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European Commission

Johannes Hahn

Commissioner for Regional Policy

Regional Policy at the Heart of the EU Agenda

Open Days 2012/Brussels

8 October 2012

Dear President,

Dear chairwoman,

Dear Ladies and Gentlemen,

I would like to welcome you also on my behalf to this year's Open Days, an event that has been growing in a smart, sustainable and inclusive way during its 10-years history. I wish Europe will have such a healthy and steady growth in the near future!

This year's Open Days are of particular importance for us. We near the end of negotiations on the budget and subsequently, the end of negotiations on our Cohesion policy reform proposals. So, it is most probably the last good occasion to send out a strong regional voice to member states and the European legislator.

The European Union still faces the challenge of exiting the crisis and restoring sustainable growth. This exit strategy is based on mainly three pillars: restoring sound public finances, structural reforms for improving competitiveness and targeted investments for growth and jobs.

It is in this new economic governance that cohesion policy needs to play an important role. We have come a long way to change the image and the importance of cohesion policy for growth and jobs. I remember when I took office cohesion policy has not been attributed the role it really deserved by policy makers on a European level.

Today, almost 3 years afterwards, cohesion policy has a central role in all economic key documents at EU level: beginning with the budget proposal, over the country specific recommendations till the recent growth compact adopted by the European Council last June.

Ladies and Gentlemen,

And this is for good reason. Together, we have managed to establish a new mind- set when it comes to cohesion policy.

My predecessor, Danuta Hübner, set the course by earmarking cohesion policy investments according to the Lisbon Agenda. I further recall the frontloading of structural funds in the beginning of the economic crisis to keep money circulating throughout the economy

Under my leadership we took further important measures: we increased the co-financing rates, especially for programme countries, to address further liquidity constraints. We changed the legislation to facilitate SME access to finance and we reprogrammed more than 30 billion euro to focus more on areas supporting sustainable growth and jobs such as in R&D and innovation, SME support, e-services, EU-infrastructures (TEN-T, sustainable energy, clean transport and ICT infrastructures), energy efficiency, labour market policies for vulnerable groups (particularly on young people).

Preliminary estimates suggest that our reprogramming and the Barroso-initiative may ultimately provide access to finance for more than 56000 SMEs and involve half a million young people in programmes to combat unemployment, e.g. providing qualifications. Member states have reported 210 000 gross jobs created in the year 2011 bringing the cumulative total to 450 000 gross jobs since the beginning of the period. And considering the time lag between the start of implementation and job creation it is expected that this jobs contribution will continue.

Of course, these efforts wouldn't have been successful without your contribution and readiness to act swiftly and smartly and I would like to thank you all for that.

But the policy can and should improve its effectiveness and performance. This is why we have proposed for the new policy post 2014 to enshrine these principles of smart, sustainable and social inclusive investments through thematic concentration on the most growth enhancing areas, through the principle of conditionality to underpin structural reforms and through focussing on more results. Moreover, under the cooperation goal, we opened new avenues to encourage common initiatives across borders, notably with the EU strategies for the Baltic and Danube Regions.

I am convinced it is the sum of all those measures which have helped put cohesion policy at the heart of the European agenda for growth.

However, ladies and gentlemen, being at the heart of the European agenda brings also growing responsibility and cohesion policy is without any doubt in the spotlight and under high scrutiny at the same time.

Now, we need to kick the ball over the goal line! That means that we have to deliver on our promises.

We need to demonstrate that cohesion policy funds are used efficiently and effectively and that we stand ready to do whatever it takes to enhance growth and jobs, especially for young people.

And, we need to demonstrate that we are serious about our reform proposal on thematic concentration, result orientation and principle of conditionality.

We need to show that through thematic concentration we make sure that there is a right mix of investments. I am aware that this might not be always welcome to regions. But believe me: examples of the past where we have seen a lot of investments in basic infrastructure which couldn't tap its full potential due to lack of investment in SMEs, research and innovation and energy-efficiency measures should be avoided.

Result orientation through milestones and quantifiable targets will help evaluate progress of the respective programmes and establish the basis for a real political debate on substance rather than on procedures. Smart specialisation strategies play an important role because they will require solid analysis and the collection of relevant data.

At the same time we need to underline our contribution to growth and jobs through the system of conditionality in our reform proposal to underpin structural reforms.

Here again I know that some of you have reservations with regard to certain aspects of these principles. But let me tell you that these principles are the core of the reform and reflect the ultimate question: To be, or not to be.

If we fail to be credible on all these elements we run the risk that the policy loses its importance. I think this is a price nobody wants to pay and above all, no region or member state can really afford. Cohesion Policy in many member states accounts for more than 50% of public investments and this guaranteed over a period of 7 years. I don't know any regional or national budget that is outlined for such a long period. And more importantly, this investment guarantee attracts further private investments.

Thematic concentration, conditionality and more results based on quantifiable targets, milestones and relevant data will also help us to sell this important policy better. In a few years' time the next budget discussion will emerge. We need to think beyond 2020.

That's why it was so important to me to consolidate the policy for good. The role and objectives of Cohesion Policy are changing. Cohesion Policy does not only help poorer regions to catch up. More and more it has the additional task of implementing the EU's objectives Europe-wide, giving financial incentives to all regions.

The architecture takes this thinking into account encompassing less developed, transition and more developed regions. Let me be clear. This does not mean giving up the traditional role of Cohesion Policy in helping poorer regions to catch up. I recall that 70% of the budget is allocated to poorer regions to serve this objective.

But what is equally important is to understand that no region has a guarantee of prosperity. In a fast changing global world regions and member states are quickly exposed to new challenges.

I remember quite well that Finland experienced an exceptionally deep economic crisis during the first half of the 1990s, mainly because of the collapse of the trade with the former Soviet Union. Within four years, the economic output was reduced by more than 10% and the unemployment rate quadrupled to almost 17%. Finland applied drastic measures to consolidate public finances – but the R&D spending was increased. The government decided to continue investments in R&D infrastructure, but also in education. This and the incentives for structural change helped improve competitiveness and put the Finnish economy on a stronger more knowledge-intensive growth path.

When the Danish world leader in the wind energy market has to delocalise from a region like Sjaelland due to increased global competition, when a company like PSA Peugeot Citroën closes in 2014 sending probably 8000 people into unemployment or when tens of thousands of US military soldiers and army employees withdraw from rural areas in Germany this poses huge challenges even to transition and more developed regions.

That's why I introduced the transition category in order to establish a fair and equal system of funding which treats regions in the same economic situation the same way.

I think after the worst economic crisis since the Second World War and in the current economic situation which reveals our strong inter-dependence in Europe it would be fatal for Europe to define budgetary interests by national or regional borders. Europe is more than the sum of its parts. Europe is vision that becomes reality and has brought tangible results. The projects implemented through Cohesion Policy are among the most visible ones.

Against the background of lessons from the past and in the light of the ongoing budgetary discussion I would like to invite you all to renew your commitment to cohesion policy as growth policy and to send a strong signal to your respective national governments on this.

Our success depends on our collective commitment to make real, sometimes difficult, choices; to concentrate funds where it matters; to fix clear targets; to ensure that we manage available resources according to the highest standards.

I am looking forward to the negotiations in the trilogue with the Council and the European Parliament. I am confident that we will lay the foundations for a reformed cohesion policy that will achieve real impact on the ground and make a difference to the life of our citizens.

Let me use this opportunity to invite your region to participate in the new call for RegioStars Awards. I am proud that the number of participants in this award is growing from year to year and I am looking forward to seeing even more of these quality performers the years ahead.

I thank you for your strong and constructive voice in the debate on the future of cohesion policy. You know: regions - your regions - are the spearhead of European integration.


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