17/10/23View in Browser

The cash dispenser that needs repair

By Jonathan Packroff | @Jonpackroff

The EU’s cohesion policy accounts for the biggest chunk of its budget, yet it is distributed through back-door negotiations, far away from public attention. For transparency’s sake, this needs to change – especially as new, less-developed countries will still join the bloc.

Manfred Weber, leader of the European People’s Party (EPP) and one of the most senior politicians of the Brussels bubble, once famously warned against seeing the EU as a mere “cash dispenser”.

Yet last week, a group met in Brussels for an exercise close to this way of thinking.

The Committee of the Regions and the European Commission held its annual “EU Regions Week”. On the agenda was an urgently needed reform of the EU’s “cohesion” policy, its main redistribution instrument from richer to poorer member states.

The case for redistributing money from rich countries like Germany, Denmark, and the Netherlands to the less wealthy such as Romania and Slovakia, is strong.

Rich countries have significantly benefitted from past EU enlargement as their companies could use Eastern Europe as both new export markets and an “extended workbench” with substantially lower labour costs.

Moreover, Eastern European migrant workers have taken many of the lower-wage jobs: Without them, the medical and care sector in countries like Germany would have collapsed long ago.

As new, even poorer countries could join the bloc, we may observe a similar pattern. Thus, it is only fair for them to expect money from the cohesion fund once their membership is a done deal.

However, this will also necessitate reforming how the EU machinery dispenses its money. 

As with the bloc’s agricultural subsidies, where the prospect of agricultural giant Ukraine joining has already sparked a debate about moving away from absurd cash-per-hectare payments, this should be more than welcome.

The EU’s cohesion policy needs reform – for several reasons.

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Photo of the day

Afghan people wait to cross the border into Afghanistan, as they voluntarily depart for their homeland, with the support of the UNHCR, following Pakistan's order for all illegal migrants to leave the country at the Pakistan-Afghanistan border in Chaman, Pakistan, 17 October 2023. Pakistani government ordered all immigrants, including 1.73 million Afghans living illegally, to leave the country by the end of the month or face expulsion after a surge in militant attacks, largely blamed on Afghan militants. EPA-EFE/AKHTER GULFAM

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Look out for…

  • European Parliament plenary session Monday-Thursday.
  • Transport, Telecommunications and Energy Council (Energy) Tuesday-Wednesday.
  • Economic and Financial Affairs Council Tuesday-Wednesday.

Views are the author’s

[Edited by Zoran Radosavljevic/Nathalie Weatherald]

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