Crucial decisions on the future of the structural and cohesion funds are coming up. A set of new regulations will be agreed this year together with 'strategic guidelines' that will set the future priorities for EU funding for 2007-2013. Dare the EU be bold and shift the funds towards really efficient use and sustainable development?

What should be changed in the cohesion policy in order to allow for more efficient and sustainable use of the EU funds? In terms of the rules, more checks on the projects and more transparency in the decision making process are sorely needed. Before money is spent, proper needs assessments, cost-benefit analyses and environmental impact assessments must be carried out. The costly, inefficient or damaging investments of the past must be stopped. If, for example, assessments of environmental impacts had been carried out properly, many of the damaging projects would never have taken place or would be implemented very differently. Projects that breach the law must no longer be approved.

Citizen groups and NGO watchdogs should also be given a greater voice in the process to offset the disproportionate influence of construction lobbies geared up to profit from the billions in the EU coffers . According to Transparency International's latest report, the construction sector is more prone to corruption than any other economic sector. As this is the sector most benefiting from the cohesion policy, the governments and the EU must strongly insist on the proper use of the funds, transparency and civil society involvement.

As for the funding priorities, these need to be radically shifted. Across Central and Eastern Europe, where energy use per unit of GDP is twice as high as in the old member states, the funds could help secure massive energy savings and thus economic gains. The region's large but unused renewable energy potential is also desperate for investment. In the transport sector, funds could help upgrade the existing railway networks, renew regional roads and improve urban public transport - rather than being ploughed into thousands of kilometers of new motorways. As about 20,000 people get killed in road accidents in the new member states every year - almost three times more per number of cars than in the old ones - road safety improvements should also be a top priority. In the waste sector, recycling and waste reduction projects are cheaper and provide more jobs in comparison with the currently promoted landfill and incineration plants. Most importantly, increased funding for education and training is a must for the new member states' long-term development. In order to create the knowledge-based economy that the EU officially wants to promote, the EU needs to invest in human brains rather than in concrete.

Business as usual

Unfortunately, unless a miracle happens in the Council or the Parliament, it is not very likely that cohesion policy will change in a desirable way. Despite some piecemeal improvements and many technical modifications in the new regulations, the general design of the policy remains the same. As for priority setting in the strategic guidelines, the danger is that they will be based entirely on the EU 'Growth and Jobs' strategy (new Lisbon agenda), which now sidelines environmental and social priorities. If the EU sustainable development strategy (Gothenburg agenda) is not equally reflected in the guidelines, it is clear the old style Europe will continue for the years ahead. The discussion about rules and priorities is anyway completely overshadowed by who's getting how much money as member states are in the process of agreeing the EU financial perspectives for the same period 2007-2013.

Martin Konecny
EU Funds Coordinator
Friends of the Earth Europe - CEE Bankwatch Network