Proposal to unlock €98m in EU aid

EXTRA EU aid totalling €98 million could be unlocked for Ireland by a proposal to increase the Brussels funding contribution to projects in areas such as infrastructure and rural development.

EU Regional Policy Commissioner Johannes Hahn has put forward the plan to ease rules for giving funds to six member states in EU or International Monetary Fund rescue programmes — Greece,Ireland, Portugal, Hungary, Latvia and Romania.

Because of austerity drives in these countries, they have been less able to come up with their share of funding for EU-financed projects.

The current maximum amount that the EU can contribute is 85% of the cost of a project, the commission is now proposing to raise that figure to 95%.

This could unlock up to €2.8 billion of unclaimed EU aid in the six countries — ranging from €98m in Ireland to €879m in Greece.

The proposal requires the approval of EU member states and the European Parliament.

The commission will push for them to adopt it before year-end to help struggling countries get through the current economic crisis. German economy minister Philipp Roesler has welcomed the EU proposal. But other budget-conscious member states could object, because unspent EU money is supposed to be returned to the countries that are net contributors to the EU budget.

Or there could be objections from poor countries such as Bulgaria who face similar challenges in accessing development funds but who managed to get through the financial crisis without outside assistance.

The proposal refers to EU aid, the European Regional Development Fund, the Cohesion Fund, the European Social Fund, the European Fisheries Fund, and the European Agricultural Fund for Rural Development.

Therefore, funds for infrastructure such as roads and airports, for rural development, for education, fisheries support, could be freed up, but the nations involved would have to prioritise among projects already on the drawing board which focus on growth and employment, such as retraining workers or investing in transport infrastructure.