Voorzichtigheid gebaat bij toekenning Europese structurele fondsen (en)
EUOBSERVER / BRUSSELS - Structural funds are the EU's main tool available for its new members affected by the recession to different degrees. But some experts say their effectiveness depends upon providing relevant aid when and where it is needed.
The 10 new members states in central and eastern Europe are not a homogenous bloc when it comes to the scale and impact of the economic crisis, experts and MEPs agreed on Monday (1 March) during a seminar on the topic in the European Parliament.
Eurozone-members Slovenia and Slovakia have different woes to cash-strapped Hungary, Latvia and Romania, which had to be bailed out by the International Monetary Fund, said Zsolt Darvas, an expert with Bruegel, a Brussels-based free-market economic think tank.
Slovakia is suffering mostly from reduced car exports, while Bulgaria, Romania and the Baltic states "see a serious deterioration of their trade balance," which offer dim perspectives for their future growth rates.
This is of particular concern because these countries still have a long way to go before catching up with richer western countries. With real estate bubbles now burst, rising unemployment and thin foreign investment flows, there are hardly any prospects for countries such as Romania and Bulgaria to make the economic leap anytime soon.
With the exception of tiny Estonia, which seems to be inching closer to joining the eurozone, none of the other new member states have similar prospects in the foreseeable future.
Experts also warn that the euro alone is no recipe for recovery.
"The euro itself cannot save the country from the impact of the crisis, as the Spanish and Greek cases have shown. Problems may disappear at surface, but they are there and can only be tackled with sound policies," Katerina Smidkova from the Czech National Bank said.
Regional aid, however, is capable of delivering some relief to these countries. It can be used to improve infrastructure, key to raising investment chances.
"There is not much on offer for new member states to deal with the crisis and cohesion has actually helped," Fabian Zuleeg from the European Policy Centre, another Brussels-based thinktank.
However, Mr Zuleeg was quick to add that with an average of 0.4 percent of EU's gross domestic product, the funding risked not making any real impact "if spread too thin."
The expert also criticised the policy as being "too slow and too bureaucratic", which was not necessarily Brussels' fault - as national governments also filter and delay payments before they get to the actual projects in various regions and cities.
Another drawback, in Mr Zuleeg's view, was the lack of flexibility in transferring money from one "priority" to another, for instance to prop up more small and medium entreprises during the economic crisis, or to reallocate money between regions or countries.
As to the speeding up of advance payments in 2009, something suggested to help alleviate the effects of the crisis, the expert warned that "increased speed doesn't necessarily mean money was spent well."
2020 economic strategy
Looking to the future of regional policy, all experts stressed the current system should be used to foster employment and a green economy, the main objectives of the bloc's ten-year economic plan.
The European Commission is just about to launch a new ten-year economic plan, known as the 2020 strategy.
"The 2020 agenda barely mentions cohesion policy. It is not a very good idea to establish new instruments outside cohesion," said Peter Heil of the Hungarian prime minister's office.
He argued that the way this multi-billion policy works, involving local and regional actors, leads to "more leverage" with public and private resources.
But Mr Heil did admit that knowhow and expertise are even more important than the money itself.
"Cohesion policy in general is as effective as the policies we want to finance. If we know how to boost employment, energy efficiency or the green economy, then we get results. If the policies financed by the European Commission are bad, so are the results," he concluded.