Cyprus Mail

MPs want Cyprus listed as a ‘poor EU country’

DYSI MP Lefteris Christoforou said that procedures for EU structural funds should be simplified

PARLIAMENT is urging the President to ask the European Commission to list Cyprus as one of the poorer regions of the EU so the crisis-stricken island can be eligible for more structural funds.

The House Commerce Committee will be addressing a letter to President Nicos Anastasiades to that effect.

According to committee chairman Lefteris Christoforou (DISY), when Cyprus acceded to the EU in 2004 it was classified as a “rich” country, which consequently deprived the island of access to a number of EU structural funds.

DIKO MP Angelos Votsis said the timing to ask for extra EU support was right, given the dire situation Cyprus now finds itself in – a situation for which Europe is party responsible for bringing about.

He was understood to be alluding to the Eurogroup decision in March which led to a major downsizing of Cyprus’ banking sector.

At the time Cyprus joined the EU, its per capita GDP was at 78 per cent of the (then) EU-15 average.

Now, after the shrinking of its financial services sector and an anticipated sharp drop in GDP, the country can be listed as “poor,” MPs argue.

Cyprus is currently classified as a region for ‘phasing-in’ eligibility under the regional competitiveness and employment objective (formerly known as Objective 2).

Objectives are a central part of the EU’s multi-billion-euro structural funds. They are used to decide how the hundreds of billions earmarked for helping Europe’s poorer regions are spent.

Convergence objective (formerly Objective 1) money goes to the bloc’s poorest areas. These are defined as regions which have a per capita GDP below 75 percent of the EU average and include most of the territory of the new member states. Funds are used to finance economic development in these areas by, for example, improving transport links. EU money is only freed up if national authorities also contribute to a project by providing “matching funds.”

Objective 1 funding can usually provide up to 75 per cent of the cost of a particular project, although this can rise to 80 per cent in very poor areas.

Regional Competitiveness and Employment objective (formerly Objective 2) funds are earmarked for regions in industrial decline and rural areas, and can be used to finance up to 50 percent of the cost of projects.

European Territorial Cooperation objective (formerly Objective 3) funds are used to finance job creation measures across the EU.

Back in April the President wrote to senior EU officials asking that Cyprus be allowed to put EU structural funds to earlier use to help its stricken economy.

The response from European Commission President Jos? Manuel Barroso was positive.

Also yesterday, members of the House Commerce Committee called on everyone – the public and private sectors alike – to favour local products and manpower as a way of containing the surge in unemployment.

Appealing to hoteliers in particular, DISY’s Christoforou said: “It is not only our duty, but also a pressing necessity, if we want to save the economy and our future, to support Cypriot workers and local manual labour.”

EDEK MP Giorgos Varnava urged the central government as well as semi-state enterprises to prefer local products and services over foreign imports.

Varnava said moreover he is drafting a letter addressed to the Defence Ministry urging the military to buy local products, such as clothing and perishables.

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