Eurofunds: A tool of nationalist policies?

It came with a great fanfare: on August 17, the European Commission's regional policy commissioner, Danuta Hübner, and employment and social affairs commissioner, Vladimír Špidla, announced an agreement between the EC and the Slovak government on a National Strategic Reference Framework (NSRF).

It came with a great fanfare: on August 17, the European Commission's regional policy commissioner, Danuta Hübner, and employment and social affairs commissioner, Vladimír Špidla, announced an agreement between the EC and the Slovak government on a National Strategic Reference Framework (NSRF). The framework lists the priorities for Slovakia's cohesion policy from 2007 to 2013 and describes how Slovakia is going to invest EU funding worth €11.36 billion (Sk382.769 billion) over the next seven years.

When the current Slovak government was formed with the participation of the Slovak National Party (SNS) - famous for a leader who once called on Slovaks to get into their tanks and flatten Budapest - European politicians were alarmed. As a result, Smer, the leading party of the current ruling coalition, was suspended from the socialists' group at the European Parliament.

Today that has been forgotten, at least in Brussels, Berlin, Paris and London. But not so in Slovakia, where SNS politicians head key ministries critical for channelling EU funds: Jaroslav Izák is the environment minister, and Marian Janušek is the construction and regional development minister.

Just a few days before the NSRF was approved in Brussels, Slovak media reported on the proposed public works programme that will be fuelled by EU funds. The Žilina Region in northern Slovakia, where the SNS has its voter base, is supposed to receive €3.63 billion (Sk122.353 billion) - the most of all eight administrative regions in Slovakia. The next on the list - the Prešov Region, also in the north - will receive €1.74 billion (Sk58.626 billion).

On the other end are regions in southern Slovakia, such as the Košice Region with €874 million or the Trnava Region with €712 million.

For the mostly ethnically homogenous Žilina Region of northern Slovakia, bordering Poland - the country of Ms. Hübner's origin - it means €5,223 per capita. An average citizen from the ethnically-mixed Košice region of southern Slovakia will receive investments worth less than a quarter of that - Ř 1,130 per capita.

Is it because northern Slovakia is suffering from the worst unemployment and social problems in the country? Not at all - unemployment in the districts of the Žilina Region was 11.8 percent in 2006, below the national average of 13.3 percent. On the other hand, unemployment in the ethnically-mixed districts of the Košice Region hit 20.3 percent in 2006, the highest number in the country that year.

Is it because Slovakia's north has the poorest infrastructure, and the most efficient infrastructure is to be built there? Nope - infrastructure in the north of Slovakia is better than in the south and construction of new motorways in the north is four times more expensive per kilometre (due to the large number of tunnels required) than through the central and southern parts of the country.

In fact, construction of motorways in northern Slovakia is, from an economical perspective, a highly inefficient investment. The internal rates of return on highway sections in the Žilina region (calculated for 2010 to 2015) are in general below 12 percent, the percentage considered bankable by responsible investors. On the motorway constructed towards the Polish border, it is even below five percent.

Roads through the central and southern parts of Slovakia that would serve the most depressed regions of the country have rates of return at the level of 18 to 19 percent. Yet they will see too little EU money, too late.

What is happening in Slovakia - so far with the European Commission's silent approval - appears to be nationalistic abuse of EU development tools. If ignored, the EU funds will be used in a way that discriminates against citizens of the most ethnically mixed and socially depressed regions.

This way of using EU taxpayers' money surely goes against the very heart of the EU philosophy. So far no one at the European Commission, nor the European Parliament, seems to care.


Juraj Mesík works at the World Bank in Washington. This article represents his personal opinion.

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