to benefit at the expense of SMEs," said a Parliament source, speaking candidly, calling the move a major shift. Big firms are more competitive, the Commission's thinking goes. 'This mid-term review marked the beginning of a fundamental restructuring of cohesion policy,' explained Repp. A coalition of majors and cities backing the policy, gathered under the banner of the 'Cohesion Alliance' are already looking to 2026, having failed to avert the Wednesday proposal that one member described as 'doomsday." "We are mobilised to fight for a strong Cohesion Policy after 2027,' reads an email seen by Euractiv addressed to 'Cohesion advocates' all over Europe. Cohesion policy problems Not everyone is expected to mourn the possible dismantling of cohesion policy. The Germans, who contribute the biggest share of the EU's seven-year budget, have long considered an overhaul inevitable . As it stands, the policy " is clearly overfunded and ineffective in many recipient regions with weak institutions, like southern Europe,' said Friedrich Heinemann, an analyst at the Centre for European Economic Research (ZEW). For Heinemann, the very premise of the policy is flawed. 'The EU's promise of catching up is primarily based on the single market,' he explained, suggesting Eastern Europe's economic gains were driven not by cohesion transfers but by "competitive" integration into the bloc's internal market. A 2023 study also shows that while cohesion funds do boost growth, most of the money goes to the rich in poor regions, widening inequality gaps. Thomas Schwab, a researcher at the Bertelsmann foundation, fears that the Commission's proposal which 'focuses only on the wealthiest regions' will inevitably 'weaken the core of the European idea.' 'What is currently being presented as 'flexibilisation' often means in practice a watering down and thus a weakening of this essential pillar of the EU.' (mm) Euractiv is part of the Trust Project
Euractiv
02-07-2025
- Business
- Euractiv
Resistance rallies against EU's €392 billion regional funding overhaul
Fourteen countries have teamed up to defend a "distinct and robust" pot of EU cash for regional development, just as the European Commission prepares to unveil its proposal for the next long-term budget. In a non-paper seen by Euractiv, the group – made up of Bulgaria, Czechia, Greece, Spain, Croatia, Hungary, Italy, Lithuania, Latvia, Poland, Portugal, Romania, Slovenia, and Slovakia – calls for cohesion funding to remain a separate pot and not to merge it into a potential 'megafund'. The group joins a growing chorus of opponents of a planned root-and-branch overhaul of the way the EU's €392 billion cohesion fund is structured and disbursed, following a letter raising similar concerns by 149 regional governments last month. "When 14 national governments, 149 regions and hundreds of local leaders and key players share deep concerns for the very logic behind the shaping of the proposal for new EU budget – it is time to start a meaningful conversation," said Kata Tüttő, the president of the EU's Committee of the Regions, an assembly of local and regional government representatives. The Commission will present its proposed overhaul of its next seven-year budget, known as the Multiannual Financial Framework (MFF) on 16 July. The countries, many of which are among the largest recipient of those funds, insist the next MFF must preserve a region-based allocation model that reflects differing development levels across the bloc. Critics have previously argued that doing away with a stand-alone cohesion fund would weaken one of the EU's most powerful tools for balancing disparities between regions, and could undermine its core political project. Neither France or Germany, the two largest contributors to the EU budget, are among the signatories. Germany supports the Commission's reform plans. The Commission wants national authorities to be more involved in administering EU cash, at the expense of regional bodies, and could set funding levels based on national rather than regional GDP. The group refers back to a similar February statement signed by seventeen countries, though this time, the line-up has shifted: Estonia, Cyprus, and Malta are no longer on board, while Poland has joined. (om)
