Thursday

25th May 2017

Interview

Regional funds may be linked to pension reforms

  • Johannes Hahn says structural funds should be used to make countries stick to economic reforms (Photo: European Commission)

Linking EU regional funds to economic reforms is "fair" because it applies to both euro and non-euro states, regional policy commissioner Johannes Hahn told EUobserver in an interview Friday (19 July).

"Macro-economic conditionality is one of the pending issues that is subject of ongoing negotiations in July, but we should definitely reach an agreement beginning of autumn," Hahn said.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

Earlier this month, the European Parliament made it clear that they would not accept this new conditionality for the €376 billion worth of regional funds in EU's next seven-year budget.

This is the main sticking point among MEPs, member states and the EU commission in transposing an agreement on the €960 billion budget into legal acts and rules.

"Everyone has an interest to have a rather quick decision if we want the funding to start next year. The multi-annual framework is also a sort of orientation for the private sector of how much money is available, that could trigger additional private investments," the Austrian politician said.

He admitted that "positions are far quite far apart", as MEPs are rejecting any link to economic reforms.

MEPs argue that the idea came up before the EU commission got new powers of oversight for countries lagging behind on economic reforms.

Hahn said this is true only for eurozone states, which are subject to increased scrutiny and sanctions from the EU commission.

"But there is nothing adequate for non-eurozone countries. Therefore the idea came up to use structural funds. This is nothing else than a justified attempt to have a fair treatment for everyone," he said.

Hahn said the details on how the macro economic strings would work in practice are not yet clear, but suggested it could also include reforms of pension systems.

"We still have discussions if structural funds could be used for more general macro-economic conditionalities. As an example, pension systems.

"We have many countries where the country-specific recommendations are referring to the existing pension systems that they need to be adapted in order to afford pensions in the future," he said.

He gave the example of Hungary, where the EU commission for the first time last year threatened to suspend the payment of regional funds because the country was not sticking to the EU deficit rules.

Hahn's services worked up a methodology on how to calculate the share of money that would be suspended, but in the end it was never used because Hungary got its deficit under control.

"The mechanism exists only for cohesion, but the idea now is to include all the other structural funds - regional development and social fund. This is still under discussion," Hahn said.

MEPs against macro strings on regional spending

The European Parliament is opposing demands by a German-led group of countries to link the payment of EU regional funds to how countries sticks to macroeconomic reforms.

News in Brief

  1. British PM to speak out on US terrorism leaks
  2. Tusk calls for 'values, not just interests' after Trump meeting
  3. Pressure grows on climate impact of EU timber harvesting
  4. US goes after Fiat Chrysler over emissions cheat
  5. Munich police break up Europe-wide burglar clan
  6. Report: VW threatened with €19.7 billion French fine
  7. Turkey begins mass trial of suspected coup leaders
  8. Merkel's CDU consolidates lead in polls

Stakeholders' Highlights

  1. UNICEFChild Alert on Myanmar: Fruits of Rapid Development yet to Reach Remote Regions
  2. Nordic Council of MinistersBecome an Explorer - 'Traces of Nordic' Seeking Storytellers Around the World
  3. Malta EU 2017Closer Cooperation and Reinforced Solidarity to Ensure Security of Gas Supply
  4. European Healthy Lifestyle AllianceHigh-Intensity Interval Training Is Therapeutic Option for Type 2 Diabetes
  5. Dialogue Platform"The West Must Help Turkey Return to a Democratic Path" a Call by Fethullah Gulen
  6. ILGA-EuropeRainbow Europe 2017 Is Live - Which Countries Are Leading on LGBTI Equality?
  7. Centre Maurits CoppietersWhen You Invest in a Refugee Woman You Help the Whole Community
  8. Eurogroup for AnimalsECJ Ruling: Member States Given No Say on Wildlife Protection In Trade
  9. European Heart NetworkCall for Urgent Adoption of EU-Wide Nutrient Profiles for Nutrition & Health Claims
  10. Counter BalanceInvestment Plan for Europe More Climate Friendly but European Parliament Shows Little Ambition
  11. Mission of China to the EUPresident Xi: China's Belt and Road Initiative Benefits People Around the World
  12. Malta EU 2017EU Strengthens Control of the Acquisition and Possession of Firearms