WRITTEN QUESTION E-1827/99

by Mogens Camre (UEN) to the Commission

(13 October 1999)

Subject: Structural aid for private firms' marketing and staff training

What will the Commission do to prevent the distortion of competition and waste of EU resources which are caused by the EU's subsidising of private firms' marketing, in-house training and rationalisation measures?

This week, the Danish press has reported that EU structural fund aid has been granted to Danish firms for the training of private-sector staff, company rationalisation and advertising campaigns.

It has caused astonishment that individual firms, with the aid of consultants versed in the formulations and key words which persuade the EU's administration to grant money, have obtained such subsidies. The funds are allocated to firms entirely at random, thereby distorting competition. I have received a 16-page pamphlet of advertising from the Landsforeningen af Danske Plantehandlere (the national Danish association of plant traders), 1 230 000 copies of which have been distributed, i.e. one to practically every household in Denmark. Household-distributed printed matter is one form of squandering resources that many members of the public wish to restrict. This pamphlet bears the EU's logo and the caption Campaign funded with the aid of the European Community.

The structural aid allocated to Denmark is very limited and there are far more provocative examples of the absurd use of structural fund aid in those countries which receive massive subsidies. If the EU granted aid to improve basic education in Denmark or to expand facilities for training doctors at our universities, that would undoubtedly make a positive impression on the Danish people but to hand out European taxpayers' money at random to private firms is a provocation which highlights the fact that the Commission is not complying with EU rules designed to avoid distortion of competition and is not interested in what it gets for the money but merely aims to ensure that the funds are used up.

Supplementary answer given by Mr Barnier on behalf of the Commission

(19 April 2000)

Preventing distortion of competition, waste and misuse of Community resources in the structural funds is a key priority for the Community and therefore of course also for the Commission.

The aid provided by the structural funds is administered in accordance with competition policy. For example aid can be given to investments but not to operational aid, there are special rules for supporting small and medium sized enterprises and there are restrictions in terms of eligible areas.

Furthermore, the funds are managed in a decentralised way in accordance with national and Community rules on financial management and control.

With regard to the actions supported by the structural funds the Member States have agreed that the promoting of new productive investments is a priority in order to generate incomes and new jobs in the weaker regions.

Finally, in order to maximise the effects of the structural fund interventions the Member States have decided to lay down provision for the kind of assistance the individual regions can receive. These provisions prevent objective 2 funding (which Denmark has received in the period 1994-1999 in regions of North Jutland and Lolland) to be used for co-financing investments in basic education infrastructures because the objective 2 regions are relatively well equipped in this regard already. Basic educational infrastructure can therefore only be co-financed by the structural funds in the weakest regions of the Community (objective 1 regions).