New money, old ideas for EU spending

11 December 2014

How EU spending plans for central and eastern Europe are selling short a greener future

Central and Eastern European countries are planning to use unacceptable amounts of their €350 billion allocation from the EU budget on dirty energy projects, polluting forms of transport and incinerators, according to a comprehensive analysis of draft government spending plans published today by CEE Bankwatch Network and Friends of the Earth Europe.

The European Commission last year made ambitious plans to transform the European economy away from fossil fuels and heavy resource use, meaning potential green benefits for the newer, more energy-intensive EU member states.

Yet the spending plans for 2014–2020 submitted to Brussels by eight Central and Eastern European countries would lock them into dirty energy futures at the expense of citizens and the environment.

"This EU budget was meant to herald a new era of greener spending and help Central and Eastern European countries become better equipped for the environmental and economic crises facing the world today. Instead what we see is a continuation of the same old spending patterns with governments planning to use the money for fossil fuel-fed, resource intensive projects," said Markus Trilling, EU funds coordinator at Bankwatch and Friends of the Earth Europe.

CEE Bankwatch Network and Friends of the Earth Europe obtained the draft spending plans of Poland, the Czech Republic, Hungary, Slovakia, Latvia, Estonia, Lithuania and Croatia from for 2014–2020 and compared these with how funds were allocated seven years ago. The analysis finds that:

  • Money meant for the development of the region will continue to fund fossil fuels – primarily gas but also coal via co-generation projects. In Poland and Estonia, fossil fuels account for over 20 percent of the energy infrastructure planned to be financed from the EU Budget.
  • Central and Eastern European countries plan to spend over half their transport funds on roads, with only token amounts going to sustainable and public transport infrastructure.
  • Funding for renewable energy is static compared to the previous seven years, or even declining in some countries (particularly in the Czech Republic); much of this funding – virtually all in Estonia, Latvia and Lithuania – goes to potentially environmentally damaging biomass projects.
  • More than half of funds meant for waste will be spent on incineration and landfills as opposed to more sustainable practices such as prevention, recycling and reuse.
  • Funding for energy efficiency has increased, roughly quadrupling in the Czech Republic and Poland – although some of this money will go to large polluters.

"Plans for using the new multi-billion Euro budget are little more than spending as usual. We're seeing the same old types of projects being financed when a new era of more modern greener spending was promised. We need more public investments in sustainable energy and transport and in waste reuse and recycling which could work as catalysts for private investors," concluded Markus Trilling.

The only significant improvement in the next seven year budgeting period is an increase in funding for energy efficiency – although it must be ensured that this is spent on the citizens and communities who need it, and not to cut the energy bills of polluting industries.

The European Commission has yet to approve the vast majority of national spending plans for the EU funds. Fewer than 40 out of a total of 535 EU-funded programmes have so far been approved, meaning the Commission can still insist on greener spending.

CEE Bankwatch Network and Friends of the Earth Europe are calling on the European Commission to make sure authorities in Central and Eastern Europe revise their plans and use European public funds to modernise their economies and bring long-lasting, sustainable benefits to citizens. They are calling for subsidies for dirty activities by major companies to be stopped.