1. COHESION POLICY Prof. Guglielmo Wolleb Objectives, principles and tools of cohesion policy

2. SUMMARY I. A short presentation II. Why a cohesion policy III. The budget IV. The legal basis V. The planning periods VI. The principles VII. Evolution of objectives and instruments VIII. Objectives IX. Eligibility

3. SUMMARY X. Allocation XI. Financial instruments XII. The architecture of the policy XIII. The Common strategic framework XIV. The partnership contract XV. Operational programs XVI. Bibliography

4. I. A short presentation http://ec.europa.eu/avservices/video/player. cfm?ref=I071779 http://ec.europa.eu/avservices/video/player. cfm?ref=I071779

5. II. Why a cohesion policy Three assumptions justify the implementation of a regional policy at European level The first assumption, widely accepted, is the persistence of large economic and social disparities within the European Union

6. II. Why a cohesion policy The second assumption, not so widely accepted, is that regional policy can reduce these disparities effectively and efficiently The third assumption, even more controversial, is that European Union can play an important role in the design, implementation and financing of these policies.

7. II. Why a cohesion policy There are various scholars who oppose the European cohesion policies on the ground that: – These policies are detrimental to the overall process of growth of the European Union – The correct scale of a regional policy is the national scale.

8. III. The budget Establishing the budget is subject of bitter disputes among member states at the beginning of each planning period These disputes on the amount and the composition of the budget reflect different political views and different material interests

9. III. The budget Cohesion policy implies a transfer of resources among countries and regions Cohesion policy is supported by the countries that have a positive net balance and opposed by the countries that have a negative net balance

10. III. The budget The budget for the planning period 2014-2020 amounts to 960 billions of euros The part devoted to cohesion policies amounts to 325 billions of euros, that is the 34% of the entire budget of the E.U. Considering the leverage effect, the amount of resources that will be devoted to cohesion policies rises to 500 billions of euros

13. III. The budget Smart and Inclusive Growth – Competitiveness for growth and jobs: includes research and innovation; education and training; trans- European networks in energy, transport and telecommunications; social policy; development of enterprises etc. – Economic, social and territorial cohesion: covers regional policy which aims at helping the least developed EU countries and regions to catch up with the rest, strengthening all regions' competitiveness and developing inter-regional cooperation.

14. III. The budget Sustainable Growth: Natural Resources: includes the common agricultural policy, common fisheries policy, rural development and environmental measures. Security and citizenship: includes justice and home affairs, border protection, immigration and asylum policy, public health, consumer protection, culture, youth, information and dialogue with citizens.

15. III. The budget Global Europe: covers all external action ('foreign policy') by the EU such as development assistance or humanitarian aid (with the exception of the European Development Fund (EDF) which provides aid for development cooperation with African, Caribbean and Pacific countries, as well as overseas countries and territories. As it is not funded from the EU budget but from direct contributions from EU Member States, the EDF does not fall under the MFF.)

16. III. The budget Administration: covers the administrative expenditure of all the European institutions, pensions and European Schools. Compensations: temporary payments designed to ensure that Croatia, who joined the EU in July 2013, does not contribute more to the EU budget than it benefits from it in the first year following its accession.

17. IV. The legal basis In the EU economic and social cohesion is pursued through three policies: 1. Extension and deepening of internal market so that lagging regions can better exploit their comparative advantage inside the EU 2. Removing barriers to competition in European and national policy (CAP reform, abolition of subsidies, regulation of state aid,…) 3. Transfer of resources through structural funds Transfer of structural funds is the essence of cohesion policy. It occurs because the first two policies are insufficient.

18. IV. The legal basis IV. The legal basis The legal basis of cohesion policy lies in the Title XVIII and in the articles 174-178 of the Treaty on the functioning of the European Union The Title XVIII reads as follows “Economic, social, territorial cohesion” The aim of territorial cohesion has been introduced with the new Treaty

19. IV. The legal basis IV. The legal basis The goal of the policy is “In order to promote its overall harmonious development the Union shall develop and pursue its actions leading to the strengthening of its economic, social and territorial cohesion. In particular the Union shall aim at reducing disparities between the levels of development of the various regions and the backwardness of the least favoured regions”

20. IV. The legal basis IV. The legal basis The Treaty mentions also the financial instruments of cohesion policy and their specific role. Article 75 refers to all funds and says that “………………..The Union shall also support the achievement of these objectives by the action it takes through the Structural Funds…..”

21. IV. The legal basis Article 76 refers to the ERDF: “The ERDF is intended to help to redress the main regional imbalances in the Union through participation in the development and structural adjustment of regions whose development is lagging behind and in the conversion of declining industrial regions”

22. IV. The legal basis IV. The legal basis Article 77 is on the Cohesion Fund: “A Cohesion Fund set up in accordance with the same procedure shall provide a financial contribution to projects in the fields of environment and Trans European networks in the area of transport in infrastructure” A specific Title (Title XI) of the Treaty is devoted to the European Social Fund, whose creation is prior to the cohesion policy

23. IV. The legal basis IV. The legal basis Article 162 states “In order to improve employment opportunities for workers in the internal market and to contribute thereby to raising the standard of living, a European Social Fund is hereby established...it shall aim to render the employment of workers easier and to increase the geographical and occupational mobility within the Union, and to facilitate their adaption to industrial changes and to changes in production systems, in particular through vocational training and retraining”

24. IV. The legal basis IV. The legal basis The rules on the operation of the Structural Funds are then contained both in a Common regulation document (Common Provision Regulation) and in specific regulations for each Fund.

25. V. The planning periods V. The planning periods The cohesion policy is implemented for planning periods lasting (now) seven years Every seven years, at the beginning of the planning period, the budget, the strategy, the institutional framework, the management, the regulations of the structural funds of the policy are revised

26. V. The planning periods The basic principles of this policy have been established in the 1988 reform. The emergence of a genuine cohesion policy dates back to this reform There have been significant changes in the following planning periods but the main principles have remained unchanged

27. V. The planning periods We have just entered the planning period 2014-20 but some of the projects of the previous planning periods are still in progress while new projects have not started yet.

28. VI. The principles The main principles of the cohesion policy are: A. Concentration B. Partnership C. Planning D. Additionality E. Co-financing F. Effectiveness and efficiency

29. VI. The principles Concentration principle – Concentration refers to territorial concentration and thematic concentration Territorial concentration: the greater part of structural fund resources (70% for 2014-2020) are concentrated on the poorest regions and countries. Thematic concentration: a consistent part of the resources are concentrated on the key growth priorities

30. VI. The principles Partnership principle – Each programme is developed through a collective process involving authorities at European, regional and local level, social partners and organisations from civil society. – This partnership applies to all stages of the programming process, from design, through management and implementation to monitoring and evaluation.

31. VI. The principles Planning principle – Cohesion policy does not fund individual projects. Instead, it funds multi-annual national programmes aligned on EU objectives and priorities.

32. VI. The principles Additionality principle – Financing from the European structural funds should not replace national spending by a member country.

33. VI. The principles Co-financing principle – Intervention financed with structural funds must be co-financed by resources from the Member State. The ceilings for European co- funding depend on the level of development of the Region/Country Objectives and other specific conditions.

34. VI. The principles Effectiveness and efficiency principle This has two aspects – Strict financial control implies: commitments for expenditure within the programming period; costs sustained no more than two years after the programming period; automatic minimum annual commitments; automatic decommitment if within 24 months (N +2) or 36 months for some countries (N +3) committed resources have not been spent.

35. VI. The principles – Monitoring and evaluation: all programmes must adopt monitoring and evaluation procedures. Monitoring is supposed to control the correct and successful implementation of the programs on a continuous basis. Evaluations may be of strategic or operational nature and they must be carried out before, during and after the implementation of the programs

36. VII. Evolution of objectives and instruments VII. Evolution of objectives and instruments The main framework of the policy includes: – Objectives that must be pursued – Regions or member states that fall within each objective – Financial instruments that can be used for each objective

37. VII. Evolution of objectives and instruments VII. Evolution of objectives and instruments 2000-2006 2007-20132014-2020 ObjectivesFunds ObjectivesFundsGoals Category of region Funds Cohesion countries CF Convergence ERDF ESF CF Investment in Growth and Jobs Less developed Regions/ Countries ERDF ESF CF objective 1 ERDF ESF EAGGF SFOP Transition regions objective 2 ERDF ESF Regional competitiveness and employment ERDF ESF More developed regions ERDF ESF objective 3ESF Interreg IIIERDF Territorial cooperation ERDF Territorial cooperationERDF URBAN II (*)ERDF EQUAL (*)ESF Leader+EAGGF * In 2007-13 Urban II and Equal are integrated into Objectives "Convergence" and "Competitiveness ”

38. VIII. The objectives The objectives of the cohesion policy have been reduced from three to two in the new planning period In the past planning period: – The first objective, “Convergence” was addressed to the less developed regions and countries of Europe and absorbed a much greater percentage of resources. – The second objective, “Competitiveness”, was reserved to all other regions absorbing a much more limited amount of resources.

39. VIII. The objectives – The third objective, “Territorial cooperation” is confirmed in the new planning period In the new planning period there are only two goals: “Investment in growth and jobs” and “Territorial cooperation” “Investment in growth and jobs absorbs the two previous objectives “Convergence” and “Competitiveness”

40. VIII. The objectives This objective will apply to all regions of the European Union and will be supported by all Funds. It will apply as well to the Cohesion Countries supported by the Cohesion Fund It pursues all the goals of the Europe 2020 strategy. All regions, according to their level of development, should contribute to the achievement of these objectives.

41. VIII. The objectives The resources of this objective will be concentrated on a set of thematic priorities identified by the Commission and spelled out in the Common Strategic Framework.

42. VIII. The objectives The second Objective, European territorial cooperation” includes three types of programmes: – Cross-border programmes refer to projects implemented by regions of different Member States which share a common border, including a marine border. – Transnational Programmes refer to cooperation programmes between different regions of Europe on a variety of matters.

43. VIII. The objectives – Interregional cooperation programmes are aimed at the building of networks to develop good practices and facilitate the exchange and transfer of experience by successful regions

44. IX. Eligibility Resources for the objective “Investment for growth and jobs” shall be allocated among three categories of NUTS level 2 regions: – less developed regions, whose GDP per capita is less than 75 % of the average GDP of the EU-27;.

45. IX. Eligibility – transition regions, whose GDP per capita is between 75% and 90% of the average GDP of the EU-27; – more developed regions, whose GDP per capita is above 90 % of the average GDP of the EU- 27. – member states whose Gross National Income (GNI) per capita is less than 90% of the average GNI per capita of the EU-27

47. │ 47 A fair system for all EU regions (eligibility simulation) 3 categories of regions < 75 % of EU average GDP/capita* *index EU27=100 75-90 % > 90 %  Canarias Guyane Réunion Guadeloupe/ Martinique Madeira Açores Malta Less developed regions Transition regions More developed regions Regional GDP figures: 2006-07-08 © EuroGeographics Association for the administrative boundaries │ 47

49. X. Allocation Resources for the first Objective “Investment for growth and jobs” shall amount to 96,50 % of the global resources (i.e., a total of EUR 327 115 655 850) and shall be allocated as follows:

50. X. Allocation (a) 48,25 % (i.e., a total of EUR 163 560 715 122) for less developed regions; (b) 10,76 % (i.e., a total of EUR 36 471 144 190) for transition regions; (c) 16,35 % (i.e., a total of EUR 55 419 403 116) for more developed regions;

51. X. Allocation (d) 20,87 % (i.e., a total of EUR 70739863 599) for Member States supported by the Cohesion Fund; (e) 0,27% (i.e., a total of EUR 924 529 823) as additional funding for the outermost regions of Austria, Finland and Sweden.

52. X. Allocation Resources for the European territorial cooperation goal shall amount to 3,48 % of the global resources available for budgetary commitment from the Funds for the period 2014 to 2020 (i.e., a total of EUR 11 700 000 004). All regions can participate to this second Objective

54. XI. Financial instruments Five main Funds work together to support economic development across all EU countries, in line with the objectives of the Europe 2020 strategy: – European Regional Development Fund (ERDF) European Regional Development Fund (ERDF) – European Social Fund (ESF) European Social Fund (ESF) – Cohesion Fund (CF) Cohesion Fund (CF) – European Agricultural Fund for Rural Development (EAFRD) European Agricultural Fund for Rural Development (EAFRD) – European Maritime and Fisheries Fund (EMFF) European Maritime and Fisheries Fund (EMFF)

55. European Regional Development Fund ERDF The European Regional Development Fund (ERDF) aims to strengthen economic, social and territorial cohesion in the European Union by correcting imbalances between regions. The fields of investment are research and development, and innovation; improving access to and quality of information and communication technologies; climate change and low-carbon economy; business support to SMEs; services of general economic interest; telecommunication, energy, and transport infrastructures; enhancing institutional capacity and effective public administration; health, education, and social infrastructures; and sustainable urban development. The share of investment in each of these topics depends on the region level of development with more advanced regions constrained to spend an higher share in research and development, innovation, low carbon economy, digital agenda, business support to SME SET UP: 1975 TREATY: Art. 160 TEU Art. 176 TFEU BUDGET 2014-2020: 183,3 billion

56. European Social Fund (ESF) The European Social Fund (ESF) is the European Union’s main financial instrument for investing in people. It increases the employment opportunities of European citizens, promotes better education, and improves the situation of the most vulnerable people at risk of poverty. The regulation proposes to target the ESF on four thematic objectives throughout the Union: (i) promoting employment and supporting labour mobility; (ii) promoting social inclusion and combating poverty; (iii) investing in education, skills and lifelong learning; and (iv) enhancing institutional capacity and an efficient public administration. SET UP: 1958 TREATY : Art. 146 TEU Art. 162 TFEU BUDGET 2014-2020: € 84 billion

57. Cohesion Fund (CF) The Cohesion Fund helps Member States with a GNI per inhabitant of less than 90 % of the EU-27 average to invest in TEN-T transport networks and the environment SET UP: 1994 TREATY: Art. 161 TUE Art. 177 TFEU BUDGET 2014-2020: € 70 billion

58. XI. Financial instruments: other cohesion instruments: EAFRD European Agricultural Fund for Rural Development (EAFRD) The aim is the promotion of sustainable rural development complementing market and income support policies such as common agricultural policy (CAP), cohesion policy and fishing policy. Contributes to: 1.Increasing competitiveness of agriculture and forestry by supporting restructuring, development and innovation 2.Protecting the environment and the countryside landscape through land management 3.Improving the quality of life in rural areas and encouraging diversification of the rural areas SET UP: 2005, replaced European Agricultural Fund for Guidance and Guarantee (Orientation section) TREATY: Art.s 36 and 37 ECT BUDGET 2014-2020: € 85 billions

59. XI. Financial instruments: other cohesion instruments: EMFF European Maritime and Fisheries Fund (EMFF) The Fund finances the Common fishery policy, whose aim is to ensure that fishing and aquaculture are environmentally, economically and socially sustainable and that they provide a source of healthy food for EU citizens. Its goal is to foster a dynamic fishing industry and ensure a fair standard of living for fishing communities. SET UP: 2006, replaced financial instrument for fisheries guidance (FIFG) TREATY: BUDGET 2014-2020: € 10 billions

60. XI. Financial instruments: other cohesion instruments: EC initiatives JASPERS Joint Assistance to Support Projects in European Regions, a technical assistance facility for the twelve EU countries which joined the EU in 2004 and 2007. Provides the Member States concerned with the support they need to prepare high quality major projects, which will be co- financed by EU funds. JEREMIE Joint European Resources for Micro to Medium Enterprises, is an initiative of the European Commission developed together with the European Investment Fund. Promotes the use of financial engineering instruments to improve access to finance for SMEs in EU regions via Structural Funds interventions. JESSICA Joint European Support for Sustainable Investment in City Areas, an initiative of the European Commission developed in co-operation with the EIB and the Council of Europe Development Bank (CEB). It supports sustainable urban development and regeneration through financial engineering mechanisms. JASMINE Joint Action to support micro-finance institutions in Europe

61. XI. Financial instruments. Other cohesion instruments: instrument for Pre-Accession Assistance (IPA)  Since 2007, both candidate countries and potential candidates have received focused EU funding and support through a single channel -the IPA- which replaced several specific instruments 5 areas of support  Transition Assistance and Institution Building;  Cross-Border Cooperation supports cross-border cooperation between candidates and potential candidates and with EU Member States;  Regional Development finances investments and associated technical assistance in areas such as transport, environment and economic cohesion;  Human Resources Development aims to strengthen human capital through education and training and to help combat exclusion;  Rural development. Two categories of IPA eligible countries:  candidate countries: the former Yugoslav Republic of Macedonia, Turkey, Iceland, Serbia. Montenegro  potential candidate countries: Albania, Bosnia and Herzegovina

62. XII. Policy stages: step-by-step XII. Policy stages: step-by-step Regional policy involves all levels of scale from EU to local: its legal basis is in the EU Treaty and its priorities are set by the EU, and it is implemented by national and regional actors in partnership with the European Commission. The regional policy framework is set for a period of 7 years.

63. XII. Policy stages: step-by-step XII. Policy stages: step-by-step The policy takes shape in the following stages: The budget of the structural funds and the rules for its use are jointly decided by the Council and the European Parliament on the basis of a proposal from the Commission. The principles and priorities of cohesion policy are elaborated through a process of consultation between the EU institutions and the member states. They are contained in the Common provisions regulations and in the Common strategic framework and are used by the national and regional authorities to align their own programming on the agreed EU-wide priorities.

64. XII. Policy stages: step-by-step XII. Policy stages: step-by-step Each country produces a document outlining the country's strategy to implement the Euro2020 strategy of growth and containing a list of Operational Programs. The Commission must approve this document. It becomes the Partnership contract.

65. XII. Policy stages: step-by-step XII. Policy stages: step-by-step Member states and regional authorities prepare national and regional programs. The Commission validates each operational program (OP). The OPs present the priorities of the country and/or regions. Workers, employers and civil society bodies can all participate in the programming and management of the OPs. For 2007-13, 455 operational programmes had been adopted.operational programmes The operational programs are implemented by the member countries and their regions. This means selecting, monitoring and evaluating thousands of projects. This work is organized by 'management authorities' in each country and/or region.

66. XII. Policy stages: step-by-step The Commission commits the funds (to allow the countries to start spending on their programs) The Commission pays the certified expenditure to each country. The Commission monitors each operational program, alongside the country concerned. The Commission along the member states evaluates the performance of the OP

67. XIII. The architecture of the policy Common Provisions regulations and specific regulations Common strategic framework Partnership contract Operational Programme Commission/European Council Commission Commission/Member states Regions or Central Administration

68. XIII. The architecture of the policy: the CPR The Common Provision Regulations contains the common rules for the operation of the three structural funds, of the rural development fund and of the fishery fund These common regulations aim at simplifying and coordinate the joint use of these funds

69. XIII. The architecture of the policy: the CSF The Common strategic framework contains the guidelines that member states must follow in the design and implementation of the cohesion policies. These are the key points:

70. XIII. The architecture of the policy: the CSF The coherence of the strategy with the Council recommendations at macroeconomic level The coherence and the integration of the cohesion policies with the other policies of the European Union An integrated use of the different structural funds and of other financial instruments

71. XIII. The architecture of the policy: the CSF A concentration of resources on some well identified thematic priorities The spelling out of two mechanisms to promote an integrated approach to territorial development: the “Community led local development” and the “Integrated Project”

72. XIII. The architecture of the policy: the CSF The mainstreaming of the horizontal principles of non discrimination and of sustainable development The design of programmes tailored to the features of each territory to enhance the specific development potential in terms of human and physical capital, natural resources, cultural heritage, knowledge, institutions and networks

73. XIII. The architecture of the policy: the CSF The identification of priorities for territorial cooperation

74. XIII. The architecture of the policy: the Partnership contract The Partnership contract is a document prepared by the Member States and approved by the Commission. It contains the national strategy to implement the Europe 2020 strategy of growth

75. XIII. The architecture of the policy: the Partnership contract It is a “contract” because it contains the commitments of the Member states to achieve the Union objectives through the use of the structural funds. Failure to achieve progress may lead to suspension or cancellation of funding. Member states are required to involve regional and local authorities and social actors in the preparation of the Partnership contract

76. XIII. The architecture of the policy: the Partnership contract The Partnership contract applies the guidelines of the Common Strategic Framework and in turn it is the point of reference of the Operational Programmes

77. XIII. The architecture of the policy: the Partnership contract A Partnership contract should contain: – An assessment on the coherence and consistency of the national strategy with the Europe2020 strategy and with its targets – An analysis of the main features of the country and of its territory, of its needs and of the untapped potential for growth

78. XIII. The architecture of the policy: the Partnership contract – The identification of the thematic priorities of the strategy and of the investment priorities within each thematic priority. – The funds utilized to finance actions within each thematic priority – Ways of respecting and promoting the horizontal principles

79. XIII. The architecture of the policy: the Partnership contract – Ways of implementing a integrated approach – The level of investment of reference to respect the additionality principle. – The ex ante conditionalities that must be guaranteed; – The link between cohesion policy and the economic governance of the Union to ensure that the effectiveness of expenditure under the CSF is underpinned by sound economic policies

80. XIII. The architecture of the policy: the Partnership contract – Where and how the coordination and the joint use of the structural funds and of the structural funds with other instruments are implemented – The guidelines to set up a framework for the performance review – The administration and the management of the programmes

81. XIV. The architecture of the policy: operational programmes The Operational Programme (OP) contains all the planned actions to implement the strategy of growth. All OP must be approved by the Commission

82. XIV. The architecture of the policy: operational programmes Each programme shall set out a strategy for the programme's contribution to the Union strategy consistent with the Common Strategic Framework and Partnership Contract. An OP shall consist of priority axes. A priority axis shall correspond to a thematic objective identified in the CSF

83. XIV. The architecture of the policy: operational programmes The investment priorities and the specific objectives (expected results) within each priority axis must be identified Each programme shall include the arrangements to ensure effective, efficient and coordinated implementation of the CSF Each program defines the allocation of the funds to the different actions and the source of co-financing

84. XIV. The architecture of the policy: operational programmes Each thematic priority shall set out indicators to assess progress of programme implementation towards achievement of objectives as the basis for monitoring, evaluation and review of performance. These shall include: – (a) financial indicators relating to expenditure allocated; – (b) output indicators relating to the operations supported; – (c) result indicators relating to the priority.

85. XIV. The architecture of the policy: operational programmes All programmes are subject to monitoring and evaluation Monitoring committees should be set up for each Programme. Member States should submit progress reports on the implementation of their Partnership Contracts in order for the Commission to monitor progress towards achieving Union objectives.

86. XIV. The architecture of the policy: operational programmes An evaluation plan for each operational programme should be drawn up by the authority responsible for the preparation of the programme. The evaluations will be submitted to the Commission. The Commission itself will undertake ex post evaluations of the OP

87. XIV. The architecture of the policy: operational programmes Tens of thousand of projects are every day taking place in every part of Europe…..

88. XV. THE KEY POINTS OF THE REFORM Investing in all regions according to their level of development Targeting resources at key growth sectors Fixing clear and measurable aims and targets Identifying a system of conditionalities Establishing a Common strategic Framework

89. XV. THE KEY POINTS OF THE REFORM Simplifying the use of E.U. investment and reduce bureaucratic costs through the provision of common rules for all funds Enhancing the urban dimension of policy Reinforcing cooperation across borders Ensuring that cohesion policy is better linked to wider E.U. economic governance To give more support to SMEs

90. XVI. Bibliography European Commission, Cohesion policy 2014-2020- Investing in growth and jobs, Luxembourg, 2011 Common Provision Regulations Common Strategic Framework Partnerships contracts for all countries Operational programmes for all regions