EU competitiveness aid about to be atomised

Photo: Margus Ansu

The European Union gives close to €135m till 2020 to boost competitiveness of Estonia’s rural areas. However, the naggings and back room agreements among local governments may spray some of the money. 

Even as interior minister’s regulation regarding the distribution of said large money is yet to be ratified at government, local government leaders are busy dividing it as they see best. At that, they at times tend to forget the main aim – to not think own-commune centred, but entire-county centred, and focus on creation of new jobs.

To select objects for investment, interior ministry let county governments have freedom to decide; by mid-January, they were to present the ministry their action plans with proposed projects listed. Now, however, the ministry has prolonged the deadline.

The amount of programs in action plans is limited, as total costs thereof may not exceed the sum allocated to a county by more than twice. At application stage, Enterprise Estonia (EAS) will sift out the ideas to be financed.

The information on how much a county will get at the moment is marked «for internal use». This, the ministry first and foremost substantiates by saying the sums will be conclusively confirmed only after the regulation regarding financing details has entered into force. In reality, however, the scheme is set.   

The poor worse off

Though rather thoroughly prescribed by the ministry to county governments how the action planes should be, at least some of the communes and towns in them have read it wearing «what-serves-me-best» glasses. Thus, Tartu County Association for Local Governments members up and met last week deciding the €5.5–6m will be divided between communes and cities according to size of population.  

Instead of completing some large buildings vital for the entire county and employment, in Tartu County the money will be sprayed between communes. That’s at least what the commune heads want. Still, the county governor has his superior say with decisions, and unbefitting action plans may be sent back by interior minister.

The regional competitiveness program does not touch Tallinn, Tartu, Pärnu, major cities in Ida-Virumaa and the surrounding counties – for these, there’s a separate urban areas measure. Still, the commune heads decision will make things worse for the poor communes at edges of Tartu County with fewer inhabitants, less budget money and in greater need of support.

As an example of that, Alatskivi Commune in the North-Eastern corner of Tartu County with mere 1,300 inhabitants would get three times less (€230,000) than Nõo Commune of 4,000 inhabitants and placed between Tartu and Elva – the latter intending to pour over €700,000 of the European Regional Development Fund money into cycle/pedestrian tracks.

In the hopes of Külli Must who, over the years and with help by various funds has made a tourist magnet out of Alatskivi Castle, two birds could have been killed with one stone: the commune could have fixed the castle’s outbuildings and offer accommodations to the busloads of tourists – she says the demand is ample. Also, a hotel would create lots of direct jobs. Ms Must hoped for up to €900,000 of the competitiveness money, but the small commune looks set up for €230,000.

In the opinion of Alatskivi commune elder Andu Tõrva, the population-based distribution of money is not according to purpose. «The county governor also said we’d have to pick out the vital and larger objects from the county point of view,» he said. «Now, the money will be crumbed away.»

But Nõo commune elder Rain Sangernebo says bicycle and pedestrian tracks would considerably improve the traffic options for commune centre people. «Well everybody wants to go on bikes or on foot, but on the highway the traffic is pretty mean,» he said. «Just the last fall three local governments and county government also agreed that covering Tartu–Elva direction by bicycle and pedestrian track is extremely vital for the county. The project even passes a county line.»

According to Tartu County Association for Local Governments head Aivar Soop, at the debate it was settled that all local governments agree to receive money to get something done in their communes. «Even the European Union divides money into all member states, not so that some go without,» he observed.

Ministry disapproves

Interior ministry regional policy bureau chief specialist Natalja Zinovjeva is grieved at the misconceptions about the nature of competitiveness support.

«We would underline that action plans are not to be compiled on basis of population. What needs to be considered is the development’s effect on the county’s employment and economic activity,» she stated.

Ms Zinovjeva proceeded to list the increased options in the programme as compared to the previous budget period. «As before, money can be applied for enhancement of tourism and industrial infrastructure, but in addition to that counties can now support incubation of companies and product development. They may also ask money for modernising city space and improvement of connections between centre and outback,» she noted.

All in all, the EU regional support in this budget period has shrunk. With close to €392m distributed in 2007–2013, now only €254.4m. At the same time, the competitiveness boosting sum is up from €93m to nearly €135m – almost a half of total regional development support for 2014–2020.

On the other hand, the options of use listed have increased and hence the increased hazard of the sums to be atomised. Bicycle and pedestrian tracks are eligible and show us a commune that would not eagerly build an abundance of these next to their highways! The fact remaining: the impact of such tracks on employment may be indirect only.

Ida-Viru County governor Andres Noormägi was surprised at the money distribution principles in Tartu County. «How exciting. How will they show the money went to create jobs and was not just distributed between local governments?» he said, adding that the European Commission has learned from past period mistakes: if Estonians want social objects, let them do it for their own money; if they want to boost entrepreneurship and create jobs, we will help.

Ida-Viru no saint

Still, Mr Noormäe had to admit his native county isn’t sinless. Due to its backwardness, Ida-Virumaa gets a lot more money that other counties – a whopping €23.5m. The local governments, however, up and handed in 70 ideas worth €85m. While county government racked their brains over it all, the local governments association launched their own assessment. «In it, half of them gave maximum points to neighbouring counties and zeros to those far away – not thinking about jobs created or not,» lamented the governor. But they are rather successfully getting the mess sorted out, he said.

Meanwhile, there have been the «good kids» like Jõgeva County – and many others, probably – who went nicely along with the ministerial guidelines. At Jõgeva County, hopes are up for €8m to boost competitiveness.