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EU Structural Funds to shift from East to South

The EU is planning to shift the centre of gravity in structural funds from Eastern to Southen Europe the Financial Times reported on Monday.

In the 2021-2027 budget period, the main losers in the reallocation of the €350bn structural funds are expected to be the Visegrad Four: Poland, Slovakia, Czech Republic and Hungary. The Baltic States may also be affected.

The main winners will be countries like Greece, Portugal, Italy and Spain.

Overall, structural funds will be reduced by 5-10% due to Brexit, according to budget Commissioner Günther Oettinger. Moreover, there will be greater demands for matching funds.

However, the key policy shift will be in the formula for the allocation of structural funds on a per capita GDP basis. According to a leaked European Commission policy paper, allocation criteria will be broader than population and the new criteria will be broader and will include criteria such as youth unemployment and rule of law of compliance.

One of the key criteria that will negatively affect the allocation of funds for Eastern Europe will be the numbers of asylum seekers regions host. This will greatly benefit Italy and Greece.

The policy shift signals a major policy departure since the 2004 “big bang” enlargement, in which new members were the main beneficiaries. Between 2014 and 2020, Poland secured €77bn, Hungary €22bn and Slovakia €14bn; at the time, the south saw 30% reduction in funding allocations.

First publication: EU Structural Funds to shift from East to South, New Europe: April 23, 2018,