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European Commission

Johannes HAHN

Commissioner for Regional Policy

Triggering Recovery in Greece with EU Regional Funds

Joint Meeting of Committees of the Greek Parliament/Athens

13 June 2013

Dear Presidents and members of the Parliamentary Committees,

We are meeting at the crucial time for Greece and regional policy.

Regional policy is the main source of public investment for growth and jobs. In fact, it accounts for more than 60% of country’s public investment programme.

Over the past three years I have visited Greece several times as we worked closely with the government and the regional and local authorities to make regional policy deliver on the ground.

You – as the representatives of the people – know only too well that this is about individuals. They are our core responsibility and what we do – whether it is creating jobs, supporting business, tackling waste – it is for them. That is why it is so important to take on the challenges both now for the current period and for the future programming of the EU funds.

But let me first make one point.

From the onset of the crisis, everyone was focused on austerity and reforms. Not regional policy though. In the past few years, more than 11 billion euros have been invested in regions for projects that contribute to growth and jobs,

It is estimated that since 2007 regional policy has contributed to the creation of approximately 111 000 jobs. Of course it cannot compensate for the huge jobs losses Greece is suffering but it has cushioned some of the impact.

When I read last week in the IMF report that the Commission is more pre-occupied with compliance with rules rather than on growth, it was clear that the authors are unaware of what we have been doing in regional policy.

The truth of the matter is that from the very beginning our objective has been to make sure that structural funds were used to promote and stimulate the economy. They are there to contribute to re-structuring and re-building the country. Since 2010 we adopted a series of measures to help Greece to use these investments well.

This allowed much needed liquidity into the real economy, keeping businesses alive and people employed. Projects from large-scale public works to small local initiatives: schools, hospitals, waste and water treatment plants, roads, museums, rails, airport and ports have all benefited from structural funds. The metro here in Athens is one of the most visible examples.

I and my colleagues are fully committed to helping Greece continue the implementation of projects. But we also need this commitment from you as the elected representatives of the cities and regions in Greece. Together we need to make sure we do not loose these valuable investments because we are unable to deliver: either though administrative weakness, lack of political will or poor cooperation.

There are signs that our efforts are starting to yield results. For example: Greece managed to have a primary surplus in the first quarter of this year, beating by far all projections and targets. The most recent economic sentiment indicator for Greece was the highest for five years. This means that people – particularly in business – are more positive.

Of course there is still a long way to go in making the Greek economy truly competitive, able to generate sustainable growth and jobs. This requires a carefully designed strategy to bring about the right kind of entrepreneurial activity and support for the small and medium size enterprises. In this respect, the new regional policy for 2014-2020 is the key to stimulating the economy.

It has become much more than a transfer of funds to the regions. It is an investment policy for the regions.

The crisis has sharpened our minds and our approach. Nowadays it is imperative to spend the limited public resources in a smart way. The policy had to become more efficient, delivering the desirable results with less money.

As a result, we have introduced conditions that have to be fulfilled before spending any funds. These are conditions like for example compliance with EU environmental law, establishing a business friendly climate and an efficient administration. Satisfying these conditions will ensure that projects and investments deliver results.

Another important condition is the adoption by the regions of a smart specialisation strategy. What that means simply is making the most of your regions’ assets. It will help regions to think of how to become more competitive by taking advantage of their unique characteristics.

In the 2014-2020 period the funds will also have to be concentrated on fewer key priorities that make a clear contribution to smart, sustainable and inclusive growth.

As we speak, the design of the strategy and programmes for the 2014-2020 period is taking place. The programming exercise gives us the opportunity to establish objectives for the next decade and set an action plan to achieve them.

In this case, the past cannot be our guide for the future. We need to move away from the approach of channelling funds to traditional infrastructure. We need to make sure that we strike the right balance. It is clear that choices have to be made. We cannot please everybody.

In terms of the new architecture for delivering the new programmes, I also believe that you should learn from the mistakes of the past.

An effective co-ordination among the relevant ministries and regional authorities is of utmost importance. The new set up must be simple and efficient which ensures ownership, accountability and transparency.

In order to guide our discussions on the design of the new programmes, the Commission presented its position last November.

At the heart of our recommendations are measures to promote the economy such as: support for entrepreneurship and a business and investor friendly environment. Providing access to finance is another important aspect of our guidance. Strengthening the link between research and businesses will also be vital for innovation and entrepreneurship.

There is a place as well for sustainable infrastructure. These could include projects in the area of multi-modal transport and modernisation of energy networks, including for natural gas.

Environment is confirmed as a priority for the next programming period. Adapting to climate change, energy efficiency, biodiversity and risk management remain high on the agenda and all the efforts should continue to comply with and implement EU environmental rules. But we should remember it is a business and employment opportunity as well as the environmental necessity.

In this context, I would like to say a few words about solid waste treatment. Last February I was in Greece and in Tripoli I visited one of the country’s many illegal landfill sites.

These sites are unhealthy, damage the environment and make your regions less attractive for business and tourists. Rehabilitating them is of huge importance but it requires a holistic approach to waste management with co-ordinated and innovative actions. It is about time that Greece deals with this issue once and for all.

Regional policy has a major role to play in Greece’s recovery and in making it competitive. By supporting business, it can also help create lasting jobs, particularly for young people who need to feel the future holds some promise.

If we really want to get results from the new policy YOU all have to be involved and cooperate – alongside non-governmental organisations to trade and business representatives and from local and regional authorities to governmental departments.

Time is a luxury that we cannot afford at the moment. It is extremely important that Greece is ready with the new programmes at the start of next year. The strategy for how to use the funds (what we call Partnership Agreement) must be agreed as soon as possible. This will allow investment in projects and inject much needed liquidity into the real economy.

The Greek people need to feel the benefits of these projects.

WE, YOU owe it to them!

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