Chasing after Brussels' millions

by Joachim Fahrun, Berliner Morgenpost

At the end of the day, it is all about the money. The journalist from Northern England asks Pawel Samecki whether his region is expected to pay back the EU millions because of inaccurate accounting. The Bulgarian is being assured by the Commissioner for Regional Policy that her poor country keeps its position among the top beneficiaries. He cannot make the same promise to the Spanish region of Asturias though: “Getting too rich implies the ineligibility for the maximum funding amount.”

Berlin has already left behind its affiliation with those most in need of help, and yet  more then one billion Euros from the Structural Funds are flowing towards the German capital within 2009 and 2013. The Berlin Senate directs the flows to construction and social projects as well as to the public sector employment. The Investitionsbank Berlin (IBB) is replenishing its funds through Brussels' millions.

However, the long-term subventions are up for renegotiation. Lobbyists and eurocrats are already arguing that the funding regime may change following 2013. Many of the Member States as well as many members of the Commission are reluctant to support wealthy regions. Since opinion making in EU-27 is an enduring process, the debate has already begun. Hence, the funding approach, better known as cohesion policy among the Brussels bureaucrats, was the top issue during the Open Days  - the “family“ gathering of the 344 European cities and regions.

Dirk Ahner, the highest-ranking official under Commissioner Samecki, is confident that "some kind of cohesion policy" would be continued as equal living conditions remain important to the Commission. However, he is bracing himself for a tough budget allocation. Until now, his office has been holding the lion's share.

Volker Löwe, Head of the Berlin Representation to the EU, is lobbying for the current funding policy. However, the upcoming budget monitoring might reveal insufficiencies in terms of European cohesion, which would result in a new funding approach. Besides, many of the Member States want to pump less money into Brussels funds in future because of the financial crisis.

The trump card is called JOSEFIN

Löwe and his team seek to discover the new trends within the Commision, the Council and the Parlament in order to ensure a long-term access to the EU funding for their region. In future, the EU might be focussing on specific areas, such as climate protection.

This is one of the reasons why Berlin has sought to be affiliated with the Baltic Sea Region. Mr. Samecki regards the Baltic Sea Strategy as a successful example of the cooperation between countries and regions without the additional support of the EU. The BSR has proved to be doubly advantageous for Berlin. Prior to the crisis, the growth rates of a number of new EU Member States such as Poland and the Baltic States have been achieving high levels. Reaching EUR 650 million, Berlin's exports to Poland have been more than doubled after Poland's accession to the EU. Swedish and Finish high-tech enterprises and technology parks offer worthwhile cooperations.

JOSEFIN is Berlin’s  trump card in Brussels. With this finance project, the Investitionsbank Berlin (IBB) and the Berlin Senate Department for Economics,Technology and Women's Issues have introduced an attractive model. JOSEFIN was last year’s best submission within the Baltic Sea Strategy (124 applications in total) and is now a flagship project for cooperation in the Baltic Sea Region.

 “We haven't reinvented the wheel. We’ve just put together the best ideas from Europe” says Torsten Mehlhorn of Investitionsbank Berlin. He keeps the project going together with Thorsten Kohlisch of  Berlin’s Senate Department for Economics,Technology and Women's Issues. However, JOSEFIN has been facing several obstacles. Initially, the EU Commission has been blocking the progress. Formar Chairman of the Executive Board of Investitionsbank Berlin (IBB) Dieter Puchta intended to bury the project. Only the intervention of Senator Harald Wolf (Senate Department for Economics,Technology and Women's Issues) made sure that the project continued to move forward.

Meanwhile, Mr. Ahner of DG Regio approves the idea as the EU moves towards a replenishment-related approach in terms of funding. "It was important to present us  for the next funding period. Now, we have something to show ",  stresses Mr. Mehlhorn, who has been invited by Director General Ahner to discuss JOSEFIN  and its adaption in emerging cooperation regions, such as the Danube Region.

JOSEFIN combines a variety of supporting measures for SMEs with ambitions that go beyond national borders. Along with the advisory services, JOSEFIN could assign an employee who is familiar with the new market to a particular enterprise and cover half of the labour costs incurred. EU counter guarantees encourage lenders to loosen conditions for even small borrowers. "The financial crisis helped us to become popular", says Mr. Mehlhorn, "Meanwhile, the credit problem is affecting larger enterprises as well. Being backed by the EU, we can approach this challenge."

For enterprises, it is helpful to have the same conditions in the BSR, whether or not the lender is based in Germany, Sweden or Poland. To agree on details with administrations and lenders from Estonia, Lithuania, Latvia, Norway, Poland and Sweden is time-consuming indeed, however, Mr. Kohlisch hopes that the first EU-backed loans can be provided next year.

The EU Commission looks forward to such promising approaches: "We are under the moral pressure of Member States and regions" shares Commissioner Samecki, "Now, we must deliver results"

The original article can be obtained here (in German)

Baltic EU project

by Karolina Drogowska, Gazeta Wroclaw

Within the next months, an EU project that will support SMEs is due to start. The initiative will facilitate the access to finance of innovative enterprises.

JOSEFIN is part of the Interregional Cooperation Programme and covers 7 Baltic States: Estonia, Germany, Latvia,Lithuania, Poland, Norway and Sweden. The initiative incorporates individual coaching and financial support instruments.

One of the institutions in charge of the implementation, the Wroclaw Centre for Technology Transfer, will be working closely together with financial institutions. The EIF partly assumes responsibility concerning the lendings to SMEs. Eligible for support are projects which are both innovative and transnational. The cooperation can be carried out either within the participating regions or with SMEs based in non-participating regions.

"JOSEFIN intends to support high-risk but at the same time innovative projects, which are usually refused finance, by partly assuming responsibility." stresses Alicja Lindert-Zyznarska of the Lower Silesian Marshal Office.

The project is due to start next year. Loan and guarantee volumes are still unknown. The maximum amount is currently estimated to be 50 million zloty.

"Interested enterprises can already make use of our free-of-charge advisory service", reveals Jacek Firlej of the Wroclaw Centre for Technology Transfer. "We offer potential beneficiaries advice on accessible financing, cooperation activities and EU regulations."

The Wroclaw Centre for Technology Transfer is member of the Enterprise Europe Network which is made up of 600 partner organisations spread across more than 40 countries in the EU and Associate countries.

The original article can be obtained here (in Polish)