EU cohesion policy 'mitigated the devastating impact of the crisis'

Tamás Deutsch believes 'a balanced, complementary relationship' is needed between cohesion policy and the Juncker plan.

By Tamás Deutsch

14 Apr 2015

The cohesion reports of the European commission are of great importance. They are milestones in the history of cohesion policy and I am of the view that the sixth cohesion report provides an excellent opportunity for renewal and gives a new impetus to cohesion policy.

The indispensable character of cohesion policy was clearly demonstrated by the way it mitigated the devastating impact of the crisis. In numerous countries, the European structural and investment fund has become the most important source of finance for public investment which member states have to cut budget deficits.

Nevertheless, despite the tangible and positive results of cohesion policy, the crisis clearly put an end to the process of convergence with significant increases in unemployment across all regions, but especially in less developed ones.

"Budgetary discipline means not only not wasting public money; it also means paying the bills on time"

Let me highlight a few points which need careful attention if we want to relaunch growth and boost employment. First, we have to put an end to recurrent liquidity-related problems. Cohesion policy had a €23.4bn backlog of payments at the end of 2013 for the 2007-2013 programming period, which undermines the credibility, efficiency and sustainability of the policy. The indispensable character of cohesion policy was demonstrated by the way it helped in alleviating the ramifications of the crisis and can help achieve the objectives of the Europe 2020 strategy.

The reoccurring problem of backlogs hampers the smooth implementation of programmes, puts additional burdens on public budgets and on beneficiaries. Apart from the 2007-2013 backlog, the delay in adopting, and implementing of operational programmes for 2014-2020 has serious budgetary consequences and further undermines the credibility of cohesion policy. Budgetary discipline means not only not wasting public money; it also means paying the bills on time.

Second, we have to reinforce the original role of cohesion policy, which is, fostering economic, social and territorial cohesion in all EU regions with special attention on the less developed ones. There is a tendency to see cohesion policy merely as an instrument to achieve the Europe 2020 goals. I believe we should highlight how the objectives of cohesion policy as defined by the Lisbon treaty contribute directly to the attainment of the goals of smart, inclusive and sustainable growth.

A balanced, complementary relationship should be sought between cohesion policy and the Europe 2020 strategy, as well as with the Juncker plan, and the European fund for strategic investments.

Third, in order to support employment we should aim at an integrated use of funds, as the European social fund is not the only tool to promote this objective. Infrastructure created by the European regional development fund is just as important. We need to focus on small and medium sized enterprises, the role of which is indisputable in providing for jobs and growth.

Youth unemployment is unacceptably high and we have to mobilise all funds available to support the training and employability of young people. We should keep in mind that by fostering employment initiatives and supporting social integration at the same time.

My draft report explores several other issues as well, such as macroeconomic conditionality, thematic concentration, the simplification of administrative procedures and the territorial dimension. I believe we have to act along the lines elaborated on in my report if we want cohesion policy to be effective and yield results in the period 2014-2020.



Industry & Finance
Share this page