Synthesis of National Reports, 2012 Evaluation Network Meeting 14-15 March, 2013

1. Expert Evaluation Network delivering policy analysis on the performance of Cohesion policy 2007-2013 Synthesis of National Reports, 2012 Evaluation Network Meeting 14-15 March, 2013

2. Objectives • To synthesise 27 national reports produced by network of independent experts on progress in implementing programmes co-financed by ERDF and Cohesion Fund in 2007-2013 period. • To update report produced a year ago by examining developments since then as regards: • socio-economic context • changes in regional disparities across the EU during the crisis • scale of support for regional development provided by EU funding • pace of implementing programmes • outcomes of programmes – what has been achieved? • evaluations undertaken in Member States on Cohesion policy interventions • future challenges

3. Socio-economic context and regional disparities • Economic crisis continued in 2011 and 2012 – at best sluggish growth with high and rising unemployment in most countries increasing importance of job creation • Widespread adoption of fiscal consolidation measures but budget deficits and government borrowing have remained high • Effect – to put pressure on government expenditure, especially investment which has declined markedly in real terms since 2009 • Government investment fell by 12% on average in EU and by more in Bulgaria, Romania and three EU15 Cohesion countries • Reduction in development expenditure likely to have been similar – public finance problems set to continue to constrain spending up to end of period • Crisis seems to have led to widening of regional disparities – weaker regions less able to cope and more affected in many MS by cutbacks in public expenditure • At same time, MS policy attention has shifted from reducing regional disparities to achieving growth and job creation at national level

4. Scale of Cohesion policy funding • ERDF and Cohesion Fund together total EUR 270.1 billion in present period – 86% under Convergence Objective • Support provided equivalent to over a third of government capital expenditure a year in most EU12 countries over period • But more in remaining period up to 2015 given low rate of expenditure so far - funding still to be claimed equivalent to half or more of annual capital spending in 8 of EU12 countries and almost a third in Greece and Portugal • Figures demonstrate critical importance of EU funding for development expenditure but raise question over ability of some countries to absorb amount available • Response of EU to financial difficulties in MS has been to increase co-financing rate – effect has been to reduce MS funding and so total expenditure on programmes • Main effect in EU15 - total funding reduced by 17% in Portugal, 13% in Belgium, 12% in Ireland, 10% in Spain and 6-7% in Greece and Italy

5. Shifts of funding between policy areas • 10% of total available for period shifted between expenditure categories (where formal approval required) up to Oct 2012, mostly in 2011 and 2012 – more shifted within categories • Biggest additions to RTD, investment support and roads plus urban renewal in EU15 • Biggest reductions to innovation support for SMEs (due to crisis depressing demand) environmental infrastructure, rail and urban transport • In around half MS, specific measures taken, with ERDF support, to help SMEs access credit • In many cases (e.g. Bulgaria, Romania, Hungary, Slovenia, Latvia, Lithuania and Greece) FEIs used for this purpose • But difficulties in setting them up and operating them have limited take-up and effectiveness • In Greece, operations speeded up by relaxing regulations on provision of credit

6. Pace of policy implementation • Difficult to assess pace of carrying out programmes – but data on payments from ERDF and Cohesion Fund and allocations to projects in MS both suggest serious delays • Limited evidence of any marked acceleration in implementation to make good time lost in early years of period when focus on spending funding of previous period …

7. At end-2012, 6th year of period, ERDF payments to EU15 averaged only 46% of total funding for period:

8. Payments from ERDFparticularly low in RO and IT and well below average in MT, BG, AT, CY and CZ - little acceleration in 2012

9. Payments from Cohesion Fund are also lagging – averaging only 41% of funding available at end-2012 and just 22% in RO – and limited acceleration in 2012

10. Delays in implementation • Payments to CBC programmes lower still – 40% of funding on average • Payments data include advance payments and so overstate pace of implementation • Data on allocations suggest more progress but available only up to end-2011 - 76% of funding allocated to projects in EU15, 69% in EU12 • In Italy and Bulgaria, 45% of funding still to be allocated, in Romania, France and Czech Republic, 35-40%, and in Austria, over a third • like payments data, these figures suggest serious delays in implementation • Prospect of funding not being absorbed and/or of priority being given to absorption over most effective use of funds • Allocation especially low as regards innovation in SMEs, investment in energy and railways (under 60% of funding available) - highlights why funding shifted • Crisis major reason for delays, or non-catch-up – problems of co-financing • Response to shift funding and to ease co-financing difficulties (e.g. through loans)

11. Payments to FEIs • Rate of implementation of programmes overstated by payments data insofar as they include payments into FE schemes • In most countries, major part of these payments still to reach final beneficiaries which needs to happen before end-2015 for them to be eligible for ERDF financing • Of EUR 6.9 billion paid into schemes across EU, only EUR 2.5 billion had reached final beneficiaries by end-2011 • In addition, EUR 3.6 billion of ERDF planned to go to FEIs still remained to be allocated to schemes • Over 75% of planned funding for FEIs was therefore still to reach final recipients at end-2011 ….

12. In all but 9 countries, over 75% of ERDF planned to go to FEIs was still to reach final beneficiaries at end-2011 and 95% or more in ES, RO, GR, BG, AT and SK

13. Achievements • Despite delays, increasing evidence of positive effects especially in respect of enterprise support, transport and environmental infrastructure • But difficulty in assessing outcomes due to continuing deficiency of information in AIRs, uncertain reliability of data on indicators and errors in data recorded • Outcomes across EU reported up to end- 2011 include: • creation of 383,000 jobs in FTE terms • almost 53,000 business start-ups assisted • 14,700 cooperation projects between research centres and business supported • creation of nearly 15,000 FTE jobs in R&D activities • construction of 1,270 km of new roads (620 km in EU12); • improvement of 10,000 km of existing roads, (5,800 km in EU12); • addition of 300 km to rail network and improvement of 800 km of existing lines • completion of second phase of Sofia metro • improved supply of drinking water to 2.2 million people • connection of 4.7 million people to improved wastewater treatment

14. Evaluations • In 2011- Oct 2012, evaluations averaged one per OP across the EU • Increase in activity in CZ, IT and GR – no new evaluations in ES, IE, DK, LU and MT, slowdown in NL and PT • Low activity in ES, PT, IE and GR cause for concern given financial constraints • Most evaluations devoted to assessing procedures and implementation – only 18% were focussed on outcomes and effects • Large number of evaluations on enterprise support and RTDI – most found positive effects, including of FEIs, but difficulties of setting FEIs up in BG and RO • Few evaluations of transport and environmental infrastructure – gap in knowledge • Few MS make systematic use of evaluation findings, though in three Baltic States procedures set up to ensure they feed into policy-making • But much room for improvement in design, methods and specifications of evaluations to increase reliability of findings – and need for wider acceptance by MS of their importance for developing more effective policies

15. A few concluding points • Large amount of funding still to be absorbed over next 3 years in many MS might not only lead to focus on projects quick to carry out but divert policy attention away from getting 2014-2020 programmes underway • Funding to be absorbed even larger than indicated because large share of FEIs recorded as expenditure when paid into schemes still needs to reach final recipients • Policy focus in MS as regards use of Cohesion policy funding shifting away from development of weaker regions just when regional disparities seem to be widening • Though growing evidence of achievements of Cohesion policy, deficiencies in AIRs and lack of information on outcomes tend to mean they are not sufficiently recognised • The indicators monitored need to be greatly improved and their link to policy objectives more clearly identified if a results-oriented policy is to become a reality • Such a policy equally requires a step change in the number, nature and quality of evaluations carried out

16. Thank you for your attention