Sunday 26. January 2020
#134 - january 2011

 

Cohesion Policy in the EU: taking stock of the current situation, sketching future perspectives

 

On 9th November 2010, the Commission published its fifth report on economic, social and territorial cohesion, taking stock of progress already realised and suggesting ways for improvement.

 

Every three years, the EU publishes a “cohesion report”. This year, as required by the Lisbon Treaty, territorial cohesion was added to economic and social cohesion.

 

Brief History of Cohesion Policy

Even though solidarity objectives were expressed in the Treaty of Rome (1957) financial instruments and initiatives could be determined only on an ad hoc basis in the 1960s and 1970s (e.g.: the European Regional Development Fund in 1975). A legal basis for regional and cohesion policy was first introduced in the Single European Act (1986) as “poorer” countries joined the Community (Greece, Spain and Portugal). In 1988, structural funds were doubled and the first regulation for Cohesion Policy was adopted for the period 1989-1993. The four key principles, which remain valid, were then introduced: programming (a strategic, multi-annual plans rather than a project-based approach); partnership (all levels of government to be involved in the programming and management of the funds); concentration (a limited number of objectives focused on the least developed eligible regions according to a GDP-based comparison); “additionality” or co-financing (EU funds to complement, not replace, national funds). In 1993, structural funding was again doubled, reaching a third of the EU budget and a new regulation adopted for 1994-1999. For 2000-2006, the number of objectives covered by the policy was reduced with a view to adapt structural funds to the foreseen enlargement to ten new, much poorer States. At present, in the 2007-2013 Multi-Annual Financial Framework (MAFF), cohesion policy is the second largest EU budget line amounting to € 347.4 billion.

 

Brief Presentation of the fifth “Cohesion Report”

The report considers regional disparities, the contribution of the EU, national and regional governments to cohesion, assesses its impact, and explores the future of the policy after 2013. Its main conclusion is that “the policy has created new jobs, increased human capital, built critical infrastructure and improved environmental protection, especially in the less developed regions”. Statistically, instead of 84 regions out of 271 currently under objective 1 (regions with a GDP per capita less than 75% of the EU average), representing 155 million citizens, “only” 68 regions, representing 120 million citizens, would be eligible under that same objective in 2014-2020, a reduction of some 20% - progress of a kind.

Second, the report calls for a common strategic framework to be adopted by the Commission, encompassing all existing structural funds (which should therefore all be retained in the next MAFF) and “translating the targets and objectives of [the EU2020 agenda] into investment priorities”. This enhanced “programming” of future cohesion policy goes hand in hand with an enhanced “partnership” between the EU, national and regional governments because the “ambitious” EU2020 agenda “can only succeed with strong national and regional participation and ownership on the ground.” Further, the report insists on the need to “concentrate EU and national resources” on a small number of priorities (see EU2020 agenda). Finally, the level of co-financing should be more flexible. The report suggests setting aside a “performance reserve” (1-2% of the funds) to be allocated after a mid-term review to States and regions who have made most progress towards the EU2020 targets and objectives.

These suggestions aim at “improving the effectiveness of the policy with an increased focus on results” thanks to a higher ownership by States and regions. They are open to discussion through an on-line consultation , until 31st January 2011, before the Commission publishes a proposal for the 2014-2020 MAFF (Summer 2011).

 

Through its cohesion policy the EU aims at reducing “disparities between the levels of development of the various regions” thus promoting “its overall harmonious development” (art. 174 TFEU). Since the economic and financial crisis is likely to widen the gap between “richer” and “poorer” regions, the latter will seek more help from cohesion policy, whereas the former will be less inclined to give. So, negotiations will doubtless be tough. We will soon be able to assess the claim of Commissioner Johannes Hahn: “cohesion policy is not charity, but involvement in growth and jobs with a view to solidarity”.

 

Hervé Pierre Guillot SJ

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