New EU programming 2021-2027: Italy receives more European funds

European funds
2021-2027: Italy receives more money

A conference entitled “A budget for the future” was held on 12 October in Brussels, where the new programming of European funds for the period 2021-2027 was discussed. The Vice-President of the European Commission, Jyrki Katainen, and the Budget Commissioner, Gunter Ottinger, attended the conference.

The Multiannual Financial Framework (MFF), the seven-year planning instrument on which the allocation of structural funds depends, was proposed by the European Commission on 2 May and now the accounts are submitted to the two budgetary authorities, namely Parliament and Council.

The next long-term budget of the Union provides resources of €1,135 billion (1.11% of EU GDP) and €1,105 billion in payments which, taking inflation into account, correspond to the budget for the previous seven years. This last figure measures the real capacity to deliver projects, services and investments for the period 2021-2027. It is just over 150 billion a year for investments and funds to be distributed among the 27 EU countries.

During the conference, Commission Vice-President Jyrki Katainen explained that the next EU budget will be smaller than the current one, partly because of the consequences of Brexit. Katainen also stressed that a new challenge will have to be faced: the problem of reforms contrary to the rule of law in some EU member states. In fact, it is insisted on several sides, so that the States that enjoy European funding ensure respect for the treaties, democracy and the rule of law.

Another challenge that the EU will inevitably have to face is the rise of populist, nationalist and Eurosceptic forces, especially in view of the forthcoming European elections in May 2019. That is why, according to Budget Commissioner Gunter Oettinger, it is necessary to reach an agreement on the budget before the elections, in order to protect the Union from any victory or prevalence of these parties.

Last May, the Commission proposed concentrating European funds on areas such as research and innovation, the digital economy, border management, security and defence, where EU spending could have a greater impact than national public spending, in order to make savings and increase efficiency.

At the same time, the Commission has suggested that funding for the Common Agricultural Policy and Cohesion Policy should be reduced modestly as a result of the new post-Brexit reality.

With regard to the latter, it should be noted that, thanks to the pressure of “decentralised” powers in Europe, it has been confirmed that Cohesion Policy 2021-2027 will continue to be targeted at all regions, with an approach focused on the needs of territories and a stronger focus on cities.

European funds In Italy:

In Italy, in particular, the Commission‘s proposals imply a 6% increase in European funds compared to the 2014-2020 period. For four Italian regions – Sardinia, Molise, Marche and Umbria – the next long-term budget of the Union provides for a substantial increase in European resources. However, this is only apparently good news.

In fact, while Sardinia and Molise move from the status of “transition” regions to that of “less developed“, Marche and Umbria leave the ranking of the richest regions to become part of the “transition” regions. In the case of the Marche, there has also been a change in the eligibility criteria: the category of transition regions, which previously included those with a per capita GDP between 75% and 90%, has expanded to include all those with a GDP between 75% and 100%.

In order to reduce their disparity with other European regions, these four regions will benefit more from European funds for the period 2021-2027.

Instead, they remain in the “club” of the richest regions of Piedmont, Trentino, Friuli Venezia Giulia and Lazio, despite a drop in per capita GDP of more than 10% between 2007 and 2016.

The downgrading of the four regions, beyond the statistical data, is a worrying sign because it indicates an economic downturn of Italy compared to other European countries.

However, the decline in per capita GDP over the last decade has not only affected the Italian regions. The Eurostat regional yearbook 2018 showed, in fact, that the situation has also worsened in France, Spain, Greece and Finland. The emergence of these data has led the European Commission to propose new criteria for the distribution of cohesion policy resources, cutting the funds allocated to Eastern European countries that joined the Union in 2004 by 40% and applying new parameters that are no longer limited only to per capita GDP.

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