Commission wants regional funds to match 2020 goals

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The European Commission presented yesterday (10 November) its blueprint for reform of the EU's cohesion policy, linking funding for regions to the achievement of the targets set out in the 'Europe 2020' strategy for jobs and growth.

The publication of the Commission's proposals marks the official start of discussions on the future of EU cohesion policy after 2013, in the framework of the next budgetary period. The main focus will be on finding ways to help member states achieve the ambitious goals of the Europe 2020 strategy, notably in relation to economic growth, job creation, poverty reduction and energy efficiency.

The 5th Cohesion Report approved yesterday by the college is a 264-page long document analysing the impacts and outcomes of EU cohesion policy during the past seven years (2000 to 2006), comparing economic growth and employment rates in every region, including the 12 so-called 'new' member states that have joined the EU since 2004.

Focusing on the 2020 strategy

Speaking to journalists, Johannes Hahn, the commissioner in charge of regional policy, together with his colleague László Andor, who is responsible for employment, social affairs and inclusion, said the report shows how the EU has helped to reduce economic differences, promote social development and support environmental improvements.

"We need to spend more intelligently, focus on the EU's top priorities and add visible value to what national and regional authorities are already doing," said Hahn, underlining the need to improve the effectiveness of the EU's cohesion policy.  

The Austrian commissioner hopes to convince all of the member states that an effective cohesion policy is absolutely necessary in order to help the Union and its regions emerge from the ongoing economic crisis and contribute to the ambitious 'Europe 2020 strategy for smart, sustainable and inclusive growth,' which was adopted by EU leaders in June.

Andor pointed out that European citizens expect their political leaders to focus on promoting employment and social inclusion.

According to a recent Eurobarometer survey, most people think that tackling unemployment should be the EU's number one priority.

The Hungarian commissioner also emphasised the importance of linking cohesion policy with the 2020 strategy. He said that higher levels of education and employment would also stimulate economic growth in all member states.

The Commission believes that the economic and financial crisis makes it more important than ever for the EU to invest in boosting the competitiveness of Europe as a whole, while continuing to allocate the majority of financial resources to helping the poorest regions.

However, it is not yet possible for the Commission to say anything about the budget for cohesion policy after 2013. The amount of money available will depend on the outcome of negotiations with member states on the multi-annual financial framework for 2014 to 2020.

Funds are shared out among the member states and their regions to co-finance numerous infrastructure, employment and training projects.

Member states to negotiate contract with Commission

The EU executive sees EU funding targeted on a limited number of priorities, including job creation and poverty reduction, in line with the goals set out in the Europe 2020 strategy.

The Commission wants to establish an overall strategic framework that sets out priorities and necessary reforms. Each member state would then be invited to negotiate its own contract with the Commission. The aim would be to make sure that money from the various EU funds is used to support measures that complement the policies being pursued at national level.

Another idea being put on the table is for a small percentage of EU funds to be kept in reserve and then paid out to the regions that achieve the best results. Commissioner Hahn believes that such a performance-based financial incentive scheme would encourage national and regional authorities to fulfil their commitments.

The Commission is also looking at a number of ideas for simplifying the system for distributing EU funds, as well as improving the monitoring and evaluation of programmes.

Consultation period

The Commission's blueprint will be discussed in the coming months. Interested parties, including national and European associations of local and regional governments, are invited to submit their priorities and wishes for the future of EU cohesion policy to the EU executive by the end of January 2011.

The Commission's ideas and the views of stakeholders will be discussed at the Fifth Cohesion Forum, to take place in Brussels on 31 January and 1 February 2011.

Michèle Sabban, president of the Assembly of European Regions (AER), said: "The AER warmly welcomes this report, which is pointing towards a Cohesion Policy that should provide Regions with the means they require to maximise their territorial potential. That said, a number of key questions remain unanswered, in particular the issue of where the ESF [European Social Fund] will be placed, and the rationalisation of European funds." (source: AER)

Michael Häupl, president of the Council of European Municipalities and Regions (CEMR), welcomed the Commission's commitment to a policy covering all EU regions "with a special focus on regions lagging behind" and a "strengthened focus on urban areas". He recalled that the objectives of EU cohesion policy are clearly laid down in the Lisbon Treaty, and insisted that it "cannot be reduced to an instrument to implement the Europe 2020 strategy". (source: CEMR)

The Conference of Peripheral Maritime Regions (CPMR) supports the idea of connecting cohesion policy with the Europe 2020 Strategy. However, it does not agree with linking the payment of EU funds to respect for the rules of the Stability and Growth Pact. Eleni Marianou, CPMR secretary- general, said: "The principle of conditionality could be based on the actual implementation rate and effectiveness of cohesion policy itself, but not on macro-economic regulations." (source: CPMR)

The EUROCITIES network welcomed the Commission’s commitment to increase the involvement of cities in the design and implementation of EU cohesion policy. Paul Bevan, its secretary-general, said: "This report represents huge progress and achievement not just for cities but for the EU as a whole. [We] will continue to support the Commission to ensure that these recommendations are taken up by member states." (source: EUROCITIES)

Polish European People's Party MEP Danuta Hübner, chair of the European Parliament's regional development committee, said: "[This] report clearly shows that cohesion policy is the main instrument of the European Union for the implementation of the EU 2020 strategy. Furthermore, it shows cohesion as a modern and effective policy, already contributing to the innovative and sustainable growth of the entire EU".

The Polish MEP was EU commissioner for regional policy from 2004 to 2009. (source: EPP group)

Michael Schneider, president of the European People's Party (EPP) group in the Committee of the Regions (CoR), said that he could find "broad agreement" between the Commission's proposals and his opinion, which was adopted by the CoR in October. He said that EU cohesion policy should be "adapted to Europe's changing conditions" and called for the development of "Territorial Pacts between the European, national and regional levels". (source: EPP group)

The Greens/European Free Alliance (EFA) group in the European Parliament condemned the Commission's "obsession with GDP growth" and called for a wider range of indicators to measure social and environmental progress in the regions. German MEP Elisabeth Schroedter said: "Cohesion funds should be used to address the real challenges faced by Europe's regions, such as climate change, social exclusion and demographic development." (source: Greens/EFA)

The regional policy of the European Union has the overall goal of promoting economic prosperity and social cohesion throughout the 27 member states and their 271 regions.

Within the current financial framework (2007-2013), spending on regional policy amounts to an average of €50 billion per year – approximately one third of the total EU budget.

Regional policy spending is channelled through three funds – often called 'Structural Funds'. These are the European Fund for Regional Development (EFRD), the European Social Fund (ESF) and the Cohesion Fund.

Over 80% of the funding is reserved for the poorest regions. These are mostly to be found in the 'new' member states (in Central and Eastern Europe) as well as Greece, Portugal, Spain and southern Italy.

  • 22-23 Nov. 2010: Informal EU ministerial meeting on cohesion policy (Liège, Belgium).
  • 7 Dec. 2010: 'Cohesion in Europe: Regions take up the challenge' Conference organised by the Assembly of European Regions (AER), Brussels.
  • 31 Jan. 2011: 5th Cohesion Forum organised by the European Commission (Brussels).

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