The First Minister, who's leading a trade mission to California, has given the Welsh Government's first detailed reaction to the EU budget deal. Carwyn Jones says its impact on west Wales and the valleys is as bad as feared. He also warns about the effect on the rest of Wales and on farming.
West Wales and the Valleys will lose out to wealthier regions,including those within the UK. The agreement would mean a reduction of some £400m for 2014-2020 compared to the funding for2007-2013 – this figure would be much greater of course in real terms. This is contrary to the EU’s objective to narrow income differentials across the Union. Furthermore, the impact for East Wales remains uncertain, as its funding allocation will need to be negotiated with the UK Government, but we have concerns that this region too will see a substantial reduction in its funding.
While other Member States, including Germany, Belgium, Ireland, Italy and Spain, have sought and secured additional special allocations for regions adversely affected by the overall budget settlement, the UK failed to negotiate similar protection for Wales. We must now look to the UK Government to make a fair allocation of support to Wales in order to address our much reduced Structural Funds budget so that we can continue our work to lift the economy of our country.
As regards the Common Agricultural Policy, it is difficult at this stage to extrapolate direct payments to farmers or for the rural development funds and we expect the details to emerge over the coming weeks and months. However, we will be pushing the UK Government hard to ensure that our allocations reflect the challenges faced by our rural communities and the industry more generally. Overall, where the agreement failed to provide adequate support at the EU level for our vulnerable communities, we will be looking to the UK Government to cover the shortfall.
Earlier today, the Prime Minister said he expected 'fruitful talks' about how European funds should be distributed. The entire seven year budget has still to be approved by the European Parliament, which could reject it.
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