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European Commission

Johannes HAHN

Commissioner for Regional Policy

Delivering on Cohesion Policy Reform with Quality and Speed

Informal Meeting of Ministers responsible for Cohesion Policy/Vilnius

26 November 2013

Last Wednesday, after an intense two-year negotiation process, the European Parliament voted in favour of the agreement on the Cohesion Policy legislative package. I would like to thank the co-legislators for their work. This was truly a collective effort.

Now everything is in place and the new regulations will enter into force before the end of the year.

I am pleased to see that the reform approach of my proposal has been endorsed by the co-legislators. We have worked hard to improve the rules for using European Structural and Investment Funds, so that more than €500 billion can be mobilized in support of the Union’s economic recovery and long-term agenda for growth. This reform re-positions Cohesion Policy as the main investment tool to promote the EU economy and improve the quality of life of all EU citizens.

Yet, this reform will have the desired positive effect only if we are serious about implementing it. The first step in this process is finalising the Partnership Agreements, which will define each Member State’s investment strategy for the next seven years.

It is not easy to prepare these investment blueprints. This is why the Commission has already been facilitating the preparation through informal negotiations for the past year and a half. As a result, nearly half of the Member States are ready to officially submit their Partnership Agreements once the legislation enters into force. However, some Member States are not yet there. They are lagging behind in the programming process or they have not made sufficient progress in drafting clear strategies for growth-oriented investments.

I cannot emphasise enough how important it is to get the strategy right. And it is imperative to ensure that all projects follow strategy, and not the other way around.

I urge you today to do whatever you can to submit quality draft strategies as soon as possible. It is the only way forward so that project approval and implementation can start as early as possible in 2014. We must avoid the mistakes of the period 2007-2013, when it took nearly a year and a half before EU investments started flowing into the economy.

But let's be very clear. The Commission is not ready to trade quality for speed. We will take all the time necessary to agree on robust, clear, forward looking strategies and programmes. Also, the Commission will apply the same standards when evaluating and eventually adopting all Partnership Agreements and Operational Programmes.

To achieve this, we must work on three, mutually reinforcing elements.

Firstly, the ESI Funds are not just big pots of cash to be distributed between and within the Member States. Instead, these structural and investment funds should be harnessed to achieve specific social and economic objectives that your governments have to define. The choice of these objectives cannot be arbitrary and each public intervention has to be justified.

Our reform package provides a framework for setting these objectives. We have identified four priority areas with high growth potential: Research and Innovation, SMEs, Information and Communication technologies and the low-carbon economy.

They are formulated broadly enough to provide you with the necessary flexibility to adjust your interventions to the specific characteristics of each of the Union’s 274 different regions.

Indeed, our reformed policy is underpinned by the belief that each region can achieve the greatest impact if it first identifies its core strengths. This will allow them to focus productive investments in the chosen sectors, thus maximizing their growth potential.

But we expect you to make clear choices. European Structural and Investment funds' allocations are not unlimited. In previous periods, many Member States made the mistake of spreading their allocations too thinly, which diminished the impact of the investments. We now require you to focus on a limited number of policy objectives therefore building up a critical mass of investment in the selected areas. Our first impression of the submitted draft Partnership Agreements is that more work is necessary to ensure sufficient concentration of funding.

Secondly, fulfilment of ex ante conditionalities is essential to our new architecture. How can we invest in research for example if there is no research strategy? It is like trying to drive a car with no steering wheel. We all have a duty to ensure effective and efficient spending. It is not only about Cohesion Policy but it is a principle which should be applicable to all policies and for every euro of public money spent.

ESI Funds will not become an investment if the proper framework conditions are not ensured. At times of crisis we cannot afford to have business as usual. This time around no money will be spent if the right conditions are not there so there is no getting away from ex ante conditionalities. And given how urgently the economy needs the investments from ESI funds do not waste any more time.

Thirdly, our reform requires that you select and formulate clear and measurable targets. This will help you to continuously assess whether the public investments achieve their desired effect. It will also allow us to put together results at the European level and therefore provide us with the necessary information to explain in a simple and convincing way how the policy is making a difference. This performance-measuring framework should be embedded in the Partnership Agreements.

Performance measurement is an essential political objective that relates to transparency, accountability and effective use of public resources. It is not something particular to Cohesion Policy, but it should apply to all public policies. Without measurable objectives and targets, there is no way to demonstrate what the policy does and what its impact is. This is clearly the area where more work needs still to be done. We will be very vigilant that your objectives are credible and measurable.

Let me conclude by focusing on one last issue, which is also crucial for the success of the reformed Cohesion Policy, namely good governance.

Thematic concentration, objective setting and strategies are necessary but not sufficient conditions for success if administrative structures do not follow. Administering Cohesion Policy is not simple, so it is crucial to set quality standards, to ensure sufficient resources and continuity of both the institutional structures and of the staff – and to achieve a true separation between managing and audit authorities.

Because we believe that administrative capacity is crucial to the success of Cohesion Policy, we have allocated additional resources for technical assistance to Member States.

We have also designed instruments that warrant a more proactive involvement of the Commission in the administration of the funds, if necessary.

Your institutional structures should not just work – they should work together. Our reform establishes a common set of rules in order to help you combine different funds and instruments towards achieving your objectives. Integrated approaches start with the integration of instruments and administrative structures. We hope you will take up the challenge.

And I hope that you will take on our recommendations and embed the spirit of the Cohesion Policy reform in your investment strategies. As always, the Commission services stand ready to support you in preparing the Partnership Agreements and Operational Programmes. But you have to always bear in mind that establishing national and regional objectives and a strategy for achieving them is ultimately your responsibility.

I urge you to expedite this planning process, so that we can start the flow of productive investments into Europe's economy!

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