EU funds-related Baltic controversies in Brussels

BRUSSELS - On Oct. 10-13, the Open Days, the ninth annual forum of almost 6,000 politicians, officials, experts, and researchers from all around Europe to discuss the EU’s Cohesion Policy, was held in Brussels. The Open Days 2011 comprised some 100 workshops and debates, which were mostly concentrated on the EU’s budget for the cohesion policy of 2014-2020. “It is the biggest forum on regional policy that we have on this planet,” European Parliament President Jerzy Buzek said at the opening session of the Open Days on Oct. 10. The Baltic States-related controversies were also heard during the world’s biggest forum on regional cooperation.

On Oct. 6, the prime ministers of Lithuania, Latvia, Estonia and Hungary sent a joint letter to the EU heads to express their disagreement with the European Commission-proposed plan to lower the EU member states’ GDP-related cap on receiving cohesion policy funding from the EU’s structural funds: from 2007-2013, the EU funding could not exceed 3.8 percent of an EU member state’s GDP, while in 2014-2020, according to the European Commission’s recent proposal, this cap will be lowered to 2.5 percent of a funding-receiving EU member state’s GDP. It is a serious blow to such countries as Lithuania, Latvia, Estonia and Hungary, where economies shrank significantly during the recent crisis. For example, some 4.3 billion euros were available to Latvia from 2007-2013, while this sum will be lower by 1 billion euros from 2014-2020 if the European Commission’s plans will not be changed. Latvian members of the European Parliament, such as Sandra Kalniete, are especially vocal in calling for a united pan-Baltic stance on this issue.

“The final agreements on the budget will be made during the Danish and Cyprus presidency [i.e. in 2012],” Elzbieta Bienkowska, Polish minister for regional development, said at the Open Days’ opening session in the European Parliament. Poland holds the EU presidency in the second half of this year.

A fierce battle over the EU budget is envisaged during the coming months. “We are living in an especially difficult moment for the EU,” European Commission President Jose Manuel Barroso said at the Open Days, pointing to the necessity to deal with the financial problems of Greece. The introduction of EU funding for so-called “regions in transition,” which have a per capita GDP between 75 percent and 90 percent of the EU average and which are situated mostly in Western Europe, in the cohesion policy budget of 2014-2020, is also the reason for lowering funding for ‘new’ EU states.

Johannes Hahn, EU Commissioner for Regional Policy, defended the European Commission’s proposal on lowering the EU funding cap to 2.5 percent of the money-receiving EU member state’s GDP during his joint press conference with Mercedes Bresso, president of the Committee of the Regions, in Brussels on Oct. 10. “We try to treat all the member states equally. This is why we proposed the cap, to find a balance between contributors and receivers,” Hahn said. He added that otherwise the share of EU funding (which exists mostly due to donations from richer EU countries, although each EU country pays a 1-2 percent share of its GDP to the EU budget) would “increase tremendously” in the national budgets of some EU states.
Bresso emphasized that EU funding already contributed significantly for public investment in the Baltics. “Whatever happens in the Baltics, you see results on the ground,” she said.

Indeed, the Balts, especially Lithuanians, can be very creative in using EU funds. On Oct. 12, the Lithuanian representatives in the Committee of the Regions, together with their colleagues from Austria, Sweden and other countries, organized a workshop in Brussels on cross-border cooperation. The EU leaves health care matters to the responsibility of member states. Regardless, the EU funding can be available for this sphere via programs on cross-border cooperation, and Lithuania successfully uses EU funds for the modernization of health care in Lithuanian regions bordering with other countries. Gintaras Skamarocius, director of the Marijampole office of the Lithuanian-Polish euroregion Nemunas, pointed to the EU co-funded on-going project “The improvement of emergency services through cooperation of medical institutions in the cross-border area,” with a budget of 4.5 million euros.

From 2012-2013, this project on cooperation between Lithuanian and Polish emergency services will result in 1,983 square meters of health care institutions’ renovated premises and 244 units of purchased equipment on both sides of the Lithuanian-Polish border. Skamarocius also spoke about similar EU co-financed Russian-Lithuanian-Polish and Lithuanian-Belarusian projects, which will boost cross-border cooperation of hospitals in these neighboring countries.

Although CAP, EU jargon for the abbreviation of the Common Agricultural Policy, is not a part of the EU’s cohesion policy, some 100 representatives of Lithuanian, Latvian and Estonian farmers took the opportunity of the Open Days forum to demonstrate in front of the central offices of the European Parliament and European Commission in Brussels on Oct. 12, demanding equal farming conditions. Another pretext for the protest was the public presentation of plans on CAP, by Dacian Colos, EU Commissioner of Agriculture, on the same day in Brussels. Latvian President Andris Berzins joined the protest demonstration in Brussels. Lithuanian MEPs Justas Vincas Paleckis, Zigmantas Balcytis, Rolandas Paksas, Radvile Morkunaite, Juozas Imbrasas, Vilija Blinkeviciute and other Brussels-based Balts also took part in the protest. The Balts, carrying their national flags and posters in English, protested against unequal subsidies for farmers in older EU member states and member states which joined the EU in 2004. The subsidies from the EU budget for the Baltic farmers are 2.5 times lower than for the farmers of older EU member states. It distorts competition in the EU’s single market, according to Baltic farmers.

When the Baltic States joined the EU, this inequality was explained by old EU member states as a temporary transitional measure, but now the total equalizing of agricultural subsidies is envisaged only in 2028. The total equalizing of subsidies for agriculture in all EU member states was unofficially scheduled for 2013, when Lithuania was negotiating its EU entry in the early 2000s, according to Klaudijus Maniokas, chairman of the board of Lithuania’s private consulting firm ESTEP and a former negotiator for Lithuania in the EU entry talks.

“CAP remains a welfare scheme for the wealthy,” reads the headline of the Oct. 9-15 issue of the Brussels-based English-language newspaper New Europe. Another Brussels-based English-language newspaper, European Voice, in its editorial in the Oct. 6 issue, also expressed a similar opinion demonstrating support for the EU’s cohesion policy, but described the funding for the EU’s agricultural sector as a controversial policy which “made wealthy farmers wealthier.”

Of the current EU budget (864.3 billion euros for the period 2007–2013), approximately 45 percent goes to the Common Agricultural Policy (CAP), 35 percent to structural funds (the EU’s supra-national regional policy) and seven percent each to EU administration, aid to non-EU countries and a diverse range of other policies.