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17/06/2005
Future of Welsh aid left hanging in the balance
Western Mail article

Billions of pounds worth of European aid for Wales could be used as a bargaining chip in the high stakes Brussels budget summit.

Britain could give away aid worth £3bn to Wales over the next 15 years, as Tony Blair battles to hold onto the annual £3bn rebate from the European Union and cap overall spending in Brussels.

Foreign Secretary Jack Straw has insisted impoverished parts of Wales will not lose out if the aid package is lost amid fierce negotiation in the "nightmare" EU summit.

Downing Street was last night predicting 24 hours of tough talking before anyone knows whether a rebate deal will eventually be possible.

But Plaid Cymru warned what the UK Government is proposing is to trade guaranteed cash from abroad for vague promises at home.

With experts predicting a summit ending in deadlock, Plaid Cymru vice-president and MEP Jill Evans said the talks could make or break Welsh aid even if they end in stalemate.

"There is up to £3bn for Wales on the table at this European summit - money we need and deserve," she said.

"This is European aid that could make such a tremendous difference and transform the economy of West Wales and the Valleys."

West Wales and the Valleys has so far received £1.2bn worth of aid from Brussels through the Objective One programme and the summit should determine whether Wales could qualify for a second round, followed by 'transitional' relief until 2020.

But Plaid Cymru believes the UK Government, which wants the European aid system scrapped, could bargain it away in a bid to break deadlock over Britain's annual rebate and the union's whole budget.

The aid is handed down to the poorest regions of Europe and Wales currently still qualifies despite seven years of Objective One cash and the introduction of ten impoverished Eastern bloc countries into the union.

Britain has branded the current system "unfair and wasteful" because it amounts to "recycling money between richer member states that could more efficiently pursue their own national programmes of aid".

Foreign Secretary Jack Straw said, "If our proposals for reform are adopted in full, the British Government have given a commitment to domestic funding for the United Kingdom's nations and the regions to ensure they do not lose out as a result."

Plaid Cymru's parliamentary economics spokesman Adam Price said such a promise was "not worth the paper it is not written on" because it does include a pledge to match the exact extra money that would have come from Europe.

He added, "The structural funds for Wales is not something the Treasury is keen to support. It is not in its interests because all the extra money that comes to Wales has to be match funded by the Treasury.

"To put this in context, Wales spends about £280m every year on economic development. The aid amounts to about £200m a year and, with match funding added, it is basically our economic development budget gone."

Plaid Cymru believes there are two main threats to Welsh aid. If the Government succeeds in capping Brussels' overall budget to £540bn over seven years, (as opposed to the planned £667bn) it is likely that could only be achieved with the help of repatriation of aid programmes. Secondly, if Britain's intransigence delays a deal on the budget, it could see West Wales and the Valleys tip over the wealth level threshold needed to qualify for European aid funding.

Welsh Conservative MEP Jonathan Evans said he believed the biggest threat to the aid was posed by deadlock rather than a potential deal.

"There is so much bad feeling at this summit, it seems hard to see how anything could get agreed.
"But if Blair gives way on the 1% budget ceiling it will end up with the UK paying £20 for every £1 it gets back in structural funding, so it's a bit of a no-brainer."

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