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EU enlargement and structural funds in Scotland

Bachtler, John (2001) EU enlargement and structural funds in Scotland. Quarterly Economic Commentary, 26 (4). pp. 28-33. ISSN 0306-7866

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Abstract

For over two decades, Scotland has been a major beneficiary of the regional policy of the European Union (EU). By 2006, it is expected that Scotland will have received around £7 billion under the Structural Funds since the inception of ERDF in 1975. During the 1990s, when Structural Fund expenditure in Scotland was at its maximum, some two thirds of the Scottish population were covered by areas eligible for EU regional policy support, averaging over £250 million per year. In the current budget planning period (2000-2006), Scotland will receive a total of £1,094 million for the various EU-funded programmes now under way. This European funding is now under threat. As the EU prepares for enlargement to take in up to 12 new members over the next decade, plans are being made to redirect Structural Funds to the poorer countries of Central and Eastern Europe. Many of these countries have income levels well below those of the EU Member States, with extensive poverty, underdevelopment and industrial dereliction. Tackling these problems will be the priority for future EU regional policy, with any remaining available Structural Funds going largely to the present less-developed countries of the EU - Greece, Portugal and Spain. Without an increase in EU budgetary resources, it seems unlikely that the richer EU Member States, including the UK, can expect to receive much, or maybe any, funding under EU regional policy, after the end of the current budgetary period in 2006. The following paper considers the implications of the next reform of EU regional policy for Scotland. It begins by reviewing the political context for enlargement and the economic development challenges, and then reviews the emerging debate on scenarios for reform, identifying the issues for Scotland.