"There is a consensus that we definitely need a cohesion policy – also in the future," said Hungary's Foreign Minister János Martonyi, speaking to journalists after ministers from the EU's 27 member states held their first discussion on the future of the European Union's cohesion polity at the General Affairs Council yesterday (21 February).
However, the Hungarian was also careful to underline that the overall goal of cohesion policy should remain, as laid down in the EU treaty, to reduce economic disparities among the various regions of the EU.
Foreign ministers endorsed the overall approach of the Commission's Fifth Cohesion Report towards cohesion policy, including the idea that all regions should be eligible to take part in programmes, while most of the money is allocated to the poorest regions and member states.
'More discussion' needed on tricky issues
However, not all of the ideas put forward by the Commission were accepted by EU governments.
The foreign ministers declared that "further discussions are necessary on certain proposals," such as the idea that member states should be expected to negotiate and agree 'partnership contracts' with the Commission.
Ministers want more time to discuss the Commission's ideas for so-called 'conditionalities' – linking conditions to the payment of EU funds – as well as incentive mechanisms such as performance-related bonuses for member states that reach their targets.
Another controversial issue on which there is currently no consensus is the Commission's idea of creating a new intermediate category for regions that are poorer than average – but not poor enough to automatically qualify as so-called 'convergence' regions.
The Council concluded that "further discussion is needed concerning the provisions of transitional mechanisms, in particular reflections on a new intermediate category".
Regarding the Commission's proposal to promote the use of financial engineering instruments, combining grants with various types of loan, the ministers insisted that it should be left up to individual member states whether they wish to make use of such methods.
National governments are also calling on the Commission to come forward with proposals to simplify all of the rules relating to the various EU funds, including financial audit and control arrangements.
The aim of such simplification would be to reduce the administrative burden and associated costs, both for the organisations receiving financial support and for the public authorities in charge of managing the programmes.
Support for reform proposals
Many of the Commission's proposals for reforming the EU's regional policy before the next round of programmes are launched in 2014 were received positively by the ministers.
In particular, ministers endorsed the idea of developing a so-called 'common strategic framework' for the various EU funds – including the rural development and fisheries funds – with the aim of ensuring "greater complementarity, coordination, coherence and synergies".
There is strong support for the idea of concentrating on a limited number of priorities, although ministers insist that member states and regions should be "given enough flexibility to select priorities and draw up appropriate policy mixes".
The ministers agree on the need for a more results-based approach, with better evaluation and monitoring of programmes on the basis of "a limited number of well-defined, easily measurable targets and a limited set of core indicators".
They support the idea of placing a greater emphasis on the objective of 'territorial cohesion' by taking into account the different needs of individual regions and sub-regions, as well as paying close attention to the development of 'functional urban areas'.
They also endorse the idea of so-called 'macro-regional approaches' such as the two multi-national strategies that are currently being developed in partnership with the countries around the Baltic Sea and along the Danube river.
There is broad agreement concerning the continuation of financial support for cross-border and inter-regional cooperation between regions in different member states – under the so-called 'European Territorial Cooperation' objective.
Cohesion policy linked to Europe 2020
This is the first time that the Council of Ministers has formally adopted conclusions on the future of EU cohesion policy, which provides financial support for projects that contribute to the economic and social development of Europe's regions.
Martonyi told journalists that the Hungarian Presidency had decided to include cohesion policy on the agenda of the foreign ministers' meeting because they consider it to be "one of the most important" EU policies, "closely interlinked" with the Europe 2020 strategy.
"It must be aligned very closely with the Europe 2020 strategy," he added, referring to the common objectives and targets in relation to employment, poverty, education and energy efficiency which were agreed by EU leaders in June 2010.
According to Martonyi, cohesion policy is a "kind of horizontal policy" because it is linked with many other important EU policies and initiatives, including the Danube Regional Strategy and the Roma integration strategy – both of which are seen as key priorities of the Hungarian Presidency.
Commissioner welcomes input
EU Regional Policy Commissioner Johannes Hahn said that the ministers' discussion would provide "an important input" for the legislative proposals that the Commission is due to publish in the summer.
However, the Commission will not publish draft regulations for the future cohesion policy until after it has presented proposals regarding the long-term financial framework that will define the overall size of the EU budget over the next seven-year period.
Hahn welcomed what he described as "great and broad agreement" among ministers on the idea that funding should be concentrated on a limited number of priorities.
The commissioner said that member states and regions should be invited to chose their own priorities – linked to the goals of the 2020 strategy – "like investment in energy efficiency or innovation, or support for small and medium-sized enterprises".