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Johannes Hahn Commissioner for Regional Policy Cohesion Policy after 2013 – improving impact, focusing on Europe 2020 strategy Open Days – Opening Ceremony Brussels, 10 October 2011

European Commission - SPEECH/11/646   10/10/2011

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Johannes Hahn

Commissioner for Regional Policy

Cohesion Policy after 2013 – improving impact, focusing on Europe 2020 strategy

Open Days – Opening Ceremony

Brussels, 10 October 2011

Presidents (Barroso, Bresso, Buzek)

Members of the European Parliament, Members of the Committee of the Regions,

Representatives of cities and regions,

Ladies and gentlemen,

As always it is a great pleasure for me to take part in the Open Days, this fantastic showcase of the importance regions and cities play in Europe in general and in regional development in particular.

This year, the Open Days take place at a particularly strategic moment, when only last week the European Commission adopted the new legislative framework for cohesion policy 2014-2020. As Commissioner for Regional Policy, I am particularly pleased with the proposals which are now on the table – they reflect to a great extent what my teams and I had set out to achieve. They are fully in line with the extensive consultations we have carried out since the publication of the 5th Cohesion Report. For us it is therefore "Mission accomplished".

I. Introduction – the crisis, Europe 2020

Before I present to you the new elements of cohesion policy, let me share a few thoughts with you.

Cohesion policy works, cohesion policy makes a valuable contribution to growth and jobs. We have evidence to demonstrate this. For the period 2000-2006, 1.4 million jobs were created through cohesion policy. 34 million European citizens are now better off as their regions have increased their GDP significantly. No-one can contest this.

Let me also stress that since the previous cohesion package was agreed, some major changes have taken place in Europe.

We are experiencing a major economic and financial crisis – there is now more than ever increased pressure on public finances but also on the general mood in Europe. We face a lot of scepticism and defeatism.

On the other hand, European leaders have taken their responsibility and agreed a major new initiative to foster and promote a much more competitive, sustainable and inclusive growth. I talk of course of the Europe 2020 Strategy.

In view of this, it is quite clear that we not only need to keep cohesion policy at the centre of our European project, but that we need to re-enforce it by making it better and smarter.

II. New Cohesion Policy – 2 key elements (concentration and performance)

This is why we have introduced a number of new elements in our proposals for cohesion policy post 2013 – we want to turn cohesion policy into the main investment strategy of the European Union, the central tool which will allow us to reach the objectives of Europe 2020. We want to ensure that it continues to be a policy for all regions and citizens, an investment which generates growth and jobs for all.

We also want to see a quantum leap in the way in which this new cohesion policy performs and delivers.

How do we propose to do this ?

First, public investment should be aimed more than ever at a small number of growth-enhancing investment priorities as outlined in Europe 2020. We have called this thematic concentration. It means we will prioritise investments to ensure that they have the maximum impact and added-value. At the same time, I firmly believe that the proposals are sufficiently flexible to ensure that all regions can select their investment strategy based on their own development needs. I have said it many times before: focus and flexibility. A focus on Europe 2020 targets via a thematic menu of 11 priorities, and flexibility to adapt strategies to individual needs and challenges. These are not mutually exclusive concepts.

Thematic concentration and prioritisation will be key aspects of the proposed Partnership Contracts between the Commission and each Member State.

Second, I want programmes to become more effective and in order to achieve this, we are proposing three major new aspects:

1. stronger target setting and monitoring systems

2. ex-ante conditionalities

3. ex-post conditionalities or performance reserve.

Let me take these three key elements one by one.

When developing the funding programmes, we want to ensure there has been proper preparation for effective investment and the definition of clear and visible results that can be monitored and measured. We have already put great emphasis on results when negotiating the current programmes. We will do that even more post 2013, and we will put the necessary resources into an extensive and solid monitoring mechanism. This means that regions and countries have to identify indicators from a pre-established list of indicators directly linked to Europe 2020. Reporting on the achievement of these objectives will be a central task for the programme managers.

Performance often depends on whether investments are made where the conditions are right to do so. Many of you will have heard already of our proposed introduction of "conditionalities".

I want to see funds spent where the regulatory and physical contexts are right, where the effectiveness of the investments is not going to be undermined by known bottlenecks. The regulations therefore propose a list of thematic and general conditions that will be carefully checked before any new programme is adopted. Criteria for fulfilment of these conditions are also clearly set out so we can have full transparency in determining whether they are fulfilled or not.

To illustrate this, let me mention for instance the existence of national or regional research and innovation strategies, the existence of actions to implement the Small Business Act, the transposition into national law of key Directives for instance on energy performance, greenhouse gas emission reduction, promotion of renewable energy, the existence of a water pricing policy, of a comprehensive national transport plan, of active labour market policies, and so on and so on.

As far as ex-post conditionalities are concerned, the regulation proposes clear provisions to reward programmes that perform well. This is not about programmes competing with one another – it is about making sure that programmes are on track to meet their targets and objectives, and rewarding good performance. 5 percent of the allocations will be kept as performance reserve to be allocated on the basis of an extensive review during 2019.

All the above is defined extensively in the regulatory package which is now on the table for your consideration.

III. Simplification

Let me now turn to an issue which was raised very frequently during our consultation exercise after the publication of the 5th Cohesion report – simplification.

The Commission has carefully looked at ways of simplifying the overall framework for Cohesion. We want to make it easier for beneficiaries to access funding. This includes harmonising rules and common provisions on management and control, not only between the different Structural Funds but also with rural development and maritime and fisheries policies. We have proposed a single overarching regulation which sets out common features and mechanisms for 5 funding instruments: the European Regional Development Fund, the Cohesion Fund, the European Social Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund. This is a bold step towards simpler access and better coordination.

Further simplification can be found in the daily management of the funds – the rules on eligibility have been harmonised between the funds, the use of simplified costs has been extended and we have introduced the notion of annual rolling closure which will reduce the administrative burden in terms of audits and controls.

For Territorial Cooperation programmes, we have introduced a separate regulation which enables us to take more fully into account the inherent complexity of managing multi-country programmes. Here too, eligibility rules will be further harmonised and the number of authorities in charge of the programmes has been reduced.

IV. Territorial cohesion

I am also very pleased to announce that the notion of territorial cohesion which is specifically mentioned in the Lisbon Treaty has also received full attention. The regulations make very specific proposals to assist sparsely populated areas and outermost regions with additional allocations.

We have also heard the call from outermost regions to give them the means to step up their cooperation with their neighbours. Finally, as Europe should continue to invest in the sustainable development of its urban regions, 5% of ERDF resources allocated at national level should be earmarked for integrated actions in our cities.

V. Partnership

Let me conclude this list of new elements by turning to you and your role in this important common venture. A major hallmark of our proposals is the reinforcement of partnership. We want to strengthen the involvement of partners in the design and management of programmes. Our proposals will provide better opportunities for regions, cities and local communities to play an active part. The Commission's view is that they play a crucial role in preparing the ground for the next generation of cohesion policy programmes, in particular in setting quantified targets and objectives to ensure that progress is made towards meeting the Europe 2020 priorities. In this context, we are proposing that for the Partnership Contract and each operational programme, Member States organise partnerships with the competent regional, local and other public authorities, economic and social partners and other bodies representing civil society in all stages of programming and implementation. To help guide the process, we will propose the creation of a European Code of good practice regarding the implementation of partnership, which will set out objectives and criteria to support this process and to facilitate the sharing of information, experience, results and good practices.

VI. Budget

Finally, I cannot close this presentation of the new Cohesion Policy package without turning to the question of financial resources. In June, the Commission tabled its proposal for the Multi-annual Financial Framework 2014-2020. In this proposal, 376 billion euro are allocated to Cohesion policy instruments, including the new Connecting Europe Facility. This represents one third of the EU budget. It also represents a slightly reduced allocation compared to the current period. This clearly demonstrates that we are not asking for more money. In the face of the economic crisis, we have to do more without an increase in our budget by investing in a smarter and wiser manner. That means a policy which is both more ambitious and more effective, with stronger governance and a streamlined delivery system to reduce bureaucracy for beneficiaries.

Ladies and gentlemen,

I have given you a bird's eye overview of my vision for the new cohesion policy. It is now up to you, European, national, regional and local representatives to engage in this process and to contribute constructively to the debate in the months ahead.

I very much look forward to our future exchanges of views.

Thank you very much for your attention.

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