The European Parliament has taken a stand against the proposed reduction, after 2014, of aid received by the EU’s outermost regions (ORs - the Canary Islands, Azores, Martinique, Guadeloupe, French Guyana, Reunion Islands and Saint-Martin) under the cohesion policy.

For the period 2007-2013, these subsidies are set to rise to €35 per resident per year. However, legislative and budgetary proposals for the 2014-2020 period would reduce this budget by nearly 40%. MEPs are not happy, and have made this clear in a resolution, adopted on April 18 in plenary session in Strasbourg, with 565 votes in favour, 74 against and 21 abstentions ⁽¹⁾.

In the light of the budgetary battle currently taking place within the Council of Ministers, it remains to be seen how much these subsidies will be worth. At the end of 2011, Johannes Hahn, the commissioner in charge of regional policy, did not particularly reassure ORs when he stated that the maintenance of special subsidies was not a given. “Those who want to see these subsidies maintained, and even increased, should strongly defend their case before the Council,” he said at the 17th conference of the outermost regions’ presidents, held on 3-4 November in Fort-de-France, Martinique.

Parliament also said it was concerned about the Commission’s desire to see at least half of these subsidies allocated to investments promoting economic diversification. The Commission believes that this is the best method of obtaining the largest returns on investments, but MEPs pointed out that the subsidies were originally conceived to compensate for structural handicaps within the ORs, and that allocating the funds to economic diversification would distort the aim of providing such aid.

Furthermore, Parliament wants ORs to be automatically included in the category of least developed regions (LDRs) of the EU, regardless of their GDP. This would have significant ramifications, since LDRs benefit from the highest co-financing rates and weakest restrictions on investment choices. The Commission has proposed reserving this category for regions whose GDP is less than 75% of the EU average, but the most recent Eurostat statistics, published in mid-March (see Europolitics4384) show that neither the Canaries (whose GDP for 2007-2009 was 89.4% of the Community average) or Madeira (103%) should be included in the LDR category, except if Parliament’s request is accepted.

In May this year, the Commission is due to publish a communication on a revised strategy for the outermost regions.

⁽¹⁾ Report by Nuni Teixera (EPP, Portugal) on the role of cohesion policy in OMRs in the context of the ‘Europe 2020’ strategy