Sustainability rules over future EU regional funds

23 January 2012, EurActiv

The EU’s next budget is likely to include the first-ever binding document setting “stronger” and “clearer” objectives for regional funds to support sustainable development.

The European Commission is poised to adopt a communication next month which will channel EU regional funds into a set of specific environmentally friendly priorities – “the most important step” to date in combining different funds.

The legislation is “clearer and legally stronger than existing regulations”, said Markus Trilling of Friends of the Earth Europe.

“This time they have gone into detail, they explain in the various stages of projects’ implementation how they must respect sustainable development principles,” he said.

The 54-page document, seen by EurActiv, is the last document to finalise before starting regional funds’ negotiations for the 2014-2020 EU budget, or Multiannual Financial Framework. The document will be shortened by the end of the month since much of its content already exists in current legislation for cohesion policy, sustainable development and innovation.

The so-called Common Strategic Framework (CSF) 2014-2020 would set a management system between EU, national, regional and local authorities for the coordination of different funds earmarked for the same types of projects.

“It is a good tool to make sure we have coherence between funds and Europe 2020 goals,” said Trilling.

‘Focused’ commitments

“It is a starting point at EU level, a top-down approach that puts all the existing rules in one place,” said Danuta Hübner, chair of European Parliament regional development committee.

“This should enable a better use for the different funds, by combining them,” Ton Van Lierop, European Commission spokesperson said.

The CSF is seen as a step forward from the former National Strategic Reference Framework. The framework used to set priorities on how EU money should be spent, taking into account member states’ national reform agendas, but did not include rural development and fisheries funds and did not channel money specifically towards sustainable development.

The Commission is also trying with this document, to be adopted next month, to push through the so-called Partnership Contracts, which should “translate the elements set out in the Common Strategic Framework into the national context and set out firm commitments for the achievement of the Union objectives by programming CSF funds”, reads the text seen by EurActiv.

This implies member states will set measurable targets aligned with sustainable development indicators, which will be binding and countries will be accounted for in the implementation of the signed partnership contract.

In the draft proposal the Commission sets 11 such commitments to achieve smart and sustainable growth.

The objectives include research; innovation, enhancing access to, use and quality of telecommunications technologies; makings smaller businesses more competitive; supporting the shift towards a low-carbon economy; promoting climate change adaptation; and resource conservation.

“This should reduce the number of environmentally harmful projects,” said Trilling. The activist gives a few examples of such “wasteful” projects: the Demir-Kapija Smokvica motorway in Macedonia that will be constructed in a pristine forest and that has serious issues related to the transparency of contracting, for example, or the Białystok airport in Poland that would damage the Biebrza and Narew national parks and their bird populations.

“The Common Strategic Framework 2014-2020 would really make a big difference by ensuring that member states obey environment policies,” Trilling said, adding that the Commission’s proposal should include a provision for stronger project monitoring as a condition for getting funds.

Focused approach to attract investors

The Common Strategic Framework will take either the legal form of a delegated act or that of an annex to already existing regulations, such as the Energy Efficiency Directive or the Cohesion Policy Regulation.

“The majority of the Council and the European Parliament want this to be adopted as an annex,” Hübner said, explaining this would make it legally stronger than any other existing document.

Tillburg agreed, but said that “there are many back doors in the Council”.

This strategy is to create incentives for investors, as it will guarantee the EU’s commitment to co-funding regional projects that fall under the sustainable development umbrella.

There are incentives to invest money in energy efficiency, innovation and energy infrastructure, Ton Van Lierop said, adding: “We want to see more private-public partnerhips.”

Hübner concurred, noting the private sector must be more involved, given the specificity of the new framework.

“We don’t want this document to be put on the shelf, like others,” said Hübner. “We want it to become a binding regulation. For the first time we have a chance to have a deeper accord between the budget and addressing climate change.”

“Plus, we will do this together with the fisheries and rural development funds, which is new”.

Change of behaviour

Tillburg said that the CSF should make people change their way of thinking regarding investment, taking into consideration the climate impact of their projects. That could trigger changes in behaviour, he said. “It’s not only about immediate gains, you have to offer money for these projects so that in time these obstacles will be overcome.”

Local or regional authorities could lead by example in this case. “Environment ministers and politicians dealing with EU funds will be forced to look at the same document,” Trilling said.

Although the CSF gives EU countries the opportunity to invest more money into low-carbon projects, “no one will eventually force them to do so”, said Trilling, stressing that there will no hiding behind the bush for those member states that complain they have no money to invest in energy efficiency, for example.

The final form of the Common Strategic Framework 2014-2020 will most likely be amended as EU members agree with the strategy, but complain it lacks clarity on combining funds, Hübner said.

Flexibility will play an important role, since operational programmes for regional funds need to take into account local interests and discussions in the Council are likely to be difficult.

Hübner downplayed differences, saying she believes an integrated approach will be found.

“It is important to reduce burdens and obstacles for the Council and make sure we do not delay its implementation,” said Hübner, noting it will take up to a year for the framework to please everyone.
Positions:

Przemek Kalinka, of the Bank Watch network covering the Central and Eastern European distribution of EU funds, said: “We support what is called the ‘integrated approach’ and framing the different funds under one strategic document which is the Common Strategic Framework 2014-2020, in order to better concentrate on Europe’s priorities, including climate change mitigation and adaptation. In case of Cohesion Policy (ERDF, ESF, Cohesion Fund) we had a problem in the past of spreading the funds over too many fields and priorities – sometimes local priorities or politically driven projects. In times of scarce budgets Europe cannot afford this, we need to stay focused.”

The framework is important as it lists key actions for each fund for each of the priorities, Kalinka said. “In some cases the CSF is important in the way that it does not contain all the priorities and actions that some member states would like to see funded by the EU. For example Poland would be interested in financing storage and distribution systems of oil and natural gas, or emission reductions in coal-fired power plants.”