Irish Regions Office Website

June 08, 2009

'Match-funding' to be relaxed for Structural Funds?

The rules that Member States must follow to obtain regional aid, employment aid and infrastructure project financing from the EU budget seem likely to be temporarily relaxed in the light of the current economic crisis. The European Commission is suggesting that, for 2009-2010, national governments could be exempted from the requirement to co-finance Structural Funds assisted projects - a burden which typically amounts to 50-60% of a project's overall cost. This would effectively free up access to hundreds of millions of euros which might otherwise have been seen as more of a drain on national public finances than a benefit at the current time. A further positive arising from this move would be a reduction in the threat of committed but unused funds being revoked if they have not been spent nationally within three years of being allocated by the EU. (''n+2'' rule).

The proposal, published in a policy paper on measures to support employment on 3 June with further details to follow later in the month, could apply to all Structural Fund facets of the European Regional Development Fund (including Ireland's two regional Operational Programmes) and the European Social Fund (National Human Resources Programme) if approved by the European Parliament and Council of Ministers. While it will be enthusiastically welcomed by many parliamentarians and governments, achieving agreement seems likely to depend on wealthier states securing assurances that any EU funding without the security of a national equivalent will only be directed towards projects which are cost-effective, well managed and will deliver real and strategic benefits.

Posted by iroronan at June 8, 2009 02:02 PM