Italy has learned a valuable lesson - rocking with Elton John costs a fortune. An all-out controversy broke out over the veteran British musician's concert at Naples after the European Union (EU) learnt that Italy drew money from the European Regional Development Fund to pay for the September 2009 show.

The EU union on Friday sent off a letter to the Italian Finance Ministry as well as and authorities in the Campania region stating that it will have to repay 720,000 euros ($981,000), part of a 2.25 million euros ($3,070,349.87) grant to Italy's Campania region to promote regional development, which was used to organize the concert.

The EU asserts that the money was intended at funding structural long-term investments aimed at promoting Campania, and not for a one-off rock concert. Ton Van Lierop, an EU spokesman, has revealed that European Commission is taking this matter really seriously.

The European Union will be deducting the money in question from future payments to Italy.

The organizers, on the other hand, claim that the concert at Piazza Plebiscitto, which was part of the Piedigrotta Festival, was aimed at promoting the Naples area.

Campania, a region in southern Italy and home to Naples, is under the grips of a powerful Italian crime syndicate, the Camorra, which is known for extorting money from local governments and businesses.

Controversy outbreak

The row over Elton John's concert and the alleged misuse of 2007 EU grant broke out when Mario Borghezio, a member of the European Parliament from Italy's Northern League party, dubbed the use of EU subsidies to fund the Naples concert as shameful and criminal.

Borghezio also filed a complaint with the European Parliament, in turn leading to an investigation by the European Commission, the bloc's executive arm.

The conflict point

While cultural projects are, in fact, considered as one of the legitimate ways to use developmental funds, the conflict arises from the fact that the EU argues that a rock show does not qualify as a structural long-term investment.

In Ton van Lierop's words, Cultural events, culture in general, can fall under the scope of operational programmes, but they have to be aimed at structural long-term investments.

Italy's counter argument

Ever since the row broke out, Italy has maintained that the concert was not only aimed at promoting the region's culture, but was also a marketing operation.

Dario Scalabrini, the ex-head of region's tourism office, had justified the concert saying it promoted Neapolitan culture.

Elton John sang the Neapolitan song O Sole Mio for the first time ever. The audience was crying with emotion, he said.

Dario Scalabrini, a former Campania official who organized the festival, justified that the concert as a huge marketing operation for the city of Naples.

Political implications

The Elton John concert episode is the latest among a slew of similar incidents over the use of funds. It underlines the weaknesses of the European Union's regional financing program, which permits national and regional governments to decide how to allocate money from EU. This applies for projects worth less than 50 million euros ($68 million).

The use of European taxpayers' money by the authorities has come under the scanner ever since governments initiated steps towards cutting public spending, hiking taxes and increasing the age of retirement.

There have been two other recent controversies over use of EU funds. Former Slovakian government has been criticised for using European Union money to improve leadership skills in a vegetable processing plant and for giving money to two soccer teams that was intended to aid education in Roma. Besides this, an EU-financed project allotting 411,000 euros ($560,000) for a Hungarian dog fitness and rehabilitation center has come under the scanner. The dog centre was never built. Follow