* European Union competition law is stifling local regeneration in Europe’s cities, the RICS has alleged. Inflexible competition rules, it says, are stopping national governments filling the vacuum left by EU regional development funds which are being redirected to Central and Eastern Europe.
Many of the ten new EU member states qualify as high priorities for regional aid – the money allocated to help develop the most deprived parts of Europe. Brussels money that previously went to Wales, Northern Ireland and North West England is now being directed to poorer areas such as Poland and Estonia.
RICS says that this funding gap should present a classic opportunity for the private sector to step in. But EU competition law prevents local and national governments, or their private sector partners, from taking up the slack. The EU is particularly wary of state money flowing into private regeneration schemes as it fears unfair competition and corruption. The UK is hardest hit as it has the most highly developed system of public/private enterprise.
RICS is recommending ten urban regeneration policy changes to ensure that Brussels plays its role in helping Europe’s urban areas realise their full potential. Domestic funding initiatives for urban regeneration should not be held back because of unrealistic EU policy.
Although the institution supports the European Commission’s proposals to move structural funds in the direction of the new member states, it is concerned that urban areas in the older member countries will suffer as they lose European funding. It calls on the Commission to ensure that there is enough flexibility in the State aid rules to allow member states to support regeneration efforts outside assisted areas.
Michael Newey, chairman of the RICS public affairs committee said the Institution has no problem with EU competition rules and agrees there is a need to switch regional support to more economically deprived regions. But Britain, along with other western nations, has been left with a huge reduction in financial support for its poorer urban areas.
Competition rules are, he said, stopping us making local arrangements to plug the gap. ‘But this is not a crude matter of East versus West. Eastern countries too will need alternatives to regional support because Brussels will have nowhere near enough money to provide the development funding they need.’
Comments