Clawback Talks Begin In Wroclaw
HOLDING a summit of European regions and cities in the sleepy backwater of Wroclaw seemed like a mad idea.
After all, the city formerly known as Breslau when it was part of Germany and which is at the heart of Lower Silesia, southern Poland, has scarcely any direct flights, so the cost to the European taxpayer of flying in hundreds of mayors, and other delegates from Europe’s far-flung corners for a two-day gathering was around £1 million.
On reflection though, Wroclaw began to look like a good place for such a conference. Poland, which joined the European Union a year ago, is thriving. Its economy grew by 5.9% last year, and cities like Wroclaw are beginning to prosper. But the painted faades barely conceal decades of neglect. It is one of those regions which now benefit from (and fully deserve) EU regional subsidies in the way that Ireland, Spain, Greece – and Scotland – benefited in the past.
But the whole shape of European regional funding is under review, and it was this that dominated discussions at the Wroclaw conference, with regional leaders demanding that the EU’s national governments should not abandon the principle of solidarity with Europe’s poorer areas.
The EU’s big spenders, led by the UK and Germany, are determined to cut their contributions to the budget from the current ceiling of 1.24% of gross national income to just 1%. That would mean much less cash to subsidise the poor regions.
The EU’s 25 nations are supposed to agree on a figure by the end of June, before Britain takes over the union’s rotating presidency, but that is beginning to look unlikely. Under Britain’s six-month chairmanship agreement will be almost impossible, as a government with a distinct point of view can rarely push it during its own presidency.
And Britain has a very distinct point of view on this. The government not only wishes to reduce its contributions to the EU budget, but has proposed “repatriating” regional subsidies. Regions such as Scotland’s Highlands and Islands would receive funding not from Brussels but from Westminster.
On this matter, Chancellor Gordon Brown is on a collision course not just with the Highlands and Islands but with the European Commission. The EU’s commissioner for reg ional development, Danuta Hubner, in Wroclaw, said that she was totally against the idea of re-nationalising Europe’s regional subsidies.
“The losses that would follow from renationalisation would be enormous and would undermine the existence of the single market, which is our great est achievement. We should think twice about this,” said Hubner.
Many believe Gordon Brown will be much stingier than Brussels has been. In the current EU budget, from 2000 to 2006, Scotland receives more than £1.45 billion for regional development. But what will happen after that is unclear. So London is squaring up for a battle on two fronts: with the Commission and other EU members over the size of the UK’s contributions (not to mention Britain’s £3bn annual rebate, which French President Jacques Chirac called into question again last week), and with the EU’s regions, including Scotland, over who should provide regional aid.
Reaching agreement on the EU’s budget was hard enough six years ago. Now, with 25 members, it will be a bloody battle.
22 May 2005, By Angus Roxburgh in Wroclaw