1. Workshop Legal Framework EU Structural Funds 2007 -2013 Riga, 4 December 2006 CHALLENGES FOR THE NEW PROGRAMMING PERIOD 2007-2013 Gerard van Gaalen Development Agency East Netherlands department European Affairs phone: +31 26 384 42 22 www.oostnv.com

2. Riga 4 december 2006 | 2 Pleased to meet you !

3. Riga 4 december 2006 | 3 Mission Statement Taking initiatives and supporting activities that lead to a stronger and more vibrant economy in the provinces of Gelderland and Overijssel. The end goal is promoting a sustainable labor market.

4. Riga 4 december 2006 | 4 Where do we add value ? BusinessesGovernment Knowledge institutes

5. Riga 4 december 2006 | 5 Principals and shareholders The principals and shareholders of the Development Agency East Netherlands NV are: The Ministry of Economic Affairs (EZ) (57,62%) The Province of Gelderland (33,56%) The Province of Overijssel (8,82%)

6. Riga 4 december 2006 | 6 East Netherlands in figures NetherlandsEast NetherlandsGelderlandOverijssel Population (1 August 2006)16,336.3463,091,7231,976,1611,115,562 Land surface (km2)41,528.038,557.365,136.513,420.85 Population density per km2393361385326 Labor force (age 15-64), 20057,401,0001,365,000870,000495,000 - primary education (%), 200524.425.425.725.1 - secondary education (%), 200544.345.544.647.4 - higher education (%), 200531.328.929.727.5 GDP (* million €), 2003476,34976,05348,31927,734 GDP per head (* 1,000 €), 20032925 Number of jobs, 20066,975,4001,246,400789,400457,200 Number of R&D jobs, 200385,98715,93511,1624,773 Source: CBS/Statline, October 2006

7. Riga 4 december 2006 | 7 New Programme period 2007-2013 cornerstones New Legislation Council Regulation 1083/2006: General Provisions Council Regulation 1080/2006: ERDF Council Regulation 1081/2006: ESF Council Regulation 1084/2006: Cohesion Fund Council Regulation 1082/2006: European Grouping of Territorial cooperation Council Regulation 1085/2006: Instrument for Pre-Accession (IPA) Commission Regulation Implementing Regulation

8. Riga 4 december 2006 | 8 Where do ‘New programme period 2007-2013 cornerstones’ we add value? Budget Allocation Allocation for cohesion policy: Council Dec. 2005 Allocation by Objective, Fund and Member State: Comission Decisions July 2006 Community Strategic Guidelines Adopted October 2006 Aide Mémoire for the desk officers Manual for negotiating and implementing programmes

9. Riga 4 december 2006 | 9 New programme period 2007-2013 first objective CONVERGENCE AND COMPETITIVENESS Regions less than 75% of EU 25 average GDP/head States with less than 90% of EU 25 average GNI/head (Cohesion Fund) Statistical effect: regions with a GDP/head below 75% of EU15 and above 75% of EU25 Special programme for outermost regions

10. Riga 4 december 2006 | 10 New programme period 2007-2013 second objective REGIONAL COMPETITIVENESS AND EMPLOYMENT Cohesion policy at the service of all other regions outside Convergence in the EU – no community zoning Two elements: 1.Employment based on European Employment Strategy (ESF) 2.Regional competitiveness (ERDF) Lisbon strategy Innovation and the knowledge economy

11. Riga 4 december 2006 | 11 New programme period 2007-2013 third objective EUROPEAN TERRITORIAL COOPERATION The succes of INTERREG III, community added value Cross border co-operation (incl. sea borders) Inter-regional co-operation Transnational co-operation Networking and exchange of experience External cross-border co-operation - linked to new European neighbourhood instrument

12. Riga 4 december 2006 | 12 Objectives, Structural Funds and instruments 2007-2013 ERDFESF Cohesion Fund Convergence Regional Competitiveness and Employment European territorial Cooperation ERDF ESF infrastructure, innovation, investments etc. vocational training, employment aids etc. MemberStates with a GNI/head below 90% environmental and transport infra- structure, renewable energy all Member States and regions Structural Funds and instruments

13. Riga 4 december 2006 | 13 Geographical concentration Regions below or close to 75% threshold below 75% in EU25 statististical effect below 75% in EU15 above in EU25 "naturally" above 75% because of growth other regions Index EU 25 = 100 Source: Eurostat Art. 5+6 Gen.Reg. GDP/head average 1999-2000-2001

14. Riga 4 december 2006 | 14 Cohesion Fund 2007-2013: Eligible Member States Allocation: EUR 61.56 bn. in 2004 prices Cohesion Fund 2007-2013 Transitional support

15. Riga 4 december 2006 | 15 European Territorial Cooperation 2007-2013 Allocation: EUR 7.75 bn. for cross-border, transnational and interregional cooperation Cross-border areas

16. Riga 4 december 2006 | 16 Budget new programming period 2007-2013 Total budget € 307.6 billion (35.7% of EU budget) Three new Objectives Convergence: 81.7% of total (€ 251.3 billion) Regional Competitiveness and Employment: 15.8% of total (€ 48.8 billion) European Territorial Cooperation 2.5% of total (€ 7.5 billion) (all figures in 2004 prices)

17. Riga 4 december 2006 | 17 Programmes and Instruments EligibilityPrioritiesAllocations Cohesion Policy 2007-2013 3 Objectives Budget: EUR 307.6 bn (0.37% of EU-GNI) (2004 prices) Convergence objective 81.7% (EUR 251.33 bn) Regional and national programmes ERDF ESF Cohesion Fund including phasing-out Regions with a GDP/head  75% of average EU25 Statistical effect: Regions with a GDP/head  75% of EU15 and >75% in EU25 Member States GNI/head  90% EU25 average innovation; environment/ risk prevention; accessibility; infrastructure; human resources; administrative capacity transport (TENs); sustainable transport; environment; renewable energy 57.6% EUR 177.29 bn 4.1% EUR 12.52 bn 20.0% EUR 61.42 bn Regional competitiveness and employment objective 15.8% (EUR 48.79 bn.) Regional programmes (ERDF) and national programmes (ESF) Member States suggest a list of regions (NUTS I or II) "Phasing-in" Regions covered by objec- tive 1 beween 2000-06 and not covered by the convergence objective Innovation environment/risk prevention accessibility European Employment Strategy 15.5% EUR 38.4 bn 3.4% EUR 10.38 bn European territorial co-operation objective 2.44% (EUR 7.5 bn.) Cross-border and transnational programmes and networking (ERDF) Border regions and greater regions of transnational co-operation innovation; environment/ risk prevention; accessibility culture, education of which: 77.6% cross-border 18.5% transnational 3.9% interregional + ENPI

18. Riga 4 december 2006 | 18 Convergence and Competitiveness and Employment Objectives Regions and population covered in EU25/27 (December 2005 figures) EU25 EU27 Number of regions Population million% of EU Number of regions Population million% of EU Competitiveness and Employment Objective Phasing-in Regions Other Regions Total Convergence Objective Convergence Regions Statistical Effect Regions Total 7012427.384153.731.7 1616.43.61616.43.4 86140.430.9100170.135.1 13193.91319 4.0 155295.261.0 168314.364.9 155295.264.9 168314.369.1 4.2

19. Riga 4 december 2006 | 19 EU Cohesion Policy 2007-2013: Allocation by Objective and Member State in 2004 prices

20. Riga 4 december 2006 | 20 New elements of programming period 2007-2013 General: 3 instead of 7 objectives, 3 instead of 5 funds, mono-fund programmes, no zoning outside “Convergence” objective -Three Funds: ERDF, ESF and Cohesion Fund No more Community Initiatives Programming: 2 steps instead of 3 No Programming Complement, no measures Stronger focus on strategic approach -National Strategic Reference Framework (NSRF) -clear link with National Reform Programmes (= national Lisbon strategies) -Earmarking -clear link with Community Strategic Guidelines Cohesion Fund integrated in programming approach -Exception for major projects (above 50 million Euro) and environment (above 25 million Euro)

21. Riga 4 december 2006 | 21 New elements of programming period 2007-2013 Stronger cooperation with other financial instruments (EIB, EIF) –JASPERS –JEREMIE –JESSICA EC Initiative: Regions for Economic Change –Tool for better exchange of best practices Support to housing under certain conditions Urban issues: subdelegation to to urban authorities possible Further decentralisation to Member States and regions –Shared management between the European, national, regional, urban and local level

22. Riga 4 december 2006 | 22 New elements of programming period 2007-2013 Higher intervention rates (up to 85%) -Differentiation between different groups of countries Additionality only to be verified for convergence objective Financial management at priority axis level, allows greater flexibility for programme adaptations Eligibility of expenses defined according to national rules (with a few exceptions) Control system: proportional if Community cofinancing below 33% and EUR 250 million of total costs SFC 2007: electronic data exchange for all documents

23. Riga 4 december 2006 | 23 Structural funds 2007-2013 : Differentiated intervention rates (1) Member States whose average per capita/ GDP below 85% between 2001-03 CZ, EE, GR, CY, LV, LT, HU, MT, PL, PT, SI, SK, BG, RO 85% Criteria Member States, regions ERDF, ESF Cohesion Fund (2) Member States other than those under (1) eligible to the Cohesion Fund ES 80%/50%*85% * The first rate concerns regions eligible under the "Convergence"; the second one those under the "Regional Competitiveness and Employment" objective ** If applicable (3) Member States other than those under (1) and (2) AT, BE, DK, DE, FR, IR, IT, LU, NL, SE, SF, UK 75%/50%*- (4) Outermost regions referred to in Article 299 (2) of the Treatyregions in ES, FR, PT 85%85%**

24. Riga 4 december 2006 | 24 Possible growth and employment effects during programme period 2007-2013 Growth Major gains in terms of additional GDP of approximately 10% in most new MS by 2013 (8.9% in Poland, more than 10% in Baltic States). Productivity Gains vary between 2.3% (Slovakia; Hungary) and 7% (Bulgaria; Romania). Employment Overall 2.5 million new jobs (between + 4% to 8%).

25. Riga 4 december 2006 | 25 Strategic guidelines, programming and follow-up Community's strategic guidelines on cohesion proposed by the Commission, adpoted by the Council, assent by the European Parliament 1 National strategic reference framework proposed by the Member State in applying the partnership principle; reflects on the Union‘s orientations, lays down a national strategy and its programming; finally decided by the Commission 2 Operational Programmes one programme by fund and Member State or region, description of priorities, management and financial sources; proposed by Member State or region; finally decided by the Commission 3 Programme management and project selection by Member States and regions; “shared management“ principle = concertation with the Commission 4 5 Strategic follow-up and annual debate by the European Council in Spring, based on an annual report of the Commission and Member States

26. Riga 4 december 2006 | 26 Timetable 1 August 2006: Structural Funds Regulations enter into force 6 October 2006: Council approves Community Strategic Guidelines (CSG) 10 October 2006: CSG enter into force October/November 2006: Member States submit National Strategic Reference Frameworks and Operational Programmes 2007: Commission adopts Operational Programmes (about 350)

27. Riga 4 december 2006 | 27 Points for attention for (new) member states 1.Public procurement - focus on implementation of EU compliant legislation: use TA 2.Strengthen inter-ministerial coordination - cooperation between Managing authorities, Certifying authority, Audit authority and Intermediate Bodies 3.Separation of financial management and control tasks management checks vs. independent sample checks 4. Adequate accounting systems - shorten delays with positive effect on absorption capacity (N+2/N+3 rule) - SFC 2007: submission via electronic data exchange 5. Recruitment and training of additional staff also for intermediate bodies and regions

28. Riga 4 december 2006 | 28 Points for attention for (new) member states 6. Clear definition of priorities keep flexibility but avoid «grey zones» Clear definition of areas of intervention of OP’s, Funds and priorities (cross financing) 7. Project pipeline reserve budget for project preparation 8. Partnership principle during programming and implementation national, regional, local, social partners, NGO's 9. Operational and reliable monitoring systems need for standardised monitoring tables assessment of N+2/N+3 risks 10. Careful planning of national co-financing integrate EU into national budget

29. Riga 4 december 2006 | 29 Convergence objectives (1) 1.Research and technological development (R&TD), innovation and entrepreneurship 2.Information society 3.Environment 4.Prevention of risks 5.Tourism

30. Riga 4 december 2006 | 30 Convergence objectives (2) 6.Transport investments 7.Energy 8.Education investments 9.Health 10.Direct aid to investment in SMEs