Wednesday

23rd Oct 2019

Opinion

Let's stick together - in defence of EU 'cohesion' policy

  • Are we, as nations of Europe, in it for good? Is, say, a Romanian family's wellbeing a concern for a Scottish taxpayer? (Photo: Adam Jones)

The media are full of stories how the EU money is spent on absurd projects from Spain to Bulgaria, from Poland to Britain: railways and bridges to nowhere; new art galleries standing empty; airports built tens of kilometres apart; mousepads and stickers distributed to schools at exorbitant cost to make pro-Europeans out of pupils.

Some of these hyperbolic headlines are even true.

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More cool-headed critics also ask relevant questions: why should, say, the Dutch taxpayer pay the EU bureaucrats to eradicate digital divide among the underclasses of Rotterdam when the national government can do it cheaper and better?

What about the stolen money by gangsters and oligarchs in Slovakia or Czech Republic? Yes, some expenses are far from efficient, some expenditure is fraudulent.

The EU Commission in turn talks up the merits of the regional development policy.

Solidarity is one of the objectives of the EU, as stated in the treaties.

For 2014-20, the EU cohesion policy is around €460bn which brings a whopping return of 274 percent. Over one million of start-ups helped, floods and fires prevented, sewage plants built for millions of Europeans, hundreds of thousands of new jobs created. Some of these figures are impressive, indeed.

Well, the regional policy of the EU is worthwhile and justification for it is much more profound than pragmatic arguments used by EU officials. Why?

First of all, cohesion policy does help to mitigate polarisation between and within countries – as seen from economic or social point of view.

This role of the EU is even more needed in the times of "geography of discontent" whose symbol is the yellow vest movement in France – capital vs province, global cities vs rural traditional communities.

The internal market has an inevitable centripetal effect due to agglomeration forces which favour Germany and those that are very closely linked through value chains.

This disadvantages peripheral regions

Regional policy can counteract these forces by favouring the retention of people, establishment of good educational and research institutions and the enterprises that cluster around them.

Second, cohesion can be perceived as a long-term instrument to build common European consciousness - to secure Europe's appeal through active tangible measures felt by ordinary people (of course it is not enough, but money is a sine qua non condition).

The cohesion policy, as the European project itself, is a an extremely rare phenomenon in international relations.

It could only emerge as part and parcel peace-building agenda in the 'old continent' after tragedy of two world wars.

Both in the world today and the history of mankind it is without precedent for countries to redistribute annually up to one percent of GDP to other countries, via an international institution, without explicit or implicit goal of subjugation, domination, conquest etc.

Third, cohesion can be a bigger part of other big integration projects, especially euro currency, whose infrastructure remains rickety and unfinished.

Regional redistribution instruments can serve as a tool to counter globalisation, help adjustment in the case of asymmetric shocks and play a stabilisatory role. It could mitigate macroeconomic imbalances or even help to sustain a certain level of investment and income convergence in times when national budgets are constrained by austerity.

That said, clouds gather over the regional policy. There is less mood for redistribution these days in Europe.

Trust and solidarity are eroding

Some big federal countries serve as a useful point of comparison, especially the US.

The problem – very fundamental to the European project itself from the very beginning – is the question of commonality of interest. Are we, as nations of Europe, in it for good? Is, say, a Romanian family's wellbeing a concern for a Scottish taxpayer?

When the US government builds a research centre somewhere in the periphery, say, in Los Alamos, Texas, rich people in NYC or DC cheer and know it's in their interest – for the wealth to spread elsewhere in the huge market.

In Europe all the efforts to redistribute back from centres to periphery will always be half-hearted. Governments' logic is that of 'juste retour' – to get back what we invested.

Cohesion was born as part of the grand continental bargain – markets for westerners in exchange for transfers for southerners and easterners.

A politically-incorrect view is that the bargain is off as the peripheries do not deliver part of the deal by becoming naughty, eurosceptic or uncooperative.

Politically incorrect sentiment in Western capitals is: you should not bite the hand that feeds you.

At the same time the cohesion policy could serve as a "nudge" to make governments of countries-beneficiaries of the EU level policies stick to rule of law.

Transfers helped the European Community to keep Greece or Spain on the path of reforms from dictatorship in 1980s, we need it now for central Europe. Democracy is under threat and we need to act through carrots as sticks will alienate voters.

The upcoming negotiations of the EU budget for 2021-2028 will be very tough.

The cohesion policy will be wrongly criticised as an obsolete type of expenditure, an item belonging to the "past". If the EU is to survive, the meaningful cohesion policy will be essential.

Author bio

Jakub Wisniewski is director of the Globsec Policy Institute in Bratislava, Slovakia.

Disclaimer

The views expressed in this opinion piece are the author's, not those of EUobserver.

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