EU Cohesion Policy 2014 – 2020 Proposals from the European Commission NO FINAL DECISIONS YET. NEGOTIATIONS ONGOING European Union Cohesion Policy

1. What is the impact of EU Cohesion Policy? European Union Cohesion Policy

EU Cohesion Policy invests in … Support for SMEs Training Energy efficiency Renewable energy Transport Cooperation between regions Research and innovation European Union Cohesion Policy

Results of EU Cohesion Policy (figures from 2000-2006 period) 8400 km of rail built or improved 5100 km of road built or improved Access to clean drinking water for 20 million more people Training for 10 million people each year Over 1 million jobs created GDP/capita up 5 % in newer Member States European Union Cohesion Policy

2. Why is the Commission proposing changes for 2014-2020? European Union Cohesion Policy

Objectives Deliver the Europe 2020 strategy objectives of smart, sustainable and inclusive growth Focus on results Maximise the impact of EU funding European Union Cohesion Policy

Connecting Europe Facility Proposed EU budget 2014-2020 “Ambitious but realistic” proposals issued by the Commission in June 2011 for the Multiannual Financial Framework (MFF) 2014-2020 Cohesion Policy 33 % (€336 billion) Other policies (agriculture, research, external etc.) 63 % (€649 billion) Connecting Europe Facility 4 % (€40 billion) European Union Cohesion Policy

3. What are the main changes? European Union Cohesion Policy

Reinforcing effectiveness and performance Focus on results Common & programme-specific indicators, reporting, monitoring & evaluation Performance framework for all programmes Clear and measurable milestones and targets Performance reserve 5 % of national allocations (by Member State, fund and category of region) Ex-ante conditionality Ensuring conditions for effective investment are in place Macro-economic conditionality Alignment with new economic governance European Union Cohesion Policy

More coherent use of available EU funds Comprehensive investment strategy: aligned with Europe 2020 objectives Coherence with National Reform Programmes Coordination: cohesion policy, rural development, maritime & fisheries funds Objectives and indicators to measure progress towards Europe 2020 targets Effectiveness: introduction of a performance framework Efficiency: reinforcement of administrative capacity, cutting red tape Common Strategic Framework Partnership Agreement Operational Programmes European Union Cohesion Policy

A menu of thematic objectives Research & innovation Information and communication technologies (ICT) Competitiveness of Small and Medium-sized Enterprises (SMEs) Shift towards a low-carbon economy Climate change adaptation & risk prevention and management Environmental protection & resource efficiency Sustainable transport & removing bottlenecks in key network infrastructures Employment & supporting labour mobility Social inclusion & combating poverty Education, skills & lifelong learning Institutional capacity building & efficient public administrations European Union Cohesion Policy

Concentrating resources to maximise impact Concentration of ERDF investments Energy efficiency & renewable energy Research & innovation Competitiveness of SMEs More developed & transitional regions Less developed regions Flexibility – different regions have different needs Special arrangements for ex-convergence regions European Union Cohesion Policy

European Social Fund (ESF) 2007-2013 2014-2020 Share of ESF within Cohesion Policy budget Of total Structural Fund support (ERDF & ESF), ESF will represent: 25 % in less developed regions 40 % in transition regions 52 % in more developed regions European Union Cohesion Policy

European Social Fund (ESF) Fully in line with the Europe 2020 strategy Promoting employment & supporting labour mobility Investing in education, skills & life-long learning Promoting social inclusion & combating poverty Enhancing institutional capacity & efficient public administration Reinforced social dimension 20 % of ESF allocations for social inclusion Greater emphasis on fighting youth unemployment Mainstreaming & specific support for gender equality & non-discrimination European Union Cohesion Policy

Cohesion Fund Supports Member States with GNI/capita < 90 % of EU27 average Investing in environment Climate change adaptation and risk prevention Water and waste sectors Biodiversity including through green infrastructures Urban environment Low carbon economy Investing in transport Trans-European Transport Networks (TEN-T) Low-carbon transport systems and urban transport European Union Cohesion Policy

Simplification Common rules - funds covered by Common Strategic Framework Cohesion Policy, rural development and maritime & fisheries policy Option of multi-fund programmes ERDF, ESF and Cohesion Fund Streamlined delivery system Harmonised rules on eligibility and durability Greater use of simplified costs Linking payments with results e-Cohesion: “one stop shop” for beneficiaries Proportional approach to control European Union Cohesion Policy

Reinforcing Territorial Cohesion Focus on sustainable urban development At least 5 % of ERDF resources Creation of urban development platform Networking between cities and exchanges on urban policy Innovative actions for sustainable urban development Subject to a ceiling of 0.2 % of the annual funding Areas with specific natural or demographic features Additional allocation for outermost & sparsely populated regions European Union Cohesion Policy

An investment-oriented policy Promoting the use of innovative financing instruments Extending scope to all areas of investment Clearer regulatory framework 10 % bonus for innovative financing instruments & community-led development A range of options offering flexibility to programme managers Maximum co-financing rates 75-85 % in less developed and outermost regions 60 % in transition regions 50 % in more developed regions European Union Cohesion Policy

Management and control Financial management New system of annual accounts Annual management declaration Annual clearance of accounts by the Commission Management and control systems National accreditation (greater responsibility for Member States) Managing Authorities may act as Certifying Authorities Commission can review accreditation (taking into account risks & track record) Greater proportionality Exemptions for low volume programmes Exemptions for systems that have delivered consistently good results Limitations on frequency of Commission audits on individual operations European Union Cohesion Policy

4. How will the funds be allocated? European Union Cohesion Policy

MFF 2007-13 vs. 2014-20 In million EUR, 2011 prices Cohesion policy

Results of the European Council (2) Cuts of EUR 85 bn in commitments and EUR 90 bn in payments in comparison with the Commission proposal for MFF, + cuts of EUR 9.4 bn in elements outside the MFF: MFF CAP*: - 16.3 bn Fisheries and Life + - 0.5 bn Cohesion: - 13.8 bn Connecting Europe Facility - 20.9 bn Competitiveness**: - 17.8 bn Security and citizenship: - 3.1 bn External action: - 11.3 bn Administration: - 1.5 bn * Including the reserve for crisis in the agricultural sector ** including ITER et Copernicus (GMES) Instruments outside the MFF Flexibility instrument: - 0.2 bn Emergency aid reserve: - 0.5 bn EU Solidarity Fund: - 3.5 bn EGF: - 1.9 bn EDF: - 3.3 bn

Despite the cuts in important areas, positive aspects remain + EUR 34 bn (+37 %) for competitiveness, notably research and development, education and mobility (Erasmus) and the Connecting Europe Facility Cohesion Policy: Result-orientation and strict application of conditionality to reinforce link with the Europe 2020 Strategy and structural reforms Climate: objective to commit 20% of EU spending to climate action objectives

New architecture of Cohesion Policy Three categories of regions Less developed regions (GDP per capita less than 75% of EU average) Transition regions (GDP per capita between 75% and 90% of EU) More developed regions (GDP per capita more than 90% of EU average) Cohesion Fund for Member States with GNI per capita <90% Territorial cooperation (3 strands: cross-border, transnational, interregional cooperation)

Changes in regional eligibility 2007-13 vs. 14-20 Difference in population covered between 2007-13 and 2014-20 million inhabitants and (in parenthesis) number of regions (excluding Croatia) 2007-2013 2014-2020 Convergence 154.7 123.3 Less developed (84) (69) Phasing-in and -out 36.5 68.1 Transition (28) (51) Competitiveness 307.1 307.0 More developed (159) (151) Total 498.4 (271) * based on GDP/head figures (2007-2008-2009)

Cohesion Policy budget (commitments) - billion EUR (2011 prices) 2014-2020 2007-2013 Less developed regions 164.3 Convergence 201.8 Transition regions 31.7 Phasing in/Phasing out 25.5 More developed regions 49.5 RCE 44.0 Cohesion Fund 66.4 70.7 European territorial cooperation 8.9 Of which Cross border cooperation 6.6 Transnational cooperation 1.8 Interregional cooperation 0.5 Outermost regions and northern sparsely populated regions 1.4 1.7 Youth Employment initiative 3.0 -- TOTAL 325.1 353.8

Average annual investment intensity: Balanced support for the 3 categories of regions

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