Editor’s Blog: Produced in collaboration with the EU Buzz team
Enshrined in the Treaty on the Functioning of the European Union is the EU’s cohesion policy which aims to strengthen economic and social cohesion by reducing disparities in the level of development between regions. In other words, this is the European Union’s strategy to promote and support the ‘overall harmonious development’ of Europe’s Member States and regions, whilst ensuring the EU remains globally competitive.
For 2014-2020, approximately 32.5% of the EU budget, around EUR 351.8 billion, was used to finance the cohesion policy budget. For 2021-2027, the European Commission has proposed to reform and update the EU cohesion policy with a new set of rules. This proposal is still not agreed, having been recommended in 2018.
The Commission original proposal has since revised several times, puts forward a Common Provisions Regulation (CPR) which will establish common arrangements for eight shared management funds: European Regional Development Fund (ERDF), the Cohesion Fund (CF), the European Social Fund+ (ESF+), the Just Transition Fund (JTF), the European Maritime and Fisheries Fund (EMFF), the Asylum and Migration Fund (AMIF), the Internal Security Fund (ISF) and the Border Management and Visa Instrument (BMVI). The thinking behind the upgrade reflects the need to make the EU instruments more innovative, simplified and have improved synergies between each of the different policy tools.
According to the European Commission, and in accordance with years of criticism from those attempting to apply for funds, fragmentation of the rules governing the different EU funds implemented in partnership with the Member States (‘shared management’) has complicated matters for the authorities managing programmes. This has also discouraged businesses and entrepreneurs from applying for different sources of EU funding.
The new regulation is set to focus resources on five policy objectives. Firstly, a more competitive and smarter Europe which should be achieved by promoting innovative and smart economic transformation and regional ICT connectivity. Secondly, a greener, low-carbon transition towards a net zero carbon economy and resilient Europe which can be reached by promoting clean and fair energy transition, green and blue investment, the circular economy, climate change mitigation and adaptation, risk prevention and management, and sustainable urban mobility. Thirdly, enabling a
more connected Europe through enhanced mobility and fourthly, a more social and inclusive Europe which implements the European Pillar of Social Rights. Finally, by fostering the sustainable and integrated development of all types of territories and local initiatives, a Europe closer to its citizens can be achieved.
Bold ambitions do not come with a smooth ride and discussions between policy-makers, including those in the European Parliament, and stakeholders, such as business organisations and trade unions, have continued without any concrete outcomes for several years now. Both the choices for future policy priorities and the funding allocations per Member State have faced challenges. Whilst Europe and its citizens continue to battle the impacts of globalisation, Brexit and the pandemic, to highlight only the most recent issues, the budget in-fighting continues.
The European Parliament has continually raised the issues of the complexity of the previous Cohesion Fund, considering that cohesion policy is an essential tool to help to meet new challenges, such as security or the integration of refugees under international protection. The Parliament has also underlined the importance of community-led local development.
The European Committee of the Regions (CoR) in 2018 endorsed the key objectives proposed in the new Common Provisions Regulation, in particular that of modernising cohesion policy by making it simpler, more flexible and more effective, and that of reducing unnecessary administrative burdens for beneficiaries and managing authorities. It also underlined the importance of the principles of partnership and multi-level governance and called for the full implementation of the code of conduct to ensure that the involvement of local and regional authorities amounts to full partnership.
Conversely, the European Economic and Social Committee (EESC) was less complimentary, objecting to any budgetary cuts and rejecting macro-economic conditionality. It also found the rules related to thematic concentration too strict and objected to the removal of the principles of promotion of equality between men and women, non-discrimination, accessibility of persons with disabilities, and sustainable development. It recommended in 2018, that the Commission develop tools to allow areas with structural and permanent disadvantages (islands, mountain regions etc.) to effectively tackle their own specific and complex challenges. The remarks from the EESC come from the dissatisfaction of the European social partners .
The Commission is aware it must substantially reduce unnecessary administrative burden for beneficiaries and managing bodies, while maintaining a high level of assurance of legality and regularity. It must also increase flexibility to adjust programme objectives and resources in the light of changing circumstances and to align the programmes more closely with EU priorities. Furthermore, the Commission needs to establish conditions conducive to enabling regions and grass roots communities to lead and develop according to their priorities and not be stifled by the bureaucracy of Brussels.
The European institutions do not seem to be able to address simplification nor flexibility in any timely manner that benefits citizens and society. Strengthening the cohesion policy at a time when the EU is seeking to emerge from the health crisis with dignity will require a commitment to economic growth and social sustainability. This is on top of migration, environment and technological innovation threats which are also facing the bloc.