Visegrad insists EU funds must not be held hostage

By bne IntelliNews June 28, 2017

EU funds should not be held hostage to politics, a senior Slovak minister insisted on June 27 as the European Commission debates placing conditions on cohesion funding.

The idea of limiting funds made available to member states that do not follow EU values has been mooted more and more often as Brussels seeks to fight populist tendencies without trying to force through formal processes that would demand unanimous agreement in the EU Council. The Visegrad states are at the forefront of the debate due to their refusal to agree with migrant quotas or withdraw measures that Brussels says are weakening the rule of law or democracy.

The Czech Republic, Hungary, Poland and Slovakia have seen their economies boosted in recent years by billions in EU funds. All of the Visegrad states have insisted that they will not give in to "blackmail" linking EU funds with accepting refugees. All of the Visegrad countries are heavily dependent on structural funds for economic growth. At around €90bn, Poland is the largest recipient in the EU under the 2014-20 budgetary window. Hungary and the Czech Republic have around €25bn available, and Slovakia €15bn.

However, German, Italian and French officials have recently revived the idea. That puts the onus on the next seven-year EU budget starting in 2021, over which negotiations will start next year. With the commission due to present ideas on the future of EU finances following Brexit on June 28, a Cohesion Forum in Brussels has seen officials discussing new conditions on funds handed out to member states to build new infrastructure and other projects designed to speed economic convergence.

Karl-Heinz Lambertz, first vice-president of the European Committee of Regions, said on June 26 that the EU needs a "stronger" cohesion policy, but insisted that while "the financial dimension is important … the underlying principles", are also vital, according to EU Observer.

"We can't shy away from this question," said EU budget commissioner Guenter Oettinger, who announced last month that the commission would present "questions and options" about a possible link between the "cohesion programme and rule of law".

Cohesion policy should "incentivise structural reforms," added EU Commission Vice-President Jyrki Katainen. "We would seek to find ways that support structural reforms by providing positive incentives to member states," he said. However, Oettinger also admitted: "It's a sensitive domain.”

Visegrad has reacted furiously to the suggestion. Poland and Hungary in particular insist that sovereign power should reside with national capitals, and reject accusations that the rule of law is deteriorating under authoritarian and conservative populist rule.

Slovakia, which says it is keen to join “core” Europe should efforts to speed integration in the bloc take off, has been less confrontational. However, Deputy Prime Minister for Investments and Informatisation Peter Pellegrini demanded at the forum that the infrastructure built by EU funding is a right for citizens across the bloc, and should not be held for ransom.

"Cohesion policy is a success story,” he said, according to TASR. “We should think of the future and not cut back on funding, notwithstanding Brexit. EU funds mustn't be taken hostage and mustn't be used to put pressure on other countries.”

Cohesion policy is a development factor and a growth engine that helps to bridge regional disparities, a process through which Slovakia is still journeying. "The second half of this journey will be difficult. We need to focus on transformation that responds to globalisation and technological change," said Pellegrini.

More than 120,000 new jobs were created in Slovakia thanks to EU cohesion policy that ran to 2015. The funding added around 2% to overall employment.

The forum's conclusions will make it into a report on Economic, Social and Territorial Cohesion that will be released in the autumn.

Germany recently said in a document that "it would be worth exploring the possibility of making EU cohesion funding subject to compliance with the basic principles underpinning the rule of law". However, a German official told EU Observer on June 26 that there is "nothing specific on this as yet".

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