The metamorphosis of European funds from development to election spending
With European Commissioner Raffaele Fitto's openness to using European funds to cope with rising energy prices, another step in the metamorphosis of cohesion policy is taken. Cohesion funds were born as the backbone of the European integration project itself. The need to allocate funds, which are not by chance called 'structural' funds, to less developed areas stems from the political need for social justice dear to the founders of the common market. The Community project had to be based on a common market from which everyone benefits. In economic terms, this translates into the concept of convergence: all territories develop, but those that are lagging behind must be helped to grow faster. The common market must therefore favour a balanced and harmonious economic development process. This is why the structural funds have always been conceived as funds to finance structural investments (such as infrastructure), and not current expenditure, in less developed regions. Due to their long-term financing nature, these funds have been subject to seven-year programming, like the European budget itself.
That said, a metamorphosis of cohesion policy has been taking place for some years now. Since the early 2000s, cohesion funds have started to be progressively integrated into industrial policy and competitiveness. But it is with the recent pandemic that the most marked twist begins. In the emergency of the recession caused by the Covid19 pandemic, the European Commission quickly changed the regulations in order to be able to use cohesion resources, especially regional funds, to support families and companies in difficulty. Last year saw the start of the debate that will lead in the coming months to define the structure of the new European budget for the seven-year period 2028-2035. There, the need to increase the share of 'flexibility' in the funds that can be used in the event of unforeseen emergencies was reiterated. In the mid-term review of cohesion policy presented last year, the Commission also included large European industrial policy projects, defence and housing among the new areas for the use of funds.
Despite the opposition of part of the European Parliament and the European Committee of the Regions, the Commission's proposal introduced a further new element in the governance of cohesion funds, in the form of a marked re-centralisation. The proposal, in fact, foresees for the next programming period starting in 2028 a much more incisive role for central governments as opposed to that of regional governments. Commissioner Fitto's openness to the use of funds for energy emergencies fits coherently into a framework that sees, on the one hand, a growing openness to the use of cohesion funds for national 'emergencies' and, on the other, a strengthening of the role of central governments in management and guidance. The use of European funds to finance housing, and now the openness to their use to cope with the energy crisis, mark a further step towards a complete metamorphosis of European funds: from investments for development with a strong territorial traction, to financial availability in the hands of central governments used to cope with expenditure that has no place within the constraints of the Stability Pact.
An additional political fact that should not be underestimated is that the Italia government is approaching the end of its term and faces an election year. Traditionally in this year, incumbent governments tend to increase current spending to boost consensus ahead of elections. Allowing an excessively nonchalant use of European funds to cope with national emergencies, such as price increases, which have a strong impact on political consensus, may set an even more significant precedent on the misuse of European funds, aggravated by the circumstance of the presence of a Commissioner of the same nationality suggesting the proposal.
* Research Executive at the National Research Council, Issirfa-CNR, and affiliated with the Centre for International and Strategic Studies - Luiss University.
