ENENRegional Policy
EUROPEAN COMMISSION
Third Cohesion report Third Cohesion report February 2004February 2004
Third Cohesion report Third Cohesion report February 2004February 2004
Convergence, Competitiveness and Co-operation
Regional Policy
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Importance of the Cohesion reportsImportance of the Cohesion reports
• Every 3 years Commission analyses state of cohesion and contribution of its policies (Art. 159 of the Treaty)
•1st report (1996) the premises of Agenda 2000
•2nd report: (2001) launched debate on cohesion policy after enlargement
• 3rd report (February 2004): presents proposals for reformed cohesion policy after 2007
contextcontext
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The report contains 4 partsThe report contains 4 parts
1. Analysis of situation and trends in the regions and factors of competitiveness
2. The contribution of national policies to cohesion
3. The contribution of community policies
4. The impact of Cohesion Policy
structurestructure
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Financial perspectives 2007-2013Financial perspectives 2007-2013
Promoting Europe's wealth - Policy challenges and budgetary means of the enlarged Union 2007-2013 Keeping the current expenditure ceiling (1.24% of the Union's GNI)
Commission proposal: commitments 1.22% and 1.14% for payments
A distinct change in the financial perspectives
Four political priorities for the Union:
• Sustainable development – competitiveness, cohesion (for growth and employment)
• conservation and management of natural resources
• Citizenship, freedom, security and justice
• The EU – a global partner
Financial aspects
Financial aspects
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Reminder:
EU budget 2000-2006 Ceiling as regards committments per year: € 108.5 billion for EU25, of which € 37 billion for structural actions, at 2004 prices
Financial Perspectives 2007-2013Ceiling as regards committments per year: € 146.4 billion for EU27, of which € 48 billion for structural actions,at 2004 prices (excluding rural development)
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0
10000
20000
30000
40000
50000
60000
70000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
0,00
0,05
0,10
0,15
0,20
0,25
0,30
0,35
0,40
Rural development deductions
Expenditure in EU15 (left axis)
Expenditure in N12 (left axis)EUR million (at 1999 prices)
BRU4711
Expenditure on cohesion policy, 2000-2013
Source: DG REGIO
Expenditure in EU15 as % of GNI in EU27 (right axis)
Expenditure in N12 as % of GNI in EU27 (right axis)
% of GNI% of GNI
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Cohesion PolicyCohesion Policy
• Is 34% of EU budget (€ 336 billion for the period 2007-2013, at 2004 prices)
• Is about 0.41% of Union GDP (with rural development and fisheries: 0.46%)
• About 50-50 between current and new Member States
• More than ¾ of the budget for regions and Member States lagging behind in development
Context Proportions of
expenditure
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Categories of expenditure in Structural Categories of expenditure in Structural FundsFunds
Categories of expenditure in Structural Categories of expenditure in Structural FundsFunds
Context
Other2%
Human resources23%
Productive environment
34%Infrastructure
41%
4,3 Breakdown of Structural Fund allocation in Objective 1 regions: all Member States, 2000-2006
Source: DG REGIO
For 2007-2013 + strengthening administrative capacity For 2007-2013 + strengthening administrative capacity
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ObservationsObservations
• Significant convergence of cohesion countries
• Positive trend in Obj. 1 regions overall
• GDP, employment and productivity growth above European average
• Modernisation of economic structures and management methods
• Better governance at regional level
• Greater regional co-operation at European level
Part 1 situation and trends: some results
Regional Policy
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-2,0
-1,0
0,0
1,0
2,0
3,0
4,0
-2,0
-1,0
0,0
1,0
2,0
3,0
4,0
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
SpainPortugalGreeceCohesion 3
GDP Growth in Cohesion CountriesGDP Growth in Cohesion CountriesGDP per head growth in Spain, Portugal and Greece between 1998 and 2002 GDP per head growth in Spain, Portugal and Greece between 1998 and 2002
compared to average GDP growth in EU15 compared to average GDP growth in EU15
GDP Growth in Cohesion CountriesGDP Growth in Cohesion CountriesGDP per head growth in Spain, Portugal and Greece between 1998 and 2002 GDP per head growth in Spain, Portugal and Greece between 1998 and 2002
compared to average GDP growth in EU15 compared to average GDP growth in EU15
Regional Policy
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Unemployment rates 1996-2001Unemployment rates 1996-2001
Unemployment rates in EU15, 1996 and 2002(% of labour force)
1996 2002
EU15 10,7 7,8
Source: Eurostat, LFS
7,4
Cohesion countries 17,0 9,6
Other Member States 9,5 7,5
Greece 9,7 10,0Spain 22,3 11,4Ireland 11,9 4,3Portugal 5,1
Part I Situation and
trends
Part I Situation and
trends
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European cohesion policy or simple European cohesion policy or simple budgetary transfer?budgetary transfer?
Impact and added value of Structural
Policies
Proportion of EU transfers to main beneficiaries spenton imports purchased from other Member States
17,4 %
18,9 %
26,7 %
35,2 %
42,6 %
14,7 %
0 10 20 30 40 50
Spain
Mezzogiorno
New Länder
Ireland
Portugal
Greece
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Impact of enlargement Impact of enlargement
• Population of the Union grows from 380 to 454 million (EU 25) or 485 million (EU 27)
• New MS bring more dynamic growth (4% per year against 2.5% in EU 15)
• GDP per head drops: -12.5% EU 25; -18% EU 27 in euros
Part I
Regional Policy
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Impact of enlargement Impact of enlargement
• Population in the convergence objective goes from 84 million to 123 million
• Development gap between regions doubles: average GDP in Obj. 1 is 69%: new MS 46%
• Employment rate in EU 15 grew from 60% to 64% (1996 – 2002). In NMS 10 it was 56%: (59% in 1999)
Part I
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GDP per head PPS 2002GDP per head PPS 2002
Source: Eurostat, National Accounts
Index, EU25 = 100
Part I Situation
and trends
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RegionalRegionalGDP 2001GDP 2001
Part I Situation and
trends
GDP per head(PPS), 2001
< 5050 - 7575 - 9090 - 100100 - 125>= 125No data
Index EU 25= 100
Source: Eurostat
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Employment rate 2002Employment rate 2002
< 56
< 56.0 – 60.2
< 60.2 – 64.4
64.4 – 68.6
>= 68.6
No data
% of population between 15-64
Standard deviation = 8.4
Source:Eurostat and NSI
EU-27 = 62.4
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Educational level 2002Educational level 2002
LOW MEDIUM HIGH
% of total population aged 25-64
< 19.219.2 – 28.028.0 – 36.836.8 – 45.6>= 45.6 no data
EU-27 = 32.4Standard deviation
= 17.7
< 35.0535.05 – 43.3543.35 – 51.6551.65 – 59.95>= 59.95 no data
EU-27 = 47.5Standard deviation
= 16.59
< 13.6513.65 – 17.9517.95 – 22.2522.25 – 26.55>= 26.55no data
EU-27 = 20.01Standard deviation
= 8.57
Source:Eurostat (LFS)
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EmploymentEmploymenthi-tech 2002hi-tech 2002
Regional competitive
factors
< 7.45
< 7.45 – 9.55
< 9.55 – 11.65
11.65 – 13.75
>= 13.75
No data
Sources: Eurostat
Average = 10.6Standarddeviation = 4.30
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The contribution of national policies The contribution of national policies
• National budgets are 47% of GDP on average
• The Cohesion budget is 0.43% of GDP
• National budgets give priority to basic services and income support
• The Structural Funds aim to improve the factors of regional convergence and support physical and human investment – about 80% of the total
Part II
Different approaches to
promote growth
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The contribution of other Community The contribution of other Community policiespolicies
• Aim at specific objectives set out in the treaty
• Do not always have cohesion as an objective
• But there have been improvements
• A need to strengthen coherence between these policies and the objective of cohesion, especially for the new MS.
Part III
Need to promote coherence of
policies
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The impact of Cohesion policyThe impact of Cohesion policy
• Increase public and private investment in beneficiary regions (growth)
• Contribute to increasing GDP (convergence)
• Create jobs and maximise potential of human resources
• Increase physical and human capital
• Better regional and local governance
• Financial stability over 7 years
Part IV
Mobilising resources to
promote growth
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A new partnership for CohesionA new partnership for Cohesion
1. In respect of the Union's priorities
2. In respect of enlargement and the increased responsibilities of cohesion policy
3. Covers all States, regions and towns – greater subsidiarity
Reform of the policy
Conclusions
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Priorities of the reform (I)Priorities of the reform (I)First objective: Convergence and First objective: Convergence and
competitivenesscompetitiveness
• Regions less than 75% of EU 25 average GDP/head
• Statistical effect regions: less than 75% of EU 15 GDP/head but more than 75% of EU 25.
• States with less than 90% of EU 25 average GNI/head (Cohesion Fund)
• Special accessibility programme for OMR
• Budget: about 78% of the total
Reform of the policy
Conclusions
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Priorities of the reform (II)Priorities of the reform (II)Second objective: regional competitiveness Second objective: regional competitiveness
and employmentand employment• Cohesion policy at the service of all other regions in the Union – no
community zoningContains two elements:• first element: regional competitiveness
- innovation and the knowledge society- accessibility and services of general interest- environment and risk prevention
would include responsibility for cities delegated to the regions (URBAN+), no community initiative (Lisbon and Gothenburg strategy)
• second element: employment - based on European Employment Strategy- adaptability of the workforce, - job creation, - accessibility to the labour market for vulnerable persons
Budget: ca 18% of total FS= current objectives 2 and 3
Reform of the policy
Conclusions
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Priorities of the reform (III)Priorities of the reform (III)Third objective: European Territorial co-Third objective: European Territorial co-
operationoperation
The success of INTERREG, community added value
Makes possible harmonious and balanced integration of the whole Union
• Border regions, including sea borders
• Cross border co-operation (MS to propose changes to the 13 present zones of INTERREG III B)
• Interregional co-operation (also within mainstream)
• External cross-border co-operation – linked to the new european neighborhood instrument, including multi-annual programming and just one financial instrument
Budget: around 4 % of the total
Reform of the policy
Conclusions
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Implementation system:Implementation system: evolution not revolution evolution not revolution
• Confirmation of the principles which made this policy a success –multi-annual programming, partnership, evaluation, co-finance, shared responsibility Retention of n+2 rule and system of advances
• Simplification: reduction in number of financial instruments: 3 not 6 and single fund programmes only Clearer division of responsibilities with the sustainable development policy Reducing the stages of programming (policy document from each MS, operational programmes) Simplification of financial management (priority axes) Controls: introduction of proportionality, contracts
• More strategic approach: Political discussion in Council, EP opinion, Commission mandate, annual report presented to spring Council
Reform of the policy
Conclusions
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Proposed timetableProposed timetable
10 and 11 May 2004: European cohesion forum, Brussels
July 2004: Commission adopts the legislative packet
End 2005: Decision by Council and European Parliament
2006: Preparation of programmes for period 2007-2013
1 Jan 2007: Implementation begins
Next stages