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No future for the EU without further cohesion, warn stakeholders at EESC hearing

At a time of growing social and economic disparities between the regions of the European Union and when Euroscepticism is on the rise, all relevant stakeholders must advocate for an ambitious and future-proof cohesion policy post-2020. The goal must be sustainable and inclusive economic and social growth, competitiveness and employment across the EU.

Cohesion policy could be an efficient way of addressing societal trends currently faced in the whole EU, if cohesion funding remains an important source of investment, bringing Europe closer to its citizens, promoting stronger engagement with stakeholders and improving communication about its impact. Cohesion funding should remain at least at its current level and funding efficiency should be improved.

These are some of the findings of a public hearing on the future of cohesion policy post-2020 organised on 22 February by the European Economic and Social Committee (EESC), which is drawing up an exploratory opinion requested by the Romanian presidency on the subject. 

At the hearing, stakeholders discussed in particular the question of whether cohesion policy could do more with less money, in view of the 10% budget cut proposed for the 2021-2027 Multiannual Financial Framework (MFF) by the European Commission.

Most participants could not accept a budget cut. Cohesion policy would need a budget of at least the current level to continue having tangible effects on the everyday lives of EU citizens, the economies of the Member States, and the overall convergence process at EU level, reducing inequalities between regions and between individuals.

In this context, EESC rapporteur Stefano Mallia called for a future-proof policy that remains relevant and strong – also in terms of the budget – to be able to meet the challenges of the future.

Ioannis Vardakastanis, the EESC co-rapporteur, stressed that the policy should not be in question: The future of the EU is not thinkable without the future of cohesion.

This was supported by research, said Ilona Raugze from the EU-funded cooperation programme ESPON EGTC. Three trends showed the need for a stronger cohesion policy: the expected increase in regional disparities in GDP per capita, the risk posed by the so-called abandoned places (>35% of EU territory), and the development of rural areas.

Current proposals and positions would take the EU in another direction, however, lamented Claude Denagtergal, Senior Advisor at the European Trade Union Confederation. For example, no additional funding had been earmarked in the proposal for the European Social Fund Plus with a view to implementing some new objectives from the European Pillar of Social Rights.

In the context of budget provisions, participants discussed measures to increase the efficiency of cohesion policy.

A place-based approach would give cities and regions the opportunity to address development challenges on the basis of development strategies designed by themselves, and could contribute to more efficiency. However, the increasing interconnection between places would require design and implementation based on function rather than administrative area. We need to start thinking beyond administrative boundaries in spheres other than Interreg, said Ilona Raugze.

With regard to efficiency, it was also mentioned that cohesion policy should ensure long-term investment and sustainability. Funding should be more flexible and could not always be tied to imposed categories if it was to address challenges and needs. Moreover, overall EU policy coherence was necessary.

Thomas Wobben from the Committee of the Regions said that cohesion policy was losing its soul: cohesion policy instruments were being fragmented and EU policies lacked political coherence. One of the key problems was that the Rural Development Fund would no longer be part of cohesion policy.

During the discussion on challenges and perspectives for cohesion policy, participants expressed concerns that simplification of the Common Provisions Regulation (CPR) could weaken the right of cities, regions and civil society organisations to participate in the design, implementation, monitoring and evaluation of programmes. Partnership should be an essential part of the policy.

Luc Hendrickx from SMEunited said: The success of the different programmes will depend on real involvement of economic and social actors in decision-making and implementation, and this should be in the form of multilevel and multi-actor governance. Measures should be put in place to build the capacity of the social partners.

There was a view that better and clear communication on the impact of cohesion policy by all stakeholders could help to tackle demagoguery, populism and unjustified Euroscepticism. In addition, measures must be taken to improve knowledge of the EU, its policies and benefits to the citizens.

Another issue on the agenda was conditionality of funding. While speakers generally welcomed the EU principle of enabling conditions, they urged that this should not be at the expense of citizens' well-being. Penalties should only be imposed outside of the funding programmes. A fine or temporary suspension from projects could be one sanctioning option.

A stronger link between cohesion policy and the European Semester was generally supported, but speakers called for full implementation of the Code of Conduct on Partnerships as an enabling condition. They also urged linking compliance with the Annual Growth Survey, the Country Reports and the Social Scoreboard. The scoreboard should be regionalised in order to be operational for a regionalised cohesion policy.

Thomas Wobben said that the European Semester process needed to be more future-orientated to have a meaningful impact on cohesion policy.

Participants were not convinced that thematic concentration should be determined at national level. Cohesion policy has a regional focus. A one-size-fits-all approach would probably be easier, but cohesion policy must find tailor-made solutions at local level to meet local needs.

There was a call for more simplification in order to achieve policy objectives. Trust and a shared understanding of simplification would be key aspects of simplification. Simplified access, especially for small projects, was needed, as these would be more tailored to the real situation. In this regard, it was said that reduced co-financing rates could have a negative impact on access to funding for less-favoured regions and the smallest players.

Finally, concerns were expressed about the ongoing negotiations on the legislative proposals for the future MFF and cohesion policy. Discussion of controversial issues such as the proposed decommitment methodology (n+3), co-financing rates and thematic concentration would be postponed until the autumn talks about the MFF between the heads of state or government. This would risk losing good proposals. Participants urged the negotiating parties to step up their efforts.

The 2019 European elections could have a negative or a positive impact on the negotiation process, according to Estela Lopez-Hermoso of the Conference of Peripheral Maritime Regions. She urged stakeholders to keep on making noise to ensure a positive outcome.

Heather Roy from Eurodiaconia said: A European Parliament with much larger groups of extremes could have an impact on political choices and the allocation of funds. The provision of the social infrastructure, supported by EU funds, could be compromised by the rise of populism.

Although a final agreement on the MFF could not be reached before the elections, the programming, the management and control of cohesion policy would be areas that could be shaped to a certain extent for future programming discussions, said Anna Wagner from the European Commission.

Luminiţa Odobescu, Permanent Representative of Romania to the EU, affirmed that the Romanian Presidency would do its utmost to ensure that as many sectoral proposals on the MFF as possible were concluded, without finalising the figures, and that agreement on cohesion policy proposals was reached with the Member States, in order to demonstrate the Presidency's commitment and to ensure that programmes could continue in 2021.

The findings of the hearing will feed into the EESC opinion on the future of cohesion policy, which will be put to the vote at the EESC plenary in March 2019.