reflections on the third cohesion report on economic and social cohesion eprc regional development...
TRANSCRIPT
Reflections on the Third Cohesion Report on Economic and Social Cohesion
EPRC Regional Development Seminar Series
27 February 2004
John BachtlerEuropean Policies Research [email protected]
New developments and implications
Context: EC financial perspective Context: Reform debate The Third Cohesion Report Rationale for EU cohesion policy Cohesion policy priorities
– Convergence– Competitiveness and employment– Territorial cooperation
State aids Implementation
EC financial perspective
Financial frameworks 2000-06 and 2007-13
0.95
1
1.05
1.1
1.15
1.2
1.25
1.3
% G
NI
Approps
Payments
EC financial perspective
New Financial Framework 2007-2013 (Appropriations € '000)
0
20000
40000
60000
80000
100000
120000
140000
160000
180000
2006 2007 2008 2009 2010 2011 2012 2013
Administration
EU as global partner
Citizenship, security, justice
Other natural resources
Agriculture
Cohesion
Competitiveness
Reform debate – Member State positions
Rationalisation
‘Status quo’
Expansion
UK, Ger, NL, Swe, Aus, Den
Be, Fr, Fin, Ire, Ita, Lux
Portugal, Spain, GreeceNew Member States
Reform debate – main policy options
Option 1 – EC model keep or expand a well-funded EU regional policy EU continues to intervene in regional problems across
Europe promotion of convergence and competitiveness
Option 2 – Net payer model limit EU regional policy to the poorest countries (“cohesion
model”) or poorest regions (“concentration model”) richer countries deal with their own regional problems reduction in contributions to the EU budget
The Third Cohesion Report
Article 159 of EU Treaty requires report every three years
Aim: to report on the progress towards economic and social cohesion and the means for achieving it
Review of:– Trends in economic and social cohesion– Impact of Member States policies– Impact of Community policies– Impact and added value of structural policies
Convergence with the EU15
GDP 2.5% > EU15 GDP 1.5% > EU 15
N12 2023 2036
Slovenia - -
Cyprus - -
Czech Republic - -
Hungary 2006 2008
Slovak Republic 2013 2019
Estonia 2019 2029
Lithuania 2020 2030
Poland 2023 2037
Latvia 2026 2040+
Bulgaria 2040+ 2040+
Romania 2040+ 2040+
EU cohesion policy - rationale
Why is cohesion policy needed? Reducing disparities: growth and cohesion are mutually
supportive Compensation: cohesion policy helps spread the benefits of
other EU policies Balanced development: cohesion policy reduces pressures of
over-concentration and bottlenecks
A new philosophy? Past: objectives of convergence and restructuring – time-limited,
geographically focused policy Future: objective of balanced development – a permanent
policy, for all regions
EU cohesion policy - structure
Three priorities for Structural and Cohesion Funds:1. Convergence: growth and job creation in the least development
Member States and regions (78% of budget)2. Regional competitiveness and employment (18%)
– anticipating and promoting regional change– helping people to anticipate and respond to change
3. European territorial cooperation: harmonious and balanced development of the EU territory (4%)
Community Initiatives mainstreamed
Rural development organised under the CAP
Convergence priority Less-developed regions (Objective 1)
– strict application of 75% per capita criterion – no other criteria; sparse population regions excluded– increase in coverage from 22% of EU15 population (2000-06) to 25.6% (2007-13) of
EU25 population (116.6 million people)
Statistical effect regions (O1 in EU15 but not in EU25)– 5.2% of EU25 population (23.7 million people)– seven-year transition period– support higher than current O1 phase-out regions (ie. €126+ per head pa)– special provisions for national regional aid
Cohesion Fund– strict application of 90% of EU GNP– all new Member States (except Cyprus), Portugal, Greece – no provision for statistical effect (Spain)
Special programme for outermost regions
Competitiveness and employment priority
Budget: €61 bn (18% of cohesion policy allocation)
Coverage:– O1 transitional regions (‘phase in’ regions)
» 3.6% of EU25 population (16.4 mill population)» six-year transitional period» regional programmes (ERDF/ESF)
– All other regions» no zoning at EU level» funding divided 50:50 between:
regional competitiveness programmes (ERDF) national employment programmes (ESF)
Competitiveness and employment priority
Allocations to Member States – not specified
– possible starting point of existing O2/O3 funding?
– use of GDP, employment, unemployment?
Allocations within Member States– Thematic concentration: innovation/R&D; accessibility; environment
– Geographical concentration – references to:» industrial, urban and rural areas» use of territorial criteria for regions with geographical handicaps» more emphasis on cities» take account of sparse population (also higher EC contribution)
– Resource concentration: “rules on minimum financial volume of programmes and priorities”
Competitiveness and employment priority
Implications:– sizeable amount of “Objective 2/3” funding – thematic concentration may not be major constraint
» fits with ‘Smart Successful Scotland’ strategy
» some repackaging of existing interventions possible
» gaps: tourism? community development?
» “maximum of three themes”
– requirements for geographical targeting are implicit rather than explicit
– Member States will have different approaches to geographical concentration:
» top-down versus bottom-up
» ‘blank sheet’ versus status quo
Territorial cooperation priority
Significant increase in funding – 4% of budget (€13.5 bn) Coverage:
– Cross-border cooperation (all land and maritime borders)
– New Neighbourhood Instrument on external borders
– Trans-national cooperation Interregional cooperation integrated into regional programmes EC-organised networks of regions and cities
Implications: – definition of maritime borders
– major redefinition of spending priorities - more on infrastructure
– may be a problem of co-financing
State aids – radical changes
Pressures:– limit population coverage in EU-25– need for flexibility in current rigid guidelines– need to reduce aid intensities– move away from investment aid to large enterprises
Radical changes to State aids:– less-developed regions: Article 87(3)(a)– statistical effect regions: Move from Art 87(3)(a) to 87(3)(c)– other regions: no maps; consistency with “applicable state aid rules”– simplification of rules – aid amounts (LETS) and aid impacts (LASA)
Implications:– no regional aid outside Article 87(3)(a) areas?– problems with implementing programmes?
Implementation
Simplification:– Three funds (ERDF, ESF, Cohesion Fund)– Mono-fund programmes– New planning framework
» EU Cohesion Policy Strategy adopted by Council
» National Development Strategy by each Member State
» National/Regional Operational Programmes (‘short documents’ at ‘high priority level’)
» No Programming Complement
» Annual reporting to Council
– Devolution of financial control (within limits)– Simplification of financial management
Implementation
Retention of key programming principles More accountability
– retention of N+2 and performance reserve– “more rigorous monitoring mechanisms”– redefinition of evaluation tasks to be “more strategic and results
oriented “ More emphasis on partnership
– further decentralisation to “partnerships on the ground”– “tripartite contracts” of Member States, regions and local authorities– more involvement of social partners and civil society
ERDF and ESF: independent or coherent? Structural Funds and rural development: coordinated?
Implementation
Implications:
– Higher profile for cohesion policy at Council level– Devolution of responsibility to Member States but
more ‘accountability’ – Genuine simplification – but limited– New challenges for programme managers:
»continued accountability for financial absorption »new accountability for policy results
EC timetable
10-11 May 2004: European Cohesion Forum
July 2005: EC legislative proposals
End 2005: Council and Parliament decision
2006 preparation of 2007-13 programmes
1 January 2007: start of new programmes
Conclusions
Key messages:
A new philosophy of cohesion policy: balanced development Increase in funding for cohesion policy Three priorities: convergence, competitiveness, cooperation All regions eligible for funding Thematic focus on innovation, accessibility and environment Radical changes to State aid control Rationalisation of implementation but more accountability