As the PIIGS Battle with Austerity the New EU States Struggle to Spend the Billions from Brussels
The European Commission has always used spending on infrastructure has an incentive for countries to join the European Union (EU) and in the 1980s and 1990s Brussels spent billions in Spain, Portugal and Greece. Even now the Commission are funding the building of new roads, and improving old ones, in Greece in an attempt to stimulate the economy.
The same incentives were given to the former eastern bloc countries, which joined the EU in 2004 and 2007, who were also promised a huge cash injection. Over the past decade that the EU has expanded eastward Brussels has set aside billions of euros to improve infrastructure in the ten new member states, initially targeting the fading communist-era railways, but now the Commission have plans to spend trillions of euros improving roads as part of the East West Transport Corridor.
However, an investigation by Reuters has discovered that since 2007 only one in ten euros on offer has been used to improve infrastructure. “Few areas were as ambitious as railways. The European Commission allocated €14.9 billion (£12.00 billion) to the so-called "cohesion fund" for 2007-2013 to finance railway projects in entrant countries and create a competitive, pan-continental system dubbed the "Trans-European Transportation Network" or TEN-T. The spending is meant to connect Europe, but is also a key part of Brussels' long-term targets to reduce carbon emissions by 60%, halve conventional car use and shift 50% of long distance freight onto trains and ships by 2050. The Trans-European Transportation Network foresees a massive overhaul of the way Europe's people and goods move about. The target is to put every business and more than 500 million citizens within 30 minutes of the core network. So far, though, only €1.65 billion (£1.33 billion), or about 11% of the fund has been used, according to calculations by Reuters based on data provided by the European Commission and governments.” (Reuters)
Failure to utilise the first tranche of EU funding is serious as it cast doubt on the EU’s ability to spend the additional €500 billion (£401 billion) that the EU has said is required for its transport network. At the moment the Commission estimates that by 2020 more than €250 billion (£200 billion) will be needed to achieve the first phase of its trasnport plan which involves connecting 120 major ports and airports to railways, upgrading 15,000 km (9,300 miles) of rail tracks to high speed and removing 35 key cross-border bottlenecks. “Transport is the lifeblood of the European economy. And if it does not flow smoothly, our economy will weaken and fail to grow," Transport Commissioner Siim Kallas said in a speech in Brussels, detailing plans to spend an additional €31.7 billion euros in transportation infrastructure over the next eight years. Europe's railways are an "inefficient patchwork," he said. There are seven gauge sizes for tracks, only 20 major airports in 27 countries are connected and major infrastructure projects "are not getting built." (Reuters)
Unfortunately the billions of euros that have been promised have failed to improve the EU’s transport network in the way envisaged and in some instances, such as in Poland, public transport has worsened. In the meantime billions of euros will sit in an EU account in Brussels until 2015 by which time if it is still unused it will be returned to the overall EU budget.
Last Updated (Thursday, 19 July 2012 09:58)