Tag Archives: Economic and social cohesion

A new impetus for cooperation in vocational education and training

A new impetus for cooperation in vocational education and training

Outline of the Community (European Union) legislation about A new impetus for cooperation in vocational education and training

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Education training youth sport > Vocational training

A new impetus for cooperation in vocational education and training

Document or Iniciative

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions of 9 June 2010 – A new impetus for European cooperation in Vocational Education and Training to support the Europe 2020 strategy [COM(2010) 296 final – Not published in the Official Journal].

Summary

Building on and contributing to the Europe 2020 strategy and the ET 2020 strategic framework, this communication proposes a new vision for vocational education and training (VET) in the European Union (EU). It focuses on elements central to the Copenhagen process, drawing on the ET 2020 strategic objectives.

Making lifelong learning and mobility a reality

Access to all levels of training must be maximised, which might entail significant changes to the current provision of VET. It is essential that the manner in which learning outcomes are acquired, assessed and lead to qualifications is made more flexible. This includes an enhanced role of, and the need to improve the provision of continuing VET by, employers, traditional initial training providers and higher education institutions. An outcomes-based approach for vocational qualifications based on the European Qualifications Framework (EQF) and the European Credit systems for Vocational Education and Training (ECVET) can help validate skills acquired outside of formal education and training. At the same time, the pathways between VET and higher education must be opened up and tertiary VET programmes should be developed. The transition from training to employment as well as between jobs must also be facilitated, to which end guidance and counselling services should be provided.

Transnational mobility must become the norm in VET pathways, particularly in initial VET, for both learners and trainers. It is also essential that mobility periods are recognised via the ECVET. Appropriate support structures should be established to facilitate training placements, and virtual mobility (through eLearning) should be used to complement physical mobility.

Improving the quality and efficiency of education and training

The quality and efficiency of VET, the high standards of VET teachers and trainers, the relevance of VET to labour market needs and the pathways VET opens to further learning contribute to its attractiveness. To improve the quality and efficiency of VET:

  • quality assurance systems must be implemented at national level on the basis of the European Quality Assurance Reference Framework for VET;
  • the continuing development of skills and competencies of teachers and trainers must be reviewed in light of their evolving roles;
  • the continuing development of key competences together with vocational skills that are relevant to labour market needs must be ensured, in particular through different forms of work-based learning;
  • forward planning tools to match skills and jobs should be developed and partnerships with relevant stakeholders should be created to strengthen labour market relevance.

Promoting equity, social cohesion and active citizenship

VET systems have an important role in combating social exclusion and promoting inclusive growth. Disadvantaged learners may profit more from non-classroom work-based learning that is relevant to the local labour market. Integrated in mainstream VET, training should be flexible and modularised, providing individualised learning pathways. Upward social mobility can be strengthened by facilitating the transition from VET to higher education. At the same time, accessible and targeted guidance services must be provided. The constant monitoring of VET learners’ employment rates, particularly those of disadvantaged learners, is also essential.

Enhancing creativity, innovation and entrepreneurship

The framework in which VET is provided should foster creativity and innovation, encouraging risk-taking and experimentation. To provide accessible and flexible training, experience-based and active learning should be promoted, including through eLearning. Education for entrepreneurship should also be promoted in order to instil a sense of initiative and creativity and the ability to concretise ideas. Entrepreneurship should also form part of VET teachers’ and trainers’ competence framework.

International dimension

Dialogue and mutual learning on EU VET policy should be further developed with the international community. With the support of the European Training Foundation (ETF), structured cooperation on VET should be strengthened with neighbourhood and enlargement countries, with a view to improving:

  • transnational collaboration;
  • regional development;
  • the management of legal mobility;
  • the fight against illegal migration.

In particular, cooperation in research activities and evidence-based policy making should be further strengthened with the Organisation for Economic Cooperation and Development (OECD), the United Nations Educational, Scientific and Cultural Organisation (UNESCO) and the International Labour Organisation (ILO).

The way forward

At the end of 2010, cooperation in VET should be re-launched in close partnership with relevant stakeholders in EU countries and the Commission. An ambitious modernisation agenda for VET must be set out with priorities for the next 10 years, including reviewable short term objectives. The Europe 2020 national programmes should implement this VET reform.

European Platform against Poverty and Social Exclusion

European Platform against Poverty and Social Exclusion

Outline of the Community (European Union) legislation about European Platform against Poverty and Social Exclusion

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Employment and social policy > Social inclusion and the fight against poverty

European Platform against Poverty and Social Exclusion

Document or Iniciative

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions of 16 December 2010 – The European Platform against Poverty and Social Exclusion: A European framework for social and territorial cohesion [COM(2010) 758 final – Not published in the Official Journal].

Summary

The European Platform against Poverty and Social Exclusion is a flagship initiative of the Europe 2020 strategy. Its creation by the Commission should support European Union (EU) action aimed at lifting at least 20 million people out of poverty and social exclusion by 2020.

Combating poverty at European level

Coordinating the policies of EU Member States is essential in order to meet European objectives on tackling poverty. Their cooperation is based on the Open Method of Coordination for social protection and social inclusion, and on shared statistics and common social indicators.

Their progress is monitored and assessed by the Commission, in order to meet the targets of the EU 2020 strategy.

In the EU, unemployment is the main cause of poverty and exclusion. However, the number of poor workers has also been increasing since 2000. Furthermore, some groups of the population are exposed to higher risks, namely:

  • children and young people;
  • single parents and households with dependants;
  • women;
  • people with disabilities and their households;
  • people with a migrant background and certain ethnic minorities;
  • the elderly.

There are serious forms of exclusion, such as housing exclusion, financial exclusion, fuel poverty (in particular electricity and heating), and exclusion from essential domestic necessities.

Objectives of the Platform

The Platform is to bring together all stakeholders involved in a partnership to tackle poverty. Such stakeholders may be Member States, EU institutions, or national, regional and local authorities, as well as the social partners, NGOs and persons who are themselves in a situation of poverty.

Their partnership is aimed at developing common approaches in all areas relating to social inclusion, particularly in respect of:

  • access to employment, by assessing national inclusion strategies and European strategy to develop jobs and workers’ skills;
  • access to basic services and social protection, particularly in the context of ageing populations and the increase in social exclusion;
  • education and youth, to reduce early school leaving and inequalities in education;
  • economic and social integration of migrants, through a new European strategy;
  • tackling discrimination, especially against minorities, persons with disabilities and the homeless, but also improving financial independence and gender equality;
  • access to information and communication technologies, network services, as well as financial and energy services.

The Commission encourages social innovation and the modernisation of social policies through exchanges of experience and good practices. The Platform supports the introduction of innovative social programmes, as well as the development of tools for cooperation among Member States.

In addition, the Platform fosters the development of the social economy, with a view to improving the legal framework and access to European funding, including the use of the 2011 Social Innovation Europe initiative. Social enterprises represent 10 % of European enterprises and employ 11 million workers, especially those in situations of exclusion.

These objectives should also be taken into consideration by partner countries in the EU enlargement process and European Neighbourhood Policy.

Funding

The Platform objectives should be met mainly by Member States and through funding from the European Social Fund (ESF), the European Regional Development Fund (ERDF), and the PROGRESS programme for employment and solidarity.

Similarly, the Progress microfinance instrument should help vulnerable people to create small businesses or to take up self-employment.

Context

The Platform offers a well-adapted framework to ensure that European action to tackle poverty can be pursued. It thus enables actions undertaken during the European Year for Combating Poverty and Social Exclusion (2010) to be continued. Its implementation will be evaluated each year at a large-scale Annual Convention that will analyse, together with Member States, the progress achieved during the current year, and will propose actions for the following year.

Third report on economic and social cohesion: the socio-economic situation of the Union and the impact of European and national policies

Third report on economic and social cohesion: the socio-economic situation of the Union and the impact of European and national policies

Outline of the Community (European Union) legislation about Third report on economic and social cohesion: the socio-economic situation of the Union and the impact of European and national policies

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These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Regional policy > Review and the future of regional policy

Third report on economic and social cohesion: the socio-economic situation of the Union and the impact of European and national policies

Document or Iniciative

Commission communication – third report on economic and social cohesion [COM(2004) 107 final – Not published in the Official Journal].

Summary

The policy on economic and social cohesion is producing positive effects in those areas of the European Union facing difficulties. However, large socio-economic disparities persist between Member States and between regions. These disparities in levels of wealth and degrees of dynamism arose from structural deficiencies in certain key areas for competitiveness such as investment in physical infrastructure, in innovation and in human resources. Member States and regions therefore need support from Community policies to overcome their handicaps, develop their strong points and evolve in an increasingly competitive environment.

The enlargement of the European Union to 25 Member States on May 1 represents a challenge without precedent for the European Union. In particular, it jeopardises the current balance of regional policy. The third report on economic and social cohesion sets out concrete proposals for regional policy after 2006. The Commission bases its proposals on the socio-economic situation of the Union and on an analysis of the impact of regional policy, other Community policies and national policies.

SOCIO-ECONOMIC SITUATION OF THE EUROPEAN UNION

Economic growth

Since 1994, disparities in income between Member States and between regions have been decreasing. Gross domestic product (GDP) and productivity have been increasing more quickly in the four countries eligible for the Cohesion Fund (Spain, Greece, Ireland and Portugal) than in the rest of the European Union. The increase has been particularly high in Spain and Ireland and more modest in Portugal and Greece. Nevertheless, major differences still exist between States. In Greece and Portugal, the per capita GDP is still around 70 % of the Community average. One thing however is certain: the contribution made by the Structural Funds to growth in the four cohesion countries (1.5 % in Spain, 2 % in Greece, almost 3 % in Ireland and more than 4.5 % in Portugal). Over the last decade, trade between these four countries and the rest of the Union more than doubled. On average, almost a quarter of structural expenditure returns to the rest of the Union in the form of imports, with Germany being the principal beneficiary.

Within Member States, the regions whose development is lagging behind, eligible for Objective 1, have enjoyed annual growth of 3 % compared with slightly more than 2 % for the Union as a whole. However, the catching-up process varies widely from one region to another. Outside the four cohesion countries, weak growth in the national economy is slowing down that of Objective 1 regions. While the growth in GDP in the new German Länder is equal to the Community average, that of the regions of the Italian Mezzogiorno is lower. This is also true for the old industrial regions. Although not Objective 1 regions, the regions of north-east England, the regions of northern Germany and the very sparsely populated regions of northern Sweden have seen their annual per capita GDP increase less than the Community average since 1994.

Employment and social cohesion

There are still wide regional disparities in employment levels. Employment has increased over the past ten years in the cohesion countries, significantly in Spain and Ireland, to a lesser extent in Portugal and in Greece. Only 43 % of those of working age were in work in the regions of southern Italy in 2002. In the ten new Member States, economic restructuring of agriculture and traditional industries is increasing unemployment and 56 % of those of working age are in work as against 64 % in the current Member States of the Union.

In 2000, approximately 55 million people were at risk of poverty, i.e. 15 % of the European population. Poverty particularly affects elderly people (more than 65 years old), single parents, the long-term unemployed, ethnic minorities and the disabled. The countries of southern Europe, the United Kingdom and Ireland are particularly badly affected and the numbers concerned in many of the new Member States are above the Community average.

Over the coming decades, the progressive ageing of the population will gradually reduce the working population, with a serious impact on growth potential. Between now and 2010, this will begin to affect Germany, the four southern Member States and the majority of the new Member States. By 2025, there will be on average less than three people of working age for each elderly person. Faced with the prospects for population structure, steady economic growth, high employment and a reduction in the number of people retiring are vital. Immigration should also provide an important source of additional labour.

Narrowing disparities in regional competitiveness factors

The challenge for cohesion policy is to invest in the competitiveness factors so that Member States and regions can overcome their structural problems. The principal competitiveness factors that have been identified are:

  • physical infrastructure: transport and telecommunication networks.
    Since 1994, transport links both within the cohesion countries and between those countries and the rest of the Union have been improving. In 1991, the density of the motorway network in those countries was 20 % less than the Community average. With Structural Fund support, it has exceeded the average by 10 % since 2001, with Spain and Portugal being the principal beneficiaries. In Objective 1 regions as a whole, the motorway density is only 80 % of the Community average and much less than that (20 % less) in the new Member States. As for the railways, although the network throughout the Union has been modernised, there is still a major discrepancy between the dynamic regions and those whose development is lagging behind. In the new Member States, road construction is accelerating the transfer of passengers from rail to road. Considerable investment will be required to bring railways up to standard.
    In telecommunications, the number of fixed telephone lines in relation to population remains much lower in both the cohesion countries and the new Member States. This is tending to be offset by a rise in mobile phone use. Broadband access, essential for the use of high-speed Internet and the development of new information and communications technologies (NICT), shows wide disparities across the Union. These reflect relative levels of prosperity;
  • human resources: the adaptability and skills of the workforce.
    As regards investments in human resources, large structural weaknesses remain both in the Union of Fifteen and in the new Member States. The proportion of people with education beyond basic schooling remains very low in Objective 1 regions, especially in Spain, Italy and Portugal, the exception being the new German Länder. This proportion is markedly above the European average in the new Member States. On the other hand, in these countries, the average number of young people who complete university studies is below the average in the Union of Fifteen. This is also the case in Objective 1 regions, despite the clear progress that has been made. The situation is similar as regards continuing training;
  • innovative capacity.
    Innovation is one of the keys to regional competitiveness. However, innovative capacity varies greatly from one region to another in the same Member State, within the Union of Fifteen and within the Union of Twenty-five. Eight of the 213 European regions account for a quarter of total R&D expenditure;
  • sustainable development.
    There is a substantial need for investment in the environment in the cohesion countries and the need is even greater in the accession countries. The main areas concerned are water treatment, waste management and the control of emissions.

THE IMPACT AND ADDED VALUE OF STRUCTURAL POLICIES

The budget for regional policy over the period 2000-06 is EUR 215 billion. The sums transferred to Objective 1 regions represent an important proportion of the wealth of the cohesion countries. They amount to 0.9 % of national GDP in Spain and more than 2.5 % in Greece and Portugal. This funding has a genuine leverage effect on public investments. The increase in investment achieved is estimated at 3 % in Spain, 4 % in the new German Länder, 7 % in the Italian Mezzogiorno and 8-9 % in Greece and Portugal. In most cases, there has also been a similar knock-on effect on private financing, as the figures for Austria, Germany, the Netherlands and Belgium testify. Private investment nevertheless remains weak in France, the United Kingdom and the cohesion countries. Structural Fund support is also supplemented by European Investment Bank (EIB) loans, particularly in the areas of transport and the environment. Since 2000, they have totalled EUR 20 billion a year. More than half has gone to Objective 1 regions and EUR 3 billion to the new Member States

Over the period 1994-99, 82 regions in the twelve Member States received aid under Objective 2. This Objective supports the conversion of regions with serious natural or structural handicaps. More than half of the expenditure was concentrated on the conversion of old industrial sites and on business services. To a lesser extent, funds went to developing human resources and providing aid for R&D. Community support permitted the creation of 700 000 jobs, the modernisation of 300 000 small and medium-sized enterprises (SMEs) and the conversion of 115 million square metres of industrial waste land. In ten years, unemployment fell slightly more in Objective 2 regions than in the rest of the European Union.

Several spheres of activity show the value added by regional policy

As regards agriculture and rural development, the Structural Funds have maintained economic activities in the countryside. They have encouraged the economic diversification of rural areas through agritourism and environmental protection activities. The fisheries sector is concentrated in a limited number of regions in the European Union and structural measures aim in particular to stimulate their economic conversion.

During the 1994-99 period, the European Social Fund (ESF) provided support for the development of human resources amounting to a third of overall Structural Fund investment. Assistance under Objective 3 was aimed at integrating young people, the long-term unemployed and other social categories at risk of exclusion into employment. It was also targeted on promoting equal opportunities between women and men. The most successful measures were those combining guidance, training and assistance with finding a job. In addition, the ESF provides finance for adapting employment, education and training systems. Since 2000, it has provided EUR 60 billion for the national plans implemented as part of the European Employment Strategy (EES).

Cooperation and networking – two success stories

The four Community Initiatives allow the adoption of innovative regional development strategies. The cooperation between regions and networking achieved through them represent an important value added of structural policy:

  • over the period 2000-06, INTERREG III is providing EUR 5 billion to support cross-border and trans-national cooperation and the exchange of experience between European regions. Border regions will play an increased role in the enlarged Union;
  • URBAN II is providing support for innovative projects in 70 towns and cities. The emphasis is on boosting the economy of urban areas in crisis;
  • the aim of EQUAL is to combat all forms of discrimination and inequalities in the labour market. A heavy emphasis is placed on cooperation, the exchange of experience and best practice;
  • LEADER+ provides assistance in rural areas. With an annual budget of EUR 300 million, the Initiative provides assistance to SMEs and supports the development of tourism.

New pilot innovative actions were launched in 2001. With a budget of around EUR 400 million, they are increasing regional competitiveness through innovation, disseminating technology and promoting sustainable development. Three quarters of all the regions have now applied for these programmes.

Structural Fund management is improving, but further progress can still be made

The management of regional policy is based on four general principles:

  • programming involves planning expenditure over a number of years. It has brought more stability and consistency but, on the other hand, the time taken to adopt programming documents has increased;
  • the partnership during the drawing up and the implementation of programmes has been strengthened.
    This mobilises a series of players: the regional and local authorities, the private sector, the social partners and civil society. An effective partnership improves the targeting and evaluation of projects and the dissemination of information;
  • the concentration of funding means that financial support is directed towards those regions that need it most. It has been increased, although evaluations show that assistance is too thinly spread;
  • additionality means that Community financing for a project is additional to other public and private financing.
    This rule is generally respected under Objective 1. It is more difficult to verify for Objectives 2 and 3.

Improving the efficiency of programmes remains a major challenge. On the ground, the local players have criticised the delay in adopting rules, which put pressure on the utilisation of financing. Thus, only a third of Objective 1 projects were completed in time and another third were completed over a year late. In addition, two thirds of projects exceeded their budget. By requiring the utilisation of funding within two years of programming, the “N+2” rule tightens discipline. What is more, a financial incentive has been introduced for the 2000-06 period in the form of a mid-term performance reserve. It rewards 90 % of the programmes on the basis of criteria such as the rate of financial absorption and sound management.

Monitoring is an essential part of the system for implementing the Structural Funds, but it has not been as effective as expected because of the difficulty in collecting information. Programme evaluation is carried out in three phases: before implementation, at mid-term and at the end of the period. A greater involvement of all those involved will permit a further improvement in the analyses made.

THE IMPACT OF OTHER COMMUNITY POLICIES

Unlike structural policy, the main aim of the following Community policies is not to combat regional disparities but they do have a strong regional impact:

  • enterprise, innovation and education policies.
    Community enterprise, innovation and education policies are aimed at strengthening the competitiveness of EU producers. Regions are far from having equal innovation capacity, as the disparities in the take-up of Community financing for research testify. To remedy this problem, the Innovation Relay Centres and the Innovating Regions in Europe network aim to disseminate a culture of innovation. In addition, the sixth action programme for R&TD is in part aimed at improving links between research centres in the more dynamic parts of the EU and those in peripheral areas. In the field of education, the ‘Education and Training 2010’ programme aims to ensure a high level of life-long education and training;
  • social and employment policy.
    In March 2001, the Lisbon European Council defined a comprehensive strategy aimed at ensuring long-term economic growth, full employment, social cohesion and sustainable development. The European Employment Strategy provides support to Member States to reform their labour markets. As regards social integration, exclusion must be combated at all levels. The Union’s commitment to equality between men and women is part of a comprehensive approach. Measures aim, in particular, to attract women into employment, encourage them to stay in the labour market and make it easier to reconcile a working career with family responsibilities;
  • transport, energy, telecommunications and the trans-European networks.
    Liberalising the markets for transport, telecommunications and energy has led to increased efficiency and lower prices. It has also, however, brought the risk that particular social groups or regions could be excluded. The European Union has therefore established public service obligations, or ‘ services of general economic interest ‘(SGEI), which guarantee access to essential services of reasonable quality and at affordable prices. At the same time, the trans-European networks (TENs) in transport, energy and telecommunications have increased the accessibility of the more remote regions. The networks planned to link the European Union of Fifteen to the new Member States will have the same effect;
  • the environment, agriculture, rural development and fishing.
    The Sixth Environmental Action Programme aims to combat the negative effects of growth and the exhaustion of natural resources. For the 2000-06 period, aid for rural development is higher for Objective 1 regions (56 % of expenditure) than in the rest of the Union. This aid is supporting the emergence of a European agricultural sector based on quality, the enhancement of the countryside and the rural heritage and the economic diversification of rural areas. After 2007, expenditure under the common agricultural policy (CAP) will decrease, in particular with a fall in price support and an emphasis on rural development. In the fisheries sector, Community policy aims to conserve fish stocks and restructure the industry. The recent emergency measures will have serious economic and social consequences in some Spanish and Portuguese regions. Of the new Member States, Poland and the three Baltic States have a fisheries sector;
  • competition policy.
    If granted in strict compliance with European competition law, state aid contributes to cohesion by influencing the geographical distribution of economic activity. Since 1997, total national expenditure on state aid has decreased sharply. In 2001, state aid in the form of assistance to Objective 1 and Objective 2 regions accounted for 9 % and 6 % respectively of total state aid. It nevertheless remains greater in the relatively prosperous Member States than in the cohesion countries. In the context of enlargement, it will play a major role. Future reforms of the rules will aim at less but better targeted assistance.

THE IMPACT OF NATIONAL POLICIES

Public expenditure by the Member States amounts on average to 47 % of the GDP of the European Union, while the budget allocated to cohesion policy is less than 0.4 %. The policies of the Member States provide, in particular, income support and basic services: education, medical care, social welfare. On the other hand, public investment in human and physical capital accounts for on average only slightly more than 2 % of Community GDP. Expenditure on business support services, higher education, innovation and R&D is even lower. In relation to the sums allocated to structural expenditure by Member States, therefore, the budget for cohesion policy does not seems so small, especially as spending is concentrated in the regions which are most in need of assistance.

In the Member States, public expenditure on income support is in general much higher in the less prosperous regions because of the lower level of income. Government revenue, on the other hand, is proportional to income, in the main because most taxes in the Member States are levied centrally either on income or expenditure. Then redistribution mechanisms reduce disparities in the revenue available to regions. The general trend is now towards devolving responsibility for public services to regional and local level without a similar trend in respect of raising the money to fund these services. The main exception is Italy, where responsibility for raising revenue is being increasingly devolved to the regions without an increase in regional transfers.

Foreign direct investment (FDI) can potentially play a key role in reducing regional economic disparities. It is not only a source of income but facilitates the transfer of technology. However, foreign investors are not necessarily attracted to places where the need is greatest. Berlin apart, only 2 % of FDI in Germany has been in the new Länder and only 4 % of FDI in Italy has benefited the regions of the Mezzogiorno. Foreign investment is mainly concentrated in dynamic urban areas. In the new Member States, most investors are attracted to the capital cities. In 2001, two thirds of FDI in Hungary was in Budapest. The same holds for Prague in the Czech Republic and Bratislava in Slovakia.

For further information, consult the INFOREGIO website of the Directorate-General for Regional Policy:

  • the full text of the third report on economic and social cohesion;

Related Acts

Second progress report on economic and social cohesion [COM(2003) 34 final – Not published in the Official Journal].

See the specific SCADplus web page

First progress report on economic and social cohesion [COM(2002) 46 final – Not published in the Official Journal].

See the specific SCADplus web page

“Unity, solidarity, diversity for Europe, its people and its territory” – Second report on economic and social cohesion [COM(2001) 24 final – Not published in the Official Journal].

See the specific SCADplus web pages: an assessment, conclusions and recommendations, 10 questions for debate

Third Report on economic and social cohesion: proposals for regional policy after 2006

Third Report on economic and social cohesion: proposals for regional policy after 2006

Outline of the Community (European Union) legislation about Third Report on economic and social cohesion: proposals for regional policy after 2006

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Regional policy > Review and the future of regional policy

Third Report on economic and social cohesion: proposals for regional policy after 2006

Document or Iniciative

Commission Communication – Third Report on economic and social cohesion [COM(2004) 107 final – Not published in the Official Journal].

Summary

The policy on economic and social cohesion has positive effects on the areas of the EU in difficulty but major socio-economic disparities between the Member States and between the regions persist. These gaps in wealth and dynamism arise from structural deficiencies in certain key factors for competitiveness such as investment in physical infrastructure, innovation and human resources. The Member States and the regions therefore require support from the Community policies to overcome their handicaps, build on their comparative advantages and make better progress in an increasingly competitive environment.

PROPOSALS FOR A REFORMED COHESION POLICY

On 10 February 2004, the Commission adopted a budget proposal for the European Union enlarged to 27 Member States (the 15, the 10 new Member States, Bulgaria and Romania) for 2007-2013. In this communication on the financial perspective, it argues that the cohesion policy should have a single budget line with increased resources. The Third Report on cohesion follows this approach, noting the challenge which enlargement represents for cohesion policy. For the first time, the Commission makes concrete proposals derived from the debate on the future of the regional policy after 2006. In financial terms, it proposes a budget for 2007-2013 equivalent to 0.41 % of the Gross Domestic Product (GDP) of the Union of 27, or 336.3 billion for that period. The Commission is basing its proposals on the socio-economic situation of the Union and the study of the impact of the regional policy, the other European policies and national policies.

Enlargement completely changes the Union’s socio-economic situation

Enlargement on 1 May 2004 will increase the population of the European Union by 20 % and its area by about a quarter but GDP by only 5 %. Regional disparities will double. Per capita wealth in a Union of 25 will fall by about 12.5 % and the proportion of the population living in regions whose development is lagging behind will increase from 20 % to 25 %. At the same time, the disadvantaged regions of the present Union will not disappear and will require continuing support.

The European Union has entered a phase of economic restructuring as a result of the globalisation of trade, the introduction of the knowledge economy and an aging population. Furthermore, the economic situation has deteriorated over the last three years and unemployment has increased.

In March 2000, the Lisbon European Council set the European Union the goal of becoming the most competitive and dynamic area of the world. A strong knowledge-based economy will stimulate job creation and promote social and environmental policies offering sustainable development and social cohesion. The European Councils in Nice and Göteborg applied this across-the-board objective through sectoral strategies in the fields of social integration and sustainable development respectively. In addition, cohesion policy helps achieve the Lisbon objective. The reform of this policy should continue this process.

What Community support for the new Member States between 2004 and 2006?

The ten new Member States will receive Community support as soon as they join. Between 2000 and 2006, they will receive 3 billion in structural assistance under the pre-accession financial instruments ISPA (transport and the environment) and SAPARD (agriculture and rural development) and the Phare programme (improving administrative capacity). Following their accession, the new Member States together with Bulgaria and Romania will receive 1.6 billion per year in aid through Phare until 2006.

For the new Member States, 2004-06 will be a transitional period which will allow them to become accustomed to managing the Structural Funds in accordance with the current rules. They will receive support from those Funds totalling 21.8 billion. The measures will concentrate on a limited number of priorities: infrastructure, human resources and productive investment.

A revised cohesion policy for 2006-2013

The future regional policy will have a limited number of key topics: innovation and the knowledge economy, the environment and risk prevention, access and public services. To achieve them there will be three Community priorities replacing the current breakdown among Objective 1, Objective 2 and Objective 3:

  • The “convergence” Objective will support growth and job-creation in regions whose development is lagging behind.
    It will concern NUTS II regions whose per capita GDP is less than 75 % of the average in the Union of 25. It will receive about 78 % of the budget for the future regional policy and until 2013 will also provide transitional support to the regions currently eligible but which will no longer satisfy this criterion for purely statistical reasons. Since the GDP of the Union of 25 will be lower than that of the Union of 15, some regions currently eligible under Objective 1 will no longer meet this eligibility criterion.
    The European Regional Development Fund (ERDF) will part-finance the modernisation of basic infrastructure (transport, telecommunications and energy), the economic diversification of territories and the protection of the environment (treatment of water and waste, prevention of natural and technological hazards). The European Social Fund (ESF) will expand its role as the main Community financial instrument for the European Employment Strategy (EES) which helps the Member States to reform their labour markets.
    Only those Member States with a GDP of less than 90 % of that of the Community will also be able to benefit under the Cohesion Fund for investment in transport and the environment. The relative weight of this Fund will increase because it will distribute one third of the aid for the ten new Member States.
  • The “Regional competitiveness and employment” Objective will help make the economic fabric more dynamic in accordance with the Lisbon and Nice objectives.
    The Commission is proposing a twin-track approach, at both regional and national level. Regional programmes will help anticipate economic change better. Supported exclusively by the ERDF, they will concern the regions currently eligible under Objective 1 and which will naturally cease to be so eligible and the regions which do not come under the convergence programmes.
    National programmes will improve implementation of the EES. Supported exclusively by the ESF, they will concentrate on three priorities: the adjustment of the working population to changes in work (life-long learning), promoting employment and combating early departure from the labour market (active aging, greater participation by women), employment of categories in difficulty (the disabled, ethnic minorities).
    This Objective will have some 18 % of total funding, divided equally between the ERDF and the ESF. The funding will be divided among the Member States using economic, social and territorial criteria fixed at European level.
  • Territorial cooperation will promote the balanced development of the territory.
    Based on the acknowledged experience of the INTERREG III Initiative, the Commission is proposing a new Objective for cross-border, transnational and interregional cooperation which will receive 4 % of the funding for the future regional policy.
    All the NUTS III regions on internal and external frontiers, whether on land or sea, will be able to cooperate with their neighbours, particularly on the key topics of the Lisbon and Göteborg agenda.
    The Commission wants to set up two new legal instruments for cooperation: the “cross-border regional collectivity” on internal frontiers and a “new neighbourhood instrument” on the Union’s external frontiers. These instruments will cope with the legal and administrative problems which this type of cooperation poses.

Natural handicaps exacerbate development problems. The future cohesion policy will therefore pay particular attention to certain areas. Measures for urban areas will be fully incorporated into the regional programmes so that more towns and cities can receive support than did under the URBAN II Community Initiative. Under the future “Convergence” Objective, the Commission will set up a specific programme for the seven outermost regions (Guadeloupe, Martinique, French Guiana, Réunion, the Canary Islands, the Azores and Madeira). Many islands, mountain areas and thinly populated regions suffer from particularly severe access problems, of which account will be taken in the allocation of resources to the “Regional competitiveness and employment” Objective through the determination of regional criteria and an increase in the maximum rate of Community finance. In addition, the instruments providing aid for rural development and fisheries will be simplified and clarified. The LEADER+ Initiative, which supports innovative development strategies in rural areas, will be fully incorporated into general programming.

The complementarity of regional policy with the other Community policies is a key factor in economic and social cohesion. The innovation policy, education and training, equal opportunities for men and women and public procurement all have a territorial impact and coherence between competition and cohesion is a vital element. Regions whose development is lagging behind will remain eligible for state aid, as will the outermost regions for a transitional period. For the other regional programmes, the Commission is proposing to scrap the current system with its detailed map of areas eligible at sub-regional level. There will be consistency at the level of the priorities to be financed.

Reforming the management of the Structural Funds

The procedures for managing regional policy affect its efficiency. They impose uniform and tough rules. Programming, the partnership, part-financing and evaluation will remain the general principles of the future regional policy. Possible improvements to increase the utilisation of appropriations include:

  • A strategy increasingly based on the Union’s priority objectives.
    This strategy will be based entirely on the objectives set at Lisbon, Nice and Göteborg. It will also increase consistency with the main thrusts of economic policy (BEPG 2003). Each year, the European institutions will consider the progress made on the basis of a report from the Commission.
  • Simplified management increasingly based on subsidiarity.
    In programming terms, each Member States will prepare a policy document on its development strategy to serve as a basis for the adoption of the regional and national programmes. The programme complement and management by measures will disappear. The number of Funds is limited to three (ERDF, ESF and the Cohesion Fund) and each programme will be financed by one Fund only. For investments in the fields of transport and the environment, a single programming system will link the ERDF and the Cohesion Fund.
    Expenditure will be governed by rules on eligibility. Payments will be made at the level of each priority and not at the level of the measures. The system of payments on account and reimbursements will continue, as will automatic decommitment under the “N+2 rule”, which requires appropriations to be used within two years of programming.
    The extent to which the Commission is involved in inspections will depend on the Community part-financing. Under certain thresholds, the national system will suffice. However, to discharge its responsibilities for the implementation of the budget, the Commission will apply the closure of accounts procedures and financial correction mechanisms. There will also be heavier penalties and more rapid recovery of funds in the event of irregularities or fraud.
    The principle of additionality, under which Community resources must be over and above national resources, remains one of the key principles of the cohesion policy. The Commission will ensure that it is applied to programmes under the “Convergence” Objective.
    Finally, improved cooperation among the Member States, the local authorities, the social partners and civil society will consolidate the partnership. A greater role for the European Investment Bank (EIB) will improve the mobilisation of modern forms of financing, such as venture capital.
  • The concentration of resources will benefit the poorest Member States and regions, particularly in the new Member States.
    The Commission is proposing to abandon the present system of micro-zoning. For the “Regional competitiveness and employment” Objective, concentration will be at the levels of financial intensity through the introduction of minimum thresholds and of the three priorities announced: innovation and the knowledge economy, access and public services, preservation of the environment and hazard prevention.
  • Higher priority for results and quality.
    Evaluation before, during and after programmes is a vital element of their quality. The Commission is also proposing a Community performance reserve to reward the best performing Member States and regions. It hopes that the Member States will do likewise in order to cope rapidly with sectoral or local crises.
    The communication on the financial perspective proposes the establishment of a special instrument, the growth adjustment fund to permit a rapid reaction to economic recessions and trade crises. The Commission is proposing resources of 1 billion for this instrument from appropriations left unused by the ERDF and the ESF.

The Commission is basing its proposals on the socio-economic situation of the Union and the study of the impact of the regional policy, the other Community policies and the national policies. See the relevant SCADPlus factsheet.

For further information, consult the INFOREGIO website of the Directorate-general for regional policy:

  • the whole of the Third Report on economic and social cohesion;

Related Acts

Second progress report on economic and social cohesion [COM(2003) 34 final – Not published in the Official Journal].

See the relevant SCADPlus factsheet

First progress report on economic and social cohesion [COM(2003) 46 final – Not published in the Official Journal].

See the relevant SCADPlus factsheet

“Unity, solidarity, diversity for Europe, its peoples and its territory” – Second Report on economic and social cohesion [COM(2001) 24 final – Not published in the Official Journal].

See the relevant SCADPlus factsheets: progress and assessment; conclusions and recommendations; 10 questions for discussion.

Fourth progress report on cohesion: The Growth and Jobs Strategy and the Reform of European cohesion policy

Fourth progress report on cohesion: The Growth and Jobs Strategy and the Reform of European cohesion policy

Outline of the Community (European Union) legislation about Fourth progress report on cohesion: The Growth and Jobs Strategy and the Reform of European cohesion policy

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Regional policy > Review and the future of regional policy

Fourth progress report on cohesion: The Growth and Jobs Strategy and the Reform of European cohesion policy

Document or Iniciative

Communication from the Commission of 12 June 2006 – The Growth and Jobs Strategy and the Reform of European cohesion policy – Fourth progress report on cohesion [COM(2006) 281 – Not published in the Official Journal].

Summary

This fourth progress report on economic and social cohesion follows on from the publication of the third progress report in May 2005. It concerns inter alia:

  • the cohesion programmes implemented in the new EU Member States following the May 2004 enlargement;
  • preparations for the 2007-2013 programming period, in particular the Interinstitutional Agreement signed in May 2006 by Parliament, the Council and the Commission on the Financial Perspectives for 2007-2013;
  • the relaunch of the Lisbon Strategy in 2005.

ECONOMIC AND SOCIAL DISPARITIES

In 2005 the EU economy was characterised by continued moderate growth. In the period 2000-2004, the average growth of the gross domestic product (GDP) of the 25 EU Member States (EU-25) was little more than 1.5% per year. However, the Commission anticipates that growth will pick up and exceed 2% across the EU between 2005 and 2007.

Disparities

With regard to disparities between Member States in terms of GDP, the report notes that the new Member States are growing faster than most of the EU-15 countries. However, convergence is still a long-term perspective.

In 2004, the average overall employment rate reached 63.3% (64.7% in the EU-15 and 56.0% in the EU-10). In order to reach the Lisbon Strategy’s employment rate target of 70% by 2010, 24 million new jobs would be needed in the EU-27 (EU-25 plus Romania and Bulgaria), which represents an increase of almost 12% on current employment levels.

Trends in disparities

This Communication gives an overview of the disparities between objectives and the disparities within each objective for the regions to be targeted by cohesion policy for the period 2007-2013 .

Disparities between objectives

The 100 Convergence regions (regions where GDP per capita is less than 75% of the EU average, 2000-2002) are characterised by low levels of GDP and employment, as well as high unemployment. Their total share in EU-27 GDP in 2002 was only 12.5%, although they account for 35% of the population.

Disparities within each objective

Under the Convergence objective, there are several regions with GDP per capita below 25% of the EU average in 2002, all of which are in Romania and Bulgaria.

The employment rate in the 155 regions covered by the new Regional Competitiveness and Employment (RCE) objective is 10 percentage points higher than in the Convergence regions.

In 2002, 10% of the EU-27 population living in the most prosperous regions accounted for over 19% of total GDP for the EU-27, compared with only 1.5% for the 10% of the population living in the least wealthy regions.

Research and development (R&D) and Information and communication technologies (ICT)

R&D is a key factor in determining a region’s innovative capacity. 35 regions, which account for 46% of total R&D expenditure in the EU-27, have R&D intensities exceeding the Lisbon target for an EU-wide average of 3% of GDP. In 47 regions (3.5% of GDP in the EU-27) R&D expenditure is below 0.5% of GDP.

Across the EU as a whole, almost half of all households had Internet access in 2005. There are marked differences between Member States, with penetration rates exceeding 70% in the Netherlands, Denmark and Sweden, whereas they are around 20% in Lithuania, the Czech Republic, Hungary, Slovakia and Greece. In today’s Objective 1 regions, only around one third of all households have Internet access.

POLITICAL BACKGROUND

Financial resources

With regard to the execution of the budget in 2005, a total of 27.1 billion was committed under the European Regional Development Fund (ERDF), the Cohesion Fund and the pre-accession fund designated for candidate countries (ISPA), and 11.2 billion for the European Social Fund (ESF). For the four Structural Funds, Cohesion Fund and ISPA taken together, payments made in 2005 reached more than 33 billion.

Based on the conclusions of the European Council in December 2005 and the adoption of the Interinstitutional Agreement of May 2006, the cohesion policy budget for the period 2007-2013 will amount to 308 billion (0.37% of the gross national investment (GNI) of the EU-27). The new Member States would receive 51.3% of total cohesion policy resources (an increase of almost 165% compared with the period 2004-2006).

Cohesion Policy 2007-2013 and the Growth and Jobs Strategy

In July 2005 the Commission published a Communication on the Community Strategic Guidelines for cohesion policy in 2007-2013, which:

  • provide a framework for the new programmes to be supported by the ERDF, the ESF and the Cohesion Fund;
  • reflect the role of cohesion policy as the principal instrument for contributing to growth and employment, in accordance with the renewed Lisbon agenda.

Cohesion policy is a key instrument in contributing to the Growth and Jobs Strategy, as:

  • cohesion policy represents one third of the Community budget;
  • strategies designed at local and regional levels must also form an integral part of the effort to promote growth and jobs;
  • the December 2005 European Council proposed that quantitative expenditure targets should be set for the new cohesion policy programmes for 2007-2013 so that a certain percentage of the funds will be used for purposes clearly linked to the Growth and Jobs Strategy (“earmarking” – 60% for the Convergence objective and 75% for the RCE objective).

Innovations in the new programmes

For the new programmes, specific initiatives have been launched to promote financial engineering for start-ups and micro-enterprises, combining technical assistance and grants with other instruments. There are three such initiatives:

JASPERS (Joint Assistance in Supporting Projects in European Regions), a new technical assistance partnership between the Commission, the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD);

JEREMIE (Joint European Resources for Micro to Medium Enterprises), a new initiative in partnership with the European Investment Fund (EIF) in order to improve access to finance for business development;

JESSICA (Joint European Support for Sustainable Investment in City Areas), enhanced cooperation between the Commission, the EIB, the CEDB (Council of Europe Development Bank) and other International Financial Institutions (IFIs) on financial engineering for sustainable urban development.

As a complement to the Strategic Guidelines, the Commission will present a Communication on the contribution of urban areas to growth and jobs in the regions.

Related Acts

Council Decision 2006/702/EC of 6 October 2006 on Community strategic guidelines on cohesion [Official Journal L 291 of 21.10.2006].

Communication from the Commission of 25 January 2006 to the Spring European Council – Time to move up a gear: The new partnership for growth and jobs [COM(2006) 30 final – Not published in the Official Journal]. 
This annual activity report (AAR) contains several recommendations regarding cohesion policy.

Council Regulation (EC) No 1698/2005 of 20 September 2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) [Official Journal L 277 of 21.10.2005].

Cohesion policy and cities

Cohesion policy and cities

Outline of the Community (European Union) legislation about Cohesion policy and cities

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Regional policy > Review and the future of regional policy

Cohesion policy and cities

Document or Iniciative

Communication from the Commission to the Council and Parliament of 13 July 2006 – Cohesion Policy and cities – The urban contribution to growth and jobs in the regions [COM(2006) 385 – Not published in the Official Journal].

Summary

The Community Strategic Guidelines 2007-2013 in the field of cohesion aim to encourage growth and jobs. They define the areas of intervention where priority should be given in the Operational Programmes for Cohesion Policy for 2007-2013 by focusing on the specific needs of certain territories, such as urban areas, and on social and environmental objectives.

Sustainable urban economic development should be accompanied by measures designed to reduce poverty, social exclusion and environmental problems. This is the reason why the objective of this communication is to present certain specific aspects of the urban dimension which are relevant in the context of the strategic guidelines.

The Communication presents and proposes actions in a large number of fields and reflects the possibilities for intervention by the Structural Funds. The actions examined are divided into six headings, i.e.:

  • making cities more attractive;
  • supporting innovation, entrepreneurship and the knowledge economy;
  • the creation of more and better jobs;
  • managing disparities within cities;
  • governance.
  • financing urban renewal.

Attractive cities

In order to rise to the different challenges and make themselves more attractive, cities should attract more investment and create jobs. Four main points should be taken into consideration when doing so:

  • the mobility and accessibility of transport. For example, cities and regions should make the best possible use of the whole transport infrastructure;
  • access to modern, efficient and affordable services, as well as to equipment;
  • the natural and physical environment;
  • a cultural sector based on the availability of facilities.

Supporting innovation, entrepreneurship and the knowledge economy

Cities can take measures to support innovation, entrepreneurship and the knowledge economy. These involve actions for SMEs as well as actions to put innovation and the knowledge economy at the service of growth. This means for example:

  • improving the economic infrastructure and adopting environmental management systems;
  • providing business support services;
  • cooperation between local partners and access to sources of finance;
  • the drafting of an innovation strategy for the whole region;
  • involvement of cities in research and development (R&D) projects (Seventh Framework Programme), and in the information society field (the i2010 initiative).

More and better jobs

Given that highly qualified people and those with very low levels of qualifications are over-represented in cities, cities offer both needs and opportunities. Under the “Convergence” objective, the Structural Funds can support:

  • actions to strengthen institutional capacity and the efficiency of public services at local and regional level;
  • initiatives to create jobs, fight unemployment and create partnerships for employment and innovation;
  • improving employability by raising levels of educational achievement and training.

Disparities within cities

Within deprived neighbourhoods of cities where high unemployment is compounded by other deprivations, this communication proposes actions to:

  • promote social inclusion and equal opportunities;
  • increase security for citizens, for example, by developing approaches to local crime reduction policies and creating safety-related jobs.

Governance

In order to improve governance and manage urban development, this communication proposes actions aimed at:

  • establishing good co-operation between the different territorial levels, e.g. by developing partnerships between cities, regions and the state or improving coordination between urban, rural and regional authorities;
  • developing an integrated approach to sustainable development. This, for example, calls for the development of a long-term plan for all the different factors promoting sustainable growth and jobs;
  • raising the participation and involvement of citizens;
  • establishing networks for the exchange of experience.

Financing urban renewal

The urban development projects could be supported within the framework of the European Regional Development Fund (ERDF), the European Social Fund (ESF) and the Cohesion Funds. The communication also suggests assistance from the new financial instruments JASPERS, JEREMIE and JESSICA, and from public-private partnerships.

Related Instruments

Council Decision 2006/702/EC of 6 October 2006 on Community strategic guidelines on cohesion [Official Journal L 291 of 21.10.2006].

Communication from the Commission of 5 July 2005 – Cohesion Policy in Support of Growth and Jobs – Community Strategic Guidelines, 2007-2013 [COM(2005) 299 – Not published in the Official Journal].

Cohesion policy to deliver the Lisbon Strategy

Cohesion policy to deliver the Lisbon Strategy

Outline of the Community (European Union) legislation about Cohesion policy to deliver the Lisbon Strategy

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Regional policy > Review and the future of regional policy

Cohesion policy to deliver the Lisbon Strategy (2007-2013)

Document or Iniciative

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions of 11 December 2007 – Member States and Regions delivering the Lisbon strategy for growth and jobs through EU cohesion policy, 2007-2013 [COM(2007) 798 final – Not published in the Official Journal].

Summary

The Commission sets out an initial overview of the results of the negotiations relating to the new generation of cohesion programmes and strategies. It looks at the part which these can play in the renewed Lisbon strategy.

This Communication is part of the package defining the actions taken by the European Union to achieve the Lisbon objectives for 2008-2011. It assesses the progress made towards achieving the objectives of this strategy in the period 2005-2007.

Cohesion policy at the heart of the Lisbon process

Since its reform in 2006, cohesion policy has focused on the achievement of the priorities of the Lisbon strategy for the period 2007-2013, namely: making the EU an attractive place to invest and work, encouraging innovation, entrepreneurship and growth of the knowledge economy, and creating more and better jobs.

The reformed cohesion policy has brought about the decentralisation of responsibilities to local and regional partners, the pooling of their knowledge and resources, and the development of strategies suited to local and regional levels.

The efforts to achieve the Lisbon objectives must continue, taking account of the variability of contexts and the difficulties facing each country. For instance, the Member States are required to provide funding for actions which achieve these objectives and for the structural reforms set out in the National Reform Programmes (NRPs).

Focusing on the Lisbon priorities

For 2007-2013, the budget for cohesion policy amounts to 347 billion euro, with an additional 160 billion euro from public and private national resources. Around 80 % of these resources will be allocated to regions under the Convergence objective: 65 % of these funds will be used for the Lisbon strategy. Regions under the Regional Competitiveness and Employment Objective will account for 16 % of cohesion policy resources, 82 % of which will be used for actions linked to the Lisbon strategy.

Efforts will focus on the four priorities of the Lisbon strategy, namely:

  • investing more in knowledge and innovation;
  • unlocking business potential (particularly of SMEs);
  • improving employability through flexicurity;
  • better management of energy resources.

Investing in knowledge and innovation

The cohesion programmes invest 85 billion euro in knowledge and innovation, in particular in order to improve the innovation capacity of businesses (49.5 billion euro) and skills, to disseminate, use and design technologies, to create businesses and promote a more flexible workforce.

In this field, it is important to exploit existing poles of excellence, improve national and regional capacities, leverage private financing and draw on existing potential. This can be done through joint action to launch a new generation of world-class infrastructures, laboratories and research instruments.

Unlocking business potential

Cohesion policy helps small and medium-sized enterprises (SMEs) to invest in human capital, install efficient management systems, offer a good working environment, anticipate economic change and reduce administrative formalities.

For 2007-2013, almost 19 billion euro are allocated to helping SMEs improve their competitiveness and gain access to the world markets. Thanks to the JEREMIE and JESSICA initiatives, which seek to improve the availability of innovative financial engineering products in the regions, SMEs can also have access to other sources of aid.

The JASMINE initiative has been adopted in the field of supporting micro-credit, in order to develop employment and boost social inclusion. A Communication proposing guidance on the synergies between cohesion policy, the Research Framework Programmes and the Competitiveness and Innovation Programme has also been issued.

Improving employability through flexicurity

For the period 2007-2013, around 50 billion euro have been allocated under cohesion policy to financing various aspects of flexicurity. The aim of the new programmes is to improve employability through flexicurity by helping businesses to develop human resources strategies and more productive working methods and to ease the transition process resulting from restructuring.

Labour market and education and training policies ensure the provision of the necessary skills and qualifications for the world of work. Funding earmarked for the reform of education and training systems will be increased (25.3 billion euro).

Better management of energy resources

The new programmes attach greater importance to improving the management of energy resources and the move towards an efficient and integrated energy policy. Compared to the period 2000-2006, investments in renewable energies and energy efficiency will be five times higher for the Convergence objective and seven times higher for the Regional Competitiveness and Employment objective.

Addressing recommendations and priorities

Investments to further the achievement of the Lisbon objectives affect a number of fields, the complexity of which could lead to difficulties for the Member States. In order to deal with this, 51 billion euro are earmarked for programmes which aim to strengthen synergies between environmental protection, risk prevention and growth.

A suitable transport network is needed for economic development. Priority is given to the development of Trans-European Transport Networks (TEN-T), with a budget of 38 billion euro. Projects which facilitate access to TEN-T and promote more environmentally-friendly transport systems will benefit from 34 billion euro.

Almost 3.6 billion euro will be used to help modernise public administrations and services and allow them to develop and implement effective policies. The JASPERS technical assistance facility will also help the new Member States to implement quality projects likely to receive EU financial support.

Promoting partnerships

Overall, there is good cooperation between those responsible for coordinating the implementation of the NRPs (National Reform Programmes) and those developing strategies and programmes for cohesion policy. Efforts must continue to be made where this is not yet the case.

All stakeholders must cooperate intensively for the preparation and implementation of cohesion policy programmes. Cohesion policy associates both “vertical” partners (Community, national, regional and local authorities) and “horizontal” stakeholders (business representatives, trade unions, NGOs, etc.).

Evaluation and monitoring of cohesion policy in the Lisbon process

Regular reports on the contribution of cohesion policy to the improvement of growth and employment are presented for the purpose of cross-checking and to guarantee the coherent management of the NRPs and cohesion policy programmes.

The Member States will submit a report each year on the aid allocated to each programme in addition to reports in 2009 and 2012 on the contribution of cohesion policy to the Lisbon agenda.

The Commission will draft a report (in 2010 and 2013) on national contributions and the need to adjust the programmes to the new challenges.

Related Acts

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions of 14 May 2008 on the results of the negotiations concerning cohesion policy strategies and programmes for the programming period 2007-2013 [COM(2008) 301 final – Not published in the Official Journal].
Following the negotiations conducted with the Member States, the Commission presents the priorities of cohesion policy programming for 2007-2013. In line with the objectives of the Lisbon Strategy, the financial resources allocated to the Convergence, Competitiveness and Territorial Cooperation Objectives support innovation, research, skills and human capital.

The regional and sectoral strategies have been adapted to new challenges. For example, investments should contribute to the global competitiveness of European businesses by facilitating their access to the markets and by helping them to deal with restructuring. The ageing of the population and demographic changes in European society call in particular for increased labour participation and enhanced workers’ skills. Cohesion policy is aimed in particular at the inclusion of migrants and the fight against discrimination, poverty and exclusion. The programmes support the development of new environmental services and new skills, as well as the financing of infrastructure, in order to achieve the European objectives in the areas of sustainable development, climate change and energy policy.

The decentralised management of the Funds is essential to the effectiveness of the programmes. The multi-level partnership introduced between the public authorities and civil society in the preparation of strategies also makes it possible to adapt investment more closely to regional and local situations. In addition, exchanges of good practices based on previous programming contribute towards the effectiveness of public spending.

Good practices are spread within the framework of the Community initiatives, particularly the new “Regions for Economic Change” initiative and the Territorial Cooperation Objective.

Implementation of the partnership for growth and jobs

Implementation of the partnership for growth and jobs

Outline of the Community (European Union) legislation about Implementation of the partnership for growth and jobs

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Regional policy > Review and the future of regional policy

Implementation of the partnership for growth and jobs (first report)

Document or Iniciative

Communication from the Commission of 25 January 2006 to the Spring European Council – Time to move up a gear – Part 1: The new partnership for growth and jobs [COM(2006) 30 final – Not published in the Official Journal].

Summary

The partnership for growth and jobs needs to be converted into a genuine reform with the help of the Community Lisbon Programme and the national reform programmes (NRPs). The Commission reviews their progress here.

Community Lisbon Programme

The Commission has already adopted two-thirds of the planned measures. However, certain measures have yet to be adopted by the European Parliament and the Council or rely for funding on an agreement on the financial framework (2007-2013). Some noteworthy measures have been added to those already planned:

  • a communication on research and innovation;
  • the development of an integrated industrial policy;
  • initiatives to improve the tax and customs environment;
  • investigations into more competitive markets in energy and financial services;
  • a proposal to create a single payment area in Europe;
  • new Community funding available for SMEs to improve energy supply and demand.

National reform programmes

All Member States have drawn up NRPs and appointed national Lisbon coordinators. Some have streamlined internal coordination in order to improve policy coherence. The Commission does not consider it necessary at this stage to adapt the integrated guidelines and feels it is too early to propose formal, country-specific recommendations. The emphasis at this stage must be on implementing the partnership and the specific measures proposed at Community and national levels. The Commission draws the Member States’ attention to the individual evaluations of each NRP, drawing conclusions on the macroeconomic, microeconomic and employment aspects, and on specific points which will require particular attention (weaknesses).

Macroeconomic aspects

Analysis of the NRPs from a macroeconomic point of view shows that:

  • many factors complicate short-term and long-term budgetary discipline, making the macroeconomic problem more serious for Member States;
  • Member States are trying to cut spending rather than increase taxes. However, it has yet to be clearly defined where and how savings can be made;
  • the measures proposed in the “euro zone” are geared mainly towards future public finances but do not aim to support labour market adjustments or to create more competitive internal markets;
  • despite recognition of the problem of ageing populations in Europe, NRP measures appear to be piecemeal or insufficient;
  • only some Member States have taken an integrated approach in planning their NRP.

Microeconomic aspects

The following conclusions may be drawn with regard to microeconomic issues:

  • the NRPs reflect the need to increase investment in research and promote innovation;
  • 18 of the 25 Member States have set investment targets relative to GDP which at EU level will equate to 2.6% by 2010, falling short of the overall target of 3%. This figure is currently 1.9% for the EU;
  • initiatives relating to transport infrastructure and communication technologies could receive support from the cohesion and rural development funds;
  • access to internal markets (energy and services) deserve greater attention. The application of Community Directives in this area is a beginning;
  • initiatives to foster a more positive attitude towards entrepreneurship do not go far enough. Education can help to reduce the stigma of failure;
  • Member States need to adopt a more integrated approach in order to improve the rule-making which affects business and at the same time supplement action at Community level;
  • comprehensive and coordinated implementation of the different microeconomic policies may achieve much greater benefits than the sum of the individual policies put together.

Employment

The Commission draws the following conclusions with regard to employment:

  • the proposed employment objectives are inspired by Community objectives but are often piecemeal and do not take the life cycle approach;
  • greater attention should be given to “flexicurity”, facilitating the transition from one job to another with adequate social protection and a reliable lifelong learning system;
  • the reform of education systems concentrates mainly on the quality and transparency of qualifications, as well as access to them. Investment needs to be stepped up.

Overall conclusions

The NRPs are a good basis for implementing the partnership for growth and jobs, but not all are of equal quality:

  • some have set clear targets and timetables, with specific measures and budget details. Others lack such information;
  • the three dimensions (macroeconomic, microeconomic and employment) could be more closely integrated so that one measure would benefit several sectors;
  • only some Member States provide for measures to remove obstacles to market access;
  • the cohesion and rural development funds will be needed to achieve the Lisbon objectives, although the macroeconomic repercussions of using these funds will need to be taken into account. Coordination mechanisms need to be put in place for planning the use of these funds and drafting the NRPs.

Key areas

The Commission calls on the Member States to implement their national reform programmes fully and on time. To correct the shortcomings which emerged from the evaluations, it proposes four integrated actions which it intends to implement by the end of 2007:

Action 1: Investing more in knowledge and innovation

The Lisbon objective was to boost R&D spending to 3% of GDP by 2010 (1% from the public sector, 2% from the private sector). Member States must increase public spending and make it more effective through wider use of fiscal incentives and closer coordination with the other Member States with regard to spending. Public procurement has a part to play in transforming the results of research into innovation. At the same time, more competitive markets encourage businesses to be more innovative.

The private sector must be able to make a greater contribution to funding for higher education, and the link between universities and business must be strengthened. The objective should be to increase investment in higher education to 2% of GDP.

Action 2: Unlocking the business potential of SMEs

By 2007, every Member State should have set up a one-stop shop to assist would-be entrepreneurs to fulfil administrative requirements all in one place – electronically, where possible. They must set up similar one-stop shops for VAT and for the recruitment of a first employee. The time taken to set up a business should be cut in half, and start-up fees should be as low as possible.

By that date they must also adopt a methodology for measuring administrative costs for national rules and regulations. This exercise should facilitate initiatives to reduce these administrative costs. The Commission will propose similar initiatives at Community level.

Action 3: Responding to globalisation and ageing

Member States must help people to work longer, and they need to reform pension schemes, for example by changing the statutory retirement age, enhancing financial incentives for older workers to remain in work, offering more training opportunities to workers over the age of 45 or allowing gradual retirement. Disability schemes, together with health care and long-term care systems, should also be reviewed to make them more effective.

The entry of young people into the labour market, in line with the Youth Pact, is another important factor. By 2007, young people who have left school should be offered a job or additional training within 6 months, or within 100 days by 2010.

The Commission wishes to consult the social partners on better ways to reconcile family and professional life. It also plans to present a report in order to seek agreement on ‘flexicurity’ by the end of 2007, comprising the following elements:

  • reduction of labour market segmentation and undeclared work;
  • Member States to establish lifelong learning strategies to prepare people for change, supported by the European Social Fund and the Globalisation Adjustment Fund;
  • removal of obstacles to worker mobility by reaching a political agreement on the portability of supplementary pension rights.

Action 4: Moving towards an efficient EU energy policy

The Commission is proposing an energy policy designed to ensure that energy is secure, competitive and sustainable. The security of supply will be improved by:

  • strengthening and deepening the internal energy market (in particular completing the energy market by 1 July 2007), by promoting more competition in the electricity and gas markets, and by more integration between the gas pipeline systems of the Member States);
  • exploiting the potential of renewable energy sources and promoting more efficient use of energy;
  • developing a more focused, coherent and integrated approach to ensuring the security of energy.

A Green Paper has been published on ways to achieve these objectives.

Implementation

The Commission intends to involve national (and regional) parliaments, local authorities and other stakeholders in the implementation of the NRPs, particularly where there has not been sufficient time to do so during the preparation of the programmes. It proposes to involve the social partners by holding an extraordinary Social Summit. The NRPs must be further developed and strengthened by mutual learning among Member States. Those Member States which have not yet set targets with regard to future R&D spending and the employment rate should do so. The Commission and Member States will ensure that the open method of coordination, in the areas of education and training, social protection and social inclusion, also makes a strong contribution to the objectives.

With regard to the implementation of the Community Lisbon Programme, the Commission has proposed a roadmap setting out the major steps required for measures supplementing the NRPs.

The European Union institutions and the Member States need to define a communication strategy to improve understanding of the challenges and opportunities of the new partnership for growth and jobs at local, regional and national levels. This is essential in order to develop a sense of ownership on the part of all involved.

Background

As provided for at the Spring European Council in 2005, the Commission has drawn up the first report on the implementation of the new partnership for growth and jobs. With this report, the 2006 Spring European Council will be able to review progress made and comment on any adjustments to the integrated guidelines, which serve as a basis for the national reform programmes and the Community Lisbon Programme.

Provisions and instruments of regional policy

Provisions and instruments of regional policy

Outline of the Community (European Union) legislation about Provisions and instruments of regional policy

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Regional policy > Provisions and instruments of regional policy

Provisions and instruments of regional policy

2007-2013: General Framework

  • General provisions ERDF – ESF – Cohesion Fund (2007-2013)
  • European Regional Development Fund (ERDF) (2007-2013)
  • The European Social Fund (2007-2013)
  • European grouping of territorial cooperation (EGTC)
  • Interinstitutional Agreement on cooperation in budgetary matters

2007-2013: Rural Development and Fisheries

  • European Union strategic guidelines for rural development
  • Financing the common agricultural policy
  • European Agricultural Fund for Rural Development (EAFRD)
  • Specific measures for the outermost regions
  • Specific measures in favour of the smaller Aegean islands
  • Access for rural areas to ICTs
  • European Fisheries Fund
  • Detailed rules for the implementation of the EFF Regulation

2000-2006: General Framework

  • Structural policy reform
  • Guidelines for programmes in 2000-2006
  • Revised guidelines for 2000-2006 programmes
  • Further indicative guidelines for the future Member States
  • Preparing the future Member States to implement the regional policy in the period 2004-2006

2000-2006: 3 Priority Objectives

  • Objective 1
  • Objective 2
  • Objective 3

2000-2006: 4 Community Initiatives

  • INTERREG III (2000-2006)
  • INTERREG III C
  • EQUAL
  • LEADER+
  • URBAN II

2000-2006: Specific Areas

  • 2000-06: support for rural development within the framework of the European Agricultural Guidance and Guarantee Fund (EAGGF)
  • Community action for regions bordering the candidate countries
  • Development and integrated management of coastal zones
  • A stronger partnership for the outermost regions
  • Northern Ireland: PEACE II programme (2000-2006)

2000-2006: Structural Funds

  • General provisions on the Structural Funds
  • ERDF: European Regional Development Fund
  • Innovative actions under the ERDF: 2000-06
  • The financing of the common agricultural policy (CAP)
  • ESF: European Social Fund.
  • FIFG: Financial Instrument for Fisheries Guidance

Cohesion Fund

  • Cohesion Fund (2007-2013)
  • Cohesion Fund

European Union Solidarity Fund (EUSF)

  • The European Union Solidarity Fund
  • Overhaul for EU Solidarity Fund

European Investment Bank (EIB)

  • The operational priorities of the European Investment Bank

Cohesion and transport

Cohesion and transport

Outline of the Community (European Union) legislation about Cohesion and transport

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Transport > Bodies and objectives

Cohesion and transport

Document or Iniciative

Communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions of 14 January 1999: “Cohesion and Transport” [COM (1998) 806 final- Not published in the Official Journal].

Summary

Transport policy plays a major role in strengthening the economic and social cohesion of the European Union. Firstly, it helps reduce regional disparities, particularly by improving access to island and peripheral regions. It also has a beneficial effect on employment, by encouraging investment in transport infrastructure and assisting workers’ mobility.

The European Regional Development Fund (ERDF) and the Cohesion Fund have done much to help finance transport infrastructure, notably in regions where development is lagging behind (the so-called ‘Objective 1’ regions) and the most remote regions. For the period 1994-99, the ERDF has earmarked EUR 13.7 billion for the Objective 1 regions, of which 70% for roads and motorways and 16% for railways. Moreover, one half of the Cohesion Fund’s resources are given over to transport infrastructure, and in particular the trans-European networks (TENs). The European Investment Bank (EIB), whose activity is geared towards regional development, also helps through loans to fund transport infrastructure.

Transport is a key element in the European Spatial Development Perspective (ESDP), which is developing an integrated and common approach to spatial planning at European level. To ensure coherent development of the European territory, it seems essential to improve access to infrastructure by removing technical obstacles linked to the national transport systems and supporting the development of the weakest regions.

Development of the TENs is contributing to economic and social cohesion. The requirements of the peripheral regions have been taken into account in this development, and the emphasis placed on airports on islands and in remote areas. The next step is to enhance the role of ports so as to assist the integration of shipping into a global network. It is also necessary, in the peripheral regions, to undertake complementary investment in secondary networks, in order that those regions may gain maximum benefit from the TENs.

Public transport, both local and regional, helps in many ways to combat social exclusion. For one thing, it is a prerequisite for the functioning of the labour market and for economic development. It reduces the isolation of outlying residential districts and rural areas. In addition, it contributes towards a better quality of life, particularly in terms of the environment (air quality, reduced noise pollution).

However, since the liberalisation of transport services could result in the under-provision of services in sparsely populated or remote regions, which would be detrimental to cohesion, care must be taken to see that transport services are maintained, notably by means of public service contracts.

Other aspects of transport policy are also being studied with an eye to economic and social cohesion. These are:

  • charging schemes, which should include marginal social costs such as environmental impact and the cost of congestion;
  • intermodal transport, which should be developed with due regard to inland and sea ports;
  • the method of financing, with increased involvement of the private sector.

Integration of the environment into the formulation of other Union policies has become essential. This is particularly true for transport, which is a major polluter. 25% of carbon dioxide emissions in the EU come from transport. In the interests of sustainable development, it would therefore appear necessary to make the best possible use of existing capacity and to encourage alternatives to road transport.

With a view to the Union’s enlargement, the trans-European network needs to develop beyond Community territory. At the third pan-European transport conference in Helsinki, ten priority transport corridors were selected to link East with West. In addition, the pre-accession structural instrument (ISPA) is concentrating resources on infrastructure projects, notably in the field of transport.

In view of all the above, the way forward over the next few years is as follows:

  • it will be important firstly to maximise the effectiveness of the Community’s contribution so as to enhance competitiveness and create jobs. To this end, projects financed through the Structural Funds will be selected according to their impact on growth, competitiveness, the environment and the creation of permanent jobs. In addition, investment will be encouraged in rail and maritime transport, and in combined and public transport. Private finance will be encouraged, and coordination tightened between the Community’s budgetary instruments;
  • the TENs will then have to be implemented, with particular emphasis on peripheral regions, but also on the applicant countries, whose successful integration will depend on the development and modernisation of their transport networks;
  • lastly, emphasis will be placed on the promotion of accessible, environment-friendly transport services. This will be possible through, inter alia, the recognition and organisation of public transport.