Sir,

The negotiations on the financial perspectives 2007-13 have severely damaged Europe's credibility and raised additional doubts for the citizens on the future of the European Union. They also showed that even after 50 years of European construction, of the creation of a wide area of peace and stability, national interests still prevail in Europe, able to cause an ambitious project of a united and enlarged Europe to regress. Just 18 months after the historical enlargement of the EU, the commitment, unanimity and solidarity are again threatened in the face of the question of financing the EU's political ambitions.

Moreover, regional and cohesion policy, where the needs and expectations of the new member states have been highest in terms of financial support, are the main losers in these negotiations. After the first cuts made by the Luxembourg presidency in June 2005, the further reduction of EU revenue proposed by the UK presidency has been achieved at the expense of the structural funds, which contribute to fostering convergence between the EU's poorest and richest regions and to supporting regional economic development throughout Europe. These decisions will surely slow down growth and hamper competitiveness and social and territorial cohesion in the whole EU.

As president of the Assembly of European Regions (AER) which represents 250 regions from 30 European countries and 13 interregional organisations, I would like to point out that regional development policy is one of the key factors, if not the key factor, of a successful Europe. Many regional examples from the north to the south of Europe show that economic stagnation and high unemployment are not inevitable, even in the regions facing structural difficulties. By investing in improving their accessibility and in the development of small to medium-sized enterprises and clusters, the prime source of growth and jobs in Europe, by financing measures relating to innovation, knowledge and human capital, many European regions have become enviable economic leaders and look forward to the future with optimism. This demonstrates the strategic role that regions perform with particular regard to the European integration process and competitiveness.

During the last general meeting of the regions of Europe, in Strasbourg last month I underlined this point of view to President Barroso he agreed with me that the EU leaders must stop bargaining on a national basis and fund their political ambitions for the EU as a whole.

The approval of the budget at the EU level is only the beginning of a long process, in which national spending plans also have to be produced and planning for investments has to be implemented. Only 12 months remain before this budget should enter into force; this is already too short a period in which to carry out this process and investment throughout the EU will be put on hold. The European regions hope the Austrian presidency will do its best in order to prevent the time that has already been lost affecting the competitiveness of the EU for years to come.

Riccardo Illy,
President of the Assembly of European Regions