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Third Cohesion report February 2004

Third Cohesion report February 2004. Convergence, Competitiveness and Co-operation. Financial perspectives 2007-2013. Promoting Europe's wealth - Policy challenges and budgetary means of the enlarged Union 2007-2013 Keeping the current expenditure ceiling (1.24% of the Union's GNI)

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Third Cohesion report February 2004

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  1. Third Cohesion report February 2004 Convergence, Competitiveness and Co-operation

  2. Financial perspectives 2007-2013 Promoting Europe's wealth - Policy challenges and budgetary means of the enlarged Union 2007-2013 Keeping the current expenditure ceiling (1.24% of the Union's GNI) Commission proposal: commitments 1.22% and 1.14% for payments A distinct change in the financial perspectives Four political priorities for the Union: • Sustainable development – competitiveness, cohesion (for growth and employment) • conservation and management of natural resources • Citizenship, freedom, security and justice • The EU – a global partner Financial aspects

  3. Reminder: EU budget 2000-2006Ceiling as regards committments per year:€108.5 billion for EU25, of which €37 billion for structural actions, at 2004 prices Financial Perspectives 2007-2013Ceiling as regards committments per year:€146.4 billion for EU27, of which €48 billion for structural actions, at 2004 prices (excluding rural development)

  4. % of GNI

  5. Cohesion Policy • Is 34% of EU budget (€ 336 billion for the period 2007-2013, at 2004 prices) • Is about 0.41% of Union GDP (with rural development and fisheries: 0.46%) • About 50-50 between current and new Member States • More than ¾ of the budget for regions and Member States lagging behind in development Context Proportions of expenditure

  6. Categories of expenditure in Structural Funds Context For 2007-2013 + strengthening administrative capacity

  7. Impact of enlargement • Population of the Union grows from 380 to 454 million (EU 25) or 485 million (EU 27) • New MS bring more dynamic growth (4% per year against 2.5% in EU 15) • GDP per head drops: -12.5% EU 25; -18% EU 27 in euros Part I

  8. Impact of enlargement • Population in the convergence objective goes from 84 million to 123 million • Development gap between regions doubles: average GDP in Obj. 1 is 69%: new MS 46% • Employment rate in EU 15 grew from 60% to 64% (1996 – 2002). In NMS 10 it was 56%: (59% in 1999) Part I

  9. GDP per head PPS 2002 Index, EU25 = 100 Part I Situationand trends Source: Eurostat, National Accounts

  10. The impact of Cohesion policy • Increase public and private investment in beneficiary regions (growth) • Contribute to increasing GDP (convergence) • Create jobs and maximise potential of human resources • Increase physical and human capital • Better regional and local governance • Financial stability over 7 years Part IV Mobilising resources to promote growth

  11. Priorities of the reform (I)First objective: Convergence and competitiveness • Regions less than 75% of EU 25 average GDP/head • Statistical effect regions: less than 75% of EU 15 GDP/head but more than 75% of EU 25. • States with less than 90% of EU 25 average GNI/head (Cohesion Fund) • Special accessibility programme for OMR • Budget: about 78% of the total Reform of the policy Conclusions

  12. Priorities of the reform (II)Second objective: regional competitiveness and employment • Cohesion policy at the service of all other regions in the Union – no community zoning Contains two elements: • first element: regional competitiveness • innovation and the knowledge society • accessibility and services of general interest • environment and risk prevention would include responsibility for cities delegated to the regions (URBAN+), no community initiative (Lisbon and Gothenburg strategy) • second element: employment - based on European Employment Strategy - adaptability of the workforce, - job creation, - accessibility to the labour market for vulnerable persons Budget: ca 18% of total FS= current objectives 2 and 3 Reform of the policy Conclusions

  13. Priorities of the reform (III)Third objective: European Territorial co-operation The success of INTERREG, community added value Makes possible harmonious and balanced integration of the whole Union • Border regions, including sea borders • Cross border co-operation (MS to propose changes to the 13 present zones of INTERREG III B) • Interregional co-operation (also within mainstream) • External cross-border co-operation – linked to the new european neighborhood instrument, including multi-annual programming and just one financial instrument Budget: around 4 % of the total Reform of the policy Conclusions

  14. Implementation system:evolution not revolution • Confirmation of the principles which made this policy a success –multi-annual programming, partnership, evaluation, co-finance, shared responsibility Retention of n+2 rule and system of advances • Simplification:reduction in number of financial instruments: 3 not 6 and single fund programmes only Clearer division of responsibilities with the sustainable development policy Reducing the stages of programming (policy document from each MS, operational programmes) Simplification of financial management (priority axes) Controls: introduction of proportionality, contracts • More strategic approach: Political discussion in Council, EP opinion, Commission mandate, annual report presented to spring Council Reform of the policy Conclusions

  15. Proposed timetable 10 and 11 May 2004: European cohesion forum, Brussels July 2004: Commission adopts the legislative packet End 2005: Decision by Council and European Parliament 2006: Preparation of programmes for period 2007-2013 1 Jan 2007: Implementation begins Next stages

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