With the regulations for the reformed cohesion policy for 2014-2020 now in force, attention has turned to ensuring the most efficient and effective use of the European structural and investment funds (ESIF) in the member states and regions.
The first step is the investment strategies for the next seven years – the so-called partnership agreements (PAs), which the commission adopts with all member states. The regional, national or sectorial 'operational programmes' (OPs) which follow then translate the strategy into action.
Progress in analysing and adopting the PAs has been steady, thanks to dedicated commission colleagues in my services, and the positive working relationship with member state authorities. We have already adopted 16 PAs and hope to adopt the rest by the end of this commission mandate in order to allow the channelling of investments as soon as possible. We have also received 96 per cent of the OPs, my services are leading the way with three already adopted for Denmark, Lithuania and the region Schleswig-Holstein in Germany.
"The commission is not ready to trade quality for speed, and member states are constantly reminded of the need for getting the strategy right from the start"
However, the commission is not ready to trade quality for speed, and member states are constantly reminded of the need for getting the strategy right from the start. In this vein, regulation has introduced a set of preconditions to be met before funds can be channelled to ensure more effective investments. For example, 'smart specialisation' strategies to identify particular strengths, business-friendly reforms – such as reducing the administrative burden for start-up companies, transport strategies, measures to improve public procurement systems and compliance with environmental laws – are among the necessary pre-conditions for receiving funding.
We want investments to be prioritised to a limited number of policy objectives – specifically four priority areas with high growth potential: research and innovation, information and communication technologies, small and medium-sized enterprises (SMEs), and the low carbon economy. We have stressed throughout the negotiations the need to ensure that 'all projects follow strategy', and not the other way round.
These strategies are indeed essential for the effective and efficient use of the ESIF and represent a new 'mind-set' about cohesion policy. We also want a 'culture change' in terms of fixing clear, transparent, measurable targets for the accountability and results of our investments. Countries and regions have to announce upfront what they intend to achieve with the available resources and identify precisely how they will measure progress towards these goals. This will allow regular monitoring and mean that additional funds can be made available to well-performing programmes through a so-called performance reserve.
In the PAs and OPs thus far we have seen steps towards what we consider the right direction. Investments are being concentrated in SME competitiveness and the low-carbon economy. Almost all member states see the strengthening of SME competitiveness as central to the fabric of national and regional growth strategies. Financing small business remains one of the biggest bottlenecks in many member states and we are encouraged by seeing investments planned here. We urge member states to maintain a focus on higher value-added activities, which will offer the most sustainable long-term growth and jobs.
"Cohesion policy is the EU's investment arm, giving support to the long term structural reforms and thus making an essential contribution to overcoming the crisis"
The commission has also encouraged member states to consider the best use of financial instruments. ESIF can be combined within these with other sources of EU budget and European investment bank/fund resources with a view, for example, to stimulate bank lending to SMEs.
On energy security and low-carbon economy, trends are very encouraging and clearly on the right track. The European commission has focused sharply on cutting carbon emissions and fighting climate change, which will lead to a massive increase for this type of expenditure – more than double that of 2007-2013.
Due to our global targets in this area, the commission set a minimum requirement for investment in the low carbon economy, requiring member states to invest a minimum of €23bn. But member states have gone well beyond this. For the next decade, according to member states' declared intentions, we expect to see more than €38bn supporting the transition to a low-carbon and climate-resilient economy, contributing to energy security across Europe.
The commission also emphasises the economic 'obligations' linked to the country-specific recommendations and the European semester. Indeed, we must ensure that cohesion policy is fully coherent with the wider EU economic governance. OPs must be consistent with national reform programmes and contribute to addressing the relevant reforms identified in the European semester. Cohesion policy is the EU's investment arm, giving support to the long term structural reforms and thus making an essential contribution to overcoming the crisis.
At the directorate-general for regional and urban policy, and indeed across many commission DGs, we have worked hard to improve the rules for using the ESIF and believe positive results will follow, helping the EU to achieve its long-term goals of growth, competitiveness and employment.