Transcript Cohesion Fund

European Economic Integration – 110451-0992 – 2014
VII
Core Policy 3 Cohesion Policy (CP)
EU to focus funds for
regional development
on creating jobs and
sustainable growth.
Cooperation
between regions
Prof. Dr. Günter S. Heiduk
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Source: http://ec.europa.eu/regional_policy/index_en.cfm
Cohesion
Principle:
Financial solidarity (to the less prosperous regions and social groups)
Cohesion:
“The act or state of sticking together tightly” (Merriam-Webster)
Cohesion Policy:
“…is aiming at ensuring economic, social and territorial cohesion across the EU. Its
integrated approach has largely proven to be beneficial to most territories across
Europe, taking into account the different parameters that support the development
of a region. Even if it is difficult to assess its precise impact, the tremendous
contribution that cohesion policy makes to regional development and territorial
cohesion in Europe should not be underestimated.”
Assembly of European Regions (2010). Cohesion in Europe: Regions Take Up the Challenge, p 3.
Transferring resources from wealthier to poorer parts of the EU.
“More growth and jobs for all regions and cities in the European Union – this
message is in the heart of cohesion policy and its instruments between 2007 and
2013.”
EU (2008). Working for the Regions.
New development paradigm: Shift of the development strategy from the national
level toward the regional/local level (territorialization), thus emphasizing the
mobilization of endogenous resources.
Leonardi, R. (2006). Cohesion in the EU, 160.
New policy design: Multilevel governance
Causes of regional inequalities within the EU:
Geographic remoteness
Enlargement (“shock absorber” for new member states that are exposed to single
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market competition)
Principles
• Concentration
- of resources on the poorest regions and countries (81.9% of
structural funds)
- of effort (e.g. research and innivation; information society; energy;
environment; transport; health; employment; social inclusion)
- spending (e.g. one programme=one fund; co-financing ceilings)
• Programming
Multi-annual national programmes; no funding for individual projects
• Partnership
Collective process (European, regional, local authorities, social
partners, organizations from civil society)
• Additionality
Financing from the European structural funds may not replace
national spending by a member country.
The Commission agrees with each country upon the level of eligible
public (or equivalent) spending to be maintained throughout the
programming period, and checks on compliance in the middle of the
programming period (2011), and at the end (2016).
A brief history of European Regional Policy
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Structural and Cohesion Funds 1975-2013
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http://www.openeurope.org.uk/research/regional.pdf
Building regions in the EU
Eurostat (2010). Regional Yearbook, p 12.6
NUTS 1 - 3
The NUTS classification (Nomenclature of territorial
units for statistics) is a hierarchical system for
dividing up the economic territory of the EU for the
purpose of :
 The collection, development and harmonisation of
EU regional statistics.
 Socio-economic analyses of the region
NUTS 1: major socio-economic regions
NUTS 2: basic regions for the application of
regional policies
NUTS 3: small regions for specific diagnoses
 Framing of EU regional policies.
Regions eligible for aid from the Structural
Funds (Objective 1) have been classified at
NUTS 2 level.
Areas eligible under the other priority
objectives have mainly been classified at
NUTS 3 level.
The Cohesion report has so far mainly been
prepared at NUTS 2 level
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NUTS 1 Regions
NUTS 2 Regions
NUTS 3 Regions
NUTS 1-3 Regions: Examples
Country
NUTS 1
NUTS 2
NUTS 3
EU-27
97
271
1303
Germany
16
39
429
Italy
5
21
107
Italy: NUTS 2 + 3 regions
Germany: NUTS 3 regions (districts)
(yellow: urban; white: rural)
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13
GDP per inhabitants in PPS by NUTS 2 regions, 2010 (% of EU average, EU-27 = 100)
Range of the highest to lowest region; capital city market in greenin a country
Dispersion of Regional GDP per inhabitant, in PPS, NUTS level 2, 2000 and 2009
Employment rate, persons aged 20-64 year sby NUTS 2 regions, 2010
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Dispersion of regional employment rates (persons aged 15 to 64 years) at NUTS 2 level (%)
Unemployment rate, persons aged 15 to 74 year, by NUTS 2 regions, 2011 (%)
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Dispersion of unemployment rates (persons aged 15 to 74 years) at NUTS 2 level (%)
GDP per Inhabitant, in Purchasing Power Standard (PPS),
Highest and Lowest NUTS 2 Regions within Each Country, 2008
Source: EUROSTAT, news release, 46/2013.
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Disposable Income of private households per inhabitant (in PPCS), highest and
lowest NUTS 2 regions within each country, 2008
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Degree of Regional Specialisation by Activity, EU-27 and Norway, by NUTS 2 Regions,
2008 (%, share of non-financial business economic employment)
At-risk-of-poverty or social exclusion rate, 2011 and 2012
Source: EUROSTAT, ilc_peps01
Regional policy in the past
Annual resources of the Structural Funds and the Cohesion Fund, 1988-2006
Regional Policy 2000 – 2006:
European Regional Policy is conducted through two main types of funds.
On the one hand, there are the European Structural Funds (€ 195 bn), which account for
the main share (91.55 %) of Regional Policy expenditure.
The Cohesion Fund resources amount to about €2.5 billion per year from 2000 to 2006,
(a total of €18 billion at 1999 prices), or 8.45% of Regional Policy expenditure.
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The Structural Funds 2000-2006
European Regional Development Funds (ERDF), whose principal objective is to
promote economic and social cohesion within the European Union through
the reduction of imbalances between regions or social groups
European Social Fund (ESF), the main financial instrument allowing the Union to
realise the strategic objectives of its employment policy
European Agricultural Guidance and Guarantee Fund (EAGGF - Guidance
Section), which contributes to the structural reform of the agriculture sector and to the
development of rural areas
Financial Instrument for Fisheries Guidance (FIFG), the specific Fund for the
structural reform of the fisheries sector
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The Structural Funds 2000-2006
Objective Outside Objective Objective Interreg Urban II Leader + Equal
Objective 2
3
III
1
1 regions
ERDF
X
X
ESF
X
X
EAGGF
X
X
FIFG
X
X
X
X
X
X
X
Leader
achievements:
a diversity of
territorial
experience
EQUAL
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Regional Policy, 2000 – 2006, 213 billion Euro
European Structural Funds: 195 billion Euro
Objective 1: 70% of the funding goes to regions whose development is lagging behind (GDP per capita <
75% of EU-Average). They are home to 22% of the population of the Union.
·
Objective 2: 11.5% of the funding assists economic and social conversion in areas experiencing structural
difficulties. 18% of the population of the Union lives in such areas.
Objective 3: 12.3% of the funding promotes the modernization of training systems and the creation of
employment outside the Objective 1 regions.
Community initiatives: 5.35% of the funding is spent on Community Initiatives seeking common solutions to
specific problems, such as:
·
cross-border, transnational and interregional cooperation (Interreg III);
·
sustainable development of cities and declining urban areas (Urban II);
·
rural development through local initiatives (Leader +);
·
combating inequalities and discrimination in access to the labor market (Equal).
Fisheries: 0.5% are allocated to the adjustment of fisheries structures outside Objective 1 regions.
Innovation: 0.51% of funds are spent as provisions for innovative actions to promote and experiment with
new ideas on development.
Cohesion Fund: 18 billion Euro - improving the environment and developing the transport
infrastructure in Member States whose per capita GNP is below 90% of the Community
average.
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Structural Funds by 15 „Old“ Member States, 2000 – 2006 (billion Euro)
45.000 €
40.000 €
35.000 €
30.000 €
25.000 €
20.000 €
15.000 €
10.000 €
Luxemburg
Denmark
Austria
Belgium
Finland
Sweden
Netherland
Ireland
France
UK
Portugal
Greece
Germany
Italy
0€
Spain
5.000 €
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Malta
Cyprus
Slovania
Estonia
Latvia
Lithuania
Slovakia
Czech Republic
Hungary
12 €
11 €
10 €
9€
8€
7€
6€
5€
4€
3€
2€
1€
0€
Poland
Structural Funds by 10 “New“ Member States, 2004 – 2006 (billion Euro)
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Results of EU Cohesion Policy
(figures from 2000-2006 period)
8400 km of rail built or improved
5100 km of road built or improved
Access to clean drinking water for 20 million more people
Training for 10 million people each year
Over 1 million jobs created
GDP/capita up 5 % in newer Member States
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Source: European Commission, General presentation on proposals for Cohesion Policy 2014-2020,
Evaluating the Regional and Cohesion Policy
Criteria:
Beta convergence by a regression analysis (per capita income of a
chosen period of time is estimated of a function of the initital level
of per capita income)
Indicator:
Growth of GDP per head
Problems: - Causality between growth and regional/cohesion policy measures
- Dependency on country/region-specific environment
- Evaluation of qualitiative effects (e.g. solidarity)
- Defining regions (esp. regions without governmental institutions)
- Territorialization of policy measures
- Multilevel governance and administrative capacity
EU‘s conclusion regarding the first phase: “ Between 1994 and 2001, growth of
GDP per head in objective 1 regions taken together average almost 3%
a year in real terms against just over 2% in the rest of the EU.“
European Commisison (2004). Third Cohesion Report, p ix.
Results 1988-1999: 8 out of 59 objective 1 regions (GDP/capita below 75% of EU
average) achieved after 8 years a level above 75%: Abruzzo, Molise,
Lisbon-Setubal, Cantabria, Corsica, Northern Ireland, Scottish Highlands,
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major parts of Ireland.
Evaluating the Regional and Cohesion Policy
Beta convergence for Objective 1 and non-Objective 1 regions, 1988-1999
(1/T)*log(Yit/Yi0) = α + β*log Yi0 + γ*Xit + uit
Yit = real per capita income of a country in i at time t
Yi0 = initial per capita income
Xit = set of structural exogenous variables influencing the
growth of per capita income
T = time in which the dynamics of convergence is measured
uit = stochastic error
α = constant term
Orlik, A (2003). Real Convergence and its differentMeasures
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Leonardi, R (2006). Cohesion in the European Union. Regional Studies, 40/2, 162.
Evaluating the Regional and Cohesion Policy
Interpretation of the beta-covergence:
- When comparing the performance of the Objective 1 regions,
much greater convergence rates are found compared with what
has been reported within nation states.
- Overall EU convergence has been driven, to a great extent, by
the convergence of the Objective 1 regions toward the EU mean
whereas the non-Objective 1 regions remained substantially
stable.
- Convergence is a fairly slow process.
The comparison with convergence before 1988 shows that countries
such as Ireland, Portugal, Greece, Spain have progressed considerably
since they joined the EU and were in receipt of Cohesion policy funding.
These countries’ performance in terms of GDP was consistent with the
positive development of the employment.
Low performing regions were Mezzogiorno, Germany’s East Bundesländer,
France overseas territories, several regions in Spain (Andalucia, Galicia)
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Objectives, Structural Funds and Instruments 2007-2013
The ERDF aims to strengthen economic and social cohesion in the European Union by correcting imbalances between its regions. In short, the ERDF finances:
direct aid to investments in companies (in particular SMEs) to create sustainable jobs;
infrastructures linked notably to research and innovation, telecommunications, environment, energy and transport;
financial instruments (capital risk funds, local development funds, etc.) to support regional and local development and to foster cooperation between towns and
regions; technical assistance measures.
The ESF sets out to improve employment and job opportunities in the European Union. It intervenes in the framework of the Convergence and Regional
Competitiveness and Employment objectives
The ESF supports actions in Member States in the following areas:
adapting workers and enterprises: lifelong learning schemes, designing and spreading innovative working organisations;
access to employment for job seekers, the unemployed, women and migrants;
social integration of disadvantaged people and combating discrimination in the job market;
strengthening human capital by reforming education systems and setting up a network of teaching establishments.
The Cohesion Fund is aimed at Member States whose Gross National Income (GNI) per inhabitant is less than 90% of the Community average. It serves
to reduce their economic and social shortfall, as well as to stabilise their economy. It supports actions in the framework of the Convergence objective. It is
now subject to the same rules of programming, management and monitoring as the ESF and the ERDF.
For the 2007-2013 period the Cohesion Fund concerns Bulgaria, Cyprus, the Czech Republic, Estonia, Greece, Hungary, Latvia, Lithuania, Malta, Poland,
Portugal, Romania, Slovakia and Slovenia. Spain is eligible to a phase-out fund only as its GNI per inhabitant is less than the average of the EU-15.
The Cohesion Fund finances activities under the following categories:
trans-European transport networks, notably priority projects of European interest as identified by the Union;
environment; here, Cohesion Fund can also support projects related to energy or transport, as long as they clearly present a benefit to the environment:
energy efficiency, use of renewable energy, developing rail transport, supporting intermodality, strengthening public transport, etc.
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Structural and Cohesion Funds 2007-2013
•The European Regional Development Fund (ERDF)
The ERDF aims at encouraging regional development, economic change, enhanced
competitiveness and territorial co-operation throughout the EU.
• The European Social Fund (ESF)
The ESF is meant to focus on employment, social inclusion and tackling discrimination.
• The Cohesion Fund
This fund applies only to member states with a Gross National Income (GNI) of less than 90% of
the EU average, and covers the new member states as well as Greece and Portugal. Spain will
be eligible for the Cohesion Fund on a transitional basis. The Cohesion Fund invests in the
environment and trans-European transport networks.
• These funds, in turn, are meant to meet three different main “objectives”:
1) Convergence (previously called Objective One): ERDF; ESF and Cohesion Fund.
2) Regional Competitiveness and Employment (previously called Objective Two): ERDF;
ESF.
3) European Territorial Co-operation (ERDF).
• The amount each member state gets is negotiated among the governments for a seven year period. Each
fund has a national “managing authority” – i.e. a government department – through which the money is
channeled. EU regulations govern how and to whom money can be granted. The grants are first paid out by
the managing authorities, and the Commission then reimburses the member states. The Commission audits
about five percent of the projects and has the right to withhold funds.
• Each project that wants grants from the SCF must find “matching funds” from other sources than the EU,
such as the national governments or private actors, usually amounting to around the same amount as that
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given by the EU.
http://www.openeurope.org.uk/research/regional.pdf
Objectives of European Regional Policy 2007-2013
 Convergence – solidarity among regions
The aim is to reduce regional disparities in Europe by helping those regions whose per capita gross
domestic product (GDP) is less than 75% of the EU to catch up with the ones which are better off.
Some regions in the EU as constituted before the two most recent enlargements are now above the
75% threshold simply because the EU average GDP has fallen with the addition of the newest member
countries. Those regions still need help from the cohesion policy, so they now receive "phasing out"
support until 2013.
Number of regions concerned: 99
Number of Europeans concerned: 170 million
Total amount: €283.3bn (81.5% of total budget)
Type of projects funded: improving basic infrastructure, helping businesses, water and waste treatment,
high-speed internet connection, training, job creation, etc.
 Regional Competitiveness and Employment
The aim is to create jobs by promoting competitiveness and making the regions concerned more attractive to
businesses and investors.
This objective covers all regions in Europe not covered by the convergence objective. In other words, it is
Intended to help the richer regions perform even better with a view to creating an knock-on effect for the
whole of the EU to encourage more balanced development in these regions by eliminating any remaining
pockets of poverty. Some regions, which used to be under the 75% threshold that would qualify them for
inclusion in the convergence group, receive extra funding to help them "phase in" to their new objective.
Number of regions concerned: 172
Number of Europeans concerned: 330 million
Total amount: €55bn (16% of total budget)
Type of projects funded: development of clean transport, support for research centres, universities, small
businesses and start-ups, training, job creation, etc.
 European territorial cooperation
The aim is to encourage cooperation across borders.
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Structural Funds 2007 – 2013: Eligible areas in the EU under the Convergence Objective
and the European Competitiveness and Employment Objective
Structural and Cohesion Funds 2007-2013
http://www.openeurope.org.uk/research/regional.pdf
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Cross-border programmes under the European Territorial Cooperation Objective
Example: Operational Programme 'Development of Eastern Poland'
On 2 October 2007, the European Commission approved the
Operational Programme entitled “Development of Eastern
Poland” for the period 2007-13. The Operational Programme
falls within the framework laid out for the Convergence
Objective and has a total budget of around €2.7 billion.
Community investment for five Polish regions (WarmińskoMazurskie, Podlaskie, Lubelskie, Podkarpackie and
Świętokrzyskie) through the European Regional Development
Fund (ERDF) amounts to some €2.3 billion. This represents
approximately 3.4% of the total EU investment earmarked for
Poland under the Cohesion Policy for 2007-13
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Example: Operational Programme 'Development of Eastern Poland'
Breakdown of finances by priority axis (euro):
Priority Axis
EU Contribution
National Public
Contribution
Total Public Contribution
Modern Economy
789 957 284
139 404 227
929 361 511
Information Society
Infrastructure
255 119 659
45 021 117
300 140 776
Regional Growth Centres
452 621 636
79 874 407
532 496 043
Transport Infrastructure
660 381 359
116 537 887
776 919 246
Sustainable Tourism
based on Natural Assets
47 500 000
8 382 353
55 882 353
Technical Assistance
68 213 812
12 037 732
80 251 544
Total
2 273 793 750
401 257 723
2 675 051 473
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Example: Cross-border Cooperation Poland - Germany
Project example: Collegium Polonicum, Collegium Universalum
Each morning, with a student card in their hand, they cross the border between Germany and Poland
on the Oder River and divide their lives and studies between the two countries. This is the reality that
students of the Viadrina European University in Frankfurt-am-Oder have been living since the
university's creation in 1991. The Union with Poland grew even closer with the opening in 1993 of the
Collegium Polonicum in Slubice where German students could sign up for a post-graduate
programme devoted to Polish law. The idea arose as early as 1991 of creating, in collaboration with
the Adam Mickiewicz University in Poznan, an institute for studies and research on the cultures,
languages, economy and society of Eastern Europe.
The Collegium Polonicum has, in addition to classrooms and the AMICUS student hall, rooms for tutorial
classes and a library boasting 6 000 books and 260 periodicals devoted to Eastern Europe: a genuine gold
mine for the students and academic researchers. The courses taught there are intended to complement the
programmes organised by the two founding universities. The students analyse the problems of the border
regions or the impact of economic upheavals on the Central and Eastern European countries, study the
different constitutional laws of these countries as well as international law and may also take language courses.
This cross-border training programme opens up excellent prospects for employment in international
organisations, in corporations, in the media or in the field of city and regional planning. The labour market
problems on either side of the Oder are also being dealt with by the "Science and Labour World"
cooperation centre of the Viadrina European University, nearby. The centre monitors the trends in
cross-border relations and ensures collaboration between the German and Polish trade unions on the
Interregional Trade Union Board.
The new school attracts students and teachers, not only from Germany and Poland but also from the
Czech Republic, France, Italy and even Russia and many other countries. It is therefore an important
academic and cultural meeting point and a centre of intellectual and human influence for Europe.
Total cost 48 000 000 euros EU contribution 8 850 000 euros
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EU Cohesion Policy 2014-2020
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Source: European Commission
“Ambitious but realistic” proposals issued by the Commission
in June 2011 for the Multiannual Financial Framework (MFF) 2014-2020
Other policies
(agriculture, research,
external etc.)
63 % (€649 billion)
Cohesion
Policy
33 % (€336
billion)
Connecting
Europe Facility
4 % (€40 billion)
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Cohesion Policy 2013 + Selection of Priorities
Integrated approach:
Multilevel governance:
New category:
Additional indicators:
“Cohesion policy is aiming at ensuring economic, social
and territorial cohesion across the EU.“
“Voluntary regions should be able to enter into a threeparty agreement/contract with their Member State and
the European Union.”
“Should transition regions become a full category, it
should be named as a 4th objective, in order to keep the
architecture clear. The criteria for this objective should
therefore be made as fair as possible and
straightforward enough to avoid any ambiguity on the
status of one region or another.“
“It seems clear however that cohesion policy is about
much more than just increasing GDP per head…there is
consequently an urgent data gap to fill in order to
adequately distribute European funding…Increased
effort should be dedicated to researching in the area of
measuring the combination of wealth, competitiveness,
sustainability and well-being.”
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Cohesion Policy 2013 + Selection of Priorities
Principles and rules:
Conditionality
Rewarding efficient regions with a
reserve fund
Partnership
Better participation of regional authorities
Efficiency
Simplifying the management of structural
funds
Uncertainty
Reducing the room for interpretation by
the different authorities amongst others.
Evaluation
Better assessing the quality of the
programmes‘ implementation
Partnership
Simplifying the the involvement of the
private sector
Coordination
Coherence between rural development
and cohesion policy; stronger integration
between ESF and ERDF
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The Future of Cohesion Policy – 2014-2020
Legislative proposals for cohesion policy during the period 2014-2020 were adopted
by the European Commission on 6 October 2011. These will be discussed by the
Council and European Parliament during 2012-2013. The new Regulations should
enter into force in 2014.
The Fifths Cohesion Report, adopted in November 2010, set out ideas on how
cohesion policy might be reformed, including:
- focusing resources on a few priorities closely linked to the Europe 2020 strategy
- defining clear and measurable targets,
- strengthening regulatory and institutional frameworks,
- conditionality and incentives,
- increasing the leverage effect of investments,
- private sector finance,
- simplification of the management rules,
- concentrating on the poorest Member States and regions.
NEWS:
Working paper on “A New regional Competitiveness Index: Theory, Methods and Findings”
Brochure “Simplifying Cohesion Policy for 2014-2020”
RegioStars Awards 2013 (http://ec.europa.eu/regional_policy/index_en.htm)
http://ec.europa.eu/regional_policy/what/future/index_en.cfm
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Source: http://ec.europa.eu/regional_policy/sources/docgener/informat/country2012/maps/2_poverty_target.png
57
Source: http://ec.europa.eu/regional_policy/sources/docgener/informat/country2012/maps/4_employment_target.png
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Source: European Commission (2012), Country Fact Sheet – Polska.
If convergence will ever happen: WHEN?
Result of an OECD report:
“..regional disparities are not falling, or at
best are declining very slowly. At the
current rate of convergence it would take
170 years to half divergence across the
regions in the EU.“
http://www.openeurope.org.uk/research/regional.pdf
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OECD (2007). Economic Survey of the European Union 2007. Paris.