Johannes Hahn, the European commissioner for regional policy, wants to create a treasure-chest of as much as €15 billion to reward those member states that are most effective in using regional development funds.
Hahn believes that the EU's cohesion policy after 2013 should be more results-focused. He said he was planning to set aside part of the cohesion budget (which amounts to €350bn in 2007-13) in “a performance reserve”. The reserved money would be released partway through the next spending cycle and given to those member states or regions that had achieved the best results in reaching agreed policy objectives. The reserve could be 2%-5% of the total cohesion policy budget. Based on the 2007-13 budget, that could amount to €7bn-€17.5bn.
Hahn's idea will not be popular with those member states that use their likely return from cohesion policy funds to calculate what they are prepared to pay into the EU's overall budget. Negotiations on the next budgetary period, post-2013, will begin in earnest next year.
Mercedes Bresso, the president of the Committee of the Regions (CoR), an EU consultative body that brings together representatives of the regions, said such a performance reserve would break the deadlock caused by the member states' practice of trying to maximise their return from the EU budget.
She said that the CoR was in favour of placing funds in a "European reserve" to be used to respond to unforeseen events. But she said that the definition of performance had to be completely revised. Until now, the system had been applied mechanically and only took a country's financial absorption capacity into account, she said. Performance should be assessed on “qualitative as well as on quantitative results, in view of political objectives set at regional and national levels”, Bresso said.
Hahn outlined his ideas for future cohesion policy yesterday (10 November) as he presented a report on cohesion policy since 2007. He said that there had to be a closer link to the EU's priorities of boosting growth and competitiveness under the Europe 2020 strategy.
He envisages that member states would conclude a development and partnership contract with the Commission on agreed objectives. The member states would commit themselves to carrying out the reforms required under the Europe 2020 strategy and make other changes to improve their ability to make use of EU funds. This could include administrative reforms or changes to law, for instance on compensation for compulsory land purchases for major infrastructure projects.
Hahn insisted that cohesion money should be made available to all regions of the EU, even to those in the wealthier member states. The highest levels of cohesion fund support are made available to those regions where average per capita gross domestic product (GDP) is less than 75% of the EU average. But Hahn is proposing to create a category of “transition regions” to ensure that regions where the average per capita GDP is less than 90% of the EU's average can still obtain some cohesion money.
Creating transition regions would ensure wider political support for maintaining a large-scale cohesion policy after 2013. The UK and the Dutch have argued that cohesion funding should be concentrated on the poorest member states.
Constanze Krehl, a German centre-left MEP who is a member of the European Parliament's regional development committee, welcomed the Commission's insistence that all regions should benefit from cohesion spending. “Cohesion policy is not about redistribution. It is there for the economic, social and ecological development of an entire continent,” she said. But she rejected the idea of a performance reserve, saying that regions should be free to decide how to use regional funds.
Séan Kelly, an Irish centre-right MEP, also a member of the regional development committee, said: “I support anything based on performance rather than aspiration.”
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