logo
ENFRع
#

Latest news with #NikolausJ.Kurmayer

Cohesion crunch: Europe's regions brace for loss of catch-up funds
Cohesion crunch: Europe's regions brace for loss of catch-up funds

Euractiv

time4 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

Commission toys with massive €522 billion competitiveness budget
Commission toys with massive €522 billion competitiveness budget

Euractiv

time4 days ago

  • Business
  • Euractiv

Commission toys with massive €522 billion competitiveness budget

The European Commission is considering a huge new fund to boost Europe's economy worth up to €522 billion between 2028 and 2034, according to a document seen by Euractiv. On Wednesday the Commission is expected to present its proposal for the next seven-year budget cycle. The €522 billion would be split between a research programme, currently at €96 billion, and various smaller programmes not likely surpassing €50 billion. That leaves room for a possible European Competitiveness Fund of over €300 billion, unheard of in the EU. The document – which may change in last-minute negotiations overnight – suggests that the total size of the budget will be €1.717 trillion, or 1.23% of gross national income, the total income earned by a country's population and businesses. That is €369 billion more than a comparable number for the previous budget, but around €200 billion would likely go to paying back the EU's pandemic recovery fund loans. The Commission typically proposes a higher figure, which is then whittled down by spendthrift EU countries in years of painstaking negotiations. During the last cycle of negotiations that began in 2018, the Commission proposed 1.11% GNI and the final agreement landed at 1.05% of GNI in comparable terms. According to the leaked document, the budget proposal would pull all the EU's expenditure into just four pots. Most of the traditional spending would be subsumed into a fund called "Europe's social model and quality of life," worth €947 billion over seven years. The Global Europe fund, which controversially may also include development aid, would be worth €190 billion, and a budget for administration would be €107 billion. Nikolaus J. Kurmayer contributed reporting.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store