European development and agricultural funds to shrink significantly

SPAIN / EUROPE  

European development funds available to Spain, and especially to Andalucía, are expected to drop sharply over the next couple of years, according to financial sources such as building societies, real estate developers and particularly agricultural organizations. Experts predict that 2010 will be the worst yet for banks and building societies; 2011, while bad, will be slightly better for the national financial system, which will only be truly on the mend in 2012. The same is expected for the construction/building/development trade, but adding a couple of years. This takes us to 2014, which is when the new EU financial package is released, to cover the next seven years. The agricultural sector, however, fears a downturn in Common Agricultural Policy budgets, with money going to new EU members in the East and significant changes in policies. Funds for internal development (e.g. infrastructure, investment development, innovation, education and agricultural and fishing development)>

Andalucía has until now been in what used to be called an Objective 1 territory, and is now called  a Convergence Objective, one of two such territories in Spain. This meant that income per capita was under  the average for the EU, or only 80% of the average. But that was before entry of the new EU members.

Andalucía received €4,000 million in 2009, of which just over half went to infrastructure, investment development, innovation, education and agricultural and fishing development. The rest, €1,870 million went to direct help or to the agricultural market. The whole amount is over 3% of the regional GDP, which is expected to show a decrease of an average of €1,500 million between 2014 and 2020.

The downturn could be considerably more, though the Director of Development and Innovation of Andalucía, Antonio Valverde, insists that EU policy has traditionally resisted sharp changes in the economy scenario.

Nevertheless, the main agricultural employment organization in Andalucía, ASAJA, predicts that over €1,000 million per year could be lost. That is, 60% less in support received by the 286,000 farmers of the region.

Other organizations say that Andalucía will get only one third of the present amount of money from 2014 onwards.