Pawel Samecki, Europees Commissaris voor regionaal beleid: cohesiebeleid blijft hard nodig (en)

SPEECH/09/ 450

Pawe l SAMECKI

European Commissioner responsible for Regional Policy

European Cohesion Policy post-2013

Figures and graphics available in PDF and WORD PROCESSED

OPEN DAYS UNIVERSITY 2009

Brussels, 8 October 2009

Ladies and gentlemen,

It is a great pleas ure for me to participate in this first edition of the Open Days University. The university is a new feature of our annual Open Days. Its objective is to bring together renowned academics and policy makers and to provide a platform for a free and doubtlessly stimulating exchange of views.

Entering into a dialogue with the academic community is very important to me. I spent the first 10 years of my professional life as an academician in university. In a fast globalizing world responding effectively to new challenges is far from obvious. This is also true for cohesion policy which is oriented at economic and social development in a context of multi-level governance. Reaching out to the academic community, informing you about our work and, most importantly, seeking your advice helps us to improve policy-making and increase the efficiency of policy implementation.

Today we will continue our debate on Cohesion Policy after 2013 which we started in 2007. Since then a number of evaluations and studies have been undertaken to enrich our debate.

I particularly welcome today's opportunity for discussion. I would like to highlight a number of questions regarding our policy, indicate where I see the need for further theoretical and conceptual work before sharing with you my own preliminary views stemming from the debate on the future shape of cohesion policy.

Let me first focus on policy development/design – which questions do we face there?

First , how should cohesion policy evolve in the context of an increasingly integrated global economy? Prospective analysis suggests that global challenges such as globalization, demographic change, climate change and energy sustainability have a strong territorial dimension. And they will most likely generate a substantial asymmetric impact on European territories.

Such an asymmetric impact might further increase existing regional disparities and change the traditional map of disparities resulting in new patterns of risks and opportunities. Further analytical work in this field is therefore needed.

Second , the increasing significance of place for economic development and competitiveness raises a number of questions. The OECD's work suggests that in a rapidly globalizing world, regional and local levels tend to be best placed to exploit the advantages of global processes. The role of place-based policy approaches in capitalising on region-specific assets, such as knowledge, specialisation and proximity is becoming increasingly recognised.

However, we need to know more about these assets to draw correct policy conclusions. We often talk about region-specific assets but how do we define them and what territorial characteristics determine regional development?

A third important issue is the geography of growth . The concentration of economic activity is considered a key driver of economic progress. Also in cohesion policy growth poles play an important role. However, some commentators suggest that development policies should focus exclusively on agglomerations from which growth will spill-over to other territories. In my view, this conclusion is too far-reaching. The evidence from our analysis as well as from recent OECD work suggests that the potential for growth exists across all types of territories. Further research is needed to better understand the functioning of different types of growth poles and the mechanism of spill-over effects in order to draw policy conclusions from the multitude of regional growth stories across Europe.

Finally , there is growing consensus in the academic and policy debate that institutions and governance are among key determinants of economic growth and the success of policies. The implications of such insights for economic development policies, including cohesion policy, however, constitute a complex and relatively new area of research. We often observe that poor institutional environments and weak administrative capacities limit the ability of regions to make the most effective use of available policy instruments. We need to transform such insights into policy.

Let me now move to policy implementation and evaluation – which questions do we face there?

Without any doubt, the governance system of cohesion policy is one of its strengths. It is multi-level indeed. It involves many partners at different levels, creates strong synergies between policy sectors and positive spill-overs on domestic administrative systems, particularly in the new Member States.

However, economic development depends on a mix of factors in completely different areas (human resources, productive sector and entrepreneurship, innovation, infrastructures of different types). Hence, providing concrete and quantifiable evidence of the outcomes and impact of interventions in support of those factors is highly complex. This is particularly the case when cohesion programmes have a broad scope with a wide variety of priorities, as it is normally the case in lagging regions.

In addition, much of our attention has been concentrated on financial management , absorption and fulfilling regulatory requirements. These elements can be measured or checked accurately – this has lured us into maybe overdoing it. The focus on spending and avoiding financial corrections has reduced the emphasis on 'outcomes and impact'. This emphasis needs to be rebalanced .

The Barca report rightly recommends strengthening the focus on performance and results in our policy. But this means that we need to develop the tools to do so. The capacity to establish realistic targets for indicators ex ante is still too poor to build conditionalities on this basis, in the sense of allocating additional funds or withholding funds. As a matter of fact, today the Commission has difficulties to judge if targets have been correctly set. In addition, linking resources to the achievement of targets can lead to perverse behaviour, such as attempts to set artificially low targets, not to mention the subsequent hassle to "audit" the achievements reported. Clearly, much more theoretical and conceptual work is needed in this area.

Evidence shows that cohesion policy implementation – despite successive initiatives to decentralise and simplify - is demanding for national administrations. In all Member States financial management and control is a dominant priority in programme management activity. We therefore need to explore how to find a better balance between necessary rules and procedures while reducing the administrative burden for implementing bodies and beneficiaries.

Another question is how to tailor the delivery system to the very different administrative capacities in Member States, and the wide variation in financial allocations. Apart from qualitative differences that exist among administration capacities in various Member States, there are simple differences based on two variables; the size of administration and the size of allocation. We have to deal with four combinations: big Member States with a small allocation, big Member States with a large allocation, small Member States with a small allocation, and small Member States with a large allocation. Reality is of course even more complex. How can these differences be best captured within a legal framework like the current one? One-size fits all, or should we look for more far-reaching solutions? For example, the combination of a much simpler and more general legal framework and bilateral contracts with each Member State (and, where appropriate, with regions) to fix details in a more tailor-made way.

Finally , some words on evaluation . While Member States have developed a significant capacity for qualitative evaluation, the next challenge is to build up capacity for more rigorous quantitative evaluation . This means experimenting with different evaluation methods for different themes and areas of intervention to understand what works and what does not work in cohesion policy and why. The Commission will pilot these new approaches and we count on you, the academic community, to support us in this exercise.

Let me now move to the final part of my speech and share with you some of my ideas on the future cohesion policy . They do not constitute a doctrine or an exhaustive list of issues; instead this is rather a selection of questions.

First, from the very beginning Europe's project of economic integration was meant to benefit everybody. This integration, driven by the Single Market, can only work if all can contribute and all can benefit. To enable all regions benefit from the Single Market, as well as to make the regions well-prepared to various challenges ahead of them, we need to be able to unlock the potential of regions and individuals. Cohesion policy is central from the point of view of support to regions and people to unveil or to reveal their strengths and potential. That is why the Union needs a strong territorial development policy, as it helps achieve a state of the Union in which not only the best prepared and best equipped regions can benefit from European integration, but also those that would have had difficulties otherwise (that is without this support). Cohesion policy will therefore remain central to the European integration process in the years to come.

Second , we need to concentrate our resources on a limited number of narrowly defined core priorities such as innovation or promoting employment and social inclusion. This would create a European-wide critical mass of interventions on agreed priorities, and focus political and public attention on clear objectives.

Third , there is a need to focus more on performance . This includes a stronger focus on results and conditionalities. This will also require a stronger monitoring and evaluation culture and commitment to learning within partnerships.

Fourth , we need to put a stronger emphasis on developing effective institutions. Experience has shown that tailor-made institutional arrangements are those which are most likely to take root. In addition, there is a strong link between the quality of institutions and economic performance.

Fifth , we need to strengthen the strategic dimension of cohesion policy. And we need to better coordinate policies and instruments at EU level. To this end, we should consider introducing a high level political peer review mechanism for debating and reporting on policy outcomes. Such a peer review would to be a very useful tool, allowing Member States to identify common problems, solutions and good practice.

Sixth , the delivery system needs to become simpler and more efficient. We have already reformed the management and control system. I admit that the shift to the new system has required significant efforts, both on the side of the Member States and the Commission, but I am convinced that this will bear fruit in the coming years. These past reforms should reduce both the annual error rate and simplify the closure of programmes.

We must strike a difficult balance: we must reduce the administrative burden for implementing bodies and beneficiaries while ensuring effective and proper use of the EU budget. Rules and procedures need to be kept to a minimum to achieve the desired policy objectives. But they also need to ensure the legality and regularity of expenditure. Reinforcing the proportionality of procedures in relation to underlying risk could be a way forward.

Finally , I believe that we should make the cohesion policy budget and spending rules more flexible to help generate new ideas and approaches, which we so desperately need. This would also encourage risk taking and experimentation, which we clearly lack in Europe.

To conclude, let me emphasize how much cohesion policy needs sound analysis, new insights and conceptual frameworks based on robust research. I hope we can count on you, the academic community, to support us.

I look forward to the presentations and wish you a solid and fruitful discussion.

Thank you.