WALES is a major beneficiary of European aid but the future of the budget that funds it is currently under negotiation.

DAVID DEANS finds out more. IN THE middle of Belgium, an institution which benefits Wales to the tune of millions of pounds a year, is having its own budget negotiated.

The outcome will decide how much money is in the pot for the so-called cohesion policy – the European Union’s Plan to reduce regional differences in income, wealth and opportunities.

This week, regional politicians and government officers from across Europe headed to Brussels to discuss the future European budget and many other issues at the Open Days summit.

It was held in the gleaming bluetinted buildings of the city’s European Quarter, which includes the huge headquarters of the European Commission as well as buildings of the European Parliament. Wales has benefited from millions of pounds in cash from decisions made in Brussels.

In particular the West Wales and Valleys region has so-called “Convergence” status given to regions where the gross domestic product (GDP) – the value of goods and services made – is 75 per cent or less of the EU average.

That has meant the huge region, which includes Blaenau Gwent, Torfaen and Caerphilly county borough but stretches as far as Conwy and Denbighshire, gains from around £1.6 billion in funding being spent between 2007 and 2013.

Projects like the A465 Heads of the Valleys dualling scheme are among those that received European support, while businesses looking to expand or grow have been able to apply for grants through the Local Investment Fund. It’s claimed that since 2007 147,000 jobs have been created in Wales as a result of EU cash with 3,900 enterprises created.

Other parts of Wales, including Newport and Monmouthshire, benefit from smaller programmes with a smaller pot of cash than that available to the Convergence area.

However Wales’ implementation of EU funds previously came in for criticism, and earlier this year figures showed GDP in the Convergence area actually fell between 2005 and 2009.

European regional policy commissioner Johannes Hahn, a member of the European Commission executive body, said Wales had been trying hard to improve but had been hit by the economic crisis.

Speaking to the Argus, the commissioner said from 2014 60 per cent of Convergence funds could be ringfenced to small and medium sized businesses, and for areas like innovation, renewables and energy efficiency.

He said: “Regional policy is definitely necessary to improve the living standards of a region. South Wales is absolutely a candidate for that.”

Mr Hahn said South Wales needs “money in order to improve the economic situation. Therefore one target for the future will be to invest in small to medium size enterprises, in their competitiveness in order to create new jobs.”

The proportion of cash available for the regions is yet to be decided, and with governments tightening purse strings across Europe pressure has been laid to bear for the EU to do the same.

Prime Minister David Cameron has said he will resist “massive”

increases in the budget.

There was a glimpse of the argument during the opening session of Open Days, which was in part organised by the Committee of the Regions which Newport council leader Bob Bright is a member of.

In one impassioned speech at the meeting European Parliament president Martin Schulz said: “There’s one country calling for savings of 200 billion.

“That would mean less regional aid for you, less rural development, it will mean fewer (European university) ERASMUS students.” He said EU cuts would be “irresponsible”.