Wednesday, June 30, 2004

The troops are grumbling

A crisis meeting in Turin has been called by the leaders of the central and northern Italian regions to discuss how they will deal with expected cuts in EU structural funding. These will kick in from 2007 as a result of enlargement, which has lowered the average GDP to the extent that many of these regions will no longer qualify for the EU gravy train.

The meeting is being sponsored by the newspaper Il sole 24 Ore and will be opened by the president of the regional government of Piedmont Enzo Ghigo. "With the admission of Central and East European countries", says Mr Ghigo, "there is reason to suspect that funds allocated to Western states will be reduced. Some of the areas to which these funds have been destined so far are located in Northern and Central Italian regions".

Hinting at battles to come, however, he adds that "I don't believe there will no longer be EU funds for us after 2006, but we expect some transition to take place".

This is typical EU-style pork-barrel politics. The member states receiving funds will accept cuts, as long as the Commission coughs up with "transitional aid" to an equivalent value. The only trouble is that someone else (or some country) is going to have to fork out, and the traditional paymaster, Germany, has already indicated that it is not prepared to pay more.

As the negotiations for the "financial perspective" – or budget, as it is better known – get in to full swing next year, you can expect some very serious posturing, with the drama queens out in full force. What is going to be really interesting though is what happens when Italy, Spain, Greece and Ireland – to name but a few - finally take on board that there really isn't any more money in the pot.

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