The link between structural and investment funds and economic governance (Article 23 of the regulation on joint provision 1313/2013), which also outlines the terms of the “macro-economic conditions”, will not require legislative changes according to the 7th cohesion report published on Monday 9 October presented by the Commissioner for Regional Policy, Corina Crețu, and the President of the Committee of the Regions, Karl-Heinz Lambertz.
Every three years, the European Commission publishes a report on cohesion policy. This draws up a balance sheet on the impact of the policy and formulates a number of recommendations. This year’s report is extremely weighty, as it is every year. It is eagerly awaited given that the Commission is in the full throes of its reflection process for presenting a proposal on the future of cohesion policy for the next financial period (see EUROPE 11818).
The recommendations on the link between structural and investment funds and European economic governance could be of interest to regional actors and delegates. In chapter 5, section III of the report, the Commission analyses the events relating to its activation last year for Spain and Portugal, which resulted in the non-suspension of funds (see EUROPE 11670). The Commission concludes that, “at this level, legislative changes are not necessary”.
In the report it is stated that, “the Commission considers that there had been no need to trigger implementation of this article (Article 23) during the first half of the current programming period”. It later indicates that this link between ESI funds and monitoring procedures as part of the framework of economic governance, “has helped to provide significant motivations for the member states concerned to take effective action within a reasonable time limit to correct and put an end to excessive deficits”.
According to one Commission source, it would be by way of this provision that two member states managed to rapidly communicate their actions to the Commission and comply with budgetary stipulations, so that the latter did not need to activate this mechanism. These conclusions may possibly not be to the taste of the signatories of the Cohesion Alliance launched the same day and which, indeed, calls for these conditions to be scrapped- at least those on which the local and regional authorities do not have any influence (see other article).
The “trap” of the intermediate income regions. The document is co-signed by the Commissioner for Regional Policy and Employment, Marianne Thyssen. It is more than 250 pages long and contains copious information and many recommendations. The main trends highlighted include the fact that regional disparities have tended to decline and Eastern European member states have also tended to converge with the EU average, although this is not the case for certain Greek and Italian regions.
Above all, the report demonstrates that many of the regions whose wealth is close to the EU average appear to be prisoners of the “intermediate income trap”. One source explained to us that the richest regions are experiencing strong growth, as well as the least developed ones but that many regions between these two levels are stagnating. According to the same source, there is a reason for these regional categorisations but this is not to provoke “abrupt” transitions for regions when they shift from one category to another. In reply to EUROPE, Mr Lambertz said that he considered it was necessary to find something “more intelligent” in this regard.
Not enough competition for public procurement. The authors of the report also point out that competition is too limited for public procurement. They also noted that there are too many single bidders. This tendency is clearly more marked in eastern and southern Europe, particularly in Greece, where it exists in all the regions (except for one) in more than 40% of cases
The major recommendations. There are many recommendations included in the report. These include: the proposal for a single body of rules for cohesion policy and other financial instruments (COSME, Horizon 2020), with a clear distinction between financial instruments, including the European Fund for Strategic Investment (EFSI); - the addition of new criteria, excluding GDP, in an effort to improve the adaptation of cohesion funds to European challenges; strengthening the link between allocations and European challenges and priorities; increased national co-financing; speeding up program implementation; the reservation, at the beginning of budget period, of a part of the financing that is not allocated, in an effort to tackle unexpected challenges.
Some of the recommendations were given a cool response by President Lambertz, who questioned the implications of speeding up program implementation, increased co-financing and too much flexibility. He believes that the latter could jeopardise the principle of long-term policy. (Original version in French by Pascal Hansens)