U.S. Markets closed

News Summary: Spending exposes Europe's errors

The Associated Press

RICHES FOR THE POOR: The European Union's aid policy for less well-off parts of the continent, meant to help bridge the wealth gap between rich areas of the bloc and poor, has done much to boost livelihoods. But the bonanza of easy money also bred political vanity projects, bridges to nowhere, lax oversight and widespread corruption — and wiser investments that might sustain long-term growth were often neglected.

HIGH EXPECTATIONS: The requirement to match the aid with local funds, often from bank borrowing, helped grow the piles of debt that are at the heart of Europe's financial crisis. This week, EU heads of state hold a special summit to hammer out the bloc's budget through 2020 — and development funds promise to be at the center of what likely to be an acrimonious debate on how to divvy up EU money.

MONEY IS GONE: Southern Europe, where countries have gone from feast to famine, spent lavishly on construction projects only to become financially overwhelmed when the economy tanked. Greece and Portugal have needed bailouts that together amount to more than €300 billion, and Spain and Italy are floundering as economic growth deserts them. That's despite together qualifying for some €104 billion in EU development aid since 2007 and much more before that.