Original publication: April 2017
Authors: European Policies Research Centre, University of Strathclyde, Glasgow: John BACHTLER, Laura POLVERARI
with contributions by Irene McMASTER and Timothée LEHURAUX.
Short link to this post: http://bit.ly/2rMfv5N

Aim and background to the study

This study discusses the essential themes expected to be part of the debate on the post-2020 Cohesion Policy. It covers the rationale and overall framework of the policy, current and future challenges, and the post-2020 delivery system. The context in which debates on the future are taking place is more challenging than previously, and the recent White Paper on the Future of Europe frames Cohesion Policy in negative terms. Advocacy of a continued strong role of Cohesion Policy has, however, started to emerge from EU, national and regional institutions.

 

Rationale for Cohesion Policy and overall framework

Achieving economic, social and territorial cohesion remains a major challenge and the negative impact of inequality has increasingly acquired a political dimension. While there are major territorial economic, social and political challenges facing the EU, the rationale for Cohesion Policy has increasingly been presented and justified in broader terms. Through thematic concentration, the ESIF programmes have been strongly orientated towards supporting the Europe 2020 strategy. However, there is significant variation across the EU in the progress towards achieving Europe 2020 targets: less developed regions are the farthest behind and innovation remains spatially concentrated. The alignment of Cohesion Policy with Europe 2020 raises questions about the balance between different policy goals, the need for a multilevel approach to Europe 2020 and EU economic governance, and the timetables of the two sets of policies.

Against the current uncertain outlook, there is no clear information on a successor to Europe 2020. The Commission has launched multi-annual sectoral strategies and the EU committed to the ‘2030 Agenda for Sustainable Development’. One of the Commission priorities for post-2020 reform is to strengthen economic governance, to ensure closer coordination of economic policies and achieve a genuine EMU. A key challenge will be establishing stabilisation mechanisms to deal with asymmetric shocks. A more immediate concern is the pursuit of structural reforms within the Member States. There are concerns, however, that the links between structural reforms through strengthened economic governance and Cohesion Policy are kept proportionate and relevant.

Current and future challenges for Cohesion Policy

Since the 2013 reform of the MFF, new challenges have emerged or intensified, including migration, climate change, geopolitical risks, the digital agenda and energy security. In some of these areas – economic growth, climate change/energy, digital Europe – Cohesion Policy plays a significant part, both financially and indirectly through ex ante conditionalities. In others, notably the management of migration, Cohesion Policy plays a more limited but equally significant role.

Trust in both the EU and national institutions is low. Just over one third of EU Citizens trust the Union (36 percent) according to the last Eurobarometer survey, a slightly higher proportion than those who trust their national parliaments (32 percent) and governments (31 percent). Forthcoming elections during the MFF timetable may present challenges for the continuation and shape of future EU integration. While there is support for the EU among most of the larger parties, and consensus on EU membership and integration across the political spectrum in many countries, the strength of anti-EU sentiment means that Eurosceptic parties may record a sizeable vote and (in some cases) be part of coalition governments.

Brexit will have affect budgetary management of commitments for the 2014-20 period and the size and scope of the post-2020 MFF. The loss of UK budgetary contributions will mean either a lower EU budget overall or increased financing requirements for net payers after 2020. Clearing the effect of Brexit on all accounts may take until 2025. It will impact on the different EU spending headings (which  would affect the overall Cohesion Policy budget) and on the distributional consequences for Member State eligibility, due to shifts in average GPD per capita levels. One area of Cohesion Policy where the UK may decide to continue involvement is European Territorial Cooperation.

Post-2020 delivery system

Synergies among the ESI Funds and with other EU instruments have improved in 2014-20, especially in research and innovation, but there is scope for further coherence if greater harmonisation of rules could be achieved. Cohesion Policy spending is relatively inflexible at the level of the MFF. Options for more flexibility include of an unallocated reserve at EU, national or programme levels, shorter programme periods or simplified reprogramming. An EU-level reserve within Cohesion Policy would seem to offer most potential.

Simplification measures were introduced as part of the 2013 reforms but have primarily helped beneficiaries rather than Managing Authorities. New simplification measures proposed by the High-Level Group for the post 2020 period relate to e-governance, simplified costs options, access to funding for SMEs, Financial Instruments, and gold-plating.

There is increasing recognition of the need for a more differentiated approach in the management and implementation of Cohesion Policy. However, this would need to be seen as fair by all Member States, and there are formidable challenges relating to the principles, methods and criteria for differentiation. A potential first step in the direction of more radical simplification or differentiation is the Commission proposal for performance-based budgeting for groups of operations as part of the negotiations on the Omnibus Regulation.

Conclusions

The reform of the EU budget and policy priorities in the post-2020 Multiannual Financial Framework comes at a difficult time for the EU  with major internal and external challenges. As in previous reform debates, Cohesion Policy is under pressure to justify its added value in relation to EU political objectives. The latest data show that the challenges for economic, social and territorial cohesion remain  profound. There is increasing evidence of Cohesion Policy effectiveness, but there are also competing pressures on the EU budget. While Cohesion Policy is already making a substantial contribution to wider EU policy priorities – both longer standing and more recent – one of the difficult debates for post-2020 is to clarify the priorities for Cohesion Policy and its relationship with other EU policies. Discussions will also focus on delivery, namely on how to achieve simplification, facilitate synergies and provide for increased flexibility.

Link to the full study: http://bit.ly/601-974

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