Analytics, Energy, EU – Baltic States

The previous (5th Cohesion Report published in 2010) emphasised the need for investments to be more in line with the 'Europe 2020 Strategy', with stricter pre-conditions and more traceable results. The EU reformed policies -with highly strategic approach -were built on these recommendations. New rules and pre-conditions for funding ensure that the right regulatory and macro-economic framework is in place so the Cohesion Policy has an even greater impact.

The new 6^th Report shows that while the recent economic crisis served to widen regional growth disparities, national figures and projections indicated a reverse in this trend thanks to more targeted Cohesion Policy investments.

The Report analyses the state of cohesion of the Union and highlights the challenges faced by national, regional and local authorities in overcoming the impact of the financial and economic crisis. In particular it finds that Cohesion Policy has cushioned the dramatic decline of public investment, injecting much needed investment resources in many Member States and creating vital financial stability which serves to attract private investment.

Investments under EU Cohesion Policy

Solid results can be seen from investments under EU Cohesion Policy in 2007-13. Figures (up to end of 2012), show the creation of around new 600,000 jobs, support to 80,000 new businesses, 5 million citizens gaining access to broadband and 3.3 million people with an improved supply to drinking water. Furthermore, 5.7 million jobseekers were helped into work and a further 8.6 million supported to obtain qualifications.

Investments under the current financial round, 2014-20, are expected to go even further with much more focus on key sectors such as the low-carbon economy, SME competitiveness, innovation and employment and social inclusion. EU Cohesion Policy investments will make more than €38 billion available to support the shift to a more environmentally-friendly economy, through investments for energy efficiency and renewables – this compares to €16.6 billion invested in the low-carbon economy for 2007‑13. According to the spending plans and "Partnership Agreements" of Member States up to €33 billion (an increase of nearly €10 billion) will support Europe's SMEs to become more competitive. More than €80 billion will be invested in human capital through the European Social Fund and the Youth Employment Initiative.

Commission’s opinion

Commenting on the Report, J. Hahn, Commissioner for Regional Policy underlined that the Report clearly showed that Cohesion Policy has been a modern and flexible tool to target different European needs. The policy has become a Europe's investment arm: responsive in crisis but strategic as far as creating growth and much-needed jobs.

As soon as the days of huge subsidies for roads and bridges are becoming a thing of the past as many member states are closing their infrastructure gap, investments focusing on innovation and green growth will create good lasting jobs and boost the member states’ competitiveness.

However, he said, the crisis left its mark on many regions and cities; hence, disparities still exist and there is much to be done. These funds must be spent wisely to ensure the best results, especially in the regions and cities where the needs are the most pressing, he added.  

László Andor, EU Commissioner for Employment, Social Affairs and Inclusion, argued that the Cohesion Report gives a thorough insight on the added value of the EU's cohesion policy, a vital source of investment in economic growth and social progress across EU-28 states. The European Social Fund represents nearly a quarter of cohesion policy and is the EU's key instrument to invest in people's skills and opportunities. The ESF supports investments in employment, social inclusion and education but also in good governance and public administration reform.

He added that the Cohesion Report is published at an important time when Partnership Agreements with individual Member States for the 2014-20 programming period are being adopted and the Operational Programs negotiated.

The report provides a good overview of the perspectives for EU budget in 2014-20 through investments into most urgent member states’ needs.

Reference: European Commission, IP/14/857 “Energy efficiency, employment and SMEs are core focus of EU 2014-20 Cohesion Policy”, Brussels, 23 July 2014.  

Good governance

The need for good governance is also emphasised in the Report, stating that without it, high growth rates and regional economic convergence cannot be achieved. While governance across Europe has improved, investments will continue to build administrative capacity in certain Member States, training and supporting staff to ensure the most robust and efficient use of EU taxpayers' money.

While cities are identified as engines of innovation and growth, they have suffered more during the crisis than other regions in terms of employment losses. City dwellers are at a higher risk of poverty and social exclusion in many Member States. Also for this reason, the new Cohesion Policy rules foresee that at least 20% of the European Social Fund should be invested in strengthening social inclusion and combating poverty.

Cohesion Policy’s open data platform

The Commission is also launching a new Cohesion Policy open data platform to support the reinforced results focus, to increase transparency and to promote debate on the performance of Cohesion Policy funding. Users can explore Report data with a range of interactive maps and charts and submit comments.

More information on the issue:

= 6th Cohesion Forum: 8-9 September 2014;  

= EU Cohesion Policy – 6th Cohesion Report;