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The EU’s Regional Policy David Müller Alpeuregio summer school 2012 1 1. Regional Policy – Cohesion Policy • Europe and its Regions • History of Regional Policy in the EU • Why Regional Policy? • Terminology: Cohesion Policy/Regional Policy 2 Europa and its Regions 271 Regions in Europe (NUTS 2 level) – – – Divergences in terms of wealth, competitiveness, natural and demographic challenges Different political traditions on “regions” “Europe of the regions”? 3 First ERDF Regulation 1975 Main aim of correcting regional imbalances due to: o predominance of agriculture o industrial change o structural unemployment Actions eligible for up to 50% of public expenditure, (preferably in national state aid areas): o investments in small enterprises creating at least 10 new jobs; o investments in infrastructure related to point 1; o infrastructure investments in mountainous areas. 4 The Reform for the Period 2007–2013 • Strategic Approach: Linking Cohesion Policy to the Lisbon Strategy • New architecture and streamlining of policy instruments • More room for manoeuvre for Member States • Simplification of management and control of structural policies 5 Differences in development in the EU-27 GDP per head as a % of the community average <50 50 - 75 75 - 90 90 - 100 100 - 125 125 6 GDP per capita in PPS in 2006 7 Disparities across the European Union Hi Lo Ratio GDP per cap (% EU27 average) Luxembourg 266% Bulgaria 44% 6.05* Population Germany 82.5 million Malta 404,000 204 *In US, this difference is only 2.5 and Japan 2 8 Regional Policy – Cohesion Policy • Structural Policy: Umbrella term covering all policies aiming at structural reforms on national and regional level. • Cohesion Policy: Policy of the EU to reduce the economic disparities between the regions using diferent funds, following shared management rules (TFEU Art. 174). • Regional Policy: Part of EU‘s Cohesion policy with the main instrumtents ERDF and CF (but not the ESF!). 9 Instruments of Cohesion Policy Cohesion policy interventions through 3 main policy instruments: • European Regional Development Fund (ERDF; based on Art. 176 TFEU; Regulation 1080/2006) • European Social Fund (ESF; based on Art. 162-164 TFEU; Regulation 1081/2006) • Cohesion Fund (based on Art. 177 TFEU; Regulation 1084/2006) Further legislation: • European Grouping of Territorial Cooperation (EGTC; Regulation 1082/2006) Source: EU Commission, DG Regio 10 European Regional Development Fund Eligibilty • Convergence Regions: GDP/capita < 75 % of the EU25-average. • Competitiveness Regions: GDP/capita > 75 % of the EU25-average • Phasing-in/Phasing-out as transitional provisions for former Objective-1 regions. Territorial cooperation Funding of a) cross-border, b) transnational and c) interregional cooperation and networks (e.g. “Urbact”). Source: EU Commission, DG Regio 11 European Regional Development Fund Scope of the funding: • direct aid to investments in companies (in particular SMEs) to create sustainable jobs • infrastructures linked to R&I, telecommunications, environment, energy and transport; • financial instruments to support regional and local development and to foster cooperation between towns and regions; • technical assistance measures Broader scope for Convergence regions (11 priorities). 12 European Social Fund Support of the ESF for Convergence regions as well as for Competitiveness regions. Scope of funding: • • • • Adaptability of workers and enterprises Access to employment for most vulnerable Social integration of disadvantaged people Enhancing human capital (special focus on education system in Convergence regions) • Promoting partnerships and stakeholder networks • Strengthening administrative capacities (conv. reg.) Source: EU Commission, DG Regio 13 Cohesion Fund Eligibility: MS with less than 90 % GNI/capita on national level (EU12 + GR, PT, ES). Scope of the funding: •trans-European transport networks, priority projects of European interest as identified by the Union; •Environment (including energy efficiency, renewable energy and transport projects outside of TEN e.g. public transport) Macro-economic conditionality (Art. 4). Source: EU Commission, DG Regio 14 Management and Control Management/control bodies on MS‘s level •Management authority: management and implementation of OP; annual reporting. •Certification authority: certification of payment requests and compliance of expenditure. •Auditing authority: independent authority responsible for auditing of each OP; annual reporting. •Monitoring committee: Stakeholder committee for each OP to monitor quality of implementation 15 EU Budet 2007-2013 (at current prices 2012) 16 Distribution of Budget. Overview • Convergence regions: 81.9% • Competitiveness regions: 15.7% • Territorial co-operation 2.4% Total budget €347bn, which will unlock up to €700bn of direct investment. 17 Geographical Eligibility for Structural Funds Support 2007-2013 Convergence objective (Regions > 75% in EU25) Convergence objective statistically affected regions Objective 'Regional Competitiveness and Employment' Phasing-in regions, "naturally" above 75% Objective 'Regional Competitiveness and Employment' Index EU 25 = 100 18 Fields of Investment European Regional Development Fund and Cohesion Fund (€271 billion) European Social Fund (€76 billion) Employment Environment Transport Human capital Research/Innovation Information society Social infrastructure Energy Tourism Culture Institutional capacity Adaptability of workers and firms Social inclusion Capacity building Technical assistance 20 Territorial co-operation Regions eligible for cross-border cooperation Source: EU Commission, DG Regio 21 European Territorial Cooperation Eligibility • Cross-Border Cooperation: NUTS 3 level regions are eligible, along all the land-based internal borders and some external borders, along maritime borders separated by a maximum distance of 150 km (1,8 % of budget). • Transnational Cooperation: all the regions are eligible but, in consultation with the Member States, the Commission has identified 13 cooperation zones (0,5 % of budget). • Interregional Cooperation and setting up networks and exchanges of experience: all the European regions are eligible (0,1 % of budget). 22 Investment in Growth and Jobs? • • • Cohesion policy provides for > 50% of public investment in 9 MS, mainly on key domains of EU interest (transport, energy, R&I, SME, etc.) € 17 bn. reprogrammed since 2007 in reaction to crisis 2012: Barroso Initiative: reprogramming of € 7 bn. focused on growth and job creation (impact on 168.000 SMEs and 450.000 young people). 23 Innovation and entrepreneurship • Targets mostly small and medium sized enterprises and startups. • At least 1 million gross jobs were created in supported companies. • Increased private investments and R&I activity in firms. Source: EU Commission, DG Regio, 5th Cohesion Report 24 Promoting employment, education and inclusion • 40% of the unemployed trained have found a job. • Funded one third of Active Labour Market Policies expenditure. • Targets specific vulnerable groups such as youth, women, minorities, low-skilled, long-term unemployed. Source: EU Commission, DG Regio, 5th Cohesion Report 25 Transport infrastructure • 2000-2006: 44,000 km of road and 12,000 km railway built or reconstructed in the period 2000-2006. • 2,000 km of motorways built • Construction of additional 4,000 km of trans-European rail, including high-speed Source: EU Commission, DG Regio, 5th Cohesion Report 26 Access to Water and Waste Water Treatment • Faster implementation of environmental directives. • 23 million inhabitants are served by waste water projects to EU standards. • 20 million inhabitants have been served by water supply projects. Source: EU Commission, DG Regio, 5th Cohesion Report 27 The Future Cohesion PolicyLegal Basis of Cohesion Policy • • • • The Proposal for the next Multiannual Financial Framework (MFF) New Architecture for Cohesion Policy „Better spending“. The Reform of Cohesion Policy 2014-2020 Timeline 28 Proposal on Cohesion Policy Budget for the MFF 2014-2020 billion EUR Cohesion Fund* Less developed regions Transition regions More developed regions Cooperation Extra allocation for outermost and northern regions Total** Connecting Europe facility for transport, energy and ICT 68.7 162.6 39.0 53.1 11.7 0.9 336.0 40.0 * Cohesion Fund will "ringfence" 10 billion EUR for the new Connecting Europe Facility ** ESF minimum share: 25% NB: ESF minimum share is 25% for less developed, 40% for transition, and 52% for more developed 29 New Architecture of Cohesion Policy • Three categories of regions – Less developed regions (GDP per capita < 75%) – Transition regions (GDP per capita between 75% and 90%) – More developed regions (GDP per capita > 90%) • • Cohesion Fund for Member States with GNI per capita <90% Territorial cooperation (3 strands: CBC, transnational, interregional) 30 31 32 Key Elements of Cohesion Policy Reform • Alignment of Cohesion Policy with Europe 2020 • Reinforced strategic programming • Thematic concentration • Conditionality and performance incentives • Stronger focus on results • Streamlined delivery system 33 Timeline • 30 June 2011: Proposal on MFF • 6 October 2011: Adoption of Legislative Proposals • March 2012: Commission Staff Working Document on the Common Strategic Framework • June 2012: Partial General Approach in Council • July 2012: Vote on CPR report in REGI committee • End 2012 (?): Agreement on MFF and adoption of new legislative package • 2013: Negotiation of new programming documents • 2014: Entry into force and adoption of programmes 34 Thank you for your attention and all the best for your further studies! For more information: http://ec.europa.eu/regional_policy 35