1 The EU’s Regional Policy David Müller Alpeuregio summer school 2012

2 1. Regional Policy – Cohesion Policy Europe and its Regions History of Regional Policy in the EU Why Regional Policy? Terminology: Cohesion Policy/Regional Policy

3 Europa and its Regions 271 Regions in Europe (NUTS 2 level) – Divergences in terms of wealth, competitive- ness, natural and demo- graphic challenges – Different political traditions on “regions” – “Europe of the regions”?

4 First ERDF Regulation 1975 Main aim of correcting regional imbalances due to: o predominance of agriculture o industrial change o structural unemployment Actions eligible for up to 50% of public expenditure, (preferably in national state aid areas): o investments in small enterprises creating at least 10 new jobs; o investments in infrastructure related to point 1; o infrastructure investments in mountainous areas.

5 The Reform for the Period 2007–2013 Strategic Approach: Linking Cohesion Policy to the Lisbon Strategy New architecture and streamlining of policy instruments More room for manoeuvre for Member States Simplification of management and control of structural policies

6 <  125 Differences in development in the EU-27 GDP per head as a % of the community average

7 GDP per capita in PPS in 2006

8 Disparities across the European Union HiLoRatio GDP per cap (% EU27 average) Luxembourg 266% Bulgaria 44% 6.05* PopulationGermany 82.5 million Malta 404, *In US, this difference is only 2.5 and Japan 2

9 Regional Policy – Cohesion Policy Structural Policy: Umbrella term covering all policies aiming at structural reforms on national and regional level. Cohesion Policy: Policy of the EU to reduce the economic disparities between the regions using diferent funds, following shared management rules (TFEU Art. 174). Regional Policy: Part of EU‘s Cohesion policy with the main instrumtents ERDF and CF (but not the ESF!).

10 Instruments of Cohesion Policy Cohesion policy interventions through 3 main policy instruments: European Regional Development Fund (ERDF; based on Art. 176 TFEU; Regulation 1080/2006) European Social Fund (ESF; based on Art TFEU; Regulation 1081/2006) Cohesion Fund (based on Art. 177 TFEU; Regulation 1084/2006) Further legislation: European Grouping of Territorial Cooperation (EGTC; Regulation 1082/2006) Source: EU Commission, DG Regio

11 European Regional Development Fund Eligibilty Convergence Regions: GDP/capita < 75 % of the EU25-average. Competitiveness Regions: GDP/capita > 75 % of the EU25-average Phasing-in/Phasing-out as transitional provisions for former Objective-1 regions. Territorial cooperation Funding of a) cross-border, b) transnational and c) interregional cooperation and networks (e.g. “Urbact”). Source: EU Commission, DG Regio

12 European Regional Development Fund Scope of the funding: direct aid to investments in companies (in particular SMEs) to create sustainable jobs infrastructures linked to R&I, telecommunications, environment, energy and transport; financial instruments to support regional and local development and to foster cooperation between towns and regions; technical assistance measures Broader scope for Convergence regions (11 priorities).

13 European Social Fund Support of the ESF for Convergence regions as well as for Competitiveness regions. Scope of funding: Adaptability of workers and enterprises Access to employment for most vulnerable Social integration of disadvantaged people Enhancing human capital (special focus on education system in Convergence regions) Promoting partnerships and stakeholder networks Strengthening administrative capacities (conv. reg.) Source: EU Commission, DG Regio

14 Cohesion Fund Eligibility: MS with less than 90 % GNI/capita on national level (EU GR, PT, ES). Scope of the funding: trans-European transport networks, priority projects of European interest as identified by the Union; Environment (including energy efficiency, renewable energy and transport projects outside of TEN e.g. public transport) Macro-economic conditionality (Art. 4). Source: EU Commission, DG Regio

15 Management and Control Management/control bodies on MS‘s level Management authority: management and implementation of OP; annual reporting. Certification authority: certification of payment requests and compliance of expenditure. Auditing authority: independent authority responsible for auditing of each OP; annual reporting. Monitoring committee: Stakeholder committee for each OP to monitor quality of implementation

16 EU Budet (at current prices 2012)

17 Distribution of Budget. Overview Convergence regions: 81.9% Competitiveness regions: 15.7% Territorial co-operation 2.4% Total budget €347bn, which will unlock up to €700bn of direct investment.

18 Index EU 25 = 100 Geographical Eligibility for Structural Funds Support Objective 'Regional Competitiveness and Employment' Phasing-in regions, "naturally" above 75% Convergence objective statistically affected regions Objective 'Regional Competitiveness and Employment' Convergence objective (Regions > 75% in EU25)

19 Distribution of Budget in Detail Source: EU Commission, DG Regio

20 Research/Innovation Environment Transport Information society Social infrastructure Energy Tourism Culture Institutional capacity Human capital Employment Adaptability of workers and firms Social inclusion Capacity building Technical assistance Fields of Investment European Regional Development Fund and Cohesion Fund (€271 billion) European Social Fund (€76 billion)

21 Territorial co-operation Regions eligible for cross-border cooperation Source: EU Commission, DG Regio

22 European Territorial Cooperation Eligibility Cross-Border Cooperation: NUTS 3 level regions are eligible, along all the land-based internal borders and some external borders, along maritime borders separated by a maximum distance of 150 km (1,8 % of budget). Transnational Cooperation: all the regions are eligible but, in consultation with the Member States, the Commission has identified 13 cooperation zones (0,5 % of budget). Interregional Cooperation and setting up networks and exchanges of experience: all the European regions are eligible (0,1 % of budget).

23 Investment in Growth and Jobs? Cohesion policy provides for > 50% of public investment in 9 MS, mainly on key domains of EU interest (transport, energy, R&I, SME, etc.) € 17 bn. reprogrammed since 2007 in reaction to crisis 2012: Barroso Initiative: reprogramming of € 7 bn. focused on growth and job creation (impact on SMEs and young people).

24 Innovation and entrepreneurship Targets mostly small and medium sized enterprises and start- ups. At least 1 million gross jobs were created in supported companies. Increased private investments and R&I activity in firms. Source: EU Commission, DG Regio, 5th Cohesion Report

25 Promoting employment, education and inclusion 40% of the unemployed trained have found a job. Funded one third of Active Labour Market Policies expenditure. Targets specific vulnerable groups such as youth, women, minorities, low-skilled, long-term unemployed. Source: EU Commission, DG Regio, 5th Cohesion Report

26 Transport infrastructure : 44,000 km of road and 12,000 km railway built or reconstructed in the period ,000 km of motorways built Construction of additional 4,000 km of trans-European rail, including high-speed Source: EU Commission, DG Regio, 5th Cohesion Report

27 Access to Water and Waste Water Treatment Faster implementation of environmental directives. 23 million inhabitants are served by waste water projects to EU standards. 20 million inhabitants have been served by water supply projects. Source: EU Commission, DG Regio, 5th Cohesion Report

28 The Future Cohesion PolicyLegal Basis of Cohesion Policy The Proposal for the next Multiannual Financial Framework (MFF) New Architecture for Cohesion Policy „Better spending“. The Reform of Cohesion Policy Timeline

29 Proposal on Cohesion Policy Budget for the MFF NB: ESF minimum share is 25% for less developed, 40% for transition, and 52% for more developed

30 New Architecture of Cohesion Policy Three categories of regions –Less developed regions (GDP per capita < 75%) –Transition regions (GDP per capita between 75% and 90%) –More developed regions (GDP per capita > 90%) Cohesion Fund for Member States with GNI per capita <90% Territorial cooperation (3 strands: CBC, transnational, interregional)

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33 Key Elements of Cohesion Policy Reform Alignment of Cohesion Policy with Europe 2020 Reinforced strategic programming Thematic concentration Conditionality and performance incentives Stronger focus on results Streamlined delivery system

34 Timeline 30 June 2011: Proposal on MFF 6 October 2011: Adoption of Legislative Proposals March 2012: Commission Staff Working Document on the Common Strategic Framework June 2012: Partial General Approach in Council July 2012: Vote on CPR report in REGI committee End 2012 (?): Agreement on MFF and adoption of new legislative package 2013: Negotiation of new programming documents 2014: Entry into force and adoption of programmes

35 Thank you for your attention and all the best for your further studies! For more information: