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First minister Rhodri Morgan has hailed the publication of the European Commission's cohesion report* as the start ...
First minister Rhodri Morgan has hailed the publication of the European Commission's cohesion report* as the start of full-blooded negotiations over future funding for Wales' least prosperous areas.

The report outlines the commission's assessment that the West Wales and the Valleys area would still qualify for significant funding beyond the end of this programme in 2006.

Mr Morgan said: 'West Wales and the Valleys is right in the middle of their£3bn Objective One programme now. I certainly would not want to see that programme come to a juddering halt on January 1, 2007. Today's report will be an important foundation for us to seek the best possible deal for Wales beyond 2006. The commission has published their proposals; now the negotiations can begin in earnest. We need to consider the EU proposals, as well as what the UK government is counter-proposing, to enable us to put us in the driving seat to secure the best deal for Wales.

'Regional development in Wales is one of our key responsibilities. Whether the money comes from the UK government or the EU, we will make sure the money is used to improve the lives of people in the less well off two-thirds of Wales.'

'The 2001 data is the first snapshot of the 2000-2006 programme. What it shows is that West Wales and the Valleys could be in line to receive significant funding as a 'statistical effect' region.'

The statistical effect refers to regions which would have qualified for Objective One, were it not for the additional 10 countries joining the EU, which means the current grant recipients are no longer the poorest areas of Europe.

The commission's offer amounts to a gradual phasing-out of funding over the years 2007-2013. Rather than end abruptly in 2006, programmes would continue, albeit at a reduced level of funding.

The first minister added: 'Objective One should never be seen as a prize, but the programme is already delivering real benefits. Since 2001 West Wales and the Valleys has seen improv ements across a broad range of economic and labour market indicators. Over 1,000 projects worth a total investment of£1.7bn so far have been approved. Money spent so far has created or safeguarded almost 55,000 jobs. We have also been awarded an additional£58m from the performance reserve in recognition of our good management of the programme so far.'

* The report is available here.


Objective One funding is awarded to regions of Europe whose GDP is below 75% of the EU average. West Wales and the Valleys will receive£1.3bn during 2000-2006 - with match funding, the programme's total investment will be£3bn.

The Cohesion Report also names Merseyside and Highlands and Islands as 'statistical effect regions'. Early figures suggest that Cornwall would remain in Objective One.

The Commission will bring forward draft regulations this summer, which will be negotiated over a 12-18 month period and subject to majority vote of the European Council.

The UK government believes that wealthier member states should finance their own regional policy objectives.

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