Council of European Municipalities and Regions (CEMR)
European section of United Cities and Local Governments


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Cohesion policy

EU budget - 19.12.2005

EU's financial perspective: No to a 'à la carte" cohesion policy
Europe's municipalities and regions welcome the fact that the EU has now a budget for the 2007-2013 period, but they will be disappointed by the agreement on cohesion policy.
 
The Council of European Municipalities and Regions (CEMR) had urged EU leaders to agree now on the budget of the Union since time is running out to prepare the 2007-2013 structural funds. The good news that an agreement on the budget was hammered out is tempered by the reduced amount set aside for cohesion policy.
 
CEMR had called for a funding of no less than 0.46% of Europe's Gross National Income (GNI), whereas the agreement reached in Brussels allocates only 0.35% of the GNI. There will be a shortfall of several tens of millions of euros for cohesion policy projects.
 
It is also worrying to see that the agreement on the future budget of cohesion policy includes separate provisions for specific regions from specific member states. While CEMR welcomes the fact that the EU's poorest regions will benefit from substantial aid, these individual deals go against the essence and the basic principles of the EU itself; instead we face the prospect of some 'à la carte" cohesion policy where each member state fights for its own turf rather than a group of states working together towards a harmonious development of all regions.
 
CEMR also welcomes the fact that cohesion countries whose GDP is less than 85% of the EU average will have three years to spend funds allocated in their national operational programmes rather than two; it should make planning easier while helping them invest in longer-term projects.
 
Finally, CEMR welcomes the news that non-reimbursable VAT (mainly local and regional governments) will be eligible expenditure for cohesion countries. The calculation of the co-financement of cohesion policy projects by the EU will include the VAT paid by local and regional governments to contractors on these projects. This means that projects will cost less to municipalities and regions.
 
The 2007-2013 financial perspectives as agreed at the 16 December Brussels summit
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