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IP/07/721

Brussels, 30 May 2007

Commission assesses impact of funding for regions, launches debate on next round of cohesion policy

Cohesion policy has had a proven effect in helping the European Union's regions to develop, but it will face some new challenges in years ahead. Those are the findings in the European Commission's latest report on economic and social cohesion . The fourth such report, published today, provides the economic, social and territorial situation of the enlarged Union of 27 Member States and 268 regions for the first time. The report contains detailed analysis of the position of regions in terms of GDP, productivity and employment. It identifies a series of challenges with which Member States and regions will be confronted in the years ahead. It provides a first assessment of the impact of European cohesion policy in the 2000-2006 programming period, as well as of the preparation for the new period 2007-2013. The report includes 10 questions to kick off f the debate inside and outside the European institutions on the future of this major policy area.

Presenting the report, Danuta Hübner, Commissioner responsible for regional policy, said: “Cohesion policy has demonstrated its capacity to adjust to changing circumstances. It has supported much-needed investment in infrastructure, human resources, and the modernisation and diversification of regional economies. It has helped to shift the policy mix of public investment in Member States towards the priorities of the Union. “

She added: "Cohesion policy is all about providing opportunities to each EU citizen wherever they live by reducing disparities between regions, by mobilising unused potential, by concentrating resources on growth-generating investments. The Union faces many challenges in the period ahead: a population which will start to decline by around 2020 and is already declining in many regions, increased economic pressure from global competitors, increased energy prices, climate change, and social polarisation. Europe must respond to these challenges. To do this we need to involve all the regions and people in generating wealth, jobs and growth”.

Vladimír Špidla, EU Commissioner for Employment, Social Affairs and Equal Opportunities, said: "This policy has helped to reducing social exclusion and poverty and to improving administration and public governance, particularly at sub-national level. In so doing, the policy has contributed to the growth of GDP and the reductions of disparities in the Union".

He added: "The European Social Fund (ESF) will be investing more than 10 billion Euros in people each year for the next seven years, helping them to improve their skills and employability. The challenges of technological progress and globalisation make it particularly important to ensure that people have the skills to cope with change – workers must be able to adapt." He added, "The ESF is an essential tool in helping Member States put flexicurity – a combination of active labour market policies, flexible contractual arrangements and lifelong learning – into practice. It also plays a major role in helping to promote and implement reconciliation policies which are especially important for the EU's efforts to raise the number of women and men in work".

Commissioner Hübner set the scene for a discussion on what to do in this policy area after the current funding period, which covers 2007-2013. "We can do even better – "I propose 10 questions for a debate on the future of this policy which I hope will be broad and inclusive. I will report on the results of this debate next year."

FINDINGS OF THE REPORT

The report has four parts:

1. Economic, social and territorial situation and trends in Member States and regions of the EU-27: The analysis shows that disparities in income and employment across the European Union have narrowed over the past decade. But, there are still important deficits to make up between the least well-off and the rest which will require a long-term effort.

2. The impact of cohesion policy: European cohesion programmes have helped directly to promote regional convergence and employment. For example, between 2000 and 2006, the policy has contributed to increasing GDP by 2.8% in Greece and 2.0% in Portugal; preliminary estimates suggest that over the period 2007-2013, the policy will contribute to increase the GDP of Lithuania, Latvia, and Czech Republic by around 8.5%, of Poland by around 5.5%, and of Greece by around 3.5%. Cohesion policy has also contributed to reducing social exclusion and poverty: it co-finances the training of 9 million people annually, more of half of them women, leading to better employment conditions and higher income; over 450 000 gross jobs were generated in six countries between 2000 and 2005, accounting for 2/3 of Objective 2 funding.

3. National policies and cohesion: Public investment over the past years has been on a declining path as budgets are confronted with the consequences of an ageing population (reform of pensions, more costly education and health systems) and economic reform leading to consolidation of public finances. In 1993, public investment amounted to around 2.9% of GDP. Twelve years later, it had declined to 2.4% of GDP. At the same time, we witness a process whereby the decision and management on public investment is slowly, but steadily being decentralised to regional and local levels. Between 2000 and 2005 public expenditure at those levels has been increasing annually by 3.6%, faster than GDP (1.7%) and total public expenditure (2.4%).

4. Community policies and cohesion: The different Community policies – R&D and innovation, agriculture, competition and state aid - have the potential to increase the effectiveness of cohesion policy, for example, by taking explicit account of economic, social and territorial circumstances. The report shows that this is increasingly the case, but that there are still synergies to exploit.

KEY QUESTIONS

The report proposes the following questions for a wide debate on the future of cohesion policy.

What lessons can you draw from the experience of preparing the 2007-2013 programmes? In this context and in the light of the analysis provided by this report, how far is cohesion policy adapted to the new challenges European regions will face in the coming years? For example:

1. What lessons can you draw from the experience of preparing the 2007-2013 programmes? In this context and in the light of the analysis provided by this report, how far is cohesion policy adapted to the new challenges European regions will face in the coming years? For example:

1.1. How can the regions react to restructuring pressures from dynamic competitors in low and medium tech sectors?

1.2. Given wide differences in birth rates, death rates and migratory flows at regional level, what is the role of cohesion policy in responding to demographic change?

1.3. To what extent is climate change a challenge for cohesion policy?

2. How can cohesion policy further develop an integrated and more flexible approach to development/growth and jobs in this new context?

2.1. How can cohesion policy better promote harmonious, balanced and sustainable development taking into account the diversity of EU territories, such as least favoured areas, islands, rural and coastal areas but also cities, declining industrial regions, other areas with particular geographic characteristics?

2.2. What are the impacts of the challenges identified in the report for key elements of social cohesion such as inclusion, integration and opportunity for all? Are further efforts needed to anticipate and counteract these impacts?

2.3. What are the key future skills that are essential for our citizens in facing new challenges?

2.4. What are the critical competencies that should be developed at the regional level to make regions globally competitive?

3. Following the appraisal of the previous questions what is the assessment of the policy management for 2007-2013 period??

3.1. Given the need for efficient management of cohesion policy programmes, what is the optimum allocation of responsibility between the Community, national and regional levels within a multi-level governance system?

3.2. How can cohesion policy become more effective in supporting public policies in Member States and regions? What mechanisms of delivery could make the policy more performance-based and more user-friendly?

3.3. How can we further strengthen the relationship between cohesion policy and other national and Community policies to achieve more and better synergies and complementarities?

3.4. What are the new opportunities for co-operation between regions, both within and outside the EU?

Notes for editors

The Fourth Report on Economic and Social Cohesion sets out the basic data and the key questions for an open debate on the future of cohesion policy after 2013 which will be officially launched with the Fourth Cohesion Forum scheduled for September 27-28, in Brussels.

The European Commission is required to produce a report on Economic and Social cohesion under the provisions of Article 159 of the consolidated version of the Treaty establishing the European Community, which states:

The Commission shall submit a report to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions every three years on the progress made towards achieving economic and social cohesion and on the manner in which the various means provided for in this Article have contributed to it. This report shall, if necessary, be accompanied by appropriate proposals.
Further information on regional policy at:

http://ec.europa.eu/regional_policy/index_en.htm


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