The EU's enlargement on 1 May 2004 has exacerbated economic and social disparities across the EU. Recipients of Structural and Cohesion Funds such as Ireland and Spain are now being called on to contribute to the development of their new partners. In the 2007-2013 financial perspectives, cohesion policy amounts to 35.7% of the total EU budget (€308 billion), 62% of which should finance projects linked to the Lisbon agenda for growth and employment.
Background
Cohesion policy was enshrined in the Treaties with the adoption of the Single European Act (1986). It is built on the assumption that redistribution between richer and poorer regions in Europe is needed in order to balance out the effects of further economic integration. Through three and soon four generations of Structural Funds programmes, the Union has invested around €480 billion in the ‘less favoured’ regions since 1988. Before enlargement, the main beneficiaries were Greece (42.6%), Portugal (35.2%), Ireland (26.7%), the new East German 'Länder' (18.9%), Italy (Mezzogiorno - 17.4%) and Spain (14.7%).
With the accession of ten new member states in 2004, the development gap between regions has doubled, bringing many former recipients above the 75% threshold. As a result, most beneficiaries of the cohesion policy are now located in central and eastern Europe (see table: Breakdown of Community aid to the new Member States 2004-2006).
Against this backdrop, the Third Report on Economic and Social Cohesion (see EURACTIV 19 Feb. 2004) called for a major overhaul of the cohesion policy in the context of the 2007-2013 budgetary debate. On 15 July 2004, the Commission proposed a new legislative package in order to concentrate Structural and Cohesion funds spending on Lisbon (innovation, growth, jobs) and Gothenburg (sustainable development) goals. Both the Council and the European Parliament came to an agreement on the controversial reform in June/July 2006 (see EURACTIV 4 July 2006).
Issues
As from 2007, the EU Cohesion policy will revolve around three new priorities or 'objectives:'
- Convergence (formerly Objective 1): support for growth and job creation in the least developed member states and regions. Regions whose per capita GDP is less than 75% of the EU average will be eligible (mostly regions from new member states), but temporary support (until 2013) will be given to regions where per capita GDP is below 75% for the EU-15 (the so-called 'statistical effect').
- Competitiveness and employment (formerly objective 2): designed to help the richer member states deal with economic and social change, globalisation and the transition to the knowledge society. Employment initiatives are to be based on the European Employment Strategy (EES) (adaptability of the workforce, job creation and accessibility to the labour market for vulnerable persons).
- Territorial co-operation: to stimulate cross-border co-operation in order to find joint solutions to problems such as urban, rural and coastal development, the development of economic relations and the networking of SMEs. A new cross-border authority will be set up to manage co-operation programmes.
In terms of financial resources, the European Council on 17 December 2005 allocated €307.6 billion to the cohesion policy for 2007-2013. 81.7% of that amount will serve Convergence regions, 15.8% will go to regions eligible under the Competitiveness priority, and 2.44% will remain for European Territorial Cooperation.
The legislative package adopted by the EP on 4 July 2006 to support these priorities, comprises one general and four specific regulations:
- The general regulation: common rules in programming, managing, controlling and evaluating the new cohesion policy; emphasis added on environmental and accessibility issues, and on the "partnership principle" that governs the whole policy.
- A regulation on the European Regional Development Fund (ERDF): to fund projects on research, innovation, environment, risk prevention, infrastructure in the least developed regions.
- A regulation on the European Social Fund (ESF): to target projects for employment, quality and productivity at work and social inclusion – in line with the European Employment Strategy.
- A regulation on the Cohesion Fund: to invest in environmental projects and trans-European networks in member states with a GNP of less than 90% of the Community average National income (e.g. the ten new member states, plus Greece and Portugal).
- A regulation on a new instrument, the European grouping of cross-border co-operation (EGCC): for cross-border projects.
Complementing the regulations, the Commission issued the Community Strategic Guidelines to help national and regional authorities make the most efficient use of the EU money and to connect their programming with the Lisbon agenda (see EURACTIV 17 July 2006). The document calls for investments in knowledge and information society, innovation, entrepreneurship, the environment and "creating more and better jobs."
All in all, with this new Cohesion policy, the Commission seeks to achieve:
- A more strategic approach to growth, socio-economic and territorial cohesion: whole programming process at EU, national and local level to be driven by a single political document (the Community Strategic Guidelines); an annual report of the Commission and member states to be debated by the European Spring Council in Spring;
- Simplification: reduced number of objectives and regulations; single-fund programmes; streamlined eligibility rules for expenses; more flexible financial management; more proportionality and subsidiarity regarding control, evaluation and monitoring;
- Decentralisation/ "ownership:" stronger involvement of regions and local players in the preparation of programmes (see the Communication "Cohesion Policy and cities: the urbain contribution to growth and jobs in the regions").
Positions
The Council of European Municipalities and Regions (CEMR) welcomes the strategic approach reflected from the new regulations and the Community Strategic Guidelines. However, the organisation regrets the lack of clarity of these guidelines regarding the "relationship between thematic and spatial targeting." On the partnership principle, it noted that "it remains to be seen whether this will translate into reality within each member state."
The European industrial and employers' confederation UNICE is especially satisfied with the earmarking for competitiveness-enhancing expenditure from the funding for cohesion policy, though remaining sceptic about member states and regional authorities' determination to implement this on the ground: "we are indeed concerned that, in the name of territorial cohesion, regional authorities may sidestep appropriate concentration of resources on research, innovation, networks and training, especially given that many regions allocate less than 0.5% of the GNP to R&D," said Jean-Paul Mingasson, UNICE General Adviser.
The European Trade Union Confederation (ETUC) welcomed the broad guidelines of the Commission's budget proposals for 2007-2013. ETUC particularly praised the new cohesion policy for its potential to contribute both to the Lisbon agenda and social cohesion, thus stressing the role of the European Social Fund (ESF) as a "privileged instrument for implementing the European Employment Strategy." Nevertheless, the confederation warned against the development of "a two-tiered Cohesion policy," due to the justified but sensitive difference of treatment between Convergence and Competitiveness regions.
On the occasion of the second reading negotiations between Parliament and Council on the cohesion policy regulations, a coalition of social and environmental NGOs (gathering, inter alia, Social Platform, BirdLife International, CEE Bankwatch Network, Friends of the Earth, WWF) insisted that sustainable development should be better integrated into all relevant articles of the regulations and ask for the development of a standard set of sustainable development indicators to be used for the evaluation of structural fund programmes.
Timeline
- Third and fourth quarter 2006: member states and regions to propose 'National Strategic Reference Frameworks' and 'Operational Programmes' – to be accepted by the Commission before implementation
- 1 January 2007: new generation of programmes start
Further Reading
European Union
- Commission (DG Regio):2007-2013: Preparing the new generation of Structural Funds programmes (homepage)
- Commission (DG Regio):Community Strategic Guidelines for Cohesion policy
- Council:Financial Perspective 2007-2013(19 Dec. 2005)
Political Groups
- EPP-ED:Positive changes in Structural Funds Regulation: Parliament says Yes after successful pressure on the Council(4 July 2006)
- Greens - European Free Alliance:EU-Struktur- und Kohäsionsfonds: EU-Parlament schreibt ökologische und soziale Ziele fest(4 July 2006)
- ALDE:Fonds Structurels: une gestion plus flexible et moins bureaucratique permettra d’utiliser au mieux les subventions aux régions européennes(4 July 2006)
- PSE - French Socialist Delegation:La nouvelle politique régionale: entre compétitivité et solidarité(4 July 2006)
Governments
- French Sénat:Politique régionale européenne pour 2007-2013 : les enjeux de la réforme pour les territoires(4 May 2006)
Regions
- Council of European Municipalities and Regions (CEMR):Policy positions on Regional Policy
- Council of European Municipalities and Regions (CEMR):CEMR welcomes Parliament’s green light to 2007-2013 structural funds package(6 July 2006)
- Council of European Municipalities and Regions (CEMR):CEMR response to the consultation on the European Commission's draft community strategic guidelines on cohesion(10 Nov. 2005)
- Conference of Peripheral Maritime Regions of Europe (CPMR):The territorial dimension of the Community Strategy Guidelines: a model for 2007 and post 2013(5 May 2006)
- Conference of Peripheral Maritime Regions of Europe (CPMR):Impact of the Council’s budget agreement on 2007-2013 regional policy and its post-2013 future(Jan. 2006)
- Conference of Peripheral Maritime Regions of Europe (CPMR):Torn between progress at European level and withdrawal into national self-interests: the schizophrenic approach to involving regions in EU policies(6 July 2006) [FR]
Business & Industry
- European Trade Union Confederation (ETUC):Move Social Europe Up a gear!(14-15 March 2006)
- European Trade Union Confederation (ETUC):ETUC contributes to the debate on the future of economic and social cohesion policy(11 Oct. 2005)
- European Trade Union Confederation (ETUC):Cohesion Policy in Support of Growth and Jobs Community Strategic Guidelines 2007-2013(30 Sept. 2005)
- UNICE:Territorial Cohesion and the Lisbon strategy : exploiting Europe’s territorial potentials(28 June 2006)
NGOs and Think-Tanks
- Coalition for sustainable EU funds:NGO statement on the sustainable and fair use of EU funds
- CEE Bankwatch Network/ Friends of the Earth (Press release):EU Funds in Central and Eastern Europe: 6 billion euros for damaging projects?(10 March 2006)
- WWF:WWF position on the draft Cohesion policy regulations for 2007-2013(Nov. 2004)
Non-assigned links
- Commission (RAPID Press Release):Commission adopts key proposals to help European regions make the most of new Cohesion policy(13 July 2006) [FR] [FR] [DE]
- Commission (RAPID):A reformed Cohesion Policy for a changing Europe Regions, Cities and Border areas for Growth and Jobs - 10 Questions and Answers(13 July 2006) [FR] [FR] [DE]
- Commission (RAPID Press Release):Regions and Cities for Growth and Jobs: An overview on the Regulations 2007-2013 for Cohesion and Regional Policy(13 July 2006) [FR] [FR] [DE]
- European Parliament (Press service):MEPs approve €308bn Structural Funds 2007-13 package(4 July 2006)
- European Commission (RAPID):The European Commission welcomes adoption by European Parliament of the legislative package for new Cohesion policy(4 July 2006) [FR] [FR] [DE]
- Council (press release):Council approves cohesion policy package for 2007-2013(5 May 2006) [FR] [FR] [DE]
- Commission (DG Regio):Fact sheet on the new structural funds regulations 2007-2013 [FR] [FR] [DE]
- European Parliament:Fact Sheet - Economic and social cohesion
- Commission (DG Regio):Communication on cohesion policy and cities
- Commission (DG Regio):New cohesion policy initiatives JASPERS, JEREMIE and JESSICA
- Committee of the Regions:Opinion of the Committee of the Regions on the Communication from the Commission Cohesion Policy in Support of Growth and Jobs: Community Strategic Guidelines 2007-2013(16 Nov. 2005)
- Commission:Growth and Jobs agenda - working together for Europe’s future (homepage)