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Spain to receive more EU money under proposed budget plans

Spain to receive more EU money under proposed budget plans

The European Commission proposed on Tuesday increased spending of EU money on Spain, Italy and other southern member states hit by the economic and migrant crises, while reducing funds for regions in the bloc’s former communist eastern countries.

The proposal on the 2021-2027 budget, which details plans announced a month ago, comes as Italy is facing the prospect of snap elections after the summer, which polls show could further strengthen eurosceptic parties.

It also comes as Spanish prime minister Marian Rajoy faces a vote of no confidence on Friday in the wake of a damning court judgement and corruption convictions handed down to dozens of people linked to his Partido Popular.

The budget, the first after Britain voted to leave the bloc, would increase to 1.1 trillion euros from 1 trillion euros in the current seven-year period. A third of spending would be allocated to the “cohesion policy” which helps reduce the gap between rich and poor regions of the bloc.

The commission proposed a new methodology to distribute funds that takes into account unemployment levels and the reception of migrants, and not just economic output as previously.

This will result in a reduction of regional funds for eastern countries because they have grown faster in recent years and have overcome the global financial crisis better than others in the bloc.

“The natural consequence of getting richer is a gradual decrease in cohesion policy support. This is a fact and in the end is a good sign,” the EU commissioner for regional policy Corina Cretu said.

Southern states, who are still struggling to fully recover from the crisis, will instead see an increase in cohesion funds.

In an overall draft budget of 373 billion euros for cohesion between 2021 and 2027, 72.7 billion would be allocated to Poland, the highest share among EU states. But that represents a reduction from the 82.1 billion euros committed to Warsaw in the current seven-year budget period.

Hungary would also see its regional funds drop to 20.2 billion from 23 billion.

EU funds for Italy’s poorest regions would increase to 43.4 billion euros from 35.1 billion. Spain will see an increase of cohesion funds to 38.3 billion euros from 31.2 billion and Greece to 21.6 billion from 17.3 billion.

Greece, Italy and Spain face double-digit unemployment, while jobless rates are below 5 percent of the workforce in Poland, Hungary and the Czech Republic.

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Chronicle Staff
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