Select Committee on Welsh Affairs Minutes of Evidence

Examination of Witnesses (Questions 180-188)



  180. Is there anything in Europe to stop it?
  (Mr Owen) Not to my knowledge.
  (Mr Beschel) This is why things have to be explained out of a given context. Ireland started its own development effort in a completely different way. They emphasised right from the beginning investment in other things than infrastructure. This is why when Ireland came and said, we have done a lot, we have increased our GDP dramatically and your funds were very valuable to that but we find ourselves in a situation now where we have great holes in terms of infrastructure, in two ways, the public infrastructure in the greater Dublin area and infrastructure on the island. Therefore, in this programme we looked at this and we said, indeed public transport in the Dublin area is a major development obstacle for this area, so we said we would finance part of the effort to do that. When we financed the 70 train cars or the 50 train cars we also looked at the related infrastructure that would have to be built by the Irish Government, it is not only the cost, it is the whole infrastructure environment, and the costs were very well identifiable, but the programme provides a much larger infrastructure investment, where our investment is about 80 per cent.

Mrs Williams

  181. Can I really press you hard on this one, if you spend a lot of money on infrastructure, I ask the question looking at it in a logical manner, if you do not carry on and improve your rolling-stock what is the point of having a good infrastructure if you do not have the proper rail service to run or proper rolling-stock to run? What I mean by I would like to press you hard on this is, if a request came forward what you are saying is that the Commission would have no objection to the member state taking such a step forward and look at examples like the one in Ireland?
  (Mr Beschel) If I say yes now we would have said it precluded the negotiations that might come up later on. What I can say is, we are looking at proposals related to infrastructure in the overall context for development in a given region. For us it is neither demonically bad or automatically a good thing. It can be good if it is rightly conceived in a strategic context and if it contributes to development in the way that it should. If such a proposal would fulfil these criteria who would we be to say no.

  182. Thank you. Mr Owen, your colleague said historically—he used the word "historically" two or three times I think—if we want to move forward and new fresh ideas come forward surely we should be considering those?
  (Mr Beschel) We look at all fresh ideas in all objectivity. Normally infrastructures are very expensive so it is a matter of how much of the available money you want to put in in an overall strategic context, you have to have a certain balance to look at. That is one thing. The second is, historically, and this is still true today, the Commission does not think that the United Kingdom generally is one of those countries which is particularly poor in infrastructure. Where we think that development efforts should normally be concentrated on and where infrastructure is required it should be demonstrated how this infrastructure could contribute to a given development target. We were in one of the Scottish regions and we were approached by telecom, at the time it was telecom, and our policy was we would rather finance telecom application projects and not the cables to be put. In one case it was an Objective 2, where this one cable linking the city to the university would give the university a different possibility and would allow businesses to come in, so we financed that, and it was a good thing to do. We are not dogmatic about it, but we look at it in the United Kingdom with a certain reservation in view of the United Kingdom context. We will not close our eyes to regional needs.

  Mrs Williams: Thank you.

Adam Price

  183. If you can tell us briefly about the forthcoming mid-term review, what you see as the purpose of the exercise? What will Wales have to demonstrate?
  (Mr Beschel) There is a mid-term review and the discussions on that and how it should be started with the United Kingdom authorities were set up last October or November for the set up. In a nutshell the mid-term evaluation should be done before the end of 2003. We have agreed with the Welsh authorities that we should try to have it in September in order to allow the necessary adjustments to be done in time to be in place as early as possible, if need should be. There is to be an independent appraisal to be made, organised essentially by the Welsh European Funding Office in conjunction with the Commission and the United Kingdom authorities, it would then depend on the outcome of this evaluation what the Committee, together with the Commission, would then do in terms of the consequences of the programme adjustments and if there is a specific need for anything. That is how it should work.

Julie Morgan

  184. What is likely to happen at the end of the Objective 1 period? Is there ever any transitional EU funding or are member states likely to have to provide their own transitional funding schemes?
  (Mr Beschel) That is a good question. I wonder if I can do it without my crystal ball, I will try and give you the elements that are there at this particular point in time. You will have noticed that, I think, in the first time of the history of structural funds the Commission started a debate very early about what should happen in 2006. They put it forward in a cohesion report last year. They came forward with questions and ideas in the cohesion forum last May. There is currently a report, an interim report as a follow up to the cohesion forum and particularly to the critical observation of some of the member states. There is a new interim cohesion report, it will be with the Commission this Wednesday, where the element of enlargement and the impact of enlargement for regional policy are being analysed. The intention of our Commission is really to start a broad debate, particularly involving the regions, and giving the elements for that debate. If you look at the new interim report you will find if the current criteria of 75 per cent of GDP average for a region Objective 1 applies a number of regions, including Wales, would not be eligible for funding any more. Until now it has been a policy of the Commission to organise for those regions that would not qualify under this any more in the new period to give a sort of soft way out, to give a transitional stage, that would be in favour of a similar solution for the current Objective 1 region. There is no law, there is a discussion going on about this. There is also the other question, if Objective 1 is not applicable in some of the regions what about their development needs that do not go away simply because the statistics have changed? There Mr Barnier quite deliberately said, "I am convinced these regions will need a continuing support". He quite clearly said that. How do you to organise it? Do it according to the model of the current Objective 2, do it on the model of the current community initiatives, in other words go by thematic things, go by job issues and by industry issues. The debate is open and what the Commission really wishes the regions to do is to say, we have an idea about how this problem could be tackled in the new programme period, we have some ideas to do that. There is a specific website that has been installed by the Commission where the regions can send their ideas to various offices, there has already been reaction from the Welsh authorities. It is an open debate and there are certain principles that our Commission adhere to and this principle being that the regions that are now eligible and will not be eligible any more will need further support. How this is organised is something to be decided. The Commission plans to do a continuous effort of trying to have the debate transparent and open so that when it comes by 2004 they will have to present their final proposals. Nobody will be surprised by then, this is the idea. This is a very open process.

  185. I wanted to ask whether you could give us any examples from the last round?
  (Mr Beschel) The principle was quite clear, those regions that are not eligible any more would have transitional status, transitional status meaning that the period would be less long, it was one year less, and it would be digressive in financing. That was the principle. That is how it was applied in Objective 1 in transitional regions in the Highlands and Islands, Ireland and in Northern Ireland.

Chris Ruane

  186. Could one of the ways of looking at it be to look at the Objective 1 regions, say Wales, at the end of that period and say Objective 1 has been a success for certain parts of Wales. Could you not break it down into smaller parts of Wales? Currently Objective 1 regions are designated at NUTS II level based on GDP, could you not say, there are consistent pockets of poverty in this area and that after that time period there should be additional resources for those smaller areas?
  (Mr Beschel) I would just invite you to put it in writing and send it to our website. Any ideas and any proposals are welcome and for the time being the Commission puts the issues on the table, it gives a general reaction. As I said, our Commissioner, not only because he is the Commissioner for Regional Policy and he does not want to lose his portfolio, which for politicians is a different matter altogether, is a regional man, from his own background—you may have seen his CV—he is convinced that regional policy as an expression of European solidarity must continue beyond the new candidates that come in, of course they will be the neediest, but beyond that there will need to be solidarity amongst the 15. Your ideas are as good or better than mine when it comes to bringing forward proposals of how this could be organised in the future.

Mrs Williams

  187. Is zoning of the choice of areas which receive assistance likely, where the Commission delegates greater autonomy to member states? If that is the case, what are the implications for Wales, would you say?
  (Mr Beschel) You will have noticed that Objective 1 was identified simply in areas of NUTS II of 75% or less. That was agreed by the council, so that was easy. The subsidiarity element came in under Objective 2 because member states were asked to bring forward proposals and select the regions themselves that they wanted to benefit under Objective 2 and there the member state had a certain margin of manoeuvre. The criteria laid down for Objective 2 gave the member states the possibility of selecting amongst a greater variety of potentially eligible areas to come forward with a proposal for the areas they finally would consider eligible themselves. If you look at an example, the way Objective 2 was allocated already reflects a fairly substantial margin of manoeuvre on the member states side in order to identify on the basis of some general criteria of the Commission the areas that they wanted to bring forward. The limits were simply by population, you cannot have more than a certain population covered. It was then up to the member states to identify the areas on the basis of the overall criteria.

  Mrs Williams: Thank you.


  188. Remarkably we have finished at exactly the time we were supposed to finish. I want to thank you very much, you have clarified a lot of issues which we have not had very good information on.
  (Mr Beschel) I enjoyed the discussion, pressurised or not. I also wish that your visit to Brussels might have broken the spell of your misfortunes that seem to be linked to European activities and culminated in a car accident that you suffered recently. I hope your visit to Brussels has broken the spell and Europe will shine on you for the future.

  Chairman: I always find it very inspiring when I come over here. I hope you are right, because it was a transport related matter. I cannot think what might happen with broadband cabling. Thank you both once again, it has been very interesting.


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