Europe Reconsiders EUR9.2bn Digital Agenda Superfast Broadband Funding

The European Commission’s (EC) plan to boost funding for its Digital Agenda strategy by €9.2bn (£7.3bn), which will help to make superfast broadband (30Mbps+) services available to 100% of EU people by 2020 and would directly impact projects in the UK, could be affected after the Cypriot presidency questioned the allocation.

The extra funding was original proposed one year ago as part of the EC’s proposals for a €50bn pan-European Connecting Europe Facility (CEF), which would have seen €31.7bn allocated to develop transport, €9.1 for energy and €9.2bn for digital communications (i.e. telecoms) via equity, debt instruments and grants. This would also need to be matched by similar private sector and local government investment.

However last weeks “informal” meeting of ministers and Secretaries of State for European Affairs, which was held in the Cypriot capital Nicosia (Thursday 30th August 2012), warned that the telecommunications part of the EC’s proposed CEF had “received less support by Member States” and would thus “need to be reconsidered” within the context of wider spending cuts.

Statement by the Cypriot Presidency

“The Presidency retains that programmes under this sub-heading have a high potential to contribute to the fulfillment of the Europe 2020 Strategy; however, they will also have to contribute to the overall reduction.

Whilst recognising the strategic importance of the Connecting Europe Facility (CEF), the Presidency notes that the telecommunications part has received less support by Member States than transport and energy and considers that the size and relative weight given to the three strands of the Connecting Europe Facility, as well as the scope of the proposed transfer of 10 billion euro from the Cohesion Fund, need to be reconsidered.”

The prospect of a reduction is bitterly opposed by the EC, which has previously warned that any cut in broadband investment would risk damaging growth and put the prospect of another recession back on the table (this is obviously a moot point for people in the UK where a second “double dip” recession has already struck).

The Presidency now aims to reach an agreement by the end of this year, which would allow the CEF to begin implementation during 2014. As a side note the EC originally estimated that €270 billion would be needed to meet its Digital Agenda targets; the current plan might fall well short of this but then it doesn’t include additional private sector and local government funding.

PRESIDENCY ISSUES PAPER (PDF)
http://www.cy2012.eu/index.php/en/file/t4OXQzwQKPz2nxXo9+AUZw