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A European commissioner has ruled out any chance of changing a plan which could cost the north-east£100m a year in...
A European commissioner has ruled out any chance of changing a plan which could cost the north-east£100m a year in grant aid.

Monika Wulf-Mathies, commissioner for the regions, said in an interview with The Journal that the region should have nothing to fear from the shake-up of the grant structure and the expansion of the European Union.

But business leaders are disappointed at Ms Wulf-Mathias' refusal to offer any hope of the plans being changed.

Following a reorganisation of the grant aid system - known as Objective 2 funding - jobless levels in the region fall below the European average and Ms Wulf-Mathies believes the unemployment rate of a region must be the 'main criterion' for deciding which areas get aid.

She believes the shake-up will help regions by helping to 'cut administrative red tape' and make the application process easier.

Ms Wulf-Mathies would not budge on calls by north-east business leaders to allow gross domestic product, a measure of productivity per head, to be used to assess whether a region deserves regional aid.

Ms Wulf-Mathies said: 'The main sign of a structural crisis is normally that people are being made redundant and cannot find jobs.'

Ms Wulf-Mathies said she could not say at this stage whether the north-east will qualify for Objective 2 aid.

However, the European Commission says only industrial regions whose unemployment is above the EU average of 10.8% will qualify for the aid. The official measure of joblessness in the north-east is currently 8.2%.

But she said the British government would be able to choose half the areas for aid using its own criteria. She said firms in the north-east will benefit from new countries joining the European Union.

'The potential for increased trade with the countries of eastern Europe is vast,' she said.

There may be a role for the North East Regional Development Agency.

'If RDAs can help co-ordinate the streams of public monies which match the European grants awarded through our programmes it will be a step forward,' she said.

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