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European Commission

Johannes HAHN

Commissioner for Regional Policy

"Cohesion Policy is the EU's Investment Policy"

OECD Ministerial Meeting /Marseille

5 December 2013

The crisis has focussed attention on the need for fiscal consolidation and structural reforms. However, these are only two sides of the EU's economic policy triangle. Targeted investments for growth constitute the third, indispensable side. And this is where Cohesion Policy can and must play a major role. As the largest investment policy in the Union, it keeps the triangle in balance by providing the necessary stimulus for sustainable growth.

More than ever before the policy framework is encouraging investments in line with the "better spending" principle. We have a duty to ensure that taxpayers’ money is invested in an efficient and effective way. We have to ensure that we make the best use of these funds. This is even more imperative at these times of tight fiscal constraints. This is why we have introduced conditions which need to be met before investment can take place and have increased the emphasis on improving administrative capacity as a whole and to improve the delivery of Cohesion Policy programmes.

For the first time we are introducing conditions that Member States and regions must meet before funds can be spent. This is to ensure that investments are made in an environment which is conducive to maximize their impact. For example, business friendly reforms, transport strategies, measures to improve public procurement systems or compliance with environmental laws are conditions which will need to be met before investments can be made in those areas. This is a radical change and a change that was supported by the parliament and the council.

The second example focusses on the role of institutions and administrative capacity. We have set up two different ways to strengthen administrative capacity. The European Social Fund can invest in the overall administrative capacity of a country or region. The European Regional Development Fund can invest in improving the administrative capacity needed to ensure a proper implementation of the programmes.

With this two-approach we hope to address many of the issues raised in this important report.

The OECD principles for effective public investment have emerged from our joint work on the role of institutions and right conditions to maximise the impact of development and investment strategies. I welcome these principles. I believe they will become a cornerstone of our goal for better spending and boosting smart growth.. I also believe they are perfectly consistent with our fundamental reform of Cohesion Policy. 

This is also the first set of OECD principles to address regional and local authorities. As the Commissioner for Regional and Urban Policy, I am of course highly familiar with the key role of regions and cities in managing public investment. Regions and cities are responsible for the bulk of public investment in the EU and the OECD.

Regional and local authorities can set up integrated strategies that tailored to their specific conditions. But to do so they need to strengthen their administrative capacities. In metropolitan areas the challenges to overcome administrative fragmentation are the biggest. As a result, the majority of the OECD member countries have set up a metropolitan governance bodies, but often without legislative powers.

The new period of Cohesion Policy has introduced a new instrument to incentivise greater cooperation at the functional urban level including the metropolitan level: the integrated territorial investments (ITI). This allows cities to plan at the functional level and combine resources from different Cohesion Policy programmes. This new instrument will ensure a greater involvement of the urban level. It will secure investment for integrated actions and support a place-based approach to development.

Ladies and Gentlemen,

I would like to thank the OECD for its excellent work and its proposal of the principles. I believe that these can serve as an important guide to improve the capacity of our regions and cities to deliver the right type of investments in the right places and in this way deliver bigger benefits to our societies at large.

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