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Brussels talks on EU cohesion, job opportunities, Catalonia and the future EU President

On October 9-12, the EU institutions-organised European Week of Regions and Cities attracted over 5,000 local politicians, experts and other Euro Enthusiasts from all over the EU. It was a unique opportunity for networking and presenting some ideas on professional skill-developing opportunities for young people, as well as discussing the EU’s future finances and such hot topics as the Catalonia crisis. It was also an occasion to listen to Brussels rumours about a possible future EU presidential candidate. At the15th traditional annual event, the European Commission presented its 7th report on EU Cohesion Policy. The latter policy has the most vital impact for the Baltic economies.

On October 9, Corina Cretu, EU Commissioner for Regional Policy and Karl-Heinz Lambertz, President of the European Committee of the Regions, presented the cohesion report (which is published by the European Commission every three years) during their joint press conference in the Berlaymont Building, the central headquarters of the European Commission.

They emphasised a rather important impact of Cohesion Policy in dealing with consequences of the financial crisis of 2007–2008 and the necessity to continue EU Cohesion Policy in the next seven-year EU budget period in 2021–2027.

“Cohesion Policy is a tool against all kinds of stress,” Cretu said.

On the same day, both of them also took part in the official opening ceremony of the European Week of Regions and Cities, which took place in the European Parliament.

“Behind this report, there are better lives of people. The Cohesion Policy is the biggest achievement of our time,” Cretu said about the 7th report on EU Cohesion Policy at the European Parliament and expressed her pity that an average EU citizen still knows rather little about the Cohesion Policy.

The EU’s Cohesion Policy, which has been functioning since 1975, was established to fight economic and social disparities between and within all the EU Member States. It is enshrined in EU treaties. Since 2004, when the Baltic States joined the EU, their levels of GDP at 40-50 per cent of the EU average, have peaked partly due to the EU Cohesion Policy funds-related co-financing, to almost 75 per cent and, in 2025, they are expected to reach 85-95 per cent of the EU average, according to a European Commission source. Almost a third of the total EU budget 2014–2020 is allocated to financial instruments, which support Cohesion Policy. There are 351.8 bn Euros allocated for Cohesion Policy for 2014–2020.

“Investment for the 2007–2013 period increased their GDP by 3 per cent in 2015,” reads the 7th report on Cohesion Policy about 12 EU Member States, which joined the EU in 2004 and 2007. The report adds that EU Cohesion Policy investments will increase GDP of 13 EU Member States, which joined the EU in 2004–2013 (i.e. including Croatia, which joined the EU in 2013), “by a similar amount for the 2014–2020 period in 2023.” Cohesion Policy is the EU’s main investment policy, providing funding equivalent to 8.5 per cent of government capital investment across EU countries, a figure, which rises to over 50 per cent in Portugal, Croatia, Lithuania, Poland, Latvia, Hungary and Slovakia (it is slightly below 50 per cent in Estonia) while the figure is below 5 per cent in Northwestern EU countries, which are the main financial contributors to EU Cohesion Policy (Germany is the biggest contributor to the EU’s budget in absolute figures, while the Netherlands is the biggest contributor to the EU’s budget per capita). At least 50 per cent of money contributed to Cohesion Policy funding comes back to Germany and other financially contributing countries because of subcontracting of western companies, as well as increased income in benefitting countries, and increased trade.

The European Commission encourages EU regions to invest in high added value innovative projects, as well energy-saving projects to address ecological issues: the Martynas Mazvydas National Library of Lithuania, which now is turned into the main cultural activities hub in the heart of Vilnius, got 757,000 Euros from EU funds for the energy saving-related construction works in 2010–2015, during the library’s reconstruction, while the Estonian town of Polva got almost 5 m Euros for construction of its new, nearly carbon-neutral school, which was opened in January, 2017. The latter project was among the 24 finalists for the 2017 RegioStars Awards. RegioStars, the prestigious annual awards for innovative business projects implemented with EU funding, is organised by the European Commission: five winners – EU co-funded projects in Belgium, Finland, Spain, Croatia and Germany – were awarded during the European Week of Regions and Cities 2017.

Johannes Bahrke, the European Commission’s spokesperson for regional policy, talking to The Baltic Times in the European Commission’s central headquarters, expressed his hope that there will be enough money for proper Cohesion Policy funding after the United Kingdom, which contributes some 16 per cent to the EU budget, will leave the EU. The UK is currently due to leave the EU at the end of March 2019.

“The conditions for the current period of 2014–2020 are set, the amounts are set. We expect the United Kingdom to honour its commitments. So, don’t be worried,” Bahrke said.

He also said that the amount of money available for the period of 2021–2027 will be known after 2018.

“In May, 2018, the European Commission’s proposal for the multiannual financial framework will be presented. And then it should be adopted by the European Parliament and the European Council. There is a financial impact, of course, since the United Kingdom will leave the European Union. We have to see what choices will be made. It is too early to speculate about that,” Bahrke told The Baltic Times.

He added that there are some ideas regarding some changes in EU rules for getting EU co-financing after 2020.

“Some ideas are presented and discussed in the cohesion report. Some ideas for the next period of Cohesion Policy will come only after the European Commission’s proposal of May, 2018 on the next EU budget. There is an idea to simplify the rules for getting EU funds. We did a lot, but we can do more. There are also thoughts on how to change the way EU funds are allocated – at the moment, it depends on the GDP. Now we have new ideas – for example, to take into account migration flows, demographics, climate change and so on. All of the ideas are welcome. I can’t speculate what ideas will be taken on board. We take it seriously. Those are possible avenues for the future,” Bahrke said.

More than half of the Cohesion Policy budget in the current period of 2014–2020 has been set aside for less developed regions, which have a GDP of less than 75 per cent of all the EU Member States, while after 2020, the three Baltic States are expected to reach the level above 75 per cent of the entire EU average. Starting from Jan. 1, 2018, Lithuania will split its territory into two EU regions in the context of the EU’s Cohesion Policy: from the start of 2018, Eurostat, which is the statistics-gathering Directorate-General of the European Commission, will collect its data about the more prosperous Vilnius region and the rest of Lithuania separately. Lithuania without the Vilnius region will still have a GDP of less than 75 per cent of the EU average and more co-funding will be available for it, if the EU rules will not change.

“The Vilnius region has a GDP, which is 9 per cent above the EU average. According to figures, the Vilnius region is like Finland, while the rest of Lithuania is like Romania,” a source from the European Commission told The Baltic Times.

According to that source, Latvia, like Lithuania, faces mass exodus to other EU countries, and would like the EU Cohesion Policy rules to include demographics as a cause for getting more EU financing in the post-2020 period.

The 7th cohesion report by the European Commission suggests revising the allocation of funds of the post-2020 with new criteria, in addition to regional wealth, linked to EU-wide challenges: demographic change, unemployment, migration or climate change.

Some politicians in Brussels, Berlin and Paris want to tie cohesion funds to respect the rule of law. It provokes angry reactions in Poland and Hungary. Both countries are dependent on Cohesion Policy: Hungary will receive almost 22 bn Euros between 2014 and 2020, while Poland, which is the biggest beneficiary of EU funds, will have 77 bn allocated over the same period of time.

In 2004–2016, Poland received EU financial support, due to the Cohesion Policy and the Common Agricultural Policy, which equals two annual budgets of Poland. Grzegorz Gorski, who is a researcher with the Warsaw Institute, the currently ruling Polish PiS party-friendly think-tank, wrote that EU funds should be available to Poland as reparations for World War II.

“We have the right to treat the Cohesion Fund as a sort of redress for the effects of the war, from those that caused it (Germany, Italy and Austria), or those who, to a greater or lesser degree, collaborated with them (France, Belgium, Netherlands, Sweden, Denmark, Spain or Portugal), and despite this, benefited from American support,” reads the article by Gorski on the Internet site of the Warsaw Institute.

The Lithuanian media cries that, until now, Lithuania used only 1 bn Euros out of 6 bn Euros, which are allocated for Lithuania for the 2014–2020 period of Cohesion Policy. However, usually, more money is used at the end of every period. “Lithuanians are at EU average, looking at the numbers. We had a successful last period of 2007–2013: in terms of job creation – that is almost 15,000 jobs. Lithuania is a success story,” Bahrke told The Baltic Times.

Some job opportunities were presented also at the presentation of the Interreg Volunteer Youth, which took part at the Press Club Brussels Europe during European Week of Regions and Cities. Interreg are EU programmes to stimulate cooperation between regions in the EU. The Interreg Volunteer Youth is a part of the European Solidarity Corps, which, in December 2016, was initiated by the European Commission President Jean-Claude Juncker to create opportunities for young people to volunteer or work in projects in their own countries or abroad, that benefit communities and people around the EU.

The Interreg Volunteer Youth (IVY), which started its activities in March 2017, welcomes EU citizens (next year maybe also citizens of EU neighbouring countries) between 18 and 30 years old and covers their travel expenses. The volunteers work for a minimum of two to maximum six months. The European Commission pays them 19-26 Euros per day: it depends on their placement – it will be 26 Euros in Luxembourg, while it will be less in EU countries where daily life is not so expensive. There is no taxation imposed on this money. Some 600 Euros per month is considered to be not a bad monthly wage for young people in the Baltics – it is above minimal Baltic wages, although it is below average Baltic wages.

Now the IVY has 46 volunteers and some 80 organisations across the EU, which would like to take volunteers. Their job can be teaching languages at school, promotion of European Territorial Cooperation policies and activities, or any other job, which suits their qualification and interests of hosting organizations. Those who wish to join the IVY should register at the Internet site of European Solidarity Corps and write an email to ivy@aebr.eu . There are some Balts who took interest in joining the Interreg Volunteer Youth.

“So far we have one Lithuanian confirmed. She will be deployed at the Council of Ardennes, in France. We expect more volunteers from the Baltic countries,” Alessandra Cardaci, Project Manager for the IVY, told The Baltic Times.

There are also some IVY volunteers, who would like to work in the Baltics. “We have a German guy deployed at the University of Tartu in Estonia for a health-related project together with the University of Lubeck in Germany,” Cardaci said.

There are some Baltics-based organisations, which are interested in taking IVY volunteers. “The Interreg Programme Lithuania-Poland has shown a preliminary interest.

The Agency for Science, Innovation and Technology in Lithuania has also shown an interest in the framework of an Interreg Europe funded project. The Interreg Programme Estonia-Latvia is very interested, and they should start the application to host two volunteers very soon. The Ministry of Environmental Protection and Regional Development of Latvia – in charge of coordinating all Interreg Programmes in Latvia – has also been in touch with us in order to potentially host volunteers. The World Sport Volunteers Movement [its secretariat is based in Tallinn] has applied and we will soon match them with a volunteer,” Cardaci said.

The European Week of Regions and Cities took part during the Catalonia crisis. On the evening of Oct. 10, the speech by Catalonian Government President Carles Puigdemont in the Catalonian Parliament was anticipated nervously in Brussels due to the main question: will he announce the independence of Catalonia or not. A couple of hours before the Puigdemont speech, the European Committee of Regions held its debates on Catalonia. Before the debates, the members of the European Committee of Regions were addressed by European Council President Donald Tusk.

“Before you start the debate, allow me – at this extraordinary time for Catalonia and the whole of Spain – to address in your presence the President of the Generalitat de Catalunya, Mr Carles Puigdemont, shortly before his speech. I appeal to you not only as the President of the European Council, but also as a strong believer in the motto of the EU: “United in diversity.” As a member of an ethnic minority [Tusk is a Kashubian; it is an ethnic minority of Poland] and a regionalist, as a man who knows what it feels like to be hit by a police baton. And as a former prime minister of a big European country. In brief, as someone who understands and feels the arguments and emotions of all sides. A few days ago, I asked Prime Minister Rajoy to look for a solution to the problem without the use of force. To look for dialogue. Because the force of arguments is always better than the argument of force. Today I ask you to respect – in your intentions – the constitutional order and not to announce a decision that would make such a dialogue impossible. Diversity should not, and need not lead to conflict, whose consequences would obviously be bad: for the Catalans, for Spain and for all of Europe. Let us always look for what unites us, and not what divides us. This is what will decide the future of our continent,” Tusk said.

The debates in the European Committee of Regions were rather predictable: representatives of the mainstream European political parties were calling for dialogue and respect for the Spanish constitution, which does not allow secession of its regions (this piece of the Spanish constitution is rather a copy/paste from the German constitution and therefore, the Catalan independence referendum was illegal, according to the Spanish constitution), while a representative from Catalonia and some other European regional parties, such as the Scottish National Party, spoke in favour of the Scottish-style referendum.

The Catalan referendum issue is clear from the Spanish legal point of view: it was illegal. The Catalan pro-independence parties would have a stronger political argument in Brussels if the support for Catalan independence would reach a level above 50 per cent of the entire Catalan population, which was not the case at the time of the Brussels debates. The EU is not a federation yet and EU institutions can not interfere into such domestic issues of its Member State if there is no breach of law by the national government. The EU institutions could help in mediation only in case both sides, the national government in Madrid and the regional government in Barcelona, would ask for it.

Interesting news from Brussels: there are rumours in Brussels, which come from non-Lithuanian sources, that in 2019, the current Lithuanian President Dalia Grybauskaite, will replace Jean-Claude Juncker in the post of the European Commission President (in case the post of European Commission President and the post of European Council President would merge, as it was suggested by Juncker in his State of the Union address of September 13, 2017, she would replace Tusk as well).

A source in Brussels told The Baltic Times that Grybauskaite could be a little bit more subtle in her rhetoric regarding Russia. Anyway, maybe the Russia issue would not be an obstacle, because Vladimir Putin is not currently the most appreciated political leader among the EU elites. The EU is, basically, the German chancellor and the French president. At least the relations between Grybauskaite and Angela Merkel are said to be good.

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