Explanatory Memorandum to COM(2011)612 - Cohesion Fund - Main contents
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| dossier | COM(2011)612 - Cohesion Fund. |
|---|---|
| source | COM(2011)612  |
| date | 06-10-2011 |
On 29 June 2011, the Commission adopted a proposal for the next multi-annual financial framework for the period 2014-2020: a budget for delivering the Europe 2020 strategy. In its proposal, the Commission decided that cohesion policy should remain an essential element of the next financial package and underlined its pivotal role in delivering the Europe 2020 strategy.
The Commission therefore proposed a number of important changes to the way cohesion policy is designed and implemented. Concentrating funding on a smaller number of priorities better linked to the Europe 2020 Strategy, focusing on results, monitoring progress towards agreed objectives, increasing the use of conditionalities and simplifying the delivery are among the major hallmarks of the proposal.
This Regulation sets out the provisions governing the Cohesion Fund, and repealing Regulation (EC) No 1084/2006. It draws on the work undertaken since the publication of the Fourth Cohesion Report in May 2007 which outlined the main challenges facing regions in the next decades and launched the debate on the future cohesion policy. On 9 November 2010, the Commission adopted the Fifth Cohesion Report which provided an analysis of social and economic trends and outlined orientations for the future cohesion policy.
Cohesion policy is an important expression of solidarity with the poorer and weakest regions of the EU – but it is more than that. One of the greatest successes of the EU has been its capacity to raise living standards for all its citizens. It does this not only by helping poorer Member States and regions to develop and grow but also through its role in the integration of the Single Market whose size delivers markets and economies of scale to all parts of the EU, rich and poor, big and small. The Commission's evaluation of past cohesion policy spending has shown many examples of added value and of growth and job creating investment that could not have happened without the support of the EU budget. However, the results also show the effects of dispersion and lack of prioritisation. At a time when public money is scarce and when growth enhancing investment is more needed than ever, the Commission has decided to propose important changes to cohesion policy.
The Cohesion Fund helps Member States whose GNI per inhabitant is less than 90% of the EU27 average in making investments in TEN-T transport networks and the environment. Part of the Cohesion Fund allocation (€10 billion) will be ring-fenced to finance core transport networks under the 'Connecting Europe' Facility. The Cohesion Fund can also support projects related to energy, as long as they clearly present a benefit to the environment, for example by promoting energy efficiency and the use of renewable energy.
Contents
Results of the public consultations of 5th Progress Report on Economic and Social Cohesion; the EU Budget Review[1], the proposals for the multi-annual financial framework[2], the Fifth Cohesion Report[3] and consultations following the adoption of the report have all been considered when making the proposals.
The public consultation on the Conclusions of the Fifth Cohesion Report was held between 12 November 2010 and 31 January 2011. A total of 444 contributions were received. Respondents included Member States, regional and local authorities, social partners, European interest organisations, non-governmental organisations, citizens and other stakeholders. The public consultation asked a series of questions about the future of cohesion policy. A summary of the results was published on 13 May 2011 i.
A public consultation was also held on the future Trans-European Transport Network from 4 May 2010 to 15 September 2010. The majority of stakeholders, especially at Member State and regional level, support better coordination between different financial instruments that fund TEN-T at EU level, namely cohesion policy, research and innovation funding, the TEN-T programme and the EIB's interventions.
The results of the ex-post evaluations carried out on the 2000-2006 programmes; and a broad range of studies and expert advice were used as input. Expert advice was also provided through the High Level Group reflecting on future Cohesion Policy, composed of experts from national administrations, with 10 meetings held between 2009 and 2011.
Options were assessed in particular in relation to the Cohesion Fund contribution to investing in basic infrastructure in transport and environment. The Cohesion Fund is aimed at supporting projects in Trans-European transport networks in accordance with Articles 171 and 177 of the Treaty on the Functioning of the European Union.
Various ways of making funding conditional on a sound macro-fiscal framework were assessed, including the status quo, with a weak ex-post conditionality which has never been applied, a strengthened ex post conditionality, and ex ante conditionality, which would require the fulfilment of preconditions before the adoption of the programmes.
An evolution of the current system best fulfils the criteria of ownership, transparency and predictability, while at the same time ensuring that the effectiveness of growth-enhancing investments is not undermined by the pursuit of unsound fiscal policies. Such a procedure implies suspension of part or all of commitments in the case of repeated breaches, and allows some flexibility, but this is limited to exceptional economic circumstances. It also ensures full alignment between the provisions for macro-fiscal conditionality of the Cohesion fund/Structural Funds and the new rules of budgetary surveillance of the Stability and Growth Pact.
European regional policy has an important role to play in mobilising local assets and focusing on the development of endogenous potential.
Article 174 of the Treaty on the Functioning of the European Union (TFEU) calls for action by the European Union to strengthen its economic, social and territorial cohesion and promote overall harmonious development by reducing disparities between the levels of development of regions and promoting development in least favoured regions.
The TFEU states that the Cohesion Fund shall be set up with the aim of contributing to projects in the fields of environment and trans-European networks in the area of transport infrastructure. Article 192 of the TFEU also refers to the use of the Cohesion Fund for environment in cases where the polluter pays principle cannot be applied due to disproportionate costs for the public authorities of a Member State. Protocol No 28 to the TFEU states that the Cohesion Fund will provide support to projects in Member States with a per capita GNI of less than 90% of the Union average.
The timing of the review of EU funding to promote cohesion is linked to the proposal for a new Multiannual Financial Framework, as contained in the Commission Work Programme.
As the EU Budget Review has highlighted, the 'EU budget should be used to finance EU public goods, actions that Member States and regions cannot finance themselves, or where it can secure better results'.[5] The legal proposal will respect the principle of subsidiarity as the tasks of the ERDF are set out in the Treaty and the policy is implemented in accordance with the principle of shared management and respecting the institutional competencies of Member States and regions.
The legislative instrument, and the type of measure (i.e. funding) are both defined in the TFEU, which provides the legal basis for the Cohesion Fund, and states that the tasks, priority objectives and the organisation of the fund shall be defined in regulations.
The Commission's proposal for a Multi-Annual Financial Framework includes a proposal of EUR 376 billion for the period 2014-2020.
Proposed budget 2014-| EUR billion
Convergence regions Transition regions Competitiveness regions Territorial cooperation Cohesion fund Extra allocation for outermost and sparsely populated regions| 162,6 39 53,1 11,7 68,7 0,926
Connecting Europe Facility for transport, energy and ICT| EUR 40 billion (with an additional EUR 10 billion ring fenced inside the Cohesion Fund)
*All figures in constant 2011 prices
The proposed Regulation determines the scope of intervention of the Cohesion Fund. It includes an article on scope defining the general areas for intervention within the area of transport and environment. The scope of intervention is also defined by a negative list of activities which will not be eligible for support, and a list of investment priorities.
In the field of environment, the Cohesion Fund will support investment in climate change adaptation and risk prevention, investment in the water and waste sectors and the urban environment. In line with the Commission's proposals on the Multi-Annual Financial Framework, investment in energy is also eligible for support, provided it has positive environmental benefits. Therefore investment in energy efficiency and renewable energy are also supported.
In the field of transport the Cohesion Fund will contribute to investments in the Trans-European Transport Network, as well as low-carbon transport systems and urban transport.