Brussels, 11/02/2013 (Agence Europe) - As regards cohesion, there is both good and bad in the political agreement on the multi-annual financial framework (MFF) 2014-2020 reached on Friday 8 February by the heads of state. Although it is a long way from the Commission's proposals, the agreement for a total of €325 billion comes as a relief to European Commissioner for Regional Policy Johannes Hahn and to the regions. On the other hand, the fact that the Council has approved macro-economic conditionality and the performance reserve may not go down too well with the European Parliament.
Hahn has expressed his relief that preparations for the forthcoming cohesion programmes may continue thanks to the political agreement reached on the MFF. However, he took pains to point out that “the Commission's original proposal would have been a better compromise for Europe. There is no doubt that it will be harder to fund all of the European priorities that we have laid down in our proposals”. Lamenting the cuts to cohesion, the commissioner consoled himself with the €325 billion, which will make it possible to support a “modernised” cohesion policy. This is the viewpoint also taken by the CPMR (Conference of Peripheral Maritime Regions), which regretted the “low level of ambition” in the agreement, which nonetheless has the merit of “showing a positive political sign of stability”. President of the Committee of the Regions Ramon Luis Valcarcel Siso acknowledged the efforts made to attenuate the proposed cuts. Like the CPMR, he also welcomed the fact that the budget takes account of youth unemployment and gets the regions involved in the European initiative to tackle this.
Regions in transition and island regions. Hahn, Valcarcel and the CPMR all welcomed the decision of the member states to keep the new category of regions in transition. In the view of the commissioner, this is a suitable response to the desire to make the cohesion policy better targeted and more effective. In addition, the political agreement mentions the specific awards to the outermost regions and regions with low population density, which was welcomed by the CPMR. The organisation nonetheless calls for clarifications “as to how the islands will be taken into account”.
Macro-economic conditionality. In their political agreement on the MFF, the member states also gave their blessing to certain legislative provisions specific to the cohesion policy, in addition to the exclusively financial aspect. This includes the controversial measure to bring a macro-economic conditionality requirement into the structural funds. The heads of state agreed to this, with some amendments to the Commission's proposals, with a view to making its application more gradual. If a member state fails correctly to apply the recommendations made by the Council on, amongst other things, the euro, the deficit procedure and excessive imbalances or the European financial stabilisation mechanism, the Commission will be able to propose suspension of commitments and, in extreme cases, payments, although the Council may always veto this. The member states stress that the priority must go to a suspension of commitments only, and that this must be applied proportionately. As a safeguard, the heads of state have also brought in a “double capping” of the suspension of commitments: firstly, on the basis of a maximum amount of funds (50% in the event of an initial excessive deficit procedure, up to 100% progressively, 25% in the event of a first excessive imbalances procedure, up to 50% progressively) and secondly, depending on nominal GDP (a maximum of 0.5% in the event of an initial excessive deficit procedure infringement, up to 1% progressively, a maximum of 0.25% in the event of an initial excessive imbalances procedure, up to 0.5% progressively).
According to Valcarcel, the regions are extremely concerned by this conditionality “which could undermine the continuity of public and private investments raised by European investments”. The Parliament has always been strongly opposed to this, which will further complicate the MEPs' approval of the MFF.
Performance reserve. Another bone of contention between the Council and the European Parliament over the cohesion policy is the performance reserve. MEPs do not want a bar of this. However, in their political agreement on the MFF, the leaders of the EU approved it. In addition, they have raised from 5% to 7% volume of national funds to be held in reserve and redistributed after 2019 to those which put in the best performances, following review. (MD/transl.fl)