1. a short history of its future
“The great regional awakening”
Annual Conference of the
Regional Studies Association
Dublin, 4-7 June 2017
Wolfgang Petzold
EU cohesion policy:
a short history of its future
Work in progress,
the usual disclaimers apply

2. Key assumptions and questions
Unanimity = path dependency: Unanimity in the Council on the EU budget will favour path-dependent reform over radical changes of EU cohesion policy post-2020.
Scope of reform: The reform debate will focus on more or less controversial issues such as simplification, differentiation and alignment with economic governance/the European Semester.
The Brexit threat: Will the White Paper process lead to deeper integration including, e.g. a completed Eurozone, and what would this mean for the EU budget and cohesion policy?
Crisis stabiliser vs. systemic equaliser: How could an EU cohesion policy for a completed Eurozone look like?

3. Policy learning: Europeanization
Who governs EU cohesion policy?
EU actors
Member
States
Regions
Policy development
vertical implementation and feed-back
Net
contributors
Council
Beneficia-
ries
European
Commission
Parliament
Regional
Lobby/CoR
Policy learning: Europeanization
of regional policies
“less EU cohesion policy”
“more EU cohesion policy”

4. EU cohesion policy reforms: context, narratives, budget shares
Period
EU context
Policy shifts and narratives
Cohesion policy share in MFF and GNI (in %)
Cuts*: total MFF vs. cohesion policy (in %)
Budget crisis; single market programme “1992”; EU9-12
Common objectives and principles for different funds, multi-annual progr.
25.5/0.3
3/2.5
EMU preparation,
Maastricht Treaty, EU12-15
Cohesion Fund
33.1/0.4
8.5/8.8
“Agenda 2000”; EU15-25
Effectiveness, decen-tralisation, concentration, capping, “audit explosion”
30.2/0.38
3/7
“Lisbon Strategy”
“Sapir threat (2003), EU25-28, financial crisis
Alignment with broader EU strategy; evidence-based; academic debate
35.8/0.4
15.4/8.7
“Europe 2020”,
Euro crisis, European Semester
Place-based approach; conditionality (ex-ante; macro-economic)
33.9/0.3
8/4 /7
EFSI, Brexit, White Paper
Results-orientation; sim-plification, differentiation; European Semester ? ?
*Comparison of cuts in % of total MFF and cohesion policy allocations: initial proposal by the European Commission vs. final agreement of Council and EP.

5. EU cohesion policy and MFF post-2020: milestones
EU budget/MFF
2014
High-level Group on own resources set up
2015
Commissioner Cretu presents “10 questions for
reform” at ERSA conference, Lisbon
High-level group on simplification of ESIF set up
‘Focus on results’ (DG BUDG conference)
2016
‘Omnibus’-Regulation on simplification, synergies with
EU programmes, financial Instruments, investments
Mid-term review of MFF
Report by high-level Group on own resources
2017
Council conclusions on cohesion policy post-2020
(25 April)
Committee of the Regions’ opinion on the future of
cohesion policy (11 May)
White paper/reflection paper on ‘EMU’ suggests to
make ESIF partly conditional on national reforms
(31 May)
EP building blocks on cohesion policy post-2020 (June)
7th Cohesion Forum (26/27 June)
7th Cohesion Report/public consultation on the future of
cohesion policy (autumn)
Report by High-level Group on simplification (autumn)
Impact Assessment (end-2017?)
White Paper/reflection paper on the ‘future of EU
finances’ (28 June)
Proposal for MFF post-2020 (end-2017?)
2018
Proposals on ESIF regulations post-2020 (summer?)
Postponed proposal for MFF post-2020 (1st semester)
2019
Inter-institutional negotiations on ESIF regulations
Inter-institutional negotiations on MFF post-2020
2020
ESIF regulations enter into force
MFF enters into force

6. EU cohesion policy and MFF post-2020: current positions
European Commission Council of the EU European Parliament Regions
ambitious
defensive
Topics
undecided
MFF
Own resources
System change
No system change
Duration
(or “5+5” years)
Ceiling/total
> 1% of GNI/EUR bn
< 1% of GNI/EUR 650- bn
Overall structure
New headings/instruments
Current headings maintained
Flexibility
Mid-term revision/high reserve
(Mid-term revision/high reserve)
Cohesion policy
Share in MFF
33% + x
33% - x
Eligibility of regions
All regions eligible
Less-developed regions only
Simplification
Single rule book etc.
Marginal change only
Differentiation
Varied implementation
Same rules for all
Synergies
EFSI, new approach
Maintain current approach
Thematic concen-
tration
Maintain/increase levels
Reduce levels
Conditionalities
Maintain/deepen provisions
Reduce/abolish provisions
Alignment with Euro-
pean Semester
Set financial incentives
No link to European Semester
Co-financing rates….
Increase nat. co-financing, n+2
Rates remain unchanged, n+3

7. MFF and EU cohesion policy post-2020: inter-institutional agenda
Institutions
8th European Parliament legislature
9th EP
EU Council President
EU Council President
New President
European Commission
New Commission
Brexit
EU27-UK negotiations
White Paper
MFF 2020+
HLG own resources
Budget for results
MFF 2020+
proposal
MFF negotiations: EU Council
‘Friends of Presidency’
Mid-term review
Cohesion
policy 2020+
Impact ass-essment
Legislative
proposal CP
Cohesion policy negotiations:
Studies, debate, modelling
EP-Council
HLG simplification
Cohesion
Report
Building
blocks 2020+
Council
conclusions
EU Presidencies
2015
2016
2017
2018
2019
2020 LV LU NL SK MT EE BG AT RO FI HR DE

8. EU cohesion policy post-2020: scenarios for reform
Continuity and modest change: modest simplification of rules, duration , budget share remains at one third; if GNI ceiling for commitments maintained, total could be about EUR bn with cohesion policy allocations of EUR bn.
Significant change: radical simplification of rules, duration (or 5+5), (“net fund” model or ERDF only for less developed regions; ESF “de-regionalised”), differentiation becomes principle, full alignment with national reforms as agreed within European Semester; budget share reduced and experimentation with new direct management instruments introduced, e.g. extension of Globalisation Adjustment Fund, introduction of “Rainy Day Fund” or “EU Investment Protection Scheme” as suggested by the reflection paper on EMU; if GNI ceiling for commitments reduced, total could be about EUR 600 bn with cohesion policy allocations of EUR bn.
System change/phasing-in of Eurozone budget: deconstructing cohesion policy on the way to fiscal federalism through, e.g. direct budget transfers, new instruments such as “EU Unemployment Reinsurance Scheme”, “Rainy Day Fund” or “EU Investment Protection Scheme” as suggested by the reflection paper on EMU become standard.

9. Conclusions
Beware of drama: reform of EU cohesion policy post-2020 most likely path-dependent, leitmotive to be simplification, differentiation and alignment with European Semester with minor system changes
Uncertainty: Brexit negotiations and White Paper reflections to continue in 2018
Completed Eurozone by 2025: fiscal capacity for EU including a revised budget and new policies and instruments to be designed