REGIONAL POLICY MEETING THE CHALLENGE OF COMPETITIVENESS

Transcription

1 REGIONAL POLICY MEETING THE CHALLENGE OF COMPETITIVENESS May

2 I. TOWARDS A NEW STAGE IN EU REGIONAL POLICY? The CPMR has spent three years preparing the future, post-2007 regional policy of a European Union with 27 Member States. It has done so just as the 2000 Agenda was entering its implementation phase, on 2nd February 2000, presenting the so-called Kastoria proposals (named after the town in which they were adopted by its Political Bureau) in Brussels, to Permanent Delegations from Member States, Missions from future Member States and Members of the European Parliament, with the participation of Commissioner Michel Barnier and the Portuguese Planning Minister who was providing the six-month presidency of the Union. Since then, the work has continued, through permanent dialogue with the European Commission, the European Parliament, the Committee of the Regions and the Member States. This topic, which has been identified by our members as being the most important for the CPMR, has led to the on-going production of technical memos and documents that have been debated and validated politically by our Bureaus and General Assemblies. Now, at the beginning of April 2003, we appear to have sufficient information to be able to outline more effectively the context in which negotiations on the future European cohesion policy will take place. The end result will depend mainly on whether or not Member States have the willingness and capacity to engage in a new stage of territorial integration for the European Union. Whatever the outcome, it should be recorded at the Summit of the Heads of State and Governments during the second half of 2005 or the first half of 2006 when the draft budget for the funding of the Union over the period will be agreed upon. By 2006, the end of the period covered by Agenda 2000, current regional policy, with its legal and financial bases, will be 20 years old. It was designed during the adoption of the Single European Act, initially with a view to giving the European Union the resources to cope with the entry of Spain and Portugal, countries with a markedly different level of development compared to the 10-country Community. It also provided a more coherent structure for the other, less developed States (Ireland and Greece) and, thirdly, allowed for the establishment of an intervention instrument for deprived industrial and rural areas. Fourthly, it created the first means of support for interregional cooperation. These elements formed the bases for the "Delors 1 Package" covering the budgetary period , then, after extension of the guidelines and resources through the Edinburgh Compromise (1992), the "Delors 2 Package" covering and, finally, Agenda 2000 agreed during the Berlin Summit in March 1999 which covers the current programming period. The context in which future regional policy will operate has undergone profound change: Within the 15-country Union, certain States, in particular the so-called "Cohesion States", have enjoyed marked economic adjustment. This has been spectacularly so in Ireland and, to a lesser extent, in Spain although the adjustment is often accompanied by an increase in internal disparities; Secondly, and decisively, the entry of 10 then 12 new Member States with a GDP/capita far below the average for EU15 again highlights the questions on the capacity for harmonious integration within a group that will cover an entire continent. This poses a considerable challenge and casts doubt on the relevance of instruments created almost twenty years ago. 2

3 To achieve solutions of a scale concomitant with the challenges, it seems to us that none of the most fundamental acquisitions of this generation of policies should be lost or disregarded. These policies made a huge contribution to the successful incorporation of five new Member States (Spain, Portugal, Sweden, Finland and Austria) and to the development of the oldest Members. In our opinion, this result is due to several fundamental characteristics of the guidelines and instruments used. Their usefulness, which has been proven in vitro throughout this period, constitutes essential input in the light of the situation that will be facing us in the near future: given the heterogeneous, diverse nature of the economic and institutional characteristics of the Union's Member States, the most worthwhile reaction has been to respond to the aim of economic and social cohesion by a policy of decentralised development. This means that single programming documents have been negotiated based on Community criteria which have value for all, but that implementation has been adapted to suit the legal and financial frameworks specific to each region. This ability to take account of European diversity will prove all the more valuable in a Union with 27 Member States; the policies rely on a greater ability to promote change through the territories rather than merely coordinating national agencies, thanks to the involvement of players close to realities during the design and implementation stages. Regional policy was, then, a pioneering policy, firstly in providing for a form of governance that brought together every echelon of public action (from Brussels to project leader) and, secondly, in setting up a Europe closer to its citizens. The action developed paved the way for both the introduction of the principle of territorial cohesion and the more formalised association of regional powers. Its effectiveness, if we compare it to the limitations encountered by the conditions of implementation of the Lisbon and Göteborg Agendas to date, is indisputable. Is there any likelihood of past achievements being called into question? What renewed objectives could such reviews serve? How can we achieve a new "Package" that would be worthwhile and beneficial for the development of our regions? To answer this question, we have to examine the contexts in which proposals are being prepared for the forthcoming period and consider the questions under debate. Then, taking this as our basis, we have to create hypotheses as to the possible outcomes of negotiations. 3

4 I.1 Preparing for Negotiations The main characteristic of the current phase of discussion is the plurality of bodies and agencies preparing analyses and proposals given that each of these bodies and agencies has its own centres of interest. A. European Commission The Treaties have given the Commission the right of initiative and proposal. It works to this end through three measures. A.1. As far as the governance of this policy is concerned, the Commission, following on from the White Paper on governance, is circulating a draft Communication on the consultation of regional and local authorities and a draft tripartite contract which would formally institute full participation by the regions in the preparation and implementation of regional policy. A.2. In December 2003, the Members of the Commission are to make public the "Third Report on Cohesion". The Commission's working programme for 2003 indicates that this report should, "where appropriate", contain its proposals for future regional policy. At the present time, there is every reason to believe that this will be so. Commissioner Michel Barnier and his departments began to prepare for this target date some time ago. What is known of the basic options retained seems to suggest a continuation of a regional policy which would remain ambitious. It is also in December 2003 that the European Commission will adopt Agenda 2007 (financial perspectives and guidelines for the Union's major policies, including regional policy through the Third Report on Cohesion). A.3. In order to prepare for 2007, President Prodi launched a wider scheme of work this year for the drafting of the Union's financial perspectives. Four Commissioners are responsible for this comprehensive area of reflection. The question of solidarity (including policies dependent on structural funds) has been entrusted to Commissioner Barnier. Much might be expected of the conclusions of this work if the Commission is able to produce a far-reaching, overall proposal extending beyond a mere continuation of the various existing policies. B. Convention on the Future of Europe The European Commission's former President, Jacques Delors, is correct when he states that, until now, the Convention has achieved more than three Intergovernmental Conferences. The question now being posed is whether it will fulfil its promise in the final proposals that it will bring before the Heads of States and Governments. On 30th May, we should know whether the constitutional draft reiterates, in fine: The inclusion of the regions in the Union's set of institutional authorities, in accordance with the constitutional orders specific to each of the Member States; The concept of territorial cohesion which extends the concepts of economic and social cohesion; The involvement of regional authorities in the democratic life of the Union; Substantially modified rules for the calculation and allocation of the Union's resources. 4

5 These four items will be vital for the frames of reference within which discussions on future regional policy will take place. C. European Parliament The Parliament should become more proactive in discussions and decision-making. It is now an integral part of the Community decision-making process in this area, given its prerogatives i.e. assent on general regulations and joint decision on the ERDF and ESF. D. Committee of the Regions Although, like the Parliament, it has only a consultative role, the Committee of the Regions issues opinions and resolutions, like the Parliament, on the successive reports from the Commission and this gives rise to very close cooperation with the rapporteurs. Moreover, through the Leipzig seminar, it is seeking to present an overview of the main areas of concern to regional and local authorities. In the future, its role in the implementation of subsidiarity, like the cooperation protocol implemented with the European Commission, should increase its scope for expression. E. Council of Member States It is here, in fine, that a compromise will be reached on the objectives and on funding, in 2005 or For the moment, each of the Member States in turn is publishing an initial position in the form of a memorandum and consultations which take place between Permanent Delegations. Moreover, an initial debate is continuing within the General Affairs Council while the two half-yearly Presidencies of 2003 (Greece and Italy) are organising an informal Council of Ministers with responsibility for regional development. It appears that only a minority of States is pleading for the re-nationalisation of regional policy, with the exception of Objective 1 and interregional cooperation. At the same time, certain States do not currently appear to be in favour of an increase in the percentage of financial resources in the Union's budget. Only the principle of a stabilisation of farm spending for has been adopted, suggesting a decrease in its relative share of the budget as a whole. It is also noticeable that the current ceiling of 1.24% (the famous 1.27% after technical adjustment) has not been reached and that, in fact, expenditure is around to %, leaving available a budgetary margin. Finally, the most important discussion has not yet begun i.e. discussion on the relative share of each Member State in the financing of the budget for EU funding. It would seem difficult to hold clear discussions, which highlight objectives first, without prior agreement on this reappraisal. F. Associations of regional and local authorities National associations are involved in a position-taking and discussion process with their national governments. European organisations (including the CPMR) are publishing their options and undertaking joint, in-depth consultations. Unlike the situation in 1999 (preparation of Agenda2000), the AER's positions reflect those expressed by the CPMR in its November 2002 seminar in Hungary. The President of the CPMR wished to congratulate the President of the AER, but 5

6 has received no response to date. The CEMR has published a more comprehensive document than in the past, on the subject of cohesion. For its part, the AEBR has succeeded in extending the scope of its considerations to include various geographical scales of interregional cooperation. The main division still lies between regions and cities. The regions see themselves as the level at which to establish a coherent development policy; the cities have a tendency to claim the same capacity, in a partnership with the European Commission. This would lead to a dramatic crumbling of regional policy. I.2. Possible Solutions This context would seem to suggest two main, possible solutions. Solidarity for the poorest regions (continuation of Objective 1 and, possibly, of an interregional cooperation programme) corresponds to an effort of the order of 0.31% of the EU's GDP. It is being supported by an extreme minority. The frame of reference that would allow for a more far-reaching solution would appear to lie within a financial envelope ranging from 0.40 to 0.60% of GDP. The probabilities, at the end of negotiations, depend on the degree of integration that the Member States consider as a desirable objective for the European Union. This is contingent upon a number of factors: A. Desire/refusal to give greater depth to the construction of Europe: - Existence or absence of a common foreign and defence policy; - Existence or absence of an economic and fiscal pact; - Success of the Convention and implementation of its conclusions by an ICG; - Extension of the Euro zone to include the other Member States. B. Link between foreign ambitions and internal cohesion: - Acknowledgement of the institutional role of the Regions in the constitutional Treaty; - Adoption of the territorial cohesion objective; - Strengthening of common policies in the second part of the Treaty (158, 159, etc.); - Systematic involvement of the Regions in the work of the European Commission through implementation of appropriate consultation; - Strengthening of the link between increased subsidiarity and increased solidarity; - Greater contribution of sectoral policies to internal cohesion. C. Funding: - Acceptance, by the States, of a complete reappraisal of the Union's funding; - Acceptance of overall consideration of the mechanisms for the subdivision and equalisation of European and national public resources; 6

7 - Acceptance by the Member States of a fixed ceiling for the Community budget based on previously agreed political objectives; - Development of resources specific to the Union in the form of direct or indirect taxation; - Vote on budgetary income and expenditure by the European Parliament; - Growth rate of the European economy and its consequences for the frames of reference in budgetary terms. Given the developments of the last twenty years and their strong contribution to the creation of a single Europe, the following two sections of this memo develop the hypothesis of a new stage in the territorial integration of the continent and its citizens. 7

8 II. IMPLEMENTING THE LISBON AND GÖTEBORG STRATEGIES TO ACCOMPANY THE SINGLE MARKET AND ECONOMIC AND MONETARY UNION II.1 General Framework Having now completed several programming periods, regional policy must take on a new, ambitious approach in order to face the challenges of the 21st century, the challenges of a Europe that is socially more just, economically more competitive and territorially more balanced, a Europe that is also capable of playing a pioneering role in the promotion of sustainable development policies. These imperatives are all the more justified given the extension from 15 to 25 then to 27 Member States, which will result in a doubling of disparities between levels of development within the enlarged European Union. The objectives of competitiveness and sustainable development were highlighted by Member States during the Summits in Lisbon and Göteborg. Their implementation is particularly appropriate given the problems and challenges with which the regions will be faced, either in the new Member States or in other European regions coping with certain competitive weaknesses. From this point of view, the framework in which the hoped-for results might be achieved still remains largely ill-defined. The main territorial differences can be summarised at the present time through six indicators, showing that the implementation of the Single Market and of economic and monetary union must be backed up by a veritable policy of territorial cohesion: - Differences in wealth: GDP per capita, productivity per worker, social markers; - Job situation: unemployment rate, levels of skill in the working population; - Level of facilities in research and innovation areas; - Economic structure: percentage of technologically advanced sectors, presence of support services for businesses, percentage of sectors most exposed to international competition; - Physical accessibility for people and goods; - Demographic factors: population changes, density. Sustainable development poses additional challenges which must be included at the core of the various policies with a strong environmental or social impact. The search for better distribution of wealth and competitiveness to accompany the Single Market is, in itself, a sustainable development objective for Europe. The conclusions of the Lisbon Summit highlighted a set of priority topics relating to the strategic objective of turning the European Union into the world's most dynamic and competitive economic area. Many of these topics represent a strong potential contribution to the development of the territories and they must constitute a support, an essential factor for the implementation and success of such policies. The main topics to be included and integrated in future regional policy are as follows: A knowledge society, in particular with regard to the creation of broadband communication infrastructures, a vital condition in order to give all regions the basis for long-term competitiveness; 8

9 R&D and innovation, especially with regard to the improvement and networking of R&D infrastructures in the regions and the implementation of regional innovation structures; Training, in accordance with the paradigm of lifelong learning, creating conditions for the development and accumulation of knowledge and know-how in order to build a more competitive society with greater solidarity; Employment, through the implementation of proactive policies based on the mobilisation and involvement of players within the framework of European strategies for employment. The latest communications from the European Commission suggest an effective consideration of the territorial dimension. Social policy in which opportunities for social inclusion are given concrete expression through the mobilisation of socio-economic players at regional and local level. The Göteborg strategy for sustainable development has, as its main feature, a demand for mobilisation on the part of all politicians, socio-economic players and citizens in favour of a style of development that closely associates economic, social and environmental aspects. The changes required to meet these demands concern the various phases of development programme creation, implementation and follow-up and must be applied to all territories without distinction. This strategy, which is often defined by the expression "Think global, Act local", reflects the need to define global objectives at every level. These objectives include the fight against greenhouse gases or the maintenance of biodiversity. They require a change in behaviour, changes in strategies and decision-making structures within public and private organisations, and differences in the modus operandi implemented by politicians. They pave the way for opportunities for innovation and development that comply with the guidelines laid down at the Lisbon Summit. The strategy's inclusion among the guidelines of the future regional policy should be fixed with the aim of strengthening the level of actual application in territories, in particular through greater transparency in programming strategy documents. Cohesion policy is one of the few policies able to give reality to the Göteborg strategy. The contribution from sectoral policies as they stand at the present time is marginal (the White Paper on transport mentions it but without any great direct ability to take action). There is, therefore, a need to subordinate sectoral policies, especially transport, research and energy, to the achievement of global objectives of sustainable development. 9

10 II.2 The Main Policies Requiring Implementation Beyond this general framework, there is a need for a precise definition of the type of actions that should be promoted within regional policy after 2006, given that adaptations will be required to suit the actual characteristics of the territories in which they will be implemented. II.2.1 Research and Innovation The main challenge faced by the European Union is the need to catch up with the USA and Japan in the areas of research and innovation, hence the idea of creating a European Research Area (ERA) to pool resources, create partnerships and establish synergies. To achieve this, there will also be a need to increase expenditure in research and innovation with, in the long term, a level of investment that may be as high as 3% of the European GDP. At present, Europe is far from achieving this goal. Firstly, public expenditure has often been severely limited by the legitimate aim of tight budgetary control in order to accompany the implementation of Economic and Monetary Union. Secondly, it is evident that there are very few territories making a strong contribution to this objective. This is obvious from the credits granted to this area in previous programming periods. In EU 15 alone, disparities in R&D expenditure per inhabitant are of the order of 1 to 18, whereas the figures for GDP range from approximately 1 to 4. If the objective of the FPRD is to promote clearly the search for excellence which, in fact, applies mainly to a few areas of excellence that are geographically in very close proximity, one of the aims of future regional policy would be to promote the development of centres of excellence in territories that are, at present, almost devoid of any major research and innovation infrastructures. This ambition cannot be achieved other than with a Community framework that strongly encourages this type of development, a framework in which Member States and agencies at regional level will play a decisive role. The Finnish example shows, in terms of both budget and territorial cover, that such an aim is possible. For many regions, this is a vital condition if they are to achieve a long-term economic development that is less dependent on the vicissitudes of international competition. Regional policy must be able to contribute both in "capital investment" (buildings, equipment etc.) and in "financing" i.e. support for a number of innovation programmes with a direct economic impact. A high level of interconnection must be established between the FPRD and regional policy. The Framework could concentrate on basic and applied research while policy could focus rather more on development and innovation. II.2.2 Education, Training and Employment The delays noted in certain regions as regards education and training constitute an enduring brake on their long-term economic and demographic existence. Not only does the lack of education and training create an obstacle to the endogenous development of existing businesses; it also limits the attractiveness of the region for new investors in an international context in which Europe no longer has any comparative advantage in the so-called "low-skill, labour-intensive industries". Another consequence of this spiralling effect is the drain of the most educated or best-qualified people towards regions that are, in many cases, located around capital cities since these are the only areas able to offer a range of high-level jobs. 10

11 This long-term trend is the main factor behind the increase in territorial disparities and the tendency towards the expansion of cities, both of them phenomena that have been analysed so frequently, in various European studies. Slowing this process down in the medium and long term will be a particularly arduous task but the provision of just and fair access to education and training throughout the regions is one of the major challenges that must be met by the future regional policy. As far as education is concerned, particular attention should be paid to initial training i.e. education for work. The aim, for subsequent age groups, is clearly to limit the arrival on the job market of young people with no diplomas or professional qualifications. In the area of training, particular efforts should be made to encourage lifelong learning i.e. training within a vocational framework. Here, the regions have an important role to play, directing vocational training to meet the requirements of regional businesses. Regional authorities are increasingly being required to anticipate rather than to react to needs and problems in the business sector, meeting specific demands that are difficult to pinpoint at national or European level. Any training policy must be more closely linked to the development needs of organisations and professionals, by involving socio-professional players and regional authorities. Vocational specialisation and qualification in a constantlychanging world demands a reactivity and proximity that only a territorial approach can provide. As far as employment policies are concerned, the implementation of measures to assist targeted sectors of the public often remain more consistent at national level. However, in certain cases, assistance with change requires the implementation of targeted actions with a greater territorial slant. This is particularly the case during the restructuring of specialist areas of employment within sectors in decline. During the period, now in the past, of major restructuring within the heavy industries inherited from the days of the Industrial Revolution, national planning was more suitable for massive intervention through an approach based on sectors of skill. Now, such restructuring is continuing in territories and sectors that are more specifically targeted and subject to problems relating to adaptation to meet demand or face up to international competition. Usually, such restructuring requires coordinated, tailored intervention on the part of public authorities and socio-economic players in the field to regenerate or change the activity and assist the working population. Such measures of help for economic infrastructures and working people should be an integral part of future regional programmes. In all these sectors, there will be a need, at a later date, to define the exact field of intervention for structural funds, whether in the form of assistance for investment (particularly in the area of vocational training) or in the promotion of courses designed for certain, targeted sectors of the public. The area of assistance for businesses must also be clarified and it will undoubtedly require adaptation compared to earlier periods. II.2.3 The Knowledge Society The Lisbon strategy clearly displayed a desire to make the European Union the most competitive area in the world by 2010, in particular through the knowledge society. This is based, first and foremost, on the new information technologies, especially the Internet. The challenge in terms of regional competitiveness is to enable all regions to have real access to these new technologies and, at the same time, to train local people in their use and 11

12 development. It is obvious that all regions are not equal in this respect. Numerous territories are not covered by broadband infrastructures for reasons relating to demography and market forces. The structural funds should not only contribute to capital investments but should also, under certain conditions, assist with the training of local people. In this respect, there is undoubtedly a link to be established between training in this specific area and the education/training actions mentioned above. II.2.4 Accessibility Policies Transport policies will be faced, over the next few years, with major challenges that will be closely linked to the objectives of regional policy: - Improving the accessibility of regions that are still suffering because of their distance from markets and, consequently, are less competitive; more generally, ensuring that transport policies make a real contribution to territorial cohesion (this point is valid for EU15; it is all the more valid for a Europe with 25 then 27 Member States); - Funding the investments required to meet these two demands, against a background of budgetary restrictions at every level; - Achieving all this in a manner that reduces damage to the environment (Göteborg strategy) and improves personal safety, with the widest possible involvement of the players responsible for taking the relevant decisions e.g. citizens, local and regional authorities, socio-economic players etc. Moreover, the search for greater equity in the pricing policies of the various modes of transport will prove to be absolutely fundamental. Such challenges require a series of actions on several scales: - Firstly, a benchmark European framework area must be identified. This cannot be political, as in the case of the current Trans-European Transport Network (TEN-T); it must be a more sophisticated instrument integrating the principles of the ESDP, and definable at several different levels. From this point of view, the corridor-based approach is worth implementing, as is the use of maritime transport in basins (rather than using only sea motorways which would "dry up" the potential short sea shipping links). Intermodality and accessibility would be at the heart of the aims translated by this future "perspective". - Secondly, priority should be given to "sustainable" modes of transport when allocating Community credit (structural funds and TEN-T budget) i.e. mainly maritime and rail transport, with experiments in sustainable public transport systems. In particular, the entry of new Member States must not lead to a deterioration of the environment. In these countries, railways play a preponderant role which should be maintained. Increased traffic flows to and from these countries must not result in the doubling of road infrastructures in transit countries or, at least, Community funding should not contribute to such moves. Community funding of a level concomitant with the importance of the challenges must be based on structural funds if it is to be effective. The TEN-T budget seems to be much more marginal in its current form. Such funding could have the following configuration: 12

13 - Priority infrastructures would be eligible for contributions from the Cohesion Fund and structural funds in Objective 1 regions; - Investments in the future Objective 2 would be eligible subject to environmental conditions, with a system modulating the rates of intervention depending on actual conditions of accessibility; - Transnational coordination should be strengthened within the framework of the future Interreg. In this context, there must be greater Community guidance for public funding allowing for the launch and development of links of general interest (shipping, airlines, railways and intermodal systems) in places where they are not economically viable but are relevant in terms of territorial and sustainable development. II.2.5 Environment and Heritage The sustainable development objective has a wider scope than the environment in the strict sense of the term and must be seen as a priority within future regional policy. As far as initial implementation of the guidelines from Göteborg is concerned, there are three main areas of potential concern: - To ensure the safety of economic development (industrial safety, safety linked to the various modes of transport, safety linked to power supplies). In this respect, particular attention must be paid to major pollution, especially maritime and coastal pollution whose repetitive nature is a very real source of concern. Interregional and transnational actions might usefully be taken in addition to regional intervention in order to organise systems for environmental protection and the prevention of catastrophes; - To enable the various levels of application to make their contribution to the Union's international commitments (climate changes, biodiversity, commitments made in Johannesburg etc.). By its very nature, this type of action must apply in various areas, in particular transport; - To contribute to changes in behaviour and promote developments in modes of production and consumption. In addition to these three general areas, there will be a need, in certain regions, especially within new Member States, to fund basic infrastructures as was the case in earlier periods (sewage, waste management, renewable energy sources etc.). Moreover, as at present, there will be an on-going need to encourage action in favour of the protection and enhancement of natural and cultural heritage sites. 13

14 III. THE ARCHITECTURE OF FUTURE REGIONAL POLICY III.1 General organisation: eligibility of all European regions Objective 1 Statistical phasing out Mechanical phasing out Regions no longer eligible under Objective 1 owing to an increase in GDP Objective 2 COHESION FUNDS Regions with a GDP/capita of less than 75% of the EU25 average Intensity // GDP Regions no longer eligible under Objective 1 as a result of statistical effects Intensity < objective 1 Intensity > objective 2 All other European regions Intensity proportional to GDP + other indicators States with a GDP/capita of less than 90% of the EU25 average Outermost Regions and sparsely populated regions in Northern Europe in respect of their specific character and the Treaty An Interreg IV instrument Cross-border transnational interregional cooperation Better coordination between the different levels of cooperation Special remarks : Three new aspects would be included in the organisation of future regional policy: 1. Eligibility of all the Regions allowing for better coordination of the different levels of public action within the territories, especially at sectoral level 2. A principle of intensity of financial aid by region within a Community framework taking into account GDP for Objectives 1 and2 3. Stepping up of Interreg on the basis of improved coordination both with regard to the instruments and with Objectives 1 and 2, and a better acknowledgement of maritime borders for the cross-border strand. 14

15 III.2 An integrated regional programme III. THE ARCHITECTURE OF FUTURE REGIONAL POLICY At present: A confused situation for Objective 2 A minimum solution: Clarifying the relation between the objectives Preferable: Integrate the objectives Optimum: Integrate the objectives and the funds Objective 1 Objective 1 Objective 1 Objectives1 and 2 An integrated regional programme 4 funds under one single programme (ERDF, ESF, EAGGF, FIFG) Objective 2 No change Objective 2 No change Objective 2 A single programme for Objective 1 and Objective 2 A single regional development fund Non-integrated system A multi-fund Objective 2 SPD with a superposition of interventions under: Objective 3 the second pillar of the CAP Clarify the relation between Objective 2 and: Objective 3 the second pillar of the CAP the socio-economic strand of the FIFG Integrate all the objectives into a single Objective 2 programme based on the current Objective 1 model Recognition of the relevance of the regional level in coordinating a certain number of policies A genuine step forward towards simplification the FIFG Special remarks: 1. The current situation, especially in the regions eligible under Objective 2, does not allow policies to be implemented in a coordinated manner. This is largely a result of the application of infra-regional zoning. Its abolition should allow a more integrated implementation on the basis of the Objective 1 model. 2. A real step forward in the governance of public policies would consist in integrating the objectives and setting up a single regional development fund, thus allowing for a genuine integration of policies and a simplification in terms of their implementation and management. 15

16 III.3 Fairer regional subsidies III. THE ARCHITECTURE OF FUTURE REGIONAL POLICY AT PRESENT TOMORROW OBJECTIVE 1 A national budget Intensity of financial aid per eligible region No change OBJECTIVE 2 A national budget A pro-rata breakdown based on population for zones eligible according to conversion criteria A national budget Regional breakdown according to Community criteria (GDP + unemployment, population density, accessibility, etc.) a bonus for territories with permanent handicaps Special remarks: Two new factors would make the financial allocations by region more equitable 1. The competitive situation of the whole regional territory would be taken into account at Community level when setting regional budgets. This calculation would be fairer than a simple prorata of population of the national budget. This change would be justified by the potential eligibility of the whole of the regional territory. 2. Territories suffering from permanent handicaps (islands, mountain areas, sparsely populated regions) would benefit from special financial arrangements allowing them to tackle the problems related to their peripherality more effectively. 16

17 III. THE ARCHITECTURE OF FUTURE REGIONAL POLICY III.4 A regional choice of themes for intervention under a Community-level framework Objective 1 Objective 2 Interreg IV Research and innovation Full eligibility Eligibility for regions lagging behind in terms of R&D expenditure and employment indicators Foster networking at all three levels (strands A, B and C) Education-training Employment Full eligibility Education: Full eligibility Training: Full eligibility Employment: Eligibility where restructuring is in progress Education and Training: foster networking at all three levels Employment: specific package under strand A Knowledge society Full eligibility Eligibility for infrastructures in territories without access to services Full eligibility for training Promotion of training and new tools at all three levels Accessibility policies Full eligibility Eligibility for sustainable infrastructures in regions with poor accessibility Full eligibility for trials of new modes of sustainable transport Transnational consideration for strands A and B in relation to TEN-T Launch of sustainable transport services at all three levels Environment Full eligibility Full eligibility for disaster (industrial or natural) prevention operations, pilot schemes and promotional actions Disaster prevention (maritime safety in particular) Promotion of protected areas Special remarks: 1. The list of eligible actions should be subsequently specified in the regulations and adapted to meet new challenges. Objective 1 regions will, in principle, be eligible for all actions. 2. The regions will be able to choose a certain number of priorities, bearing in mind that this choice will be subject to a Community framework for Objective 2 to prevent the structural funds from having the effect of widening regional disparities. 3. Strands A, B and C of the future Interreg instrument (cross-border, transnational and interregional) will, for some thematic areas, help to ensure a better coordination of the levels of intervention in regional development policies. 17

18 III. THE ARCHITECTURE OF FUTURE REGIONAL POLICY III.5 A thematic approach combined with a territorial dimension Territories with permanent handicaps (islands, mountain areas, sparsely populated regions) Rural territories Fishery-dependent areas Urban districts in crisis Eligibility Either at regional level as a whole (bonus system) Or at infra-regional level through specific zoning under a Community framework Rural areas in decline as defined under the Community framework (zoning) Fishery-dependent areas as defined under the Community framework (zoning) Districts in crisis under the Community and national frameworks and identified at regional level Zoned territories taken into consideration within the regional programme A new URBAN Community initiative Special additional measures in relation to the 5 thematic issues All measures which aim to sustainably reduce the negative effects of permanent handicaps: SGEI* Transport services maintaining activity SGEI* for areas in decline Socio-economic diversification programmes Socio-economic diversification programmes Specific actions in the fields of employment, education and training Social inclusion Urban regeneration Special remarks: 1. Specific territories need to be dealt with at Community level through infra-regional zoning 2. The eligibility of the whole regional territory under Objectives 1 and 2 should not prevent infra-regional zoning to take into account specific territorial characteristics, according to the wishes of regional executives. 3. Special measures may be applied in these territories over and above the list of eligible measures applicable to Objective 1 or 2 regions 4. There is still the question of an extra financial allocation for regions that have to take account of a number of the specific territorial situations mentioned above in their regional programme. * Services of General Economic Interest 18

19 III. THE ARCHITECTURE OF FUTURE REGIONAL POLICY III.6 Tripartite implementation to improve the vertical and horizontal coordination of policies A COMMUNITY REFERENCE FRAMEWORK A principle of economic, social and territorial cohesion Towards a territorial reference framework SECTORAL POLICIES Research & Innovation, Education-training employment, Knowledge society, Accessibility policies, Environment TERRITORIAL POLICIES A guideline: polycentrism EUROPEAN NATIONAL AN INTEGRATED REGIONAL DEVELOPMENT PROGRAMME Objective 1 or Objective 2 EUROPEAN ESDP, Structural Funds regulations, Interreg NATIONAL Territorial cohesion policies Operational coordination A comprehensive development strategy Thematic choices combined with Territorial priorities Strategic coordination AN OBJECTIVES AGREEMENT AND A CONTRACT BETWEEN EUROPE/STATES/REGIONS to be adapted to the national institutional contexts 19

20 III.7 Adapting the link with competition policy III. THE ARCHITECTURE OF FUTURE REGIONAL POLICY AT PRESENT TOMORROW OBJECTIVE 1 Full coverage by Article 87a on regional State aids Full coverage of phasing-out regions Increase in the eligible population Full coverage by Article 87a on regional State aids Full coverage of phasing-out regions OBJECTIVE 2 Almost full coverage of areas eligible by virtue of Article 87c on regional State aids Special attention for certain territories Need to make territorial choices Coverage by virtue of Article 87c: of territories with permanent handicaps (islands, mountain areas, sparsely populated regions) Coverage of the rural community in decline Interim coverage of employment areas suffering from industrial recession Special remarks: 1. An increase in the population eligible under Objective 1, combined with the eligibility of all the other regions under Objective 2, means that the map of areas eligible under the structural funds and the map of regional State aids cannot match. 2. This situation leads to a greater selection of territories within Objective 2 regions that would continue to be covered by regional State aids. 3. The so-called de minimis rules shall apply to all the territories not covered by Article 87. A variation of de minimis ceilings could be envisaged on the basis of the competitiveness of these territories evaluated using Community indicators. 20