Transcript Coordinated policies and cohesion policies, their relationship and

Coordinated policies and cohesion
policies, their relationship and impact
on the Member States in 2000-2010
Marek Tiits, Imre Mürk, Tarmo Kalvet (IBS),
Judit Kalman (IEHAS), Sandor Richter (WIIW)
Paper prepared under GRINCOH FP7 project funding
Research question
Open method
of co-ordination
Real funding,
relevant primarily
to cohesion
regions
Lisbon /
EU2020
strategy
Cohesion
policy
Policy
results
Actual socioeconomic
development
Judit Kalman
Institute of Economics, Hungarian Academy of Sciences
2
Lisbon strategy
Make EU “the most competitive and dynamic
knowledge-based economy in the world capable of
sustainable economic growth with more and better
jobs and greater social cohesion” by 2010
• Targets:
•
•
•
•
•
employment rate 70%;
GERD 3% of GDP
vast number of specific targets when initially launched;
with the re-launch in 2005, emphasis on action plan rather than
specific targets
Judit Kalman
Institute of Economics, Hungarian Academy of Sciences
3
Lisbon policy and beyond
•
•
•
Even if progress has been made it must be said that the
Lisbon Agenda has been a failure
(mixed priorities, poor cordination, lack of political
resolve, too top-down, etc,)
Key targets of the Lisbon strategy were nonetheless
reinstated in EU2020
• How likely is EU2020 to succeed?
• What needs to be done differently?
Judit Kalman
Institute of Economics, Hungarian Academy of Sciences
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Europe 2020
We want EU to become a smart, sustainable and
inclusive economy
• Targets:
•
– employment 75% of 20-64 yr olds
– GERD 3% of GDP
– reduce greenhouse gas emissions by at least 20%, increase the share
of renewable energy in final energy consumption to 20%, and achieve
a 20% increase in energy efficiency
– share of early school leavers 10%
– reduce the number of Europeans living below national poverty lines
by 25%
Judit Kalman
Institute of Economics, Hungarian Academy of Sciences
5
Link between co-ordinated and
cohesion policy
Initially, cohesion policy was not assigned explicit
role in achieving Lisbon objectives
• Cohesion policy has been operationalised to follow
the objectives of Lisbon Strategy and Europe 2020
only from 2006+ onwards
•
• strategic planning: Community Strategic Guidelines +NSRF : explicit
„Lisbonization”
• earmarking of SF (60%and 75%)
• strategic reporting on achievement of obj. (new ‘Lisbon type’
indicators; earmarking codes incorporated into monitoring, link
with NRP annual reports
Judit Kalman
Institute of Economics, Hungarian Academy of Sciences
6
Effectiveness of
European cohesion policy
•
Barca report (2009):”The state of the empirical
evidence on the performance of cohesion policy is
very unsatisfactory”
• Earlier econometric studies inconclusive on effectiveness of
policy
• A deficit of strategic planning and in policy concept
• Lack of focus on priorities (convergence itself is not a proxy for
policy objectives!)
• Failure to focus on results; problems with indicators
• ineffective investment mix ( too much focus on infra+business)
• Focus on absorption, lack of real policy debate
Judit Kalman
Institute of Economics, Hungarian Academy of Sciences
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Cohesion gap remains even
decade(s) after EU accession
Regional gross domestic product
PPS per inhabitant, % of EU28,
NUTS2, PPS, 2011
(Eurostat 2014)
Judit Kalman
Institute of Economics, Hungarian Academy of Sciences
9
Cohesion gap in income terms
Judit Kalman
Disposable income of private
households, NUTS2, PPS, 2011
(Eurostat 2014)
11
Rapid catching up on-going?
120
3.5
Manufacturing gross value added per employee
Judit Kalman
Bulgaria
Romania
Latvia
Lithuania
Croatia
Estonia
Poland
Slovakia
Portugal
Hungary
Czech Republic
Cyprus
Slovenia
Greece
Spain
Italy
0.5
France
0
Luxembourg
1.0
Germany
20
United Kingdom
1.5
Finland
40
Denmark
2.0
Austria
60
Sweden
2.5
Netherlands
80
Belgium
3.0
Ireland*
100
Gross manufacturing
value added per
employee in KEUR, 2011
(Eurostat 2014)
Growth of MVA 2001-2011 (right axis)
13
Erosion of cost competitiveness
the EU in periphery
Real effective exchange
rate index 2000-2012
(Eurostat 2014)
Judit Kalman
Institute of Economics, Hungarian Academy of Sciences
14
Unemployment rate is now higher
in many MS than in 2000
Unemployment rate, 2013
(Eurostat 2014)
Judit Kalman
Institute of Economics, Hungarian Academy of Sciences
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Domestic and international
equilibrium
•
•
•
Keynes-Nurkse (1947) effect
Germany highly cost competitive in exporting
manufactured goods, trade surplus highest ever
Cohesion countries that run the highest external
imbalances prior to the crisis, export their
unemployed workforce
– Change of working age population
LV -18%, LT -9%, BG -4%, EE & PL -3% between 2008 and
2013.
Judit Kalman
Institute of Economics, Hungarian Academy of Sciences
16
Risk of poverty or
social exclusion has increased
Judit Kalman
People at risk of poverty or
social exclusion, 2012 in
comparison with 2010
(Eurostat 2014)
Institute of Economics, Hungarian Academy of Sciences
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Stronger knowledge intensive industry needed!
60
50000
45000
40000
50
30000
40
25000
20000
15000
30
10000
5000
20
0
(Eurostat 2014)
Knowledge-intensive services
Judit Kalman
High-technology manufacturing
Medium high-technology manufacturing
Institute of Economics, Hungarian Academy of Sciences
GDP per capita
21
GDP per capita in euro
% of employment
35000
YET: Early school leavers aged 18-24
Distance to national
EU 2020 target
Eurostat, DG Regio
Judit Kalman
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Cohesion policy is NOT the driving force for
growth - but can help!
•
•
Broader EU policy mix, macro conditions and cross-border financial
flows played clearly greater role in gearing the growth in cohesion
countries than the EU cohesion policy itself in 2000s
• uncontrolled flows of foreign financing increased trade imbalances,
less so in case of floating exchange rate
• rapid increase of unit labour costs, labour productivity gap and
erosion of cost competitiveness despite of R&DI and enterprise
policies
• increase of unemployment despite active labour market policies
Such cyclical and structural imbalances did not get sufficient attention
from other EU policy domains (Lisbon goals unmet) role for
Cohesion (linked to EU2020)!
Judit Kalman
Institute of Economics, Hungarian Academy of Sciences
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EU has become major source of
public investment after crisis in CEE
Share of ERDF, ESF and Cohesion Fund allocations and
national co-financing in total public investment,
average 2011-2013 (Eurostat 2014)
Judit Kalman
Institute of Economics, Hungarian Academy of Sciences
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Lisbon vs Cohesion: Policy coordination
failure
Two different loosely connected policy and governance systems
•
•
•
Lisbon Strategy more of a
vision, a political engine,
than true policy process
Voluntary compliance with
Lisbon goals did not work
OMC as a soft mechanism
of policy learning
beneficial, but failed to
achieve an overall EU
focus on competitiveness
and employment
Judit Kalman
Cohesion Policy: long traditions,
impact unclear
o decreased MS co-financing ability
after the crisis Reprogramming
o Effectiveness depends on
institutional environment!
o Recent reform (performance
contracts ) hopefully improve
situation for 2014-2020
o
Institute of Economics, Hungarian Academy of Sciences
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•
•
•
Programming and implementation issues
Lisbon objectives contradictory or unfeasible; several would
not have been met even without crisis (Reinfeldt 2009)
‘Lisbonisation’ of cohesion policy by earmarking did not
really help (‘too little too late’):
huge differences between MS in Lisbon earmarked allocations
(exemption for CEEs, HU:46.8% and EE:54.1% among least
• Administratively demanding
• Emphasis on spending (absorption of ESIF) instead of outcomes
(will see how it changes in 2014-2020)
•
Yet it was a precedence of top-down governance (EUMS)
– same tendency for 2014-2020 with more specific spending
categories
Judit Kalman
Institute of Economics, Hungarian Academy of Sciences
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Quality of governance continues to be
a major obstacle
EU28 average absorption:68%
6th Cohesion Report,2014
Judit Kalman
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Judit Kalman
Institute of Economics, Hungarian Academy of Sciences
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Conclusions & Recommendations
Economic cohesion has been a mixed success so far
•
•
asymmetrical integration within EU28, with gains & losses
A number of blind spots in the EU economic policy framework in
2000s
• Governance and institutional problems
EU needs a more effective policy mechanism for co-ordination of
production and employment levels across EU MS
( challenging due to multi-level governance system with several principals
and agents – yet to be seen how the new and more stringent
conditionalities for 2014-2020 will work in reality)
 Reinforcement of EU2020 strategy, clearer and actionable vision,
identifying lead markets for emerging IT,green etc. technologies +
development of an industrial revival strategy + foster upgrading by
e.g. specialized investment funds (role of EIB! not only Cohesion)
Judit Kalman
Institute of Economics, Hungarian Academy of Sciences
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–
Proper operationalisation of EU2020 headline indicators
into meaningful policies remains a major challenge in
cohesion countries (institutional weaknesses, rent seeking,
distortions)
 getting incentives right in EU governance is
crucial
 Capacity building (regul., admin, institutional)
–
Along these lines better definition of policy actions + a
more careful selection of performance indicators
(Headline EU2020 / cohesion policy indicators often still
too abstract – ‘One size does not fit all’, successive stages of
development, natl. averages ‘blur’ important issues, etc.)
Judit Kalman
Institute of Economics, Hungarian Academy of Sciences
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