Brussels, 10/10/2014 (Agence Europe) - The connection between the economic governance of the European Union and implementation of its Cohesion Policy was examined by EU regional development ministers at a meeting in Milan on Friday 10 October. Their discussion is part of the preparations for the General Affairs Council (GAC) on the EU's Cohesion Policy on 19 November. There may be further such debates ahead of the 19 November meeting.
Necessary, but to what degree? The connection between the economic governance of the EU and implementation of its Cohesion Policy has become much closer under the current financial programming period and reform of the Cohesion Policy. The policy has become the investment arm of economic governance and the European Semester (Stability and Growth Pact, excess budget deficits, macroeconomic imbalances and adjustment programmes). EU Regional Development Commissioner Johannes Hahn explained in Milan that this interconnection was what was expected of a policy that is “the main investment instrument at the EU level. It cannot operate in isolation; it cannot be at odds with other fiscal and investment choices made at national and European level; it cannot be undermined by unsound macro-economic choices.” He admitted, however, that “fiscal consolidation has not been as growth-friendly as recommended by the Commission in several reports.”
During their exchange of views in Milan, the 'cohesion country' ministers were still critical of the conditions arising from this link, thus opposing the net contributors, explains a close source. The former are critical of the macroeconomic conditions (suspension of Cohesion Fund monies if the EU's economic recommendations are bent). The divisions have not grown any wider, and the connection between Cohesion Policy and European governance is not being challenged. It is more a question of working out where the limits should be.
Budget flexibility. The ministers brought up the question of flexibility under the Stability and Growth Pact, which the Italian Presidency is keen on, in order to ensure that the necessary co-financing required for the release of Structural Funds does not worsen the calculation of the budget deficit. But the ministers are reported to have not made clear their desire to amend the rules. The close source says different countries put the flexibility cursor in different places. Commissioner Hahn admitted that there was room for manoeuvre for an improvement, but that this must remain connected with the country-specific recommendations.
GAC Cohesion. Quizzed by the Italian Presidency about the establishment of more regular high-level political dialogue on the Cohesion Policy, the ministers were more united. The idea of discussing implementation of Cohesion Policy at the General Affairs Council is reported to be attractive to regional development ministers, who don't want to leave all debate in the hands of Europe's finance ministers. Commissioner Hahn said after the meeting that a political dialogue on this matter was needed at least once every six months, but new structures were not needed. It should be left in the hands of the ministers in question.
Timing. In their interventions, many ministers are reported to have urged the Commission to speed up the approval of Partnership Agreements and Operational Programmes. Hahn said: “You should not count on relaxed quality requirements for latecomers. On the contrary, those Partnership Agreements and Operational Programmes that have already been adopted will be the benchmark for the others in terms of quality,” and quality was more important than the speed of approval. Some delegations warned of the danger of delays in getting programmes off the ground but the Commissioner refused to budge, responding: “By the end of the year, it will be clear who is still lagging behind, and this will not be kept secret.” (MD)