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EU: Commissioner Criticizes Estonia, Promises Baltics Maximum Aid

Michel Barnier, the European Union's commissioner for regional policy and institutional reform, yesterday began a three-day tour of the three Baltic nations. Barnier is looking into how Latvia, Estonia, and Lithuania manage their share of the EU's yearly 1.04-billion-euro aid program for candidate countries' infrastructures. In a talk with RFE/RL Brussels correspondent Ahto Lobjakas before his departure, Barnier said he was generally satisfied with the success of the program, but that front-runner Estonia would come in for some criticism.

Brussels, 17 July 2001 (RFE/RL) -- When the European Union's commissioner for regional policy and institutional reform, Michel Barnier, meets with the three Baltic governments this week, he will do so primarily in his capacity as the overseer of EU infrastructure aid to candidate countries.

Barnier is in charge of an aid fund known as ISPA -- or Instrument for Structural Policies for pre-Accession -- which has an annual budget of 1.04 billion euros (about $884 million) from 2000 to 2006. ISPA supports large projects in the fields of transport and environment -- among other things, road and railway upgrades, waste management and water purification systems -- all essential to candidates' preparation for EU membership.

Commissioner Barnier says that overall the ISPA program has performed well. Its sister program -- called SAPARD -- which is intended to disburse 540 million euros (about $460 million) a year in farm and rural development aid between 2000 and 2006, only released its first payments last month. ISPA, Barnier says, has fully allocated all of its funds for the year 2000.

This year, however, a problem in implementing IPSA has appeared. Project allocations in some countries have stalled. According to the European Commission, the problem is most acute in Estonia, which has so far been rated as one of the most advanced candidates.

Barnier says his office has run into problems disbursing funds earmarked for Estonian projects in 2001. That's because officials in Tallinn appear unable to meet EU standards when presenting potential projects.

"[The problem is not that] there are no projects, but [that of] the administrative capacity [necessary for] preparing the projects sufficiently well technically [and financially.] And the purpose of my visit is to see how this could be improved in Estonia and other countries."

Asked whether the problem was more serious in Estonia than in Latvia or Lithuania, Barnier responded, "This is the feeling we have."

The problem is not only that Estonia might forgo vital development aid as a candidate. Barnier notes that ISPA -- in both its aims and administrative setup -- is a forerunner of the EU's generous regional development aid schemes, which become available to candidates upon accession. He says that being well prepared to use regional aid is one of the essential conditions of qualifying for such support as a new member.

Barnier points out that all three Baltic countries are in great need of massive development aid. In terms of per capita GDP (gross domestic product), they rank among the poorest of candidate countries. Barnier cites the latest available figures, which show that Estonia's per capita GDP is 37 percent of the EU average, Lithuania's 31 percent, and Latvia's 28 percent.

The regional aid commissioner says that given their relative poverty, the three countries would qualify for highest aid levels as members.

"Considering the actual situation of the three [Baltic] countries and the size of their GDP, they would be entitled to the highest levels of regional and cohesion aid available under [the next budgetary period]."

Barnier indicates, however, that aid budgets would not increase after enlargement. He also says current development aid recipients would not lose out, a signal that Spain, Portugal, and Greece -- the three "poorest" current EU members -- would probably receive more aid initially than any of the new members.

One way of justifying disparities in regional aid would be to argue -- as the Commission itself has done -- that new members would be unable to absorb more than 4 percent of their GDP annually. But independent analysts have suggested that new members would need development support in excess of 5 percent of their GDP a year to have a realistic chance of catching up with the rest of the EU.

Barnier admits that limiting aid to new members is a highly complex issue.

"The question is not taboo for me -- whether the 4 percent level is fair, whether there is a risk of penalizing some of the very poor countries. I cannot, of course, now prejudge the position of the Commission or of the member states, but I have posed the question to avoid unfairness."

Barnier goes on to say that he personally feels exceptions should be made for the poorest new members for larger infrastructure projects, permitting them to overshoot the 4 percent threshold. But, he notes, this remains an open question.