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Johannes Hahn Commissioner for Regional Policy Evaluation of ERDF Objectives, 2000 - 2006 Debate on Synthesis Report at Bibliothèque Solvay Brussels, 19th April 2010
Commission Européenne - SPEECH/10/167 19/04/2010
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Commissioner for Regional Policy
Evaluation of ERDF Objectives, 2000 - 2006
Figures and graphics available in PDF and WORD PROCESSED
Debate on Synthesis Report at Bibliothèque Solvay
Brussels, 19th April 2010
Ladies and gentlemen,
It is a great pleasure to be here today and to discuss with you the findings of the synthesis report of the ex-post evaluation of Cohesion Policy for the period 2000-2006.
This ex post evaluation proves that also a wide-ranging policy can be evaluated in a meaningful manner. Even though I am aware that this exercise must have been quite a challenge.
So, first of all I would like to thank all people, especially the authors, the 14 evaluation teams and other external experts for their invaluable and forward looking work. I also want to thank my predecessors Hübner and Samecki who have put more emphasis on this and last but not least to my Directorate-General.
We know that evaluation is an important tool for result based management and performance orientation but a policy like cohesion policy cannot be fully evaluated and performance-oriented through a top-down approach driven by the Commission. We need the active engagement of Member States and regions.
Our policy has already brought evaluation culture to many national and regional administrations and is today probably the most evaluated EU policy. This is an asset we must build on. Credible evidence, best methods and user orientation must be the aspiration.
In this regard, this report is more than a documentation of policy results. It forms a solid basis of evidence to enter in discussions with member states and regions how to improve this important policy area for the future.
Despite all critics in recent years this evaluation proves in a powerful manner that Cohesion Policy made a major contribution to the economic development of regions assisted by the Structural Funds over the 2000-2006 period. This is especially the case in Objective 1 regions but also in Objective 2 regions despite the relative small amount of financing involved.
Programmes in Objective 1 regions increased the long term productive potential of the economies and enhanced the level of GDP per capita. Moreover, economic modelling suggests that the entire European Union was better off with Cohesion Policy than without it due to increased trade effects. The boost to growth in lagging economies, therefore, outweighed any adverse effects in the countries which were net contributors to funding.
Enterprise support in Objective 1 and 2 regions is targeted particularly at small and medium sized enterprises and start-ups. An estimated 1,4 million gross jobs were created in the companies supported. We have convincing evidence that European Regional Development Fund support leaded to increased investment in companies and increased Research and Development activity. For example, R&D investment per employee in Thuringia in East Germany was nearly two and a half times higher in assisted enterprises. This means a clear leverage effect.
But Cohesion Policy delivered not only on economic development. It also delivered on environmental and social development.
So, it has improved the environment in line with EU Directives, especially in Objective 1 areas, making them a more attractive place to live and work. We see that 20.5 million inhabitants more were covered by waste water projects and an additional 14 million inhabitants have been served by water supply projects, both co-financed by the ERDF.
In addition, we have evidence that Cohesion Policy supports territorial cohesion, facilitating people to people contacts, mobilising the local ownership and ensuring that interventions meet their needs.
And, Ladies and Gentlemen, this is not the complete picture. We have yet to get the results from the Cohesion Fund evaluation.
But already now we have insights into the effects of the policy but, more importantly, we have got some orientation on how we should maximise this impact in the future. This will be of crucial importance for the design of the future Cohesion policy in view of the budget review and implementation of the Europe 2020 strategy.
In this regard, I am determined to make sure that Cohesion Policy keeps pace with today's changes. This evaluation confirms what we have been promoting for several months and even years now.
Let me share with two important points in this regard.
Firstly, I think we need a more strategic approach.
That is why I will argue to align Cohesion Policy as far as possible to EU 2020 objectives. Cohesion Policy has unique instruments to help achieve our goals for Smart, Green and Inclusive growth.
As this evaluation shows we have an integrated tool to work across various policy areas. Creating a competitive, connected and greener economy requires integrated investments in high-speed internet, smart transport and energy infrastructures, measures to foster energy efficiency and renewable energies, green public procurement and well functioning administrations.
Furthermore, Cohesion Policy offers the right multi-level framework to implement this strategy on the most adequate level.
However, Cohesion Policy should not be considered as the sole delivery mechanism for the Europe 2020 strategy. European wide objectives are not necessarily meaningful to every region in Europe (i.e: target of raising R&D expenditure to 3% of GDP or the employment rate of those between 20 and 64 does not mean that every region should seek to achieve this rate).
In addition, I believe our Cohesion investment should have the greatest leverage effect possible. However, infrastructure projects in the past were in many cases not adequately integrated into an overall regional development strategy. The result was that they were less effective than they might have been in furthering the strategy concerned and in pursuing more than one objective at the same time.
Therefore, I believe we should aim at integrating the regional dimension in our strategic objectives in high-level policy debates.
Till now, our debates seem to be limited to the issue how much and how fast we have spent our cohesion money but we do not know enough to feed the political debate. In this regard, we sometimes miss simple information, e.g. the exact number of enterprises supported without having extensive research like this evaluation proves.
I believe that we should arrive at a point where we are able to discuss strategic objectives of Cohesion investments.
We know that investment in transport and enterprises is very much in line with economic theories of development which emphasise the importance for growth of both efficient communications in order to widen the market and save travel time and investment in productive capacity. For example, in the case of enterprise support, there is a need to consider to what extent the ERDF should be used to finance aid to large enterprises given the real possibility of significant "deadweight" effects.
Related to these issues we need to discuss in a broader context how Cohesion Policy can contribute to secure locations for businesses in the regions.
Let me illustrate you what I mean on a concrete example: The region of Macael in the province of Almeria in Andalusia was famous for its marble and marble related products. Due to the fall in marble resources and new emerging factors like environmental protection the Andalusian authorities launched in the 1990s a project to create an Andalusian Stone Technology Centre (CTAP). Today this centre has become the mainstay for the region’s natural stone sector and a sound reference for innovation. Alongside its numerous specialist equipment items, the Centre contains a Natural Stone Observatory and a school of industrial engineering and marketing of stone products, managed in partnership with the University of Almeria. Because of this long-term investment in education and training there is no lack of specialised experts – a problem growing businesses are often confronted with. Quite in contrary the Macael area has nearly no unemployment.
I think this clearly illustrates that we always should keep in mind the strength of regions in order to make best use of the regions comparative advantage in a global competition.
That leads me to a second important point which is also closely linked to a strategic approach.
We don't need a one-size fits all policy. We must have tailor-made solutions for each and every region, with visible and tangible results for our citizens.
That's why we need a focused but flexible system.
The objective 1 and 2 funding was virtually dispersed over a wide range of policy areas and measures. The average regional operational programme in Objective 1 regions in the EU 15 contained 41 measures. Of course, there are complementarities between policy areas, which have to be supported. But there should be no political temptations to distribute funding across regions in relatively even way and to give something to everybody without clear priorities.
As for Objective 2 regions there is a need to evaluate how the funding is being used across Member States in the present programming period and what the effects are. The study finds for Objective 2 that in many cases, the most effective way of helping the areas to develop was to stimulate the growth of economic activity in neighbouring areas where businesses were already concentrated. These, however, were not designated as problem areas and so were not eligible for support.
So, we need to concentrate funding in regions on a limited number of objectives in order to ensure that they have a tangible impact and achieve critical mass. At the same time we shouldn't loose sight neither of commonly agreed EU-level strategies nor of regional strategies of neighbouring regions which implies a degree of central coordination (such as in relation to transport networks)
However, it should be up to regions to decide, within these constraints, on the objectives and measures on which to concentrate funding, since they are in the best position to determine the areas in which it would have the greatest effect. I believe this should be subject to discussion with the European Commission who is to be considered as honest broker in this case to avoid favouritism.
We have to make sure that Cohesion Policy is a performance orientated policy.
And even though the evaluation illustrated tangible results and carried out more monitoring of expenditure and many evaluations than ever before we could have seen even better results if we had put in place the right and appropriated qualitative and quantitative indicators.
In this regard we have to recognise the multi-dimensional nature of cohesion policy goals
The impact of Cohesion Policy cannot only be measured by macro-economic indicators like GDP.
Investing in environmental or social infrastructure does not have necessarily impact on GDP but longer term impacts on living and working conditions cannot be denied.
So, there is an inherent need to develop more indicators for different thematic approaches.
For social and territorial cohesion we could for example look at household income per head, access to health care or education as the study suggests.
In view of a smarter and greener growth it would not be a bad idea to develop a mode to be able to evaluate economic activities on environmental and on depletion of exhaustible resources
Having better and more precise indicators to measure our results would also motivate people, making them responsible for their work and more knowledgeable about it.
That would also facilitate to integrate monitoring and evaluation system in decision-making process which is of crucial importance as a pace maker. The Strategic Report I presented End of March marked an important milestone. However, as I said in the beginning, an active role of Member States and regions is decisive in this exercise.
In this regard I want to stress one point which is not to be confused with this evaluation exercise but which is a very important point for our policy to be credible and accountable for with view to our citizens.
There is a tendency, in general in our policy and I think in other areas as well, to focus more on processes and financial absorption than on effectiveness and physical outcomes.
As Cohesion Policy aims to be implemented on the most adequate level we cannot demand a PhD in European Affairs from every beneficiary.
We need to make an end-user friendly policy.
Therefore, we have to achieve a better balance between use of EU taxpayers’ money and reducing administrative burden for our beneficiaries.
The error rate reported by the European Court of Auditors is alarm signal (20% of the error rate account for the area of public procurement).
I am convinced sound financial management is not contradictory to simplified procedures. On the contrary: we need simpler procedures and better regulation in order to minimise error rate and maximise our efficiency.
I believe this evaluation shows that Cohesion Policy has achieved a lot – with more data than ever before, but still not sufficient data to paint the full picture of the policy outcome.
It has also revealed some room for improvement when it comes to policy design and policy implementation.
This evaluation looked at the past. I am glad to see that we are on the right track towards a more strategic and focused but flexible system but now we have to double our efforts for the current period and to design a simple yet performing system for the future. The fact that two thirds of Cohesion investments are aligned to the former Lisbon objectives illustrates that Cohesion policy is heading to a modern and competitive Europe. Thank you!