For internal use only EC proposal for the next MFF/smart specialisation Marek Przeor Team Leader - Smart Growth G1 Smart & Sustainable Policy Unit DG Regional and Urban Policy 25 October 2018 #CohesionPolicy #EUinmyRegion

Package of legislative proposals has been proposed by the European Commission in May/June 2018

Timeline

Common Provisions Regulation * governs 7 Funds European Regional Development Fund (€ 200 billion, incl.€8.4 bn "Interreg") Cohesion Fund (€ 41 bn, incl.€11bn under CEF2) European Social Fund Plus (€101 bn) European Maritime and Fisheries Fund (€6.1 bn) Asylum and Migration Fund (€ 11.3 bn) Internal Security Fund (€ 2.5 bn) Border Management and Visa Instrument (€ 8 bn) Not included anymore: European Agricultural Fund for Rural Development (€ 78.8) *) https://ec.europa.eu/commission/publications/regional-development-and-cohesion_en

Policy objectives 11 objectives are simplified and consolidated to 5: A smarter Europe (innovative & smart economic transformation) A greener, low-carbon Europe (including energy transition, the circular economy, climate adaptation and risk management) A more connected Europe (mobility and ICT connectivity) A more social Europe (the European Pillar of Social Rights) A Europe closer to citizens (sustainable development of urban, rural and coastal areas and local initiatives)

ERDF THEMATIC CONCENTRATION Maintaining spending in the key areas for growth and jobs At national level based on GNI per head => flexibility 6% of budget to urban development, delivered through local development partnerships For countries with: minimum % PO1 ("smarter Europe") minimum % PO2 ("greener, low carbon Europe") GNI below 75% 35% 30% GNI 75-100% 45% GNI above 100% 60% PO1 + PO2 min. 85% MS GNI index 2014-2016 Group of MS BG 47.7 GNI <75 RO 56.1 HR 58.9 LV 64.6 HU 66.3 PL 66.5 EL 71.0 LT 73.9 EE 74.7 PT 76.3 75 < GNI < 100 SK 76.9 SI 81.6 CY 82.0 CZ 82.4 MT 88.7 ES 91.9 IT 97.5 FR 108.8 GNI>100 FI 112.4 BE 120.7 SE 127.7 DE 128.7 NL 129.8 AT 130.8 DK 131.9 IE 139.1 LU 178.2  

New regional eligibility map Total ERDF budget: €200 bn New regional eligibility map 2021-2027

Scope of support from the ERDF The ERDF shall support (Art. 4 ERDF Regulation): investments in infrastructure; investments in access to services; productive investments in SMEs; equipment, software and intangible assets; information, communication, studies, networking, cooperation, exchange of experience and activities involving clusters; technical assistance. In addition, the ERDF shall also support: productive investments in enterprises other than SMEs when they involve cooperation with SMEs in research and innovation capacities and the uptake of advanced technologies under PO1 Smart Growth (a) (i) training, life-long learning and education activities under PO1 (a) (iv); sharing of facilities and of human resources, soft investments and other activities linked to PO 4 under the ESF+, under the European territorial cooperation goal (Interreg). Not eligible: Operating costs (except in the outermost regions) Funding undertakings in difficulty Checks for selection of projects include (Art. 67(3) CPR): verify that the beneficiary has the necessary financial resources and mechanisms to cover operation and maintenance costs; consistent with the corresponding strategies and planning documents established for the fulfilment of enabling conditions

A smarter Europe by promoting innovative and smart economic transformation Market orientation of research activities Digitalisation - an innovation enabler Development of skills Location matters for SMEs and start-ups A smarter Europe Interregional cooperation in value chains

Thematic S3 Platforms 3 platforms, 1 goal Joint EC-initiative (DG REGIO, GROW, AGRI, ENER, JRC, …) Bottom-up approach > 100 regions involved > 25 partnerships under the 3 platforms Using S3 as a coordination principle in strategic EU priority domains Alignment of regional S3 Creation of interregional value chains  investment projects Alignment of strategic investments (public/ private)

Testing new approaches for interregional innovation investments Test new ways to:  Commercialize and scale-up interregional innovation projects that can create or reshape European value chains  Attract private investment for promising innovation projects Explore and strengthen synergies between different EU instruments (ESI funds, the Investment Plan, Horizon 2020, COSME)

S3P Industrial modernisation - 16 partnerships

S3P Agro-food - 5 partnerships

S3P Energy – 6 partnerships BIO-ECONOMY BIOENERGY MARINE RENEWABLE ENERGY SMART GRIDS SOLAR ENERGY SUSTAINABLE BUILDINGS

Need to accelerate the work done within the thematic platforms. Moving from learning to commercialisation and scale-up in interregional partnerships Need to accelerate the work done within the thematic platforms. The focus will be on projects on higher TRLs (>5/6 TRL). The results will feed into preprations for 2021-2027. Support from S3Platform and external experts Learn Connect Demonstrate Commercialise Scale-up

Interregional innovation investments WHAT Interregional innovation investments through the commercialisation and scaling up of interregional innovation projects having the potential to encourage the development of European value chains ('component 5'). (ETC Art 3.5) HOW MUCH 11.5 % of ETC Resources (i.e., a total of EUR 970m) for interregional innovation investments (component 5). (ETC Art. 9.2) HOW It shall be implemented under direct or indirect management. (ETC Art 16.1) FOR WHOM At the initiative of the Commission, the ERDF may support interregional innovation investments, as set out in point 5 of Article 3, bringing together researchers, businesses, civil society and public administrations involved in smart specialisation strategies established at national or regional levels. (ETC Art 61) Crossborder programmes should change from primarily managing and distributing funds toward acting as institutions of exchange, facilitating cross-border activity and being a centre for strategic planning. €900 million to bring together researchers, businesses, civil society and public administrations involved in smart specialisation strategies established at national or regional levels. Example: the vanguard initiative – 20-30 regions across Europe co-operating on innovation. The addition of co-operation outside the EU. This will take the form of (1) a specific strand for outermost regions (2) the incorporation of current IPA/ENI funding to support enlargement and cooperation with neighbourhood countries. In many cases cross-border barriers (especially in relation to health services, labour regulation, local public transport and business development) stem from differences in administrative practices and national legal frameworks. These administrative obstacles are difficult for programmes to address alone, requiring decisions beyond programme structures. The Commission proposes two "off-the-shelf" legal instruments to allow one Member States' rules to apply across the border. Since the action is voluntary and optional, being used (or not) at the initiative of Member States concerned, it respects subsidiarity and proportionality. It also has no cost incidence for the EU budget.

Programmes/Funds supporting innovation (1/2) ERDF focus on regional relevance, economic transformation, diffusion of existing knowledge & technology to places that need it, based on smart specialisation strategies; new interregional innovation investment support developing European value chains by helping partnerships cooperate in investments in shared S3 priority areas (€226.3bn with minimum thematic concentration of 35% to 60% on innovation, digitisation, SMEs) Horizon Europe focus on European research and innovation excellence, the generation and exploitation of new knowledge and disruptive, market-creating innovations (€100 bn) InvestEU focus on market-based instruments, for strategic investments (€38bn (incl. €23 for R&I and SMEs) mobilising €650bn (incl. €415 for R&I, digitisation and SMEs) Digital Europe focus on digital transformation via AI, cyber-security, high performance computing, advanced digital skills, interoperability, deployment of digital solutions in business and administrations, incl. networking of Digital Innovation Hubs (€9.2 bn) Single Market Programme focus on improving the functioning of the internal market, SMEs' access to markets, favourable business environment, competitiveness of sectors, the modernisation of industry and the promotion of entrepreneurship (€6 bn, of which €3bn for SMEs) Thematic concentration in ERDF: Member States with the GNI equal to and above 100% of the average EU will have to allocate at least 85 % of their total ERDF resources to policy objective1 (PO1: “smarter Europe”) and PO 2 (“greener, low carbon Europe”), and at least 60 % to PO 1 – so they can go above 60% Member States with the GNI equal and above to 75% but below100% of the average EU will have to allocate at least 45 % of their total ERDF resources to PO 1, and at least 30 % to PO 2; Member States with the GNI below 75% will have to allocate at least 35 % of their total ERDF resources under priorities other than for technical assistance to PO 1, and at least 30 % to PO 2.

Programmes/Funds supporting innovation (2/2) ESF+: inclusion, education and skills (notably basic digital skills) to adapt to the current and future needs of the economy, health, labour mobility and social innovation (€100 bn) EAFRD: sharing of knowledge, uptake of innovation and digitalisation in agro-food sector (€78.8bn) Erasmus+: learning mobility of individuals and cooperation, for education and training, creativity and innovation at the level of organisations (€30bn) Reform Support Programme: institutional reform and efficient and service-oriented functioning of public administration and e-government (€25 bn) Space Programme: support to space sector, space infrastructures and services (Copernicus, Galileo, EGNOS) (€16 bn) Defence Fund: minimising fragmentation and boosting competitiveness and innovation of the EU defence industry (€13bn, incl. €4.1 from Horizon Europe) LIFE programme: support demonstrating techniques and best practice in Circular Economy, quality of life, climate mitigation and adaptation; and Clean Energy Transition that can be replicated and up-scaled in larger programmes (€5.4bn) Creative Europe: competitiveness and innovation capacity the creative and audiovisual industry, promote cultural diversity and heritage, support culture-based creativity in education and innovation (€1.8 bn)

Synergies The “Seal of Excellence” allows projects successfully evaluated under Horizon Europe to be funded by Cohesion Policy without having to pass another selection process, if they are consistent with the region’s or the programme’s smart specialisation strategy. On a voluntary basis, and up to 5%, Member States can transfer Cohesion Policy resources to another EU instrument to fund a project; in this case, the rules of the other instrument apply. The other way around, Member States can also choose to use their Cohesion Policy money to finance a project selected under another EU budget tool; in this case Cohesion Policy rules apply. Member States can choose to transfer up to 5% of their Cohesion Policy resources to the new InvestEU fund.

Thank you!