1 Cohesion Policy Brussels, 15 July 2004

2 Objectives retained The reinforcement of economic and social cohesion is one of 3 objectives of the Union guaranteed by the Treaty (article 2) Cohesion Policy is the main pillar for promoting the harmonious development of the whole Community (Art. 158 of the Treaty).

3 The successful outcome of a process 3 years of rich debate launched by the Second Cohesion Report in January 2001 Publication of the Third Cohesion Report, 18 February 2004: Adoption of the main principles of the reform by the Commission Cohesion Forum, 10 and 11 May: Plebiscite on the guidelines of the Commission Adoption of the draft regulations, 14 July 2004

4 The legislative proposals The legislative proposals are put in place through 5 regulations: A general regulation, which fixes the main objectives and eligibility rules, for interventions, for programming and for the management of the funds 3 regulations, ERDF, ESF and the Cohesion Fund, which spitulate the arrangements specific to each fund A regulation on groupings for European transborder cooperation, which creates a new cooperation tool available to regional and local organisations

5 The increase in disparities in the context of enlargement leads to concentration of cohesion policy on 3 priorities: The convergence of countries (GNI < 90% of the average) and regions (regional GDP < 75% of the average) and the regions concerned by the statistical effect, that is 33% of the population of the Union Regional competitiveness and employment: reinforce attractiveness and ensure that socio-economic changes are anticipated in other regions, without Community zoning European territorial cooperation: Cross-border, trans-national and inter-regional The 3 political priorities

6 Re-orientation of Cohesion Policy based on the priorities of the Union (Lisbon and Göteborg) Articulation around the 3 pillars of sustainable development: Competitiveness: innovation, research, education and Accessibility Employment and social inclusion Environment and risk prevention

7 The general principles of the reform 1.A more strategic approach based on Union priorities 2.Budgetary and thematic Concentration 3.Decentralised and Territorial approach through greater responsibility for countries, regions and towns 4. Simplification of management methods 5.Proportionality and efficiency of control and monitoring

8 1. A more strategic approach Definition of Union priorities in the strategic guidelines established by the Council Translation by the Member States of these Community priorities in a national strategic reference framework decided by the Commission Operational implementation by means of regional and thematic programmes

9 2. Concentration Budgetary resources are concentrated on those who need them most (budgetary concentration): 78,54% in favour of convergence: Less-developed regions Less-developed countries regions concerned by the statistical effect linked to enlargement (drop in GDP per capita) 17,22% in favour of regional competitiveness and employment 3,94% for cross-border and trans-national cooperation Programmes will focus on the Lisbon and Göteborg priorities (thematic concentration)

10 3. A decentralised and territorial approach Each region may benefit from a programme, which it implements Territorial specificities are taken into account: Integration of the urban dimension with the possibility of sub-delegation to the urban authorities Attention given to zones with a geographic or natural handicap: islands, mountains, rural zones with low population density, previous external border areas may benefit from an increased rate of cofinancing Nordic zones: very low population density taken into account in the financial allocation Ultraperipheral regions: covered by a specific allocation compensating for extra costs

11 4. Significant simplification 3 funds in place of 6: ERDF, Cohesion Fund, ESF A single fund by programme Integration of projects of the Cohesion Fund in multi- annual programming Identical management rules for the Cohesion Fund and the Structural Funds Programming and financial management by priority and no longer by measure National eligibility rules for expenditures and no longer Community rules

12 5. More efficient financial management and control, in the interests of the Community Clearer share of responsibilities between the Commission and the Member States (clearer articulation of different control levels) Generalisation of the rule N+2: efficiency and discipline Intervention of the Commission in control and monitoring in proportion with the degree of assurance given by the Member State and the financial stakes involved Payments conditioned by the commitment of the Member States on the reliability of the countrys management and control systems Clarification of the mechanisms for financial correction in cases of irregularity Conditionality of the Cohesion Fund linked to the respect of convergence programmes (temporary suspension of commitments, but restitution possible)