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Page last updated at 10:55 GMT, Sunday, 11 October 2009 11:55 UK

Funding fears over expanding EU

European Parliament
The European Union has grown to include former Soviet Bloc countries

Wales could lose out on hundreds of millions of pounds in European funding, leading to cuts in jobs and services, it has been claimed.

As one of the poorest regions in Europe, it currently qualifies for funding of £1.3bn over seven years.

But that will change with the enlargement of the European Union (EU).

All four Welsh MEPs admitted Wales is unlikely to qualify again for the highest level of European support. Derek Vaughan MEP wants action.

He told The Politics Show something needed to be done to ensure the funding to Wales is not cut when the current package ends in 2013.

With the inclusion of other countries like Bulgaria and Romania, Wales is no longer among the very poorest regions and is likely to miss out on the next round of so-called convergence funding.

The Assembly Government said it expected Wales to receive transitional funding after 2013 and it was working with the UK Government to prepare for the future and maximise those funding opportunities.

Fears for the future of European funding in Wales were expressed as 47 regions in a similar position came together in Brussels.

Derek Vaughan
The worst case scenario is that Wales gets nothing at all and therefore we will lose £1.5bn
Derek Vaughan MEP, Labour

John Davies, leader of the Welsh Local Government Association, said the lobbying had already started.

"There are 47 regions already signed up to that process, capturing 75m people - 75m voices of concern will mean that politicians here in Brussels will have to stand up and listen," he said.

Mr Vaughan said losing the funding would have terrible consequences.

"The worst case scenario is that Wales gets nothing at all and therefore we will lose £1.5bn and the many many projects right across Wales who are currently benefiting from convergence funding will just stop being funded," he said.

"Those projects could go out of existence, the services will go and people could lose their jobs. We've got to stop that happening."

The money from the European Regional Development Fund is awarded to countries whose GDP is less than 75% of the EU's average.

Deprived communities

In recent years the average has come down with the admission of some eastern European countries.

Many politicians fear Wales won't qualify for the next round of funding.

The money has been used in the past to support projects aimed at improving the Welsh economy and regenerating deprived communities.

John Bufton
It's not European money, it's Welsh money, it's our money, taxpayers' money which we put in to the EU and it will fall by the wayside
John Bufton MEP, UK Independence Party

The announcement last week of a £38m city centre regeneration project in Swansea relied on £20m from the fund, while roads have been built and job creation programmes established using the money in the past.

But Conservative MEP Kay Swinburne said the money Wales has received to date had not been well spent.

"I have to say I'd like to be in a situation that we don't need the money," she said.

"If we do qualify I'm afraid it means the policies and the investments we've made with the funding we've had over a prolonged period of time won't have been put to very good use."

UKIP MEP John Bufton said Wales was entitled to further funding whether it matches the qualification criteria or not.

"It's not European money, it's Welsh money, it's our money, taxpayers money which we put in to the EU and it will fall by the wayside; we will not have it back," he said.

'Best deal'

Plaid Cymru MEP Jill Evans said the onus was now on politicians to mitigate the losses.

"We want the best deal possible for Wales so we'll be fighting at the European level for equality with the other areas for people in Wales to have the same opportunities as people in the rest of Europe," she said.

Among the challenges for politicians will be to ensure the European Commission, which proposes European policy, agrees to transitional funding for regions like Wales who currently receive funding but are set to miss out in future.

The commissioner for regional policy, Pawel Samecky, will eventually make this decision, and he told The Politics Show Wales that Wales was unlikely to have all its funding cut overnight.

"It is difficult to prejudge what the results of the assessment of eligibility will be for the next period but I am quite positive that there will be still some kind of transitional arrangements helping those regions who will lose eligibility to go smoothly through a transition period," he said.

"There would be a period of "x" years during which Wales or any other regions could receive this transitional decreasing amount of funding."

The Politics Show is on BBC1 Wales at 1200 BST on Sunday.

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