Czech Minister: ‘Flexibility’ needed in EU regional spending

Daniel Braun.JPG

What are the most important aspects of EU cohesion policy from the perspective of a 'new' member state in Central Europe? EURACTIV Czech Republic interviewed Daniel Braun, a deputy minister in the Ministry for Regional Development, who described the main elements of the Czech government's position.

Daniel Braun is the Czech Republic's deputy minister for regional development.

He was speaking to EURACTIV Czech Republic's chief editor, Jan Vitásek.

To read a shortened version of this interview, please click here.

Last November, the European Commission published its Fifth Cohesion Report, launching a discussion on future EU Cohesion Policy after 2013. Where do you see the most significant points?

We have seen a great shift in the Commission's position since the draft communication on the EU budget review leaked out [in October 2009]. Significant differences can be seen not only in the Fifth Cohesion Report, but also in preparing the new multi-annual financial framework for the period after 2013.

The Commission now acknowledges that Cohesion Policy proved to be an outstanding instrument for countries and regions in terms of the support for growth and prosperity, and it is also an important tool for fulfilling the objectives of the Europe 2020 strategy.

I see it as a fundamental change of paradigm which I truly appreciate.

Which issues does the Czech Republic welcome and which are seen as potentially problematic?

I do not think we were taken by surprise by any part of the proposal. But there are two or three very strong tendencies in the document. The first of them is the tight alignment of Cohesion Policy with the Europe 2020 strategy, which we will need to accommodate.

The second issue, and one which will probably be discussed very intensively in the upcoming months, is conditionality. I perceive it as a rational deliberation of the Commission. DG Regio [the Commission's Directorate-General for Regional Policy] will insist that EU taxpayers' money does not end up in some 'black hole'.

The third and a very strong accent is concentration [Editor's note: the Commission is proposing that each member state should focus on a limited number of priorities when deciding how to use its share of EU funds].

In principle, we do not see a problem here. I think it is essential that the results of Cohesion Policy are visible and this can only be achieved when there is a critical mass of investment in defined areas. This is rather a challenge for us on the national level – we will need to agree where we want to be heading and what are our key priorities.

You say that the Czech Republic will need to agree on several priority areas. What should these priorities be based upon and how will they be decided?

First, we will set them by reflecting our potential needs. I am convinced that our needs may well fit under the Europe 2020 strategy umbrella. We will proceed in a way that should be followed every time we decide on spending public money: to identify a need, define how to address it, assess whether public intervention is a solution or would not just lead to crowding out private resources, and finally answer the question of whether it makes sense to support the particular area from EU resources.

The Fifth Cohesion Reports stresses the importance of place-based policy. Do you think that this is applicable in the Czech Republic, or would it be necessary to make some changes to public administration at local and regional levels to ensure efficient implementation?

I think these are two separate issues. Place-based policy means that the policy is derived from the needs of a particular territory. This is not only about the system of implementation but also about the whole cycle from programming, where sectoral priorities should take into account both territorial characteristics and impacts on individual territories, to implementation on the ground, monitoring and evaluation. We need to strive for this. This is the right trend.

The second issue is multilevel governance. One of the benefits of Cohesion Policy is that it brings cooperation among different levels of state and public administration. I think this can be achieved. On the other hand, this is not the most important thing today.

At the moment, we should rather try to find common 'national' priorities and then talk about what the implementation should look like.

How will the Czech Republic link its national priorities, based on the potential needs of regions, with the priorities of the Europe 2020 strategy?

In our position paper [on the future EU Cohesion Policy], we stress the need for a sufficient level of flexibility so that member states and regions are able to define the main priorities that cover their needs. These are two triangles aiming at each other and we must find the best way to link them together.

From the top-down view, these are the Europe 2020 strategy and other requirements of the Commission. The bottom-up view is a pyramid of all kinds of needs and we need to choose them in a way that fits within the limits defined from above.

You said you regard conditionality as a potentially problematic issue. Could you be more specific?

The problem is that it is a brand new concept and it is unclear what is conditional on what. But as I have already said, in principle, and in the context of strengthening the orientation on results of the policy, we do not see a problem there. But it is important how conditionality will be defined in the European legislation and then applied. The devil lies in the detail.

It is also important to reach a consensus on who will set up the rules, who will define the targets, how the comparability of these targets will be ensured across the various member states, etc.

This notion is also reflected in our position, where we say 'no' to a so-called 'performance reserve' at the EU level [Editor's note: the Fifth Cohesion Report contains a suggestion that countries which achieve their targets could be rewarded with extra bonus payments from EU funds].

We cannot imagine that countries could compete with each other in fulfilling their National Reform Programmes. Each country will need a completely different set of structural and institutional reforms, and each of them will have a different starting position and will need to meet different objectives.

What is your perception of the condition that countries could lose EU funds in the event that they break the provisions of the Stability and Growth Pact?

In case of macroeconomic (fiscal) sanctions we say 'yes' – but at the same time our position is that the impact must be equal (fair and symmetrical) for all member states and it should cover all policies under so-called shared management, where country-specific allocations are determined ex-ante [in advance]. This will be the subject of serious discussions. I really think that currently there is no consensus on this issue.

A different issue is conditionality in the sense that was presented to ministers at the informal meeting in Liège [on 22-23 Nov. 2010] and that I have already mentioned. In this case, a limited number of conditions to be met by individual member states would be set up for every priority field as a prerequisite for EU funding.

I think this could be an option – but on the condition that we find clear parameters that would clearly state whether a member state meets the conditions or not, and that this will not delay the preparation and launching of the new generation of programmes.

One can imagine that with regard to conditionality, some member states might raise objections if they felt that 'Brussels' was imposing requirements on them in a way that interfered with their national sovereignty.

Exactly. That is why we need to talk about it more.

For example, I can understand a condition saying that EU funding to transport infrastructure should not be paid out unless a member state has a legislative framework that regulates the terms and prices of construction, or if a country has not carried out an Environmental Impact Assessment properly.

In such cases, these are things that would hinder the progress of implementation on the ground. At the same time, we need to watch for the subsidiarity principle.

Are there formal debates on how much the Czech Republic (and other 'new' member states) should, during the preparation of its future programmes, focus on convergence [helping the poorest regions] or would it be better to invest more in raising competitiveness?

At the recent meeting of the V4 countries [Editor’s note: the Visegrád Four or V4 is a group of Central European countries: the Czech Republic, Hungary, Poland and Slovakia], we clearly demonstrated that we wanted to give converging member states a chance to use EU money on investment in basic infrastructure, as investments into innovation and education cannot be efficient while there are still gaps in basic infrastructure.

These are two sides of the same coin: without a competitive environment, convergence might not work.

The European Commission assured us that there would be a space to accommodate these needs. I think that this type of investment is important (in particular for the Czech regions). On the other hand, I believe that the weight of convergence priorities should decrease in the long term.

Our future lies in interventions that support competitiveness and unlock the growth potential of the territory.

Do you think this notion should already be reflected in national documents that are being prepared for the next programming period?

In our country, building basic infrastructure has not been finished yet. But let us not think about basic infrastructure only in terms of connections to the core transport network. It is also energy, information and communication networks, environmental interventions, and others.

You mentioned contacts among the V4 group of countries. What are the upcoming plans following the V4 ministerial meeting in Bratislava (on 15 November 2010)? Is your common voice being heard at European level?

The opinions of the V4 countries, with support from Slovenia, Bulgaria and Romania [Editor’s note: the V4 meeting on 15 Nov. 2010 was also attended by ministers from these countries] have gained a reputation in Europe.

The feedback we received from the European Commission – in terms of its reactions to the letter from the V4 Prime Ministers and to the conclusions of the V4 meeting – was very strong.

If you look at the ministerial conclusions and at a presentation which Commissioner Johannes Hahn gave at the ministerial meeting in Liège, you will see that many of our points were reflected. The majority of what has changed from the publication of the Fifth Cohesion Report is in line with our conclusions.

The debates within the V4 group are more intensive now, because 2011 will be a year of V4 Presidencies of the Council of the EU [Editor's note: Hungary followed by Poland]. We have already established cooperation with our Hungarian colleagues and we have agreed to cooperate on contributing to their Presidency events and documents.

I see it as an opportunity to promote our interests.

What are the common priorities of the V4 countries?

Keeping Cohesion Policy as one of the key expenditure headings of the future EU budget, keeping the flexibility to choose priorities reflecting best our regional context, stressing the opportunity to finance at least partly our convergence objectives, (as well as having the) same objections towards conditionality.

These are all issues we are discussing and our positions are very close.

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