Brussels to propose 5% hike in cohesion funds for Spain

Brussels is planning to propose a 5% increase in structural funds for Spain, according to documents seen by EL PAÍS.

A new calculation method used to allocate the funds is proving detrimental to Eastern European countries and favorable to southern ones – including Italy, which is currently mired in an institutional crisis, and Greece, which has been struggling financially for a decade.

If the European Commission’s plans prosper, between 2021 and 2027 Spain will benefit from €34 billion in funds (at constant 2018 prices, without factoring in inflation).

Spain scores very poorly on youth unemployment and education, which makes it a candidate to receive more funds

The EU’s cohesion policy has always been one of the pillars of the European budget. It seeks to reduce economic and social disparities among countries and regions through cohesion funds, rural development aid and the European Social Fund.

But together with the Common Agricultural Policy (CAP), these funds are dwindling. Under the long-term 2021-2027 budget proposal, the Juncker Commission, named after European Commission President Jean-Claude Juncker, is suggesting cuts of around 6% to common agricultural policy and cohesion policy programs in order to meet the new European priorities.

Until now, the cohesion funds had been allocated based on per capita gross domestic product (GDP), but new criteria will apply during the 2021-2027 period. And these new conditions are good news for Spain: Brussels will on Tuesday propose giving Spain €34 billion in funds, a 5% rise from earlier EU budgets.

Spain continues to be the third-biggest recipient of cohesion funds after Poland and Italy, and this upcoming increase becomes even more significant if current and not constant prices are used: at current prices, Spain would receive €38.8 billion to 2027, representing a 21% increase.

Under the new system, per capita GDP will remain the predominant criterion for allocating funds (80%), but youth unemployment and educational levels will weigh more in the balance (15%), followed by polluting gas emissions (1%) and reception and integration of migrants (3%). Spain scores very poorly on youth unemployment and education, which makes it a candidate to receive more funds.

Additionally, Brussels is extending the range of candidates who may apply for aid, by adding a “transitional region” category that includes regions whose per capita GDP is between 75% and 100% of the EU average. This mostly benefits Spain and France, said European sources. These figures are not final, however, and will be subject to the usual disputes among member states.

English version by Susana Urra.