1. EN Regional Policy EUROPEAN COMMISSION Regional Policy Cohesion Policy Growth and jobs Background presentation for Group of Mayors from Estonia (20/01/09) charles.white@ec.europa.eu http://ec.europa.eu/regional_policy

2. EN Regional Policy EUROPEAN COMMISSION 18/02/2004 EN2 So what is Regional Policy? Regional Policy is how Europe helps poorer regions catch up (reducing disparities) and areas suffering from economic change to restructure It is the second biggest budget (35%) and helps the realisation of most other policies (environment, transport, energy and others) The scope is staggering: investments in road rail and environment infrastructure, in people and in the business environment. 600,000 projects so far. It is at the centre of the Lisbon strategy. A European Cohesion Policy Simple message

3. EN Regional Policy EUROPEAN COMMISSION 18/02/2004 EN3 And what’s the link with Cohesion Policy? Regional Policy is part of it, along with Social policy More specifically the funds which finance these policies (the ‘Structural Funds’: ERDF and ESF) Also the Cohesion Fund (not a structural fund but treated like one) which came from the Maastricht treaty and is handled by REGIO now Also IPA But not EAGGF or FIFG any more A European Cohesion Policy Simple message

4. EN Regional Policy EUROPEAN COMMISSION 18/02/2004 EN4 Why bother with a Cohesion Policy? Leaving disparities in place is not an option: that would wreck two of the policies on which Europe’s growth has been based: the single market and EMU EMU needs an adjustment mechanism. The Lisbon agenda partly fulfils that role but Lisbon needs the Cohesion Policy to function properly It is in the treaty: to promote economic and social cohesion (though not territorial cohesion as yet…) by reducing disparities between the regions A European Cohesion Policy Simple message

5. EN Regional Policy EUROPEAN COMMISSION 18/02/2004 EN5 What is a Region anyway? Good question: not defined in the treaty. We work with the second level of the Nomenclature for Territorial Statistics, NUTS to everyone. NUTS2 regions range from 800th to 3 million population Second question: is spatial targeting the right approach? The World Bank is not convinced. Other parts of the world have achieved balanced growth without it. Eventually. A European Cohesion Policy Simple message

6. EN Regional Policy EUROPEAN COMMISSION 18/02/2004 EN6 Results of the Public Consultation Consensus on the need to continue Cohesion policy post-2013, majority in favour of covering whole territory of the EU. Not only a policy of solidarity, but also aimed at fostering competitiveness, essential role for human capital and innovation Increasing focus on sustainable development Strong support for territorial cooperation Encouragement of integrated approaches (esp. rural development) More clarification of respective roles of territorial levels required Need for further simplification e.g. single fund Community sectoral policies should have a stronger regional dimension

7. EN Regional Policy EUROPEAN COMMISSION 18/02/2004 EN7 Europe 2020: key issues for future policy Wide variations resulting from globalisation Competitive, innovative economies will benefit; non knowledge based economies will be more exposed Diversity in demographic patterns One third of regions, mainly centre EUR 15 will experience greater dependency of ageing population. EUR 12 later, so can prepare. Far reaching impacts of climate change Especially in South and East Europe Challenge of volatile energy markets across the board Peripheral regions in South and east especially vulnerable Alerting regions to the extent of the risks

8. EN Regional Policy EUROPEAN COMMISSION 18/02/2004 EN8 Open Days 2008 Regions and cities in a challenging world: Innovation; sustainable development; co-operation and networking; cohesion policy tomorrow Co-organised by Commission and Committee of the Regions with 216 partner regions and cities from 32 countries 7,700 participants registered at 140 workshops (23,900 sessions) 230+ local fringe events in the participating regions. Investors’ café also bigger than ever Widening international dimension.

9. Regional Policy EUROPEAN COMMISSION EN A new partnership for Cohesion 18/02/2004 EN 9

10. Regional Policy EUROPEAN COMMISSION EN A new partnership for Cohesion 18/02/2004 EN10 Why should contributing regions keep pouring money into ‘Club Med’? It is not pouring it is investing. For all investments there are returns As poorer regions catch up they buy more goods Many building and supply contracts come back to contributing regions (35% PO, 42% HE) Solidarity is vital, especially now. A European Cohesion Policy Simple message

11. Regional Policy EUROPEAN COMMISSION EN A new partnership for Cohesion 18/02/2004 EN 11 A short history Differing practices from the start, then three reforms between 1988 and 2000, harmonising rules, simplifying systems, decentralising management, phasing eligibility as a result of success. Reform continues in the fourth period, 2007- 2013, which particularly targets: Greater disparities with enlargement Achieving growth and sustainable development –the Lisbon and Gothenburg agendas Globalisation and restructuring Dealing with ageing population, slower growth A European Cohesion Policy The early days

12. Regional Policy EUROPEAN COMMISSION EN A new partnership for Cohesion 18/02/2004 EN 12 Our tools Three new objectives Our tools Three new objectives Convergence (like old Obj 1: greater scope) 81.9% Competitiveness (old Obj 2&3, tie to Lisbon) 15.7% Territorial co-operation (former Interreg programme and RFEC networks to test ideas) 2.4% Total budget €347bn, which will unlock up to €700bn A method based on what works: Programming, Partnership and Decentralised management Mainstreaming: INTERREG and URBAN Non grant instruments now in regulations Reform of the policy Conclusions

13. Regional Policy EUROPEAN COMMISSION EN A new partnership for Cohesion 18/02/2004 EN 13 The method is important Has improved quality of many public administrations Has introduced an evaluation culture, stimulated strategic thinking, responsibility Supported co-operation, improved accountability, transparency Main element in visibility of ‘Europe’ Cohesion policy is a synonym for good European governance and balanced growth China Russia Brazil (also Paraguay/Mercosur) now formally linked Time to ‘export’ A European Cohesion Policy Simple message

14. Regional Policy EUROPEAN COMMISSION EN A new partnership for Cohesion 18/02/2004 EN 14 Index EU 25 = 100 Geographical Eligibility for Structural Funds Support 2007-2013 (GDP/head 2000-2001-2002) Objective 'Regional Competitiveness and Employment' Phasing-in regions, "naturally" above 75% Convergence objective statistically affected regions Objective 'Regional Competitiveness and Employment' Convergence objective Regions > 75% in EU25) Source: Eurostat A European Cohesion Policy

15. Regional Policy EUROPEAN COMMISSION EN A new partnership for Cohesion 18/02/2004 EN 15 The link to Lisbon? The Lisbon Agenda (first version, competitiveness, knowledge society, ICTs) 1) set certain targets Member States realised that it needed to be extended to all growth factors and so be centred on Cohesion Policy So Member States were asked to prepare National Reform Programmes (cf Integrated Guidelines for Growth and Employment) and report annually Cohesion Policy programming is now integrated into this: stage 1: preparation by EC of the Strategic Guidelines for Cohesion, and stage 2: preparation by MS of National Strategic Reference Frameworks based on Strategic Guidelines and Integrated Guidelines above background

16. Regional Policy EUROPEAN COMMISSION EN A new partnership for Cohesion 18/02/2004 EN 16 Community's strategic guidelines on cohesion proposed by the Commission, adopted 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 Commissionen 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 Five levels of programming and follow-up 5 Strategic follow-up and annual debate by the European Council in Spring, based on an annual report of the Commission and Member States A European Cohesion Policy

17. Regional Policy EUROPEAN COMMISSION EN A new partnership for Cohesion 18/02/2004 EN 17 The new Strategic guidelines: building in the (revised) Lisbon agenda (1) I) Making Europe and its regions a more attractive place to invest and work expand and improve transport infrastructures improve the environmental contribution to growth and jobs address the intensive use of traditional energy sources II) Knowledge and innovation for growth increase and improve investment in RTD facilitate innovation and promote entrepreneurship promote the information society for all improve access to finance Priorities A European Cohesion Policy

18. Regional Policy EUROPEAN COMMISSION EN A new partnership for Cohesion 18/02/2004 EN 18 The new Strategic guidelines: building in the Lisbon agenda (2) III) More and better jobs attract and retain more people in employment and modernise social protection systems improve adaptability of workers and enterprises and the flexibility of the labour market increase investment in human capital through better education and skills administrative capacity health and the labour force Priorities A European Cohesion Policy

19. Regional Policy EUROPEAN COMMISSION EN A new partnership for Cohesion 18/02/2004 EN 19 II) Improve the environmental contribution to growth and jobs Address the significant infrastructure needs for compliance with environmental legislation (esp. new MS) Ensure attractive conditions for business and staff by planning and rehabilitation, natural and cultural assets Develop innovative and job creating businesses Promote investments that contribute to EU Kyoto commitments Undertake risk prevention measures through improved management of natural resources more targeted research better use of ICTs more innovative public management policies a more attractive place…

20. Regional Policy EUROPEAN COMMISSION EN A new partnership for Cohesion 18/02/2004 EN 20 New Instruments in the new period Improve performance in closer co-operation with International Financial Institutions (IFIs): JASPERS: a new technical assistance/evaluation partnership with EIB and EBRD for large projects JEREMIE: finance for business development for micro to medium enterprises through European Investment Fund. JESSICA: financial engineering for sustainable urban development with EIB, CEB and other IFIs JASMINE: encouraging the provision of micro credit Regions for Economic Change initiative European Grouping of Territorial Co-operation (EGTC): gives legal structure to implement programmes New Instruments A European Cohesion Policy

21. Regional Policy EUROPEAN COMMISSION EN A new partnership for Cohesion 18/02/2004 EN21 And in Estonia? €3.4 billion (€1.86 billion ERDF, €1.15 billion Cohesion Fund €391milllion ESF) OP Development of the living environment (€1.6 billion) OP Development of the working environment (€1.4 billion) OP Human resource development (€391 m) Aims: 100% clean water; from 36.7% to 60% recycled solid waste; stable public transport use; share of investment for Lisbon 47%. New Instruments A European Cohesion Policy

22. Regional Policy EUROPEAN COMMISSION EN A new partnership for Cohesion 18/02/2004 EN22 Some Examples of projects Cleaning up power station Narva

23. Regional Policy EUROPEAN COMMISSION EN A new partnership for Cohesion 18/02/2004 EN23 Some Examples of projects The road to Russia, Narva.