1. EU budget Review and 5th Cohesion Report
European Social Fund
EU budget Review and 5th Cohesion Report
Mandate
Commission invited to undertake a wide ranging review of:
all aspects of EU spending, including the CAP
all aspects of resources, including the UK correction
Process
Extensive preparation:
Public consultation – more than 300 contributions (all Member States, EU institutions…)
Political conference – biggest conference ever organized on the EU budget.
EU Parliament participated actively in the process (Lamassoure and Böge reports)
Dirk Reyntjens, DG EMPL ESF Coordination Unit ESF Evaluation partnership meeting 19 November 2010

2. Five key principles for the budget
Delivering key policy priorities
EU added value
A results-driven budget
Mutual benefits through solidarity
A reformed financing of the budget
Delivering key policy priorities
The weight of spending should mirror the EU core priorities and the Lisbon Treaty – energy, climate, foreign affairs, justice and home affairs
EU added value
Spending at EU level means a better deal for citizens: economies of scale, critical mass, cross-border challenges, leverage
A results-driven budget
Spending programmes must have a real impact and fulfil their real purpose
Mutual benefits through solidarity
EU budget is an indispensible part of the EU approach to solidarity. Geographically concentrated interventions can be necessary to achieve collective goals.
A reformed financing of the budget
The connection between the own resources and common EU policies has been lost. Need for principles of autonomy, transparency and fairness.

3. Emerging vision for the EU
The Europe 2020 strategy – towards a smart, sustainable and inclusive Union
New emphasis on policy priorities to be supported by the EU budget
The issue is not about spending more or less – but to spend more intelligently
Develop the right tools to make a difference for the EU citizens

4. Smart growth Research and innovation
A common strategic framework for innovation: Innovation Union
Refocus on major societal challenges, such as energy supplies and greenhouse gas emissions reductions
Deliver the European Research Area and modernise education systems
Infrastructures of the future
cross-border infrastructure in transport (inter-modal connections), communication (high-speed broadband) and energy (smart technologies)
Appropriate regulatory framework and strong involvement of private investors.
Research and innovation
A common strategic framework for innovation. Innovation Union built on success stories such as the Risk-sharing Finance Facility and the European Technology Platforms
Refocus priorities on major societal challenges, such as energy supplies and greenhouse gas emissions reductions
Deliver the European Research Area and modernise education systems
A major effort to simplify procedures
Infrastructures of the future
Low carbon revolution requires strategic cross-border infrastructure in transport (inter-modal connections), communication (high-speed broadband) and energy (smart technologies)
Requires an appropriate regulatory framework and strong involvement of private investors.

5. Sustainable growth Mainstreaming energy and climate policies
Large-scale dedicated funds devoted to investment in distinct programmes
Mainstreaming inside policies like research, cohesion, agriculture and rural development may be more efficient.
The Common Agricultural Policy
Direct payments: strong case for progressively bringing payments levels closer together and moving away from historical references. Greening direct aids.
Rural development: greener and more closely linked to other policies in a common strategic framework.
Mainstreaming energy and climate policies
Large-scale dedicated funds devoted to investment in distinct programmes can help addressing the credit crunch and give credibility to EU long-range policies.
Mainstreaming inside policies like research, cohesion, agriculture and rural development may be more efficient.
The Common Agricultural Policy
Direct payments: strong case for progressively bringing payments levels closer together and moving away from historical references. Greening direct aids.
Rural development: greener and more closely linked to other policies in a common strategic framework.
Reliance on the market coupled with forms of insurance.

6. Inclusive growth Cohesion policy
Cohesion to benefit to all, with concentration on less developed MS.
CSF for cohesion, agricultural, rural and fisheries funds.
A contractual agreement between the Commission and the MS reflecting the commitments at national and regional level.
Stronger thematic concentration on the Europe 2020 priorities
Options for increasing quality and performance, e.g. through reserves and introducing a certain level competition amongst MS
« Smart specialisation » of programmes rather than overlapping schemes
Cohesion policy
A Common Strategic Framework at EU level for Structural, agricultural, rural development and fisheries funds.
A contractual agreement between the Commission and the Member State reflecting the commitments of partners at national and regional level.
Cohesion policy should continue to benefit to all regions, with concentration on less developed Member States and regions.
Stronger thematic concentration on the Europe 2020 priorities,
European Employment Initiative to coordinate EU and MS activities.
Options for increasing quality and performance, e.g. through reserves and introducing a certain level of qualitative competition amongst Member States and regions.
European Globalisation Adjustment Fund

7. Inclusive growth The right skills for tomorrow’s workforce
ESF reflects new balance in EU economics policy: promote inclusion alongside growth
Targeted investment to foster adaptability, lifelong learning, inclusion, education and training and institutional capacity
Refocus ESF to secure 2020 targets
Devise a European Employment Initiative with joint initiatives in education, employment and integration
Cohesion policy
A Common Strategic Framework at EU level for Structural, agricultural, rural development and fisheries funds.
A contractual agreement between the Commission and the Member State reflecting the commitments of partners at national and regional level.
Cohesion policy should continue to benefit to all regions, with concentration on less developed Member States and regions.
Stronger thematic concentration on the Europe 2020 priorities,
European Employment Initiative to coordinate EU and MS activities.
Options for increasing quality and performance, e.g. through reserves and introducing a certain level of qualitative competition amongst Member States and regions.
European Globalisation Adjustment Fund

8. Inclusive growth European Globalisation Fund:
Supporting sectors under pressure:
Extended EGF could be put on permanent footing
Help cushion the impact of disruptions on workforce
simplification of procedures
Cohesion policy
A Common Strategic Framework at EU level for Structural, agricultural, rural development and fisheries funds.
A contractual agreement between the Commission and the Member State reflecting the commitments of partners at national and regional level.
Cohesion policy should continue to benefit to all regions, with concentration on less developed Member States and regions.
Stronger thematic concentration on the Europe 2020 priorities,
European Employment Initiative to coordinate EU and MS activities.
Options for increasing quality and performance, e.g. through reserves and introducing a certain level of qualitative competition amongst Member States and regions.
European Globalisation Adjustment Fund

9. Citizenship
One visible programme promoting European unity in diversity to integrate cultural programmes and the involvement of young people.
EU Solidarity Fund: broaden the scope and make interventions faster and more effective.
More emphasis on the management of external borders, return policy, asylum and integration of legal immigrants.

10. A budget delivering results
Incentivising the use of resources
Link to discussion on reinforcing economic policy coordination.
Possible introduction of conditionalities defining a specific set of targets on which disbursement of EU funds would depend.
Other options: performance reserves or modulate co-financing rates to performance.
Need to define specific, measurable, achievable, relevant and timed objectives as well as performance indicators.
Large scale projects
Projects like Galileo, ITER, and GMES require considerable investments over a time period going well beyond a financial framework.
Cost overruns make them hardly compatible with the way in which the EU budget is planned.
Possible alternative: separate support structure set up by the project promoters, to which the EU budget would make a fixed annual contribution.
Incentivising the use of resources
Link to discussion on reinforcing economic policy coordination.
Possible introduction of conditionalities defining a specific set of targets on which disbursement of EU funds would depend.
Other options: performance reserves or modulate co-financing rates to performance.
Need to define specific, measurable, achievable, relevant and timed objectives as well as performance indicators.

11. A budget delivering results
A MFF structure to reflect priorities – 2 options
A framework reduced to a minimum of (three) headings: Internal expenditure, External expenditure and Administrative expenditure.
Internal expenditure heading possibly divided in four sub-headings: smart growth, sustainable growth, inclusive growth, and citizenship.
Duration of the MFF
Commission favours ten year period, but with a substantial mid-term review ("5+5"), possibly facilitated by substantial reserves and margins.
A MFF structure to reflect priorities – 2 options
A framework reduced to a minimum of (three) headings: Internal expenditure, External expenditure and Administrative expenditure.
Internal expenditure heading possibly divided in four sub-headings: smart growth, sustainable growth, inclusive growth, and citizenship.
Duration of the MFF
Commission favours ten year period, but with a substantial mid-term review ("5+5"), possibly facilitated by substantial reserves and margins.
Flexibility: responding to changing circumstances
Current framework too inflexible to meet the pressure of events.
Many mechanisms are discussed: compulsory (increasing) margins; increased size of flexibility instruments, transfer of unused margins...
Current 0.03% flexibility arrangement should be maintained.

12. A budget delivering results
Simplify and minimise administrative burden
Proposal to revise the Financial Regulation contains bold measures for simplified financial rules.
A clear set of common principles for eligibility rules under shared and centralised management should be agreed.
Ensuring sound financial management
Need for a common understanding of the tolerable risk of error for different policy areas and proportionality of controls.
Shared management: the system of payments based on a declaration of payments by Member States, rather than on expenditure by beneficiaries could be extended.
Simplify and minimise administrative burden
Implementation procedures and control requirements are too complicated.
Proposal to revise the Financial Regulation contains bold measures to put in place simplified financial rules.
A clear set of common principles for eligibility rules under shared and centralised management should be agreed.
Ensuring sound financial management
Need for a common understanding of the tolerable risk of error for different policy areas and proportionality of controls.
Shared management: the system of payments based on a declaration of payments by Member States, rather than on expenditure by beneficiaries could be extended.

13. The 5th Cohesion Report and its conclusions: Options for the future
Enhancing European added value
Strengthening governance
Streamlining delivery
Architecture of the policy
Evaluations reports published in April 2010 give a clear indication of the achievements of the policy. Capturing the impact and results of cohesion policy is critical to its ongoing success. Letting the public know what is achieved with the investment from the policy is key to its transparency and accountability. It also offers the opportunity to learn from good practice elsewhere, and to continuously improve projects and programmes.
The task of safeguarding and developing competitiveness as a constant necessity in successful economies - no region in Europe can assume prosperity forever. It is important for regions to diversify their economic activities in order to sustain their success – regional policy strategic programming support this.

14. 1. Enhancing European added value
Reinforcing strategic programming – translate EU 2020 objectives into investment priorities
Focus resources on limited number of key priorities
Introduce stronger incentives and conditionality
Improving evaluation, performance and results
Stronger emphasis on new financial instruments
Evaluations reports published in April 2010 give a clear indication of the achievements of the policy. Capturing the impact and results of cohesion policy is critical to its ongoing success. Letting the public know what is achieved with the investment from the policy is key to its transparency and accountability. It also offers the opportunity to learn from good practice elsewhere, and to continuously improve projects and programmes.
The task of safeguarding and developing competitiveness as a constant necessity in successful economies - no region in Europe can assume prosperity forever. It is important for regions to diversify their economic activities in order to sustain their success – regional policy strategic programming support this.

15. 2. Strengthening governance
Reinforcing partnership (improve involvement of local and regional stakeholders, social partners, civil society)
Introducing a new dimension: territorial cohesion
Reinforcing territorial co-operation
Developing an ambitious urban agenda
Addressing areas with specific geographical or demographic features
Evaluations reports published in April 2010 give a clear indication of the achievements of the policy. Capturing the impact and results of cohesion policy is critical to its ongoing success. Letting the public know what is achieved with the investment from the policy is key to its transparency and accountability. It also offers the opportunity to learn from good practice elsewhere, and to continuously improve projects and programmes.
The task of safeguarding and developing competitiveness as a constant necessity in successful economies - no region in Europe can assume prosperity forever. It is important for regions to diversify their economic activities in order to sustain their success – regional policy strategic programming support this.

16. 3. Streamlining Delivery
Improving financial management
Reducing the administrative burden
Simplifying financial discipline
Reviewing financial control

17. 4. Architecture Full geographical coverage distinguishing between:
Less developed regions
More developed regions
Transition regions
Simpler system – replaces current phasing-out and phasing-in system
Territorial cooperation

18. 4. Architecture In line with the Budget Review:
Focus the ESF on securing the 2020 targets
Greater visibility and predictable funding volumes for the ESF
Contribution to European employment initiative

19. Questions
1. How could the Europe 2020 Strategy and cohesion policy be brought closer together at EU, national and sub-national levels?
2. Should the scope of the development and investment partnership contract go beyond cohesion policy and, if so, what should it be?
3. How could stronger thematic concentration on the Europe 2020 priorities be achieved?
4. How could conditionalities, incentives and results-based management make cohesion policy more effective?
5. How could cohesion policy be made more results-oriented? Which priorities should be obligatory?

20. Questions
6. How can cohesion policy take better account of the key role of urban areas and of territories with particular geographical features in development processes and of the emergence of macro-regional strategies?
7.  How can the partnership principle and involvement of local and regional stakeholders, social partners and civil society be improved?
8. How can the audit process be simplified and how can audits by Member States and the Commission be better integrated, whilst maintaining a high level of assurance on expenditure co-financed?
9. How could application of the proportionality principle alleviate the administrative burden in terms of management and control? Should there be specific simplification measures for territorial cooperation programmes?
10.  How can the right balance be struck between common rules for all the Funds and acknowledgement of Funds' specificities when defining eligibility rules?
11.  How can financial discipline be ensured, while providing enough flexibility to design and implement complex programmes and projects?

21. Questions
12. How can it be ensured that the architecture of cohesion policy takes into account the specificity of each Fund and in particular the need to provide greater visibility and predictable funding volumes for the ESF and to focus it on securing the 2020 objectives?
13. How could a new intermediate category of regions be designed to accompany regions which have not completed their process of catching up?

22. Timeline 19 October 2010: Budget Review (COM(2010)700)
10 November 2010: Fifth Cohesion Report
11 November 2010 – 31 January 2011: public consultation
31 January/1 February 2011: Cohesion Forum
Spring 2011: Proposal on future financial perspectives
Summer 2011: Legislative proposals
End 2012: Adoption of new legislative package and expected agreement on new budget post 2013
2013: Finalisation of new programming documents
2014: Entry into force

23. Public consultation open until 31 January 2011:
Make your voice heard!
Public consultation open until 31 January 2011:
ec.europa.eu/regional_policy/cohesion_report
Thank you for your attention!

24. European Social Fund More Info