The Commissioner was commenting on changes to rules concerning the spending of structural and cohesion policy funds in a document tabled by the UK Presidency on December 5 on the 2007-13 budget. The paper proposes extending the time limit for spending allocated funds from three to four years and lowering the proportion of funds recipient member states have to provide to match money from the EU budget. National and regional authorities would also be able to count the cost of VAT on projects towards their national contribution as well as private finance. New member states will also be able to use regional development funds to modernise Soviet-era housing blocks.

Mrs Hubner said she objected to the UK's proposals because they substituted "short-term concessions" for long-term investment which was the whole point of regional policy. The UK proposals needed an "extreme makeover" rather than just a face-lifting exercise, she said. The overall level of the budget was crucial, she said, and called on the UK to restore the additional euro 14 billion offered to the new member states by the Luxembourg Presidency in their compromise in June.

She also attacked the concept of having two sets of rules for different member states, pointing out that the new member states were not having real problems spending the money they were being allocated. The UK argues that the new members struggle to spend all of the funds they are entitled to and so should accept lower entitlements in exchange for a range of measures to help them spend their EU funds more quickly.

But the Commissioner insisted that data for the last 18 months "gave no grounds" for thinking that new member states had a worse track record on utilisation of funds than the existing EU15. For example, they had managed to spend over 95% of their allocations for pre-accession funds, she said. In any...

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