Cohesion Policy

What Cohesion in the EU? Economic and Social Cohesion: a main Community goal EU Funds (ERDF, ESF, FEOGA-0, Cohesion…) 1/3 of the total Budget Redistributive policy (North-South; West-East), but also distributive Multi-level governance approach (cities, regions, state, EU institutions) “Europeanization” of domestic policies: principles, strategies, ideas, procedures, opportunities for policy innovation at territorial level

The historical process 5 main phases: 1) ) ) ) )

: No specific provision for a regional policy or fund Some references to “territorial or social unbalances, inequalities or disparities among the regions” European Investment Bank Public aids forbidden (competition policy) 1958: ESF (FSE) and FEOGA (market, rural areas) First moves to EMU (European Monetary System) 1973: Entry of UK, Ireland and Denmark 1975: ERDF (FEDER)

The creation of the ERDF (1975) Following a Council in Paris, in December 1974, a budget of 1.4 billion ECU (then budget's "currency") was allocated on the basis of “national quotas” for the years 1975 to 1977 (4% of the budget) was split between the then 9 Member States Member States had to apply for ERDF support at project level. Decisions were taken in a Regional Policy Committee based on Commission proposals

Member states bargaining (unanimity) EP (“non compulsory expenditure”) A new DG (XVI) No significant impact on regional disparities : Some incremental reforms + Community programs (STAR, Telecom, Resider, etc.), Mediterranean Integrated Programs

: Widening and Deepening (SEA + IM) impacts Entry of Spain and Portugal + 18% population + 8% GNP 36% agricultural unemployment 14% industrial unemployment 20% of EC pop under 70% of EC average (Spain 74,8; Greece 54,4%

Deepening: the 1986 Single European Act (SEA) Cohesion in exchange of free market ° 1985: White Paper on the Internal Market (1992 Program) ° New Title V: concern “to strengthen economic and social cohesion” with the aim of reducing the disparities between the levels of development of the regions and the backwardness of the least favored ones ° Direct Treaty base for the ERDF ° A doubling of the structural funds ( ): 25% of the EC budget ° Negotiating activism (Delors and Kohl) + intergovernmental bargain (F,UK) and side-payments (compensations for the SEM)

The Implementation 4 basic principles: 1) concentration (priorities-objectives) 2) partnership: cooperation between the levels of government at every stage 3) additionality: EU complements 4) programming: common procedures - CSFs: national/regional development programs. (90%) - Community Initiatives (10%)

OBJECTIVES ( ) 1. GDP per capita less than 75% of EU average – 70% of the total (all funds) 2. Regions affected by industrial decline, unemployment above the average (eligibility negotiated COM-Council)- ERDF-ESF 3. Combating long-term unemployment 4. ( ): adaptation to industrial change (ESF) 5. 5a devoted to agricultural and forestry assistance; 5b aimed at promoting the development of rural areas (diversification) 6. (after 1995 enlargement): developing sparsely populated Nordic areas

The 1993 Reform: Cohesion for EMU Maastricht: complex intergovernmental bargain including new cohesion provisions Title 1 (art. 1): promoting “economic and social progress which is balanced and sustainable (…) through the strengthening of economic and social cohesion and through the establishment of EMU” Art. 3: “strengthening economic and social cohesion and development of TENs” Art : a new Cohesion Fund for countries with a GNP below 90% of Community average with a program for fulfilling the EMU criteria

The Implementation Second-level negotiation: (Spain, Germany, UK, Com) Edinburgh summit: doubling of SF ( ) from 18.6 billion euros to 30 in 1999 = 1/3 of Community budget + Cohesion Fund (from 1.5 to 2.6 billion in 1999): Spain, Portugal, Greece and Ireland Creation of the Committee of the Regions (consultative functions including cohesion)

The implementation: new regulations (94-99) Some significant changes: 1.New objective 4 2.Horizontal partnership including economic and social actors 3.Programming: simplification 4.Environmental and SD considerations in regional policy (ex ante evaluation) 5.3 Community Initiatives (9% of the total): LEADER II, INTERREG II, URBAN

The Reform The challenge: how to face cohesion expenditure and the enlargement without increasing the budget? Enlargement: +29% population, +34% territory, -16% EU GDP; 10 candidates: 30% of EU p.c. average Constrains: the German contribution, the UK “check”, EMU costs, CAP, Commission crisis, Spain threats, etc. Freezing of the overall budget at 1.20% of EU GDP The preparation: Agenda 2000 (July 1997) = Financial Perspectives The outcome (Berlin Summit, March 1999): “providing something to everybody” or “enlargement without additional costs”

The Implementation Funding: 198 billion to SFs; 18 to Cohesion Fund; 45 to accession countries 3 objectives: Objective 1: Helping regions whose development is lagging behind to catch up. Objective 2: Supporting economic and social conversion in industrial, rural, urban or fisheries dependent areas facing structural difficulties. Objective 3: Modernizing systems of training and promoting employment (the whole Union except for the Objective 1 regions).

4 Community initiatives aimed at finding solutions to common problems (6% of the total) Interreg III for the development of cross border, interregional and transnational cooperation; URBAN II to support innovative strategies in cities and urban neighborhoods; Leader+ to promote rural development initiatives; EQUAL to combat discrimination in the labour market. The Community initiatives absorb 5.35 % of the Structural Funds budget. In addition, programs for innovative actions receive funding to work as laboratories of ideas for disadvantaged regions. The Instrument for Structural Policies for Pre-accession (ISPA) and the Special Accession Programme for Agriculture and Rural Development (Sapard) complements the Phare programme that has been in existence for seven years to promote economic and social development and environmental protection in the applicant countries in central and eastern Europe.

The preparation of the next round ( ) 2000–01 The European Council in Lisbon (March 2000) adopts a strategy focused on employment and designed to make the Union ‘the most competitive and dynamic knowledge-based economy in the world by the year 2010’. The Gothenburg Council (June 2001) completed this strategy by linking it with sustainable development The European Council in Copenhagen (December 2002) leads to an agreement on the conditions for the accession of 10 new Member States to the Union (February), the Commission presents its proposals for the reform of cohesion policy for the period 2007–13: ‘A new partnership for cohesion: convergence, competitiveness, cooperation’. On 1st May, accession to the European Union of the 10 new member states.

The Commission proposal 5 regulations: A general regulation, which fixes the main objectives and eligibility rules, for interventions, for programming and for the management of the funds 3 regulations, ERDF, ESF and the Cohesion Fund, which spitulate the arrangements specific to each fund A regulation on groupings for European transborder cooperation, which creates a new cooperation tool available to regional and local organisations

3 objectives-priorities The convergence of countries (90% of the EU average) and regions (regional GDP < 75% of the average) and the regions concerned by the statistical effect, that is 33% of the population of the Union (78,54% including transition regions) competitiveness and employment: reinforce attractiveness and ensure that socio-economic changes are anticipated in other regions, without Community zoning (17,22%) European territorial cooperation: Cross- border, trans-national and inter-regional (3,94%)

Simplification 3 funds in place of 6: ERDF, Cohesion Fund, ESF A single fund by program Integration of projects of the Cohesion Fund in multi-annual programming Identical management rules for the Cohesion Fund and the Structural Funds Programming and financial management by priority and no longer by measure National eligibility rules for expenditures and no longer Community rules

Problems Who is going to pay? Financial Perspectives ( ) - EU Council bargaining - Council/EP bargaining Transition arrangements for present Cohesion countries-regions

Cohesion policy and Multi-level Governance The UE is a new political order (Post-national, Post- modern, etc.) The central governments are no longer the only actors (EU, regions, cities, private interests) EU integration = a new window of opportunities (incentives, ideas, concepts, representation channels) which challenges the domestic distribution of power Commission activism (problem-solving strategies) European governance: interaction among actors and levels (dispersion of power) Network governance is prevailing in the EU

MLG and Europeanization Euro-integration and regionalism: new actors in the EU arena Regions without legal representation at the EU level Cooperative governance: a) public private partnership (horizontal) b) multilevel governance (vertical)