WRITTEN QUESTION E-1449/02

by Samuli Pohjamo (ELDR) to the Commission

(23 May 2002)

Subject: Flexibility of the EU support system

Before Finland joined the EU, Finnish local authorities received national regional policy support to finance investments in basic services such as school repairs and sewage treatment plants. The effect of EU membership has been that national funding is increasingly being accounted for by contributions to the Objective 1 areas defined for the purposes of EU regional policy, with the result that operations are taking the form of development projects and investment in basic services is no longer possible.

It is perfectly understandable that the modus operandi of EU regional policy should be project based because the measures are by nature additional. However, Finland has implemented its policy in the same way by earmarking national funding for projects. Local authorities have no money of their own to invest in municipal engineering or social and health services. In the small local administrative areas local taxes have already been raised to the maximum.

Could not the EU support system be made more flexible so that aid could likewise be granted for basic services? Should not a local authority be allowed to apply for a grant for, say, a project to renovate a sewage treatment plant and channel more of its own resources into, for example, the recruitment of doctors?

Answer given by Mr Barnier on behalf of the Commission

(24 July 2002)

Community aid can be given for basic infrastructure work such as renovation of sewage treatment plants provided the investment is in a region enjoying Structural Fund eligibility and is compatible with the rules in force. The basic Structural Fund Regulations define a specific field of application for each Fund. The European Regional Development Fund can part-finance investment in infrastructure that helps increase economic potential or assists in development, structural adjustment or the creation or maintenance of sustainable jobs but there is no provision for financing e.g. schools.

Further, the national authorities can restrict the programmes to be part-financed from the Funds to a set number of strategically chosen fields. Thus the four Objective 1 and 2 programmes for mainland Finland offer co-financing possibilities for investments in infrastructure and basic services but the budget allocations vary from programme to rogramme according to the strategic choices made by the regional and national authorities. For example in the Eastern Finland Objective 1 programme some 14 % of the Community funding has been allocated under priority 4 to development of structures geared to everyday life and a good environment. Total Community funding for this programme is EUR 626,6 million. Under western Finland Objective 2 some 26 % of the total Community funding is allocated under priority 3

for developing structures and the living environment. Total Community funding for the programme is EUR 284,2 million. The types of project eligible include waste management, developing new service provision models and developing and experimenting with social welfare services.

Council Regulation (EC) No 1260/1999 of 21 June 1999 laying down general provisions on the Structural Funds(1) sets ceilings that must be respected where each operation is concerned. In addition in any programme part-financed by the Funds the average aid rate per measure must be respected.

(1) OJ L 161, 26.6.1999.