Regions leader: More flexibility for the new ‘cohesion policy’

Dr. Michael Schneider, Chairman of the European People’s Party Group in the Committee of the Regions. [EPP Group in the CoR / Flickr]

Regional structural funds absorption procedures should be simplified, Dr. Michael Schneider said in an interview with EURACTIV Greece, adding that financing through the European Strategic Investment Fund should also include a geographical factor.

Dr. Michael Schneider is the Chairman of the European People’s Party Group in the Committee of the Regions.

Schneider spoke with EURACTIV Greece’s Romanos Antonopoulos.

What are the regions’ main obstacles in achieving the 2020 cohesion policy goals?

I would like to underline that it is too early at this stage to conclude whether the objectives of the cohesion policy will be achieved because we are at an early phase of the cohesion policy implementation in this programming period.

However, obstacles occurred, such as the late adoption of the regulatory framework on the European Structural & Investment Funds (ESIFs). As a consequence, the preparation of the operational programmes was delayed. This led to a very slow take-up of ESI funds and persistent delays in the implementation of programmes under shared management.

In addition, the regulatory framework for the structural funds has become much more complicated than it was before. We have prepared an analysis in the Committee of the Regions (CoR) related to this. If you look at the volume of the regulations, currently there are more than 4,000 pages, in contrast to over 1,000 pages in the previous programming period. These lengthy instructions need to be read by all the managing authorities and civil servants directly involved in the implementation. This is not only a time-consuming and complex process but also one requiring extensive administrative capacities at local and regional levels.

What are the CoR’s suggestions to the Commission in order to ensure the European regions’ convergence?

Firstly, the cohesion policy has to become more flexible in the next funding period, without impact on the strategic focus and planning certainty for regional and local authorities. We cannot change the time that has been lost, but we have to diminish the bureaucratic burden in the future so that the cohesion policy will be successful in the long-term.

Secondly, the management of EU-funded projects for the post-2020 period needs to be drastically simplified. For this programming period, in the interest of the legal certainty, no fundamental changes should be made, but some immediate simplification should be envisaged. In this sense, I welcome the recent proposal of the Commission for simplification in the Financial Regulation, which touches upon some of the CoR recommendations, such as the reducing the numbers of audits towards one single audit.

Thirdly, the basic structure of cohesion policy with its three categories – most developed regions, transition regions, and less developed regions – is tried and tested and should, therefore be retained. It is precise and at the same time flexible enough to allow the inclusion of new challenges and priorities.

What is your opinion about the post-2020 cohesion policy regarding the combination of grants and loans which should be used for the European regions?

Member states may also use financial instruments within ESI funds. They could follow a method of a loan not of a grant. My region, for instance, has used financial instruments in this way and we created a system of loans for special investments and beneficiaries that had to return the part they received after some years. In this way, these funds could be “reused” again. Thus, the financial instruments can be useful and may constitute an alternative or complement grants where it is deemed to be useful by regional or local authorities on the ground or in a given policy area. However, we should abstain from any obligations to a further increase of financial instruments in the next funding period.

We think that the EFSI is a very important instrument for improving investment and growth in the EU, but its nature is different from the structural funds. EFSI is a monetary instrument, while structural funds are designed to bring long-term effects. The optimal solution would be if both would be mutually complementary and not in conflict with each other. However, local and regional authorities need further clarity and guidance from the EC on how to combine the EFSI with other EU funds.

In the evaluations of the European Investment Plan, it is addressed an unequal distribution of the investments in the more developed countries. What mechanisms would you suggest to ensure that areas particularly in the South and East, will be able to compensate for their structural problems (high-interest rates, lack of a stable banking system, political instability, weak administrative functioning) to attract private investment?

The EFSI Managing Director, Wilhelm Molterer, who was a guest at our last EPP group meeting, a few weeks ago, agreed there is a need to better address the geographical imbalances and that he will do everything to counterbalance this situation. It is not just an issue of North versus South or West versus East you can find disparities within a single member state. For example, there are currently no EFSI projects in the Eastern Germany. They concentrate in the Western part of the country for the moment. You may find geographical imbalances on many levels. Capacity building, pro-active advisory operations, and close cooperation with local and regional authorities on promoting and originating projects, are key for ensuring the proportional distribution of EFSI operations.

What changes would you suggest to the Multiannual Financial Framework final mid-term review?

The crucial point for us concerning the mid-term review is to secure that no major modifications will affect the programmes under the shared management. They have not only been negotiated and agreed by all of the political levels, from local to the European one but most of all they were designed to reduce disparities between European regions, in line with the Treaty obligations. On the other hand, we believe that certain degree of flexibility is necessary to be able to rapidly respond to crises and unforeseen events, such as the refugee crisis.

Are you satisfied with the work that the other EU institutions (Commission, Parliament) are putting in place regarding the regional policy?

We have a very good cooperation with the European Parliament’s REGI Committee with which we hold annual joint meetings and we are also happy about our cooperation with the Commissioner for Regional Development and DG REGIO.

However, at this moment, I am not sure if everyone in the European Commission is similarly convinced about the efficiency and the effectiveness of the EU regional policy. I hope that the Commission will continuously support this cornerstone of the European solidarity in the future. After all, Cohesion Policy is an investment policy, creating jobs and growth. It is enshrined in the EU Treaty.