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The EU’s Regional Policy

David MüllerAlpeuregio summer school 2012

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1. Regional Policy – Cohesion Policy

• Europe and its Regions• History of Regional Policy in the EU• Why Regional Policy? • Terminology: Cohesion Policy/Regional Policy

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Europa and its Regions

271 Regions in Europe (NUTS 2 level)– Divergences in terms

of wealth, competitive-

ness, natural and demo-

graphic challenges– Different political

traditions on “regions”– “Europe of the

regions”?

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First ERDF Regulation 1975

Main aim of correcting regional imbalances due to:o predominance of agricultureo industrial changeo structural unemployment

Actions eligible for up to 50% of public expenditure, (preferably in national state aid areas):

o investments in small enterprises creating at least 10 new jobs;

o investments in infrastructure related to point 1;o infrastructure investments in mountainous areas.

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The Reform for the Period 2007–2013

• Strategic Approach: Linking Cohesion Policy to the Lisbon Strategy

• New architecture and streamlining of policy instruments

• More room for manoeuvre for Member States

• Simplification of management and control of structural policies

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<50

50 - 75

75 - 90

90 - 100

100 - 125

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Differences in development in the EU-27

GDP per head as a % of the community average

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GDP per capita in PPS in 2006

0

50

100

150

200

250

300

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Disparities across the European Union

Hi Lo Ratio

GDP per cap (% EU27 average)

Luxembourg266%

Bulgaria44% 6.05*

Population Germany82.5 million

Malta404,000 204

*In US, this difference is only 2.5 and Japan 2

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Regional Policy – Cohesion Policy• Structural Policy: Umbrella term covering all

policies aiming at structural reforms on national and regional level.

• Cohesion Policy: Policy of the EU to reduce the economic disparities between the regions using diferent funds, following shared management rules (TFEU Art. 174).

• Regional Policy: Part of EU‘s Cohesion policy with the main instrumtents ERDF and CF (but not the ESF!).

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Instruments of Cohesion PolicyCohesion policy interventions through 3 main policy instruments:•European Regional Development Fund (ERDF; based on Art. 176 TFEU; Regulation 1080/2006)•European Social Fund (ESF; based on Art. 162-164 TFEU; Regulation 1081/2006)•Cohesion Fund (based on Art. 177 TFEU; Regulation 1084/2006)

Further legislation:•European Grouping of Territorial Cooperation (EGTC; Regulation 1082/2006)

Source: EU Commission, DG Regio

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European Regional Development Fund Eligibilty•Convergence Regions: GDP/capita < 75 % of the EU25-average.•Competitiveness Regions: GDP/capita > 75 % of the EU25-average•Phasing-in/Phasing-out as transitional provisions for former Objective-1 regions.

Territorial cooperationFunding of a) cross-border, b) transnational and c) interregional cooperation and networks (e.g. “Urbact”).

Source: EU Commission, DG Regio

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European Regional Development FundScope of the funding:•direct aid to investments in companies (in particular SMEs) to create sustainable jobs•infrastructures linked to R&I, telecommunications, environment, energy and transport;•financial instruments to support regional and local development and to foster cooperation between towns and regions;•technical assistance measuresBroader scope for Convergence regions (11 priorities).

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European Social FundSupport of the ESF for Convergence regions as well as for Competitiveness regions.

Scope of funding:•Adaptability of workers and enterprises•Access to employment for most vulnerable•Social integration of disadvantaged people•Enhancing human capital (special focus on education system in Convergence regions)•Promoting partnerships and stakeholder networks•Strengthening administrative capacities (conv. reg.)Source: EU Commission, DG Regio

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Cohesion FundEligibility:MS with less than 90 % GNI/capita on national level (EU-12 + GR, PT, ES).

Scope of the funding:•trans-European transport networks, priority projects of European interest as identified by the Union;•Environment (including energy efficiency, renewable energy and transport projects outside of TEN e.g. public transport)Macro-economic conditionality (Art. 4).

Source: EU Commission, DG Regio

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Management and Control

Management/control bodies on MS‘s level•Management authority: management and implementation of OP; annual reporting.•Certification authority: certification of payment requests and compliance of expenditure.•Auditing authority: independent authority responsible for auditing of each OP; annual reporting.•Monitoring committee: Stakeholder committee for each OP to monitor quality of implementation

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EU Budet 2007-2013 (at current prices 2012)

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Distribution of Budget. Overview

• Convergence regions: 81.9%

• Competitiveness regions: 15.7%

• Territorial co-operation 2.4%

Total budget €347bn, which will unlock up to €700bn of direct investment.

18Index EU 25 = 100

Geographical Eligibility for Structural Funds Support 2007-2013

Objective 'RegionalCompetitiveness and Employment'Phasing-in regions, "naturally" above 75%

Convergence objectivestatistically affected regions

Objective 'RegionalCompetitiveness and Employment'

Convergence objective(Regions > 75% in EU25)

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Research/Innovation

Environment

Transport

Information societySocial infrastructureEnergy

TourismCultureInstitutional capacity

Human capital

Employment

Adaptability of workers and firmsSocial inclusionCapacity buildingTechnical assistance

Fields of InvestmentEuropean Regional Development Fundand Cohesion Fund (€271 billion)

European Social Fund (€76 billion)

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Territorial co-operation

Regions eligible for cross-border cooperation

Source: EU Commission, DG Regio

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European Territorial CooperationEligibility•Cross-Border Cooperation: NUTS 3 level regions are eligible, along all the land-based internal borders and some external borders, along maritime borders separated by a maximum distance of 150 km (1,8 % of budget).•Transnational Cooperation: all the regions are eligible but, in consultation with the Member States, the Commission has identified 13 cooperation zones (0,5 % of budget).•Interregional Cooperation and setting up networks and exchanges of experience: all the European regions are eligible (0,1 % of budget).

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Investment in Growth and Jobs?

• Cohesion policy provides for > 50% of public investment in 9 MS, mainly on key domains of EU interest (transport, energy, R&I, SME, etc.)

• € 17 bn. reprogrammed since 2007 in reaction to crisis

• 2012: Barroso Initiative: reprogramming of € 7 bn. focused on growth and job creation (impact on 168.000 SMEs and 450.000 young people).

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Innovation and entrepreneurship

• Targets mostly small and medium sized enterprises and start-ups.

• At least 1 million gross jobs were created in supported companies.

• Increased private investments and R&I activity in firms.

Source: EU Commission, DG Regio, 5th Cohesion Report

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Promoting employment, education and inclusion

• 40% of the unemployed trained have found a job.

• Funded one third of Active Labour Market Policies expenditure.

• Targets specific vulnerable groups such as youth, women, minorities, low-skilled, long-term unemployed.

Source: EU Commission, DG Regio, 5th Cohesion Report

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Transport infrastructure

• 2000-2006: 44,000 km of road and 12,000 km railway built or reconstructed in the period 2000-2006.

• 2,000 km of motorways built

• Construction of additional 4,000 km of trans-European rail, including high-speed

Source: EU Commission, DG Regio, 5th Cohesion Report

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Access to Water and Waste Water Treatment

• Faster implementation of environmental directives.

• 23 million inhabitants are served by waste water projects to EU standards.

• 20 million inhabitants have been served by water supply projects.

Source: EU Commission, DG Regio, 5th Cohesion Report

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The Future Cohesion PolicyLegal Basis of Cohesion Policy

• The Proposal for the next Multiannual Financial Framework (MFF)• New Architecture for Cohesion Policy• „Better spending“. The Reform of Cohesion Policy 2014-2020• Timeline

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Proposal on Cohesion Policy Budget for the MFF 2014-2020

billion EUR

Cohesion Fund* 68.7Less developed regions 162.6Transition regions 39.0More developed regions 53.1Cooperation 11.7Extra allocation for outermost and northern regions

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Total** 336.0

Connecting Europe facility for transport, energy and ICT

40.0

* Cohesion Fund will "ringfence" 10 billion EUR for the new Connecting Europe Facility** ESF minimum share: 25%

NB: ESF minimum share is 25% for less developed, 40% for transition, and 52% for more developed

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New Architecture of Cohesion Policy

• Three categories of regions – Less developed regions (GDP per capita < 75%)– Transition regions (GDP per capita between 75%

and 90%)– More developed regions (GDP per capita > 90%)

• Cohesion Fund for Member States with GNI per capita <90%

• Territorial cooperation (3 strands: CBC, transnational, interregional)

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Key Elements of Cohesion Policy Reform

• Alignment of Cohesion Policy with Europe 2020

• Reinforced strategic programming

• Thematic concentration

• Conditionality and performance incentives

• Stronger focus on results

• Streamlined delivery system

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Timeline• 30 June 2011: Proposal on MFF • 6 October 2011: Adoption of Legislative Proposals • March 2012: Commission Staff Working Document

on the Common Strategic Framework• June 2012: Partial General Approach in Council• July 2012: Vote on CPR report in REGI committee • End 2012 (?): Agreement on MFF and adoption of

new legislative package• 2013: Negotiation of new programming documents• 2014: Entry into force and adoption of programmes

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Thank you for your attention and all the best for your further

studies!

For more information:http://ec.europa.eu/regional_policy