By Martin Banks - 31st March 2011
Cohesion policy definitely has value for money
Johannes Hahn
EU regional policy commissioner Johannes Hahn has said it is "not impossible" to reach consensus on future regional funding.
Speaking in Brussels, he made a robust defence of the much-criticised policy, saying it had given "added value" in a range of areas.
However, he accepted that as public finances "all over Europe" are put under heavy pressure the ongoing debate on the EU budget will "inevitably lead to some tensions."
He said, "Some member states have already expressed their will to reduce the size of the EU budget while at the same time some governments are struggling to maintain acceptable levels of public spending in their own economies and sometimes heavily rely on the EU budget to do so."
"Cohesion policy is at the forefront of that debate."
His comments come as the debate over future EU funding - and the amount to be allocated for regional policy - intensifies with some, including many MEPs, calling for a drastic reduction in regional funding.
Some predict a major fight between the commission and member states on the issue before the issue of EU funding after 2013 is settled.
Currently, cohesion policy represents more than one third of the EU budget, second only to the common agricultural policy.
Hahn said that for some member states, the financial resources provided by structural and cohesion funds in their economies represent almost 4 per cent of their GDP, or more than eight per cent of their public expenditure.
Hahn, who was speaking at a high-profile debate on convergence policies, organised by the Friends of Europe think tank, said the economic crisis had put public spending at the "heart" of the political debate.
"At the same time, it is needed to preserve public spending in areas which are directly conditioning our growth prospects and our future capacity for fiscal consolidation."
Future cohesion policy, he said, must be "results-driven" and have a "genuine added value."
Turning to reform of regional policy, he said, "In fact, the reforms proposed for shaping the future cohesion policy are completely in line with principles underlying the EU budget.
"Cohesion policy will be a key delivery mechanism of the Europe 2020 strategy. In that respect, the policy has a key advantage. It responds to one of the key lessons we learnt from the Lisbon strategy: that policies designed far away from firms and people face problems of implementation."
"Even if it will cover the whole EU, cohesion policy will continue to concentrate its support on the poorest member states and regions of the EU."
He also said the planned reform will "reinforce the effectiveness" of the policy.
"Member states and regions will be required to develop strategies which concentrate EU and national resources on a small number of priorities of European importance, closely linked to the Europe 2020 priorities."
Such a system, he argued, will oblige member states to "prioritise investment and orient it toward growth-enhancing areas."
The official added, "We also agreed to introduce a system of incentives meant to encourage structural reforms in member states by providing funds to progress in areas directly linked to the operation of the policy.
"The reform proposes also to introduce simpler rules and lighter procedures to address the complexity of delivery."
He said it was "difficult to predict" whether discussions concerning cohesion policy will contribute to bring the views of the member states closer to each other.
"On the other hand, due to the current economic situation, the pressures on the EU budget are severe. The UK asked that several of the largest nations in the EU support a real-term freeze of the budget and has received support from France and Germany.
"However, cohesion policy mostly finances public investments which are necessary for securing future growth and fiscal consolidation.
"Without it, a number of member states will simply not be capable of fully playing their role in reaching the objectives of Europe 2020.
"It is therefore legitimate to plead for maintaining a strong cohesion policy and give it the financial means it needs to fulfil its tasks."
He said cohesion policy indeed has proven to have very positive impact on member state economies.
"This is particularly true for the newcomers where cohesion funding concentrates."
The policy has contributed to the development of many transport infrastructures such as international airports and improved water treatment facilities, "connecting thousands of people to modernised drainage system," he said.
"It supported many SMEs in the field of innovation and RTD, thereby triggering the creation of many new jobs.
"As a result, cohesion policy had a positive impact on global performance of these economies, both in terms of increased GDP per head and employment creation.
"Such impact is in some case impressive."
He said projections suggest that GDP per head in Hungary will be on average two per cent to 4.5 per cent higher thanks to cohesion policy over the period 2007-2013.
"This indicates that cohesion policy definitely has value for money.
"As such, it really can contribute both support member states in their efforts to contribute to the Europe 2020 strategy.
"Under these conditions, a consensus among the member states on a strong future cohesion policy is not impossible.
