TALLINN – The 30 percent own contribution requirement for EU-funded projects in the EU's next budget period will widen regional gaps, and to avoid this the Estonian state must start compensating small towns and rural regions for the own funding they provide under the projects, deputy chairman of the opposition Social Democratic Party (SDE) Lauri Laanemets says.
"Under the agreement between European leaders, Estonia will get 6.8 billion euros from the new European Union budget and the fund for restarting the economy, whereas the ratio of own contribution will rise from the present 15 percent to 30 percent," Laanemets said through spokespeople for SDE.
"This will reduce the capability of smaller and weaker municipalities to use Euro funding, as a result of which the already big differences in the development of the major cities and rural areas will grow," he said.
According to Laanemets, Estonia needs a new focus in the distribution of EU funding that concentrates on creating wellbeing and reducing peripherization, in addition to competitiveness. Estonia must be prepared, based on regional specifics and regional needs, to apply the 30 percent own contribution requirement in some cases, while paying a portion, such as 15 percent, from the state budget in other cases.
The same principle must apply to the fund for restarting the economy, money from which should not be distributed evenly across Estonia but used to reduce growing regional inequality, according to the opposition MP.
He said that devising the solution cannot be delayed, as the use of money under the new budget and the economic recovery facility will start already in 2021.
"Taking account of regional specifics definitely requires a public discussion and a political decision in order for Euro funding to be distributed more in favor of the periphery than has been the case to date," Laanemets said.
The MP pointed out that the Human Development Report on Estonia published at the beginning of this summer says that, in comparison with other countries of Europe, a location neutral, meaning mainly competitiveness-focused regional policy has been pursued in Estonia.
Without considering the actual capabilities of regions and their specifics, the distribution of EU funds rather has increased regional inequality. The doubling of the own contribution requirement would increase peripherization further, he added.