1 European Union Regional Policy – Employment, Social Affairs and Inclusion Addressing challenges in a changing world: -The future Cohesion Policy- Wolfgang Münch Directorate General for Regional Policy European Commission

2 European Union Regional Policy – Employment, Social Affairs and Inclusion Europe 2020 Strategy Challenges – Cohesion Policy key element for a successful strategy Budgetary Challenges - The Multi Annual Financial Framework (MFF) – budgetary figures and governing principles Responding to challenges: Reforming Cohesion Policy Why reform? The context of the EU Cohesion Policy reform Economic, Social and Territorial Challenges – Specific policy reform needs

3 European Union Regional Policy – Employment, Social Affairs and Inclusion Europe 2020 Strategy Challenges Cohesion Policy: key role to achieve EU 2020 goals Europe 2020 Strategy – a new strategy for Europe Smart growth Growth for all Sustainable growth EU Member States will propose national targets for 2011 Future Cohesion Policy must be aligned with Europe 2020 Reinforce the partnership principle in Cohesion Policy Integrated and place based concepts of Cohesion Policy essential for success of Europe 2020

4 European Union Regional Policy – Employment, Social Affairs and Inclusion Policy Challenges 1: Prosperity and economic development Overall Regional disparities have shrunk over the last decade Wide gaps between least and most developed regions still remain Global economic crisis has accentuated these gaps

5 European Union Regional Policy – Employment, Social Affairs and Inclusion Cohesion Policy conclusions: Substantial resources for Cohesion Policy. 336 billion and 40 billion for the Connecting Europe Facility Solidarity with the less developed regions: renewed focus –57% of support goes to EU12 from 51% New transition region category will give adequate continuity of funding to finalise catch up process Supporting more developed regions to help address challenges

6 European Union Regional Policy – Employment, Social Affairs and Inclusion Policy Challenges 1: Prosperity and economic development Coverage of Cohesion Policy: million people in 64 regions will be covered by the highest support levels million people or 20 regions less will need highest support levels as compared to Support in transition regions will enable 72 million people in 51 regions to better catch up million people will be covered by cohesion policy in more developed regions

7 European Union Regional Policy – Employment, Social Affairs and Inclusion Average annual aid intensity: Fair and balanced support taking into account adaptive capacities Policy Challenges 1: Prosperity and economic development

8 European Union Regional Policy – Employment, Social Affairs and Inclusion Knowledge and know how: regional vulnerability Policy challenge 2: Research & Innovation and SME support Vulnerabilities in all European regions and in neighbouring countries High impact and low adaptive capacities in Mediterranean regions Very high impacts but moderate adaptive capacities in Eastern regions Scandinavian and a number of metropolitan regions least vulnerable Southern neighbourhood and Western Balkan most vulnerable Source: Regional Challenges in the Perspective of 2020 – Phase 2: Deepening and Broadening the Analysis

9 European Union Regional Policy – Employment, Social Affairs and Inclusion Cohesion Policy conclusions: support of innovation and research infrastructure receives specific focus in all European regions SME support strengthened in all regions Funding focus: – 60% of ERDF allocations in more developed and transition regions –44% of ERDF allocations in less developed regions

10 European Union Regional Policy – Employment, Social Affairs and Inclusion Policy challenge 3: Climate change Climate change does not stop at borders Multiple challenges in Mediterranean regions North and Western regions less affected, except lowland coastal areas. River floods will occur in central and Eastern regions. Lower vulnerabilities in Eastern neighbourhood High vulnerabilities in Western Balkan as well as in Egypt Natural hazards: regional vulnerability Source: Regional Challenges in the Perspective of 2020 – Phase 2: Deepening and Broadening the Analysis

11 European Union Regional Policy – Employment, Social Affairs and Inclusion Cohesion Policy conclusions: Climate change is mainstreamed into new Cohesion Policy Strengthen territorial cooperation to address problems across borders concentration of funds on renewable energy and energy efficiency: –20% of ERDF allocations in more developed and transition regions, – 6% in less developed regions

12 European Union Regional Policy – Employment, Social Affairs and Inclusion Policy challenge 4: Access to the single market Trans European Networks in transport, and energy often lack linkages Access is base condition of taking part in single market Regional connectivity to TENs important for regional development Transport, energy key contributor in reaching the climate objectives –urban context important TEN-T priority projects

13 European Union Regional Policy – Employment, Social Affairs and Inclusion Cohesion Policy conclusions: Connecting Europe Facility to aim at cross border infrastructure through central finance and selecting the highest European added value projects Cohesion policy concentrates on main infrastructure in less developed regions –focus on TEN-T investments, broadband –focus on regional connectivity to TENs by investments in transport, energy distribution networks and broadband –supporting clean urban transport –favouring climate friendly investments

14 European Union Regional Policy – Employment, Social Affairs and Inclusion Cohesion Fund for Member States with GNI per capita <90% Main beneficiaries - the Member States that joined the EU in 2004 and Portugal Cohesion Fund 68.7 billion of which 10 billion will be ring fenced for the Connecting Europe Facility Investment areas: environment and Trans-European Networks for transport

15 European Union Regional Policy – Employment, Social Affairs and Inclusion Quality of Government Policy challenge 6: Governance Denmark, Sweden, Finland, Netherlands, Luxembourg, Germany, Austria, U.K. and Ireland have a consistently high quality of government. France, Spain, Belgium, Malta, Portugal, Cyprus, Estonia and Slovenia have a moderate quality of government. The Czech Republic, Lithuania, Hungary, Slovakia, Poland, Latvia, Greece, Italy, and especially Bulgaria and Romania have a lower quality of government.

16 European Union Regional Policy – Employment, Social Affairs and Inclusion Cohesion Policy conclusions: strengthening strategic programming capacity building for less developed Member States and regions conditionalities to support creating a framework for successful investments performance framework to reward success

17 European Union Regional Policy – Employment, Social Affairs and Inclusion Reform Major Hallmarks: A more ambitious and more effective Cohesion Policy Achieving more with the same amount by spending wisely Contributing to Europe s aims of smart, sustainable and inclusive growth Strengthening partnership and governance Reinforcing a fair for all system Focusing on objectives and results Rewarding performance Supporting integrated programming Strengthening territorial cohesion Monitoring progress towards agreed objectives Streamlining the delivery system

18 European Union Regional Policy – Employment, Social Affairs and Inclusion Thank you for your attention. Regional Challenges in the Perspective of 2020 – Phase 2: Deepening and Broadening the Analysis on/studies/index_en.cfm#1

19 European Union Regional Policy – Employment, Social Affairs and Inclusion A significant share for Cohesion Policy (1/3 of total budget) COMPARISON MFF / Billion in 2011 prices Difference (in %) Smart and Inclusive Growth % Of which Cohesion Policy % Of which infrastructure (Connecting Europe Facility) % Of which Competitiveness (CSF research & innovation; Education; Galileo etc) % 2. Sustainable Growth: natural resources % Of which Market related expenditure and direct payments % 3. Security and Citizenship % of which Freedom, Security and Justice % of Citizenship % 4. Global Europe % 5. Administration (including pensions and European schools) % Of which administrative expenditure of EU institutions % 6. Compensations0.9 Total commitment appropriations % In % of EU-27 GNI1.12%1.05%

20 European Union Regional Policy – Employment, Social Affairs and Inclusion Budget for Cohesion Policy post 2013 billion EUR (2011 prices) Cohesion Fund*68.7 Less developed regions162.6 Transition regions39.0 More developed regions53.1 Territorial Cooperation11.7 Extra allocation for outermost and northern regions 0.9 TOTAL336.0 Connecting Europe facility for transport, energy and ICT 40.0 TOTAL * Cohesion Fund will ringfence 10 billion EUR for the new Connecting Europe Facility