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22nd May 2022

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EU regional projects see 'encouraging' shift in focus

  • Johannes Hahn - happy with his "legacy" as he heads to the European Neighbourhood policy dossier (Photo: European Parliament)

As he finishes up his mandate as EU regional affairs commissioner, Johannes Hahn says his "legacy" is getting member states to spend money on the real economy rather than hulking infrastructure projects.

Under his watch, rules governing how regional aid money - running to €325 billion between 2014-2020 - is spent were given a shake-up to encourage projects in line with the EU's long-term economic goals.

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Adopted at the end of December, the new rules have already resulted in a big decrease in spending on traditional infrastructure - such as roads - and a leap in spending on green and ICT projects.

"We see a clear shift from investment in infrastructure towards stimulation of the "real" economy," Hahn told this website, adding that this is "encouraging".

"I like to think [of this] as a legacy of my time as commissioner for this policy."

Analysis by late September of the plans of various regions have showed that there was a 22 percent rise in spending (to €125bn) on projects dedicated to research & development, innovation, ICT, small businesses, and low-carbon economy compared to the last budget cycle (2007-2013).

Spending on transport and other major infrastructure has sunk by 21 pecent, to €60bn, while member states such as Belgium, Croatia, Italy, Portugal, and the UK have made helping small companies a priority.

On energy security and green projects specifically, the chunk of aid money has more than doubled to €38 billion.

Red tape - also in the member states

Hahn notes that while the more stringent rules mean that getting spending programmes agreed is more time-consuming, the "insistence" on focussing on what results will be achieved rather than just whether money will be spent is "very valuable".

"Member states will have to spell out what they want to achieve and by when, and be monitored whether those results are there," he says.

And while he admits that the rules are still complicated - or not simplified "as much as we might have wished" - leading to grumbling by some local authorities, he says member states themselves are just as much to blame.

"Many layers of red tape come from member states themselves – what we call 'gold-plating' and it is too easy to blame this on the so-called 'Brussels bureaucracy '."

On tying funds to good economic governance - a controversial innovation to the rules - Hahn said stopping EU aid because a member state is fiscally misbehaving would be a "last resort", but underlines that "investments will deliver more in the context of budgetary discipline".

"We are not talking about punishment but rather about an incentive to maintain financial and budgetary discipline so that funds can deliver for citizens."

The Austrian politician, who is due to take over the European neighbourhood policy dossier from November, declines to give advice to his successor candidate, Romania's Corina Cretu.

But he does suggest that, in future, GDP - or how rich a region is - should not be the only criteria for determining whether it should qualify for EU money.

"Other measures such as innovation performance could be taken into account," he says, indicating that being a forward-looking region with clever ideas should be enough for a shot at EU aid.

This story was originally published in EUobserver's 2014 Regions & Cities Magazine.

Click here to read previous editions of our Regions & Cities magazine.

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