Cohesion Policy post-2020: Doing more with less and additional private funding

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV.COM Ltd.

MEP Maria Sypraki: "The European Union remains one of the safest yards for investments within the globe." [European Parliament]

In the aftermath of Brexit, which is expected to create a financial gap of €14 billion per year, doing more with less has, once again, become a cliché. But this time it is different, writes centre-right MEP Maria Spyraki.

Maria Spyraki is a member of the European People’s Party in the European Parliament and the spokesperson for Greece’s main opposition New Democracy party, an affiliate of the EPP. 

It is not Brussels as usual that just calls for more money in order to meet everyone halfway with a compromise.

These words eloquently -if not urgently- speak about the necessity for pragmatism in a time where indeed money is less, and the European Union is facing more challenges. At the same time the Union is quite stable after the first soak of facing Brexit and at the same time is overcoming the crisis and the growth rate is rising. The European Union remains one of the safest yards for investments within the globe.

The European Commission, in a communication published on the 14th of February, under the title “A new, modern Multiannual Financial Framework for a European Union that delivers efficiently on its priorities post-2020” laid out three possible scenarios for the future of EU finances for the period 2021-2027 ranked by level of ambition, which from the perspective on their impact on Cohesion Policy, translate as follows:

  1. The less ambitious and most unrealistic, in my opinion, scenario states that support from the European Structural and Investments funds should be maintained for all Member States, thus making available some €370bn to foster economic, social and territorial cohesion.
  2. The next scenario calls for a reduction in cohesion policy funds of up to €95bn, which will derive from the end of support to more developed and transition regions.
  3. The most ambitious scenario will limit support only to cohesion countries, thus further reducing ESI funds by €124bn, which respond to approximately 11% of the current Multiannual Financial Framework.

That’s the big picture. Let’s now zoom into Greece, which, according to the same communication, has been the third most benefitted country in accounting terms for the period 2014-2016. This translates to receiving annually €4.8bn per year whereas EU contributions for the programming period of 2014-2020 were equal to €20,4bn. Pragmatically speaking, all countries that are among the biggest beneficiaries of the EU will be negatively affected by net accounting terms if the second or the third aforementioned scenario plays out.

Under these circumstances, if countries like Greece would like to meet these ambitious challenges, they should plan ahead. This would happen if most, if not all, of the following conditions are met:

  1. Increase stakeholder involvement beyond the level of the direct beneficiary. Cohesion policy money has indirect, yet significant, an impact that is diffused to the entire EU. For example, as the communication states, it is estimated that a quarter of additional growth in non-cohesion countries is due to indirect benefits from increased sales to and trade with cohesion countries.
  2. Additionality is the new subsidiarity. We need to prepare solutions that manage to mobilize funds and make cohesion funds not only the investment arm but also the investment brain of the EU by using taxpayers’ money in a smart way, thus optimizing between grants and financial instruments to have a multiplying effect. We need to blend funds from all available resources, ESIF, EFSI, Horizon 2020, CEF, etc.
  3. Embrace uncertainty by flexibility. A practical example of that would be to enforce the Plan-Do-Check-Act virtuous circle by a solid implementation of the planned initiatives keeping a keen eye for improvements and changes when necessary. An example of that would be the reuse of decommitted funds under a Union reserve similar to the initiative that six MEP, including myself, proposed via European Parliament to the Commission for the use of unused funds to address the migration crisis back in 2016.

To conclude, I foresee that among the proposed scenarios, the first one is the least possible to move on. Member states should inevitably plan ahead if they want to move forward.

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