EU regional funding: MEPs back better terms for crisis-stricken countries

The EU should pay up to 95% of regional development project costs in Greece, Ireland, Portugal, Romania, Latvia and Hungary to spur recovery, says a resolution voted on Thursday. MEPs backed a proposal for a temporary increase in the EU's share of funding for targeted projects, without changing the total volume of structural funding for each Member State.

Member States facing liquidity difficulties and benefitting from EU financial assistance should be eligible for a temporary 10 percentage points top-up of current co-financing rates in justified cases, says the legislative resolution, passed by 536 votes to 43, with 44 abstentions.

Rapporteur and Regional Development Committee Chair Danuta Hübner (EPP, PL), said before the vote: "I am happy that given the urgency, this proposal could be adopted at the first reading. We need to act quickly because national and regional economies in distress need growth. Reducing the pressure on national budgets and promoting investment through European regional policy can help restore growth, facilitate job creation and improve productivity."

Priority for competitiveness, growth and employment

Eligible Member States will need to demonstrate that they lack the resources to pay their share of project costs and the need to apply the increased co-financing rates. They will also have to show how they intend to concentrate the funds on competitiveness, growth and employment.

The increase in the EU co-financing rate will be restricted to the period for which the  Member States in question benefited from EU assistance under the European Financial Stabilisation Mechanism or the Balance of Payments Mechanism and will also apply retroactively. It shall however be limited until the end of 2013 and apply without prejudice to the post-2013 programming period.

Next steps

The Council is supposed to agree formally to the proposal in the week starting 12 December, paving the way for the amendment to the regulation to be signed in the same week in Strasbourg. The new rules will enter into force immediately after their publication in the EU Official Journal.       

Procedure:  Co-decision, 1st reading