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Competitiveness, cohesion and the reform of the regional policy of the European Union, 2007-2020

Competitiveness, cohesion and the reform of the regional policy of the European Union, 2007-2020. Ronald Hall Director Directorate General for Regional Policy European Commission Glasgow, 25 February 2009. 700 staff in total. Director General – Dirk Ahner. Deputy Director General

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Competitiveness, cohesion and the reform of the regional policy of the European Union, 2007-2020

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  1. Competitiveness, cohesion and the reform of the regional policy of the European Union, 2007-2020 Ronald Hall Director Directorate General for Regional Policy European Commission Glasgow, 25 February 2009

  2. 700 staff in total Director General – Dirk Ahner Deputy Director General Katarina Mathernova Deputy Director General Michele Pasca-Raymondo Directorate Resources 3 directorates addressing strategic issues of cohesion policy 5 directorates dealing with implementation in the Member States 1 directorate for financial control and auditing of actions 3 units: Commun-ications, intl relations, outer-most regions, legal advice 4 units: Policy and research, territorial develop-ment, Evaluation. 3 units: Coordination, financial eng-ineering 18 units for the 27 Member States and accession States 4 units for various auditing functions

  3. Regional policy decision-making in the EU European Commission proposes European Parliament agrees  with/without modifications Council decides or co-decides Legislation is adopted Commission implements in partnership

  4. The reform of EU regional policy 2007-2020

  5. Reforming EU regional policy: a complex process • January 2003 Working Groups led by Commissioners • July 2003 Seminar to discuss Working Groups reports • February 2004 Financial Perspectives proposal (total €1022 billion of which €336 billion for regional policy); Third cohesion report • July 2004 Draft regulations for regional policy • December 2005 Member States agree Financial Perspectives (total €862 billion of which €308 billion for regional policy) • May 2006 European Parliament agrees Financial Perspectives (Inter-Institutional Agreement) • July 2006 Regional policy regulations adopted

  6. July 2003: ”An Agenda for a Growing Europe” Chair: A. Sapir Box 12.3 (p 161/161): the 1% budget (see also DE,FR,NL,Ö, S, UK) EU budget scenario 2007-2011 (economic and social part only) % EU GDP • Growth 0.45 • Convergence 0.35 • Restructuring 0.20 displaced workers (0.05) agriculture (0.05) CAP phasing out) (0.10) TOTAL 1.00

  7. EU Financial Perspectives 2007-2013European Council - 19 December 2005

  8. Principles of the reform of regional/cohesion policy, 2007-2013 Challenge 1 - Closing the gaps on a global scale Challenge 2 - Closing the gaps on a European Scale

  9. Challenge 1 - Closing the gaps on a global scale: EU and US compared

  10. Challenge 1:GDP growth rates compared Area Population 1995-2005 2000-2005 (mill.) %pa %pa US 299.8 3.3 2.5 Brazil 186.8 2.4 2.7Russia 142.0 3.9 6.1 India 1134.4 6.2 6.7 China 1312.9 9.0 9.4 EU 491.9 2.3 1.7

  11. Challenge 2 - Closing the gaps on a European Scale: the 27 Member States

  12. EU Member States

  13. INNOVATION PERFORMANCE

  14. Responding to the challenges – A reform based on: 1. A concentration of resources on the least prosperous regions 2. A concentration of the effort on the Lisbon agenda

  15. Over ¼ of population lives in regions below 75% of EU average GDP • 13 Member States have GDP below 90% of average (25% of population) 1. Concentration on the regions: policy targets

  16. Regional approach – 274 (NUTS 2) regions > average: ca. 16 000 km sq. – 1.8 million population • Not income transfers – support for programmes 1. Concentration on the regions: basic principles of EU Regional Policy

  17. Concentration of EU budgetary resources: > 81.5% Convergence regions (35% of population); up from 72% > 16.0% Competitiveness regions > 2.5% Territorial co-operation Scotland : 14.5 billion euros, 2007-2013, incl rural development and fisheries 1. Concentration on the regions: basic principles of EU Regional Policy

  18. Convergence objective (Regions > 75% in EU25) Objective 'Regional Competitiveness and Employment' Geographical Eligibility for Structural Funds Support 2007-2013 Convergence objective statistically affected regions Objective 'Regional Competitiveness and Employment' Phasing-in regions, "naturally" above 75% Index EU 25 = 100 Source: Eurostat

  19. Originally adopted in March 2000 (Gothenburg update in 2001) • Aims to make Europe the most competitive and dynamic economy in the world… • Updated in 2005 : the growth and jobs agenda • Two quantitative targets: employment rate of 70% (64.4%) by 2010, R&D 3% of GDP (1.84%) • Since 2005, reinforced governance: detailed annual reporting; peer pressure 2. Concentration on the Lisbon agenda: what is the Lisbon agenda?

  20. Making Europe and its regions a more attractive place to invest and work: • expand and improve transport infrastructures • improve the environmental contribution to growth and jobs • address the intensive use of traditional energy sources 2. Concentration on the Lisbon agenda: substance (CSG of October 2006)

  21. 2. Knowledge and innovation for growth: • increase and improve investment in RTD • facilitate innovation and promote entrepreneurship • promote the information society for all • improve access to finance 2. Concentration on the Lisbon agenda: substance (CSG)

  22. 3. More and better jobs • attract and retain more people in employment and modernise social protection systems • improve adaptability of workers and enterprises and the flexibility of the labour market • increase investment in human capital through better education and skills • administrative capacity • health and the labour force 2. Concentration on the Lisbon agenda: substance (CSG)

  23. 2. Concentration on the Lisbon agenda: process aspects COHESION POLICY (Community method) LISBON AGENDA (OMC) Community Strategic Guidelines Integrated Guidelines National Strategies (NSRFs) National Reform Programmes National and Regional programmes Annual Progress Report

  24. Closer co-operation with International Financial Institutions (IFIs): • JASPERS: a new technical assistance/evaluation partnership with EIB and EBRD for large projects • JEREMIE: finance for business development for micro to medium enterprises through EIF. Extension to include micro-credit action plan. • JESSICA: financial engineering for sustainable urban development with EIB, CEB and other IFIs • And to develop better co-operation between regions • Regions for Economic Change; European Grouping of Territorial Co-operation: 2. Concentration on the Lisbon agenda: new instruments

  25. Changing the culture: JEREMIE & JESSICA • transformation of grants into recyclable forms of finance (sustainability); • leverage effect combining grants and loans, etc; • new sources of expertise and technical, financial and managerial capacity; • stronger incentives towards better performance; • development and modernisation of the financial sector in the regions. 2. Concentration on the Lisbon agenda: new instruments

  26. JEREMIE: first agreement • First contract (funding agreement) signed between EIF and Greece on 26 June 2007; • EIF appointed as Holding Fund; • Total contribution from the programme: 100 million euros; • Target: venture capital and micro-finance. 2. Concentration on the Lisbon agenda: new instruments

  27. 2. Concentration on the Lisbon agenda:new instruments Improving delivery: JASPERS • Individual decisions on major projects are taken by the Commission. Around 900 expected 2007-2013; • Major increase in resource transfer to new Member States; • Lack of experience in preparing such projects in new Member States; • JASPERS offers technical assistance free at point of delivery to national authorities; • Commission’s objective: more projects submitted, more quickly and to a higher quality

  28. All EU15 Objective 1 regions: GDP per head up from 63% to 70% of EU15 average • gap relative to EU15 reduced by one sixth 1988-2001. • Ireland: GDP 64% of EU15 average in 1988 and 128% in 2005. Growth of 7.4% per year since 1995 A policy that works: GDP trends in the regions?

  29. Increase in GDP levels attributable to regional policy: • 1989-1999: • 10.0% in Greece and 8.5% in Portugal • 3.7% in Ireland and 3.1% in Spain • 2000-2006: • 6.0% for Greece and Portugal • 4.0% in German Länder and 2.4% in Spain • 2007-2013: preliminary estimates suggest: • 8.0% for Lithuania, Czech Republic and Slovakia • 6.0% for Bulgaria, Poland and Romania • 3.0% in Greece and 1.5% in Spain, German Länder and Mezzogiorno A policy that works: impact assessment

  30. Internal market: trade between cohesion countries and rest of EU doubled in last decade (¼ of Objective 1 expenditures return as imports – particularly in Greece – 42% - and Portugal – 35%) • EUR 43 billion of Cohesion funding invested in transport in Objective 1 regions in the period 2000-2006 A policy that works: other impacts

  31. Cohesion Report: 30 May 2007 • Issues paper on Policy/budget review for post-2013: 12 September 2007 • Cohesion Forum: 27-28 September 2007 • APR 2007, incl Cohesion policy annex, 11 Dec 2007 • Review of 2007-2013 programmes: May 2008 • Fifth Progress Report on Cohesion: May 2008 • Green paper on Territorial Cohesion: Sept 2008 • (Orientation paper: April 2009) • Barca report: April/May 2009 • Sixth Progress Report on Cohesion: June 2009 • Paper on budgetary review: Summer 2009 • Ex-post evaluation 2000-2006: Autumn 2009 • Fifth Cohesion Report: Autumn 2010 • Cohesion Forum: December 2010 Outlook

  32. General: • Remit: “to undertake a full, wide ranging review covering all aspects of EU spending, including the CAP, and of resources, including the UK rebate, toreportin2008/9” • The criteria: added value, subsidiarity, proportionality • Efficient delivery matters Framework for the future: The issues Paper, 12 September 2007

  33. Specific issues: • The balance between spreading support between a range of activities and concentrating the funds available(what priorities? Objectives?) • The balance between centralised and decentralised management (what future for the regional approach?) • Enhanced simplification and strengthened delivery instruments (what further margins remain? Performance indicators?) Issues Paper, 12 September 2007 (contd)

  34. Specific issues (contd): • Leveraging resources(role of the private sector?) • Co-financing(rates too high or too low?) • Ensuring full transparency, visibility and accountability in the management of the budget • Flexibility (how to adjust programme priorities?) Issues Paper, 12 September 2007 (contd)

  35. The Czech Republic (80%), Cyprus (91%), Malta (78%) and Slovenia (89%) have already crossed the 75% threshold (compared to the EU27 average in 2007). • By around 2016, perhaps earlier, the Baltic States, Hungary and Slovakia will have reached it • Poland, Romania and Bulgaria will take longer • Many lagging regions could take much longer still Who cares about Objective 2?

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