Commissioner Hahn is afraid that if Europe's regions fail to spend all of the money that has been allocated to them in the current seven-year period, which ends in 2013, then it will be difficult for him to stop the Council from cutting the budget for regional policy (also known as 'cohesion policy').
Looking ahead to the next seven-year period, due to start in 2014, Hahn said: "the size of the overall budget for cohesion policy will depend to a large degree on the current period".
The commissioner was speaking in Brussels yesterday (1 February) before a large gathering of politicians and officials who are responsible for implementing projects and programmes that are being co-financed with money from the EU's structural funds.
Hahn made clear that the future of these funds will be at stake later this year, when EU leaders officially start to discuss the framework for the EU budget in the years after 2013.
"It is hard to negotiate a budget if the resources allocated for [the current] period are not fully used – or not used in meaningful ways reflecting European added value," he admitted.
The Commission is not due to publish its own proposals for the future financial framework until the end of June, but some national leaders have already indicated that they will be looking for ways to restrain spending at EU level.
Addressing the closing session of a major conference on EU regional policy, called the 'Cohesion Forum', the commissioner made a direct appeal to those who are responsible for managing programmes with financial support from the EU's structural funds (also known as 'cohesion funds').
"I hope each of you will leave this Forum with a renewed determination to speed up the implementation of projects on the ground, and show doubters that cohesion funds work hard for the taxpayers, with not a cent wasted," declared Hahn.
Towards the end of last year, it was revealed that more than halfway through the current seven-year period, only 56% of the €347 billion available through the various structural funds had already been allocated to specific programmes, leading to a wave of negative headlines in the media.
If the money available during the current period is not fully used up, or if it is being spent too slowly, this would threaten to undermine the case that Commissioner Hahn has been making since last year, that the budget for cohesion policy should be maintained at its current level of around €50 billion per year – also in the years after 2013.
'Fight for an adequate budget'
This week's Cohesion Forum, which attracted some 800 participants, coincided with the end of a public consultation that was launched last November, when the Commission put forward its own ideas on the future of EU regional policy in the conclusions of the 5th Cohesion Report.
"Our fight for a strong cohesion policy for the future – meaning also our fight for an adequate budget – is far from over," declared Hahn, anticipating a tough political battle ahead.
"Only with a sufficient budget can we make meaningful headway with support for improving the quality of life in regions and strengthening territorial cooperation," he added.
"Without an adequate budget, all regions will see their funding squeezed," Hahn warned.
The commissioner said it would be a mistake to assume that the budget for cohesion policy could be cut without affecting the amounts available to the poorest regions.
"If there would be a significant reduction of the budget, it would mean that all the regions would receive less," said Hahn.
"If the cake gets smaller, that means all the slices are smaller," he added.
Hahn called on the assembled politicians and officials to help him make the case for maintaining the budget for cohesion policy in the coming years.
"We need to explain that our policy proposals are a serious effort to equip Europe with a regional policy that brings results," said the commissioner.
"We defend Cohesion Policy not out of loyalty to an old ideal, but out of commitment to a more prosperous and efficient future," he insisted.
Promise to simplify rules and procedures
At the Cohesion Forum, Commissioner Hahn also promised that further progress would be made on simplifying the rules and procedures for how money from the structural funds should be used, from project management to financial reporting.
"Simplification is of course a very powerful tool to drive our policy towards more results," said Hahn.
"Simpler rules simply mean fewer errors," he added.
Hahn said that the efforts the Commission had undertaken to lighten and simplify rules in the current period "have already borne fruit" – citing the recent Court of Auditors report which found a significant reduction in the error rate between 2008 and 2009.
The commissioner promised to further reduce the administrative burden on those making use of EU funds, by proposing "targeted adjustments to the existing system".
He also said that that the Commission is "currently examining ways how best to streamline the delivery of the next generation of cohesion policy programmes".
"We are exploring options for a more differentiated approach to delivery in order to ensure that controls are proportionate to the level of risk," said Hahn.
"We intend to extend the use of simplified reimbursement methods, such as lump sums," he added.
According to the commissioner, national authorities also have an important role to play in ensuring that simplification efforts bring real benefits to actors at regional and local levels.
"To ensure that managing authorities and beneficiaries really see a positive change, I will make sure that our commonly agreed simplified rules are properly transposed into national rules," said Hahn.
"All of us have to work on the reduction of red tape phenomenon," he insisted.
Hahn promised to ensure better coordination and alignment of rules between different EU funds, and also to take up some of the ideas that stakeholders had suggested to the Commission.
Cohesion policy on ministers' agenda
The commissioner also told the Cohesion Forum's participants that he is very pleased with the close cooperation that is being developed with the governments of Hungary and Poland, who during 2011 hold the presidency of the EU Council.
One result of this cooperation is that the future of EU cohesion policy is being discussed in the General Affairs Council, which brings together the national government ministers in charge of foreign affairs.
Hahn said it was "astonishing" that until this year, developments in EU cohesion policy were not being regularly discussed at the level of the Council of Ministers.
The commissioner reflected that, in the past, cohesion policy had perhaps been seen by many people "simply as a financial delivery mechanism" for distributing money to the regions.
According to Hahn, the fact that cohesion policy was now being regularly discussed by ministers showed "a recognition of accepting cohesion policy" as being "a policy which contributes to the welfare of the Europeans as a whole".
