EPP-CoR members call on EC for closer territorial analysis
"I do believe in solidarity between European regions. But rules for regional aid should not drive a wedge between regions through displacement of jobs. When a company receives regional aid and, at the same time, relocates production to another region, the European Commission should investigate the causal relation between aid and relocation, and explain why benefits outweigh the damage, and depending on the outcome of this assessment, not allow this aid." Eddy van Hijum, Member of the Council of the Province of Overijssel made these remarks during a debate on EU matters for local and regional authorities focusing on 'State aid and delocalisation'.
van Hijum who is also the EPP-CoR ECON commission Coordinator brought such issues to light by means of presenting the case of the tyre company Apollo Vrestedein which announced a restructuring plan for its plant in the city of Enschede which will lead to the loss of 500 jobs in addition to impacting suppliers down the chain. He empahasised the big impact on families and the social fabric of the region of Twente.
van Hijum explained that this restructuring is partly the result of the drop in automotive sales due to the COVID-19 pandemic but also due to direct and indirect subsidies and also state aid to upgrade production lines provided by the Hungarian government. van Hijum complained that the dislocation effect for the region of Twente, which was also a disadvantaged region until 2007, was not properly taken into consideration.
van Hijum recalled that the Regional Aid Guidelines were recently extended until 2023. He called upon the European Committee of the Regions to collect input for the upcoming evaluation of the Guidelines to share stories that are impacting regions and to propose ways how to counter the power that the industry has to take advantage of the unleveled playing field and play off one region against another .
van Hijum said that it was time to reconsider the scope for additional regional aid in disadvantaged regions, in addition to the financial support they already receive from cohesion policy. He went on to say that cohesion policy is necessary to strengthen disadvantaged regions and help them become more competitive. "Together, we must work on a ‘Made in Europe’ strategy that promotes industrial self-sufficiency on our continent." concluded van Hijum.
In the same topic debate, Mariusz Frankowski, Warsaw City Councillor spoke about the need to take into account the diversity of EU regions and cities in the revision of the Regional Aid Guidelines.
He provided a detailed account of the needs of economically diversified metropolitan regions to ensure that the cohesion policy objectives can be achieved, especially in the post COVID-19 economic recovery.
A reason for this need of revision is due to the exclusion of companies from metropolitan regions characterized by high internal economic diversity.
This concerns, among others, the Warsaw Capital region which includes Warsaw City and the surrounding district regions (poviats).
He continued that the Mazovia region generates about 20% of the Polish GDP, the majority of which comes from Warsaw, where a number of companies and research institutions with a huge potential for innovation are located and which are the driving force of the entire Polish economy.
However, apart from the capital, there are also areas with a much lower level of economic development and lower investment intensity.
Frankowski argued that an eventual tightening of the rules of state aid for the whole NUTS 2 region would practically eliminate the investment support for entrepreneurs in the new financial planning perspective.
And that it would be particularly noticed by the representatives of the sectors most affected by the pandemic - the creative, gastronomic or tourist sectors, as well as a number of related industries, which require additional support. Moreover, such an approach raises the risk of relocation of companies to areas covered by a much higher level of support under the regional aid map.
He concluded that the designed rules for state aid should support the implementation of cohesion policy objectives, instead of hindering efforts to build a smart and sustainable Europe.
He took the opportunity to call on the European Commission to pay particular attention to both the amounts of aid agreed for individual regions, as well as the state aid intensities provided for in the regional aid maps.