Concentration of funds elicits many questions

25 November 2011, Europolitics

The question of the concentration of EU aid on a limited number of priorities defined at Community level is undoubtedly emerging as one of the sensitive points of the negotiations on the future EU cohesion policy.

This was confirmed by the Polish EU Presidency’s conclusions presented at the informal meeting of ministers for regional development, on 25 November in Poznan, Poland. On the one hand, they stress the need not to spread interventions too thin; on the other, they state that what is needed is flexibility to take account of the needs of the different regions. EU Committee of the Regions (CoR) President Mercedes Bresso, who was present in Poznan, voiced the opinion of the regions: “We cannot agree to Brussels dictating that 80% of the funds should be concentrated on only three strategic objectives of the 11 contained in ‘Europe 2020′”. Members of the European Parliament had sent out signals along the same lines a few days earlier (see Europolitics 4313).

The legislative proposals on the post-2013 Structural Funds provide for concentrating a large part of aid under the European Regional Development Fund (ERDF) – at least 80% in developed and transition regions (60% if the region is no longer eligible for the current convergence objective), at least 50% in the less developed regions – on three main priorities: research, technological development and innovation; enhancing the competitiveness of small and medium-sized enterprises; and support for the shift to a low-carbon economy. The Presidency conclusions do not directly call into question the percentages in the proposals and even support the idea of concentration of the funds. Between the lines, though, reluctance emerges. Among the points “which require further clarification and discussion” is this question. The conclusions stress the need for a policy that meets the real needs of regions and above all allows enough flexibility to take account of their specific requirements. For Markus Trilling, a Structural Fund expert with the NGO CEE Bankwatch, it is clear: “It seems member states would prefer to keep the status quo and be free to spend money on everything and nothing – satisfying political needs and ambitions”.

In Poznan, Regional Policy Commissioner Johannes Hahn tried to be reassuring about the capacity of the proposed mechanisms to meet individual needs. However, he said he is “ready to explore” how to make the system “better adapted to different contexts”. He also repeated that the proposed concentration for ERDF investments was necessary. He warned: “We will not be able to defend the budget we have requested for this policy if we are not committed to truly concentrate resources on few priority areas”.
Conditionality counter-productive?

Among the other points “to be discussed” is, predictably, the macro-conditionality of aid. “Despite being legitimate in principle,” this idea, state the conclusions, must not “have counter-productive consequences for cohesion policy’s implementation and thus for the socio-economic development of member states with macroeconomic imbalances”. Here, too, the same reasoning was heard in Parliament and echoed in Poznan by Bresso. The CoR president repeated: the regions are opposed. “Furthermore, the Commission’s recent proposals for increasing the European co-financing rate to accelerate implementation of regional development programmes shows that the opposite needs to be done to relaunch investment.”

The next discussion will take place in Brussels, on 6 December, at a formal meeting of ministers for regional development in the framework of a General Affairs Council.

The Polish Presidency conclusions are available at www.europolitics.info > Search = 304218