ENENRegional Policy

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Regional PolicyRegional PolicyCohesion Policy Cohesion Policy Growth and jobsGrowth and jobs

Regional PolicyRegional PolicyCohesion Policy Cohesion Policy Growth and jobsGrowth and jobs

Background presentation for

English schools group

24 March 2009

charles.white@ec.europa.euhttp://ec.europa.eu/regional_policy

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So what is Regional Policy?So what is Regional Policy?

• Regional Policy is how Europe helps poorer regions catch up (reducing disparities) and areas suffering from economic change to restructure

• It is the second biggest budget (35%) and helps the realisation of most other policies (environment, transport, energy and others)

• The scope is staggering: investments in road rail and environment infrastructure, in people and in the business environment. 600,000 projects so far.

• It is at the centre of the Lisbon strategy.

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And what do we actually do?And what do we actually do?• Transport infrastructure: road, rail, urban

transport…

• Environmental infrastructure: dams, waste water treatment plants, solid waste management, walkways, waterways, paths and parks.

• Research infrastructure: laboratories, equipment, access

• Innovation and the business environment: technology transfer, management, marketing, mentoring, clusters etc;

• Training, education, adaptation, integration

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Tram system AthensTram system Athens

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Big red motorbike, FranceBig red motorbike, France

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These people were turned away by their These people were turned away by their bankbank

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The Guggenheim

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The Guggenheim

effect in action

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Sustainable development, Burgenland

Sustainable development, Burgenland

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Motorway near BilbaoMotorway near Bilbao

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Me as an Ambassador, (at the back)Me as an Ambassador, (at the back)

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So how much?So how much?And who for?And who for?

• Convergence (like old Obj 1: greater scope) 81.9%

• Competitiveness (old Obj 2&3, tie to Lisbon) 15.7%

• Territorial co-operation (former Interreg programme and RFEC networks to test ideas) 2.4%

• Total budget €347bn, which will unlock up to €700bn

• A method based on what works: Programming, Partnership and Decentralised management

• Mainstreaming: INTERREG and URBAN

• Non grant instruments now in regulations

Reform of the policy

Conclusions

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And what’s the link with Cohesion Policy?And what’s the link with Cohesion Policy?

• Regional Policy is part of it, along with Social policy, and has been since 1988

• More specifically the funds which finance these policies (the ‘Structural Funds’: ERDF and ESF)

• Also the Cohesion Fund (not a structural fund but treated like one: don’t ask) which came from the Maastricht treaty and is handled by REGIO now

• Also IPA

• But not EAGGF or FIFG any more

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But why bother with it?But why bother with it?

• Leaving disparities in place is not an option: that would wreck two of the policies on which Europe’s growth has been based: the single market and EMU

• EMU needs an adjustment mechanism. The Lisbon agenda partly fulfils that role but it needs the Cohesion Policy to function properly

• It is in the treaty: to promote economic and social cohesion (though not territorial cohesion as yet…) by reducing disparities between the regions

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What is a Region anyway?What is a Region anyway?

• Good question: not defined in the treaty.

• Note we are looking at sub-national units, not groups of countries

• We work with the second level of the Nomenclature for Territorial Statistics, NUTS to you. NUTS 2 regions range from 800th to 3 million population

• Second question: is spatial targeting the right approach? The World Bank is not convinced. Other parts of the world have achieved balanced growth without it. Eventually.

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Index EU 25= 100

Geographical Eligibility for Structural Funds Support 2007-2013 (GDP/head 2000-2001-2002)

Objective 'RegionalCompetitiveness and Employment'Phasing-in regions, "naturally" above 75%

Convergence objectivestatistically affected regions

Objective 'RegionalCompetitiveness and Employment'

Convergence objectiveRegions > 75% in EU25)

Source: Eurostat

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Why should contributing regions keep Why should contributing regions keep pouring money into ‘Club Med’? (the pouring money into ‘Club Med’? (the Economist) or the PIGS (the Sun)?Economist) or the PIGS (the Sun)?

• You are not pouring you are investing. For all investments there are returns

• As poorer regions catch up they buy more goods

• Many building and supply contracts come back to contributing regions (35% PO, 42% HE)

• Solidarity is vital, especially now.

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So how does the Commission choose projects?

(It doesn’t…)“Shared” responsibility between the European Commission and Member State authorities

Commission draws up the priorities, negotiates and approves the operational programmes proposed by the Member States, and allocates resources

Member States manage the programmes, implement them by selecting thousands of projects, monitor and assess them

Economic and social partners as well as civil society bodies (environment, equal opportunities, sport etc.) participate in the programming and the management of the OP

Commission does programme monitoring, commits and pays out approved expenditure and verifies the control systems

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Full decentralised management of funds (2/2)

For each operational programme, the Member State appoints:

A managing authority (a national, regional or local public authority or public/private body to manage the operational programme); and a monitoring committee

A certification body (a national, regional or local public authority or body to certify the statement of expenditure and the payment applications before their transmission to the Commission);

An auditing body (a national, regional or local public authority or body for each operational programme to oversee the efficient running of the management and monitoring system)

Automatic decommitment (N+2 or N+ 3)

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The method is importantThe method is important• Has improved the quality of many public

administrations

• Has introduced an evaluation culture, stimulated strategic thinking, responsibility

• Supported co-operation, improved accountability, transparency

• Main element in visibility of ‘Europe’

• Cohesion policy is a synonym for good European governance and balanced growth

• China Russia Brazil (also Paraguay/Mercosur) now formally linked

• Time to ‘export’

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Isn’t it just a lot of Structural Boondoggles*?Isn’t it just a lot of Structural Boondoggles*?

• Evidence suggests positive contribution to growth, national

convergence and to the reduction of interregional disparities

• Ex-post evaluations demonstrate positive employment effects

• Clear benefits in terms of regional governance

Although:

• Geographical targeting possibly not the only way

• Type of intervention sensitive to economic sequence

* Term coined by Simon Heffer of the Daily Telegraph, circa Nov 2006o

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Five things to rememberFive things to remember• It has successfully reduced the gaps between

the regions in Europe and made a major contribution to prosperity and democratic stability. Regions do deliver growth and jobs.

• It has improved management and governance in the regions by decentralising management and devolving responsibility: the Commission does not select projects;

• It is, with research, the EU’s biggest budget heading;

• It works by investing in infrastructure, training, integration, as well as by investing in innovation and research. No hand outs.

• Its success is recognised by all candidate countries and by many others (China, S. Africa, Russia, Brazil…)

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What about the future?What about the future?

• Globalisation and multi-level governance: Regional and local

approaches are becoming increasingly relevant. Which is the

most appropriate territorial level to address global challenges?

• Institutions: How can we ensure good governance and quality

institutions at all territorial levels?

• Simplification: How can we best combine administrative

efficiency with sound financial management?

• Results and performance orientation: How can we deliver

better results and put increasing emphasis on appropriate

evaluation mechanisms?

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for Cohesion Will any of this help the crisis?Will any of this help the crisis?

• We concentrate on growth and jobs: Europe needs these more than ever

• Europe hasn’t got a Federal reserve…

• In the emergency we do more up-front

• Last week’s summit allocated €5bn more in the short term for infrastructure including ICT

• But we don’t fund toxic debt, help ruined banks or subsidise bankers’ bonusses…

• Who knows which way the economy will go?

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Europe 2020: key issues for future policyEurope 2020: key issues for future policy

• Wide variations resulting from globalisationCompetitive, innovative economies will benefit; non knowledge based

economies will be more exposed

• Diversity in demographic patternsOne third of regions, mainly centre EUR 15 will experience greater

dependency of ageing population. EUR 12 later, so can prepare.

• Far reaching impacts of climate change

Especially in South and East Europe

• Challenge of volatile energy markets across the board

Peripheral regions in South and east especially vulnerable

• Alerting regions to the extent of the risks

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Why do it at EU level? Why not Why do it at EU level? Why not re-nationalise?re-nationalise?

• Leverage effect of additional resources

• Multi-annual planning, partnership, monitoring and evaluation

• Support of other EU objectives such as internal market, Lisbon

• Interregional cooperation and sharing of best practice

• Unique financial perspectives

• Record

Although

• Complexity of management and control structures

• Results on ground very variable, esp in Objective 1 regions

• Unclear in some MS if effects are consistent or attributable to cohesion policy alone

• Monitoring and evaluation can be undermined by poor data

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The link to Lisbon?The link to Lisbon?

• The Lisbon Agenda (first version, competitiveness, knowledge society, ICTs) 1) set certain targets

• Member States realised that it needed to be extended to all growth factors and so be centred on Cohesion Policy

• So Member States were asked to prepare National Reform Programmes (cf Integrated Guidelines for Growth and Employment) and report annually

• Cohesion Policy programming is now integrated into this: stage 1: preparation by EC of the Strategic Guidelines for Cohesion, and stage 2: preparation by MS of National Strategic Reference Frameworks based on Strategic Guidelines and Integrated Guidelines above

backgroundbackground

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Cohesion Policy and the Lisbon Cohesion Policy and the Lisbon Agenda: parallel processesAgenda: parallel processes Cohesion Policy and the Lisbon Cohesion Policy and the Lisbon Agenda: parallel processesAgenda: parallel processes

Community Strategic Guidelines

National Strategies (NSRFs)

National and Regional programmes

Integrated Guidelines

National Reform Programmes

Annual Progress Report

• COHESION POLICY • LISBON AGENDA