Unleashing the potential of Central and Eastern Europe

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

As the budget debate begins, cohesion policy remains critical to creating the infrastructure that Central and Eastern European EU members need to unleash their full potential for growth and convergence with the rest of the Union, argues Hendrik Bourgeois of General Electric.

Hendrik Bourgeois is vice-president of European Affairs at General Electric. He has extensive experience working in government relations, competition and regulatory matters related to Europe.

The commentary was first published on blogactiv.eu.

"I attended a roundtable dinner at the European Parliament hosted by Danuta Huebner, MEP and chair of the Regional Development Committee and Laszlo Surjan MEP, on the topic of EU regional policy. The discussion was timely not only as we transition from the Hungarian to the Polish Presidencies but also in the context of the discussions which are taking place on the next EU budget and cohesion policy. 

Since then, we have seen the proposal by the European Commission to increase the next EU budget by 5% and the opposition which has been raised by some member states. The proposals by the Commission to introduce revenue generating measures will undoubtedly create a passionate, if not fraught, debate. Under the plan €376 billion would go to boosting underdeveloped areas of the EU.

There were a number of interesting points and proposals made during the discussion which merit further debate. I will try to summarise these.

Firstly, and not surprisingly, there was consensus, which I concur with, that the EU needs to continue to support the economic development of more recent member states and that achieving greater integration and cohesion was a social and economic imperative for Europe.  This is essential to unlock the huge growth potential of the Central and Eastern Europe (CEE region), which on its turn is critical for Europe's overall growth prospects in the global economy, where competition from other growth regions is cut-throat.

Secondly, the next EU Budget 2013-2020 needs to support and help achieve the three objectives of the EU's 2020 Strategy namely 'Smart, Sustainable and Inclusive growth'.

Thirdly, while there is a clear need to use the available funding under regional policy to upgrade the basic infrastructure of the receiving member states and regions, this needs to be done with a clear view to the future. Hence, investments in infrastructure need to be focused also in the area of affordable health care and sustainable energy.

Fourthly, simply investing in cheap solutions will not necessarily result in a smart allocation of scarce resources. Purchasers of infrastructure resources need to think ahead and look at total lifecycle performances and costs.  During the dinner, Laszlo Surjan put it succinctly quoting his uncle who said 'I am too poor to buy cheap stuff'.

Fifth, there is an issue in relation with some member states' ability to absorb available funds. Stakeholders should give greater attention to technical expertise, bandwidth and/or capability. The issue of co-financing in the current economic environment is one which will also need to be debated and here again we need to look at potential innovative financial solutions. Having said that, we obviously need to avoid absorption for the sake of absorption.

Sixth, the private sector can and should be more involved in driving development through investment in the region via mechanisms like public-private partnerships, playing a greater role in assisting the public sector in identifying innovative solutions to help solve society's long-term needs and greater involvement in monitoring committees.

Finally, I was struck by the focus in the debate on the issue of the competitiveness of the region. As one speaker put it, the CEE region does not need money because it is poor but as a way to reduce regional disparities and increase the competitiveness of the region – 'infrastructure is not the objective, it is the way to achieve it'.

The responsibility now rests with those engaged in the debate, and ultimately the decision-makers, to look at cohesion policy in terms of realising the goals of the EU and its unleashing its full potential."

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