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New member states “may lose” billions in unspent aid, EU warns

Ten of the European Union’s poorest member states - and Poland in particular - risk losing billions of euros of unspent aid, a top EU official warned Monday.

“All member states, but especially the 10 new member states, must ... make more efforts to (spend) their structural and cohesion funds, because time is running out,” said Dalia Grybauskaite, the EU commissioner in charge of the budget. The so-called EU-10, which joined the now 27-member bloc in 2004, are Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia.

The EU has allocated a total of €8.5 billion ($12 billion) in “cohesion funds” over the 2004-2007 period to help the EU-10 catch up with the “EU-15,” the older and richer member states. This aid is in addition to separate “structural funds” available to all member states. According to figures provided by Grybauskaite, the EU-10 have to date used on average 57% of their structural funds and just 22% of their cohesion funds.

Addressing reporters, the commissioner suggested that failure to utilize such funds would be taken into account when negotiating the next budget. Grybauskaite noted that the EU-15 had suffered €750 million ($1,057 billion) in “decommitment” - an EU technical term describing the process whereby unspent money allocated in the EU budget to a member state is withdrawn - for the 2003-2006 period, and that there was “a real risk” that the EU-10 might suffer a similar fate next year. “Don’t dream about an endless possibility to absorb these funds,” she said. “Absorption levels are not satisfactory and time is running out.” Grybauskaite singled out Poland as one of the worst offenders and said it was solely up to national governments to spend the money at their disposal rapidly and efficiently. “Don’t look for excuses, because there will be no excuses. If Poland isn’t able (to spend the money), then Poland loses out,” Grybauskaite, a Lithuanian, told a press conference.

Overall, 91% of the EU’s €106.6 billion ($150.5 billion) budget for 2006 has so far been spent by the 25 member states (Bulgaria and Romania joined in 2007), according to official figures. France remains by far the largest recipient of EU money with €13.5 billion ($19 billion), of which €10 billion in agricultural funds, ahead of Spain. In terms of percentage of gross national income, Greece, Lithuania and Malta are the biggest beneficiaries after Luxembourg. At €316.1 billion ($445.6 billion), the Common Agricultural Policy (CAP) absorbed nearly 50% of EU expenditure between 2000 and 2006 and continues to command the lion’s share of the bloc’s annual budget. Structural and cohesion funds accounted for €202.8 billion ($285.8 billion) over the same period while expenditure designed to make the EU more competitive totaled €35.2 billion ($49.6 billion), despite increasing by 68% since 2000. (m&