Reports: EU structural funds to be shifted to South. Linked to rule of law

According to the Financial Times, the EU has prepared new outlines for the upcoming 2021-2027 financial network which will see structural funds, Brussels’ main financial incentive for poorer regions, shift its center of gravity from the east to the south of Europe. The funds, already reduced by 5-10 percent due to Brexit, will be tied to various criteria, including compliance with the rule of law, youth unemployment, number of asylum seekers a member states host. Currently, GDP per capita was the main factor in allocating some €350 billion in structural funds. Member states that would lose the most under new rules are the Visegrad Four members, including Poland, while Southern countries like Greece, Portugal, Spain, and Italy would benefit the most. In the current financial framework, Poland secured €77 billion in financing, other CEE member states also enjoyed significant EU funds, at the same time, Southern states saw 30 percent reduction in funding allocations. Other sources, quoted by the Polish Press Agency PAP, the European Commission wants to present the conditions that will be the basis for a possible freezing of EU funds for a country violating the principles of the rule of law. “For example, if there is no independent judiciary in a given country, it will be possible to freeze the funds. The point is for European taxpayers to be sure that the funds are spent properly,” an unnamed Brussels official told PAP. The commissioners are to discuss this proposal this Wednesday. The proposal for a new budget is to be adopted on May 2. According to the source, it’s still to be decided who will decide whether a member state is infringing on the rule of law. It could be member states themselves as part of the EU Council or it could be decided by the European Commission to “avoid politicization.” The EU budget commissioner Guenther Oettinger announced at the beginning of April that in the next multi-annual budget, the funds will be linked to the rule of law. The EC suggests that such a solution will be included in executive acts so no unanimity will be needed to implement them.