Development & Aid, Economy & Trade, Environment, Europe, Financial Crisis, Headlines

EUROPE: Help the Economy, Hurt the Environment

Claudia Ciobanu

BUCHAREST, May 13 2009 (IPS) - The European Economic Recovery Plan devised by the European Commission last year to help deal with the financial crisis is likely to fast-track environmentally damaging projects in the new member states.

One of the tenets of the European Economic Recovery Plan (EERP), launched in November 2008 by European Commission (EC) president Jose Manuel Barroso, is acceleration of payments to new EU member states from the European Structural and Cohesion Funds and the European Investment Bank.

The accelerated funds, amounting to about 23 billion euros, are destined mainly for infrastructure development, and are considered essential by the EC to creating employment and assisting the economic recovery of the Central and Eastern European countries.

The EERP, which was approved by the European Parliament in March 2009, stresses the need for “smart” investments through promotion of clean technologies, support for micro-enterprises, and programmes for re-training labour.

But environment groups warn that these payments could be used by the new member states for infrastructure projects that are environmentally costly, have better alternatives, or are not sustainable in the long run.

Bankwatch, an independent group monitoring the impact of investments by financial institutions and corporations Europe-wide, has published a map of 55 EERP projects that are “environmentally threatening and economically unsound.” The list includes 22 incinerators – 12 of them in Poland – and several transport routes that pass through naturally protected areas.

These projects are high on the list of government priorities, and are the ones most likely to get financing through the EERP.

“EU funds granted to post-socialist states provide hard cash for heavy investments, but fail to deliver capacity building and knowledge transfer for small-scale projects, which usually have more development effect for local and regional communities,” Keti Medarova from Bankwatch told IPS. “Because of this, the money allocated for small initiatives cannot be absorbed, and gets re-allocated towards the ever-growing costs of large infrastructures.”

Medarova warns that the combination of “the Keynesian approach promoted around the crisis to pump in public money for big infrastructure” can have negative consequences in the new member states, where politicians are keen to use this opportunity to “undertake grand promises and plans at the expense of promoting local and regional developments.”

The 55 controversial projects lined up for EERP funding are still to receive the green light. Medarova says the map is intended as “an early warning” for the EC, which has a say in granting the money, and could also monitor procedures such as the environmental impact assessment and public consultation.

Many of the 55 projects lined up for EU funding have drawn considerable local opposition. Ignoring protests against incinerators in places such as Warsaw or Krakow in Poland, the government increased the number of planned incinerators from eight to 12.

Regardless of technological progress achieved over the past years in making incinerators less damaging to health and the environment, most incinerators still run the risk of producing carcinogenic emissions such as dioxides and metal particles.

Bankwatch figures also show that the 12 Polish incinerators would use up 66 percent of the cohesion funds granted to the country for waste management, restricting investment in more environment friendly and cost-efficient forms of waste management such as collection and recycling schemes. The EU is in fact going against its own policy of promoting recycling, reduction and reuse, according to Bankwatch. Currently, the Polish recycle only 3 percent of municipal waste.

According to the independent Global Alliance for Incinerator Alternatives (GAIA), lobbying from companies building incinerators has led to a policy that is more permissive for investors. In June 2008, the group revealed that Caroline Jackson, Member of the European Parliament and rapporteur for the EU Waste Framework Directive, held a remunerated position in the environmental advisory board of waste industry company Shanks PLC.

It is not just incinerators that are controversial. The R52 motorway planned in the Czech Republic to connect Brno city with Vienna would affect several sites protected under the European framework Natura 2000. After evaluating the environmental impact of the route, as well as an alternative proposed to it, the Czech government decided in June 2008 to go ahead with both projects, even though they would service the same transportation needs.

In Bulgaria, the planned nuclear plant at Belene, prioritised by the government for EU funding, has been opposed by environmentalists and specialists for years, principally on the grounds that it would lie on a highly seismic area, making it more prone to accidents.

Bankwatch has sounded an additional warning over the public-private partnership formula being promoted for investment through the EERP. The EC says public-private partnerships have strong stimulus effects for economic recovery, but critics say fast access to this money encourages corrupted politicians and greedy companies. The International Monetary Fund (IMF) has cautioned that “the money received by private corporations in the current setting is more likely to be hoarded than reinvested.”

“The economic crisis should not be used as a political momentum to push forward controversial infrastructure projects with little recovery effects for the economy,” says Medarova. “Instead, what the EC should insist on is even stricter implementation of environmental legislation, especially as regards the impact assessment procedures, the evaluation of alternative solutions – both for waste and transport – and increased transparency and public debate over how the money for economic recovery and stimulus measures is spent.”

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