POLICY
The primary objective of EU cohesion policy is to reduce the significant economic, social and territorial disparities that still exist between Europe’s regions. Failure to act to reduce these disparities would undermine some of the cornerstones of the EU, including its single market and its currency, the euro.
Cohesion policy also has a key role to play in delivering the Europe 2020 objectives throughout the EU. Well-targeted cohesion spending can deliver real added-value, stimulating growth and creating jobs in Europe’s regions. In accordance with the conclusions of the 5th Cohesion Report7, the Commission proposes to strengthen the focus on results and EU added-value by tying cohesion policy more systematically to the Europe 2020 objectives.
In particular, the Commission is proposing important changes to the way cohesion policy is designed and implemented. Funding will be concentrated on a smaller number of priorities, progress towards agreed objectives will be monitored more closely and strict conditionalities will be established in partnership contracts with the Member States. This will allow EU cohesion policy to make the greatest possible contribution to economic, social and territorial cohesion and the creation of growth and jobs.

INSTRUMENTS
>A common strategic framework
The Commission is proposing to bring the European Regional Development Fund, the European Social Fund and the Cohesion Fund together under a Common Strategic Framework, which will also cover the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund. This will ensure greater coherence between the sources of funding and a much sharper focus on Europe 2020.

>Increased concentration on Europe 2020
To increase the effectiveness of cohesion spending, funding in future will be targeted on a limited number of objectives linked to the priorities of Europe 2020.
Cohesion funding will continue to be concentrated on the less developed regions and Member States. However, in view of the difficulties experienced by Member States in absorbing structural funding and in raising the necessary co-financing, the cohesion allocation will be capped at 2.5% of GNI.
A new category of region – ‘transition regions’ – will be introduced to replace the current phasing-out and phasing-in system. This category will include all regions with a GDP per capita between 75% and 90% of the EU27 average, and more in particular:
•Regions currently eligible under the convergence objective but whose GDP per capita has grown to more than 75% of the EU27 average. As a safety net, these regions will keep two thirds of their current allocation; and
•Regions which – although currently not eligible under the convergence objective – have a GDP per capita between 75% and 90% of the EU27 average. The level of support will vary according to the level of GDP, so that regions with GDP close to 90% of the EU average will receive an aid intensity similar to that of the more developed regions.
Competitiveness regions with GDP above 90% of the EU average will continue to receive support from cohesion policy for a limited number of priorities.
Transition regions and competitiveness regions would be required to focus the entire allocation of cohesion funding (except for the ESF) primarily on energy efficiency and renewable energy; SME competitiveness and innovation. In these regions, investments in energy efficiency and renewable energy will be at least 20%. Convergence regions will be able to devote their allocation to a wider range of objectives reflecting their broader range of development needs.
Finally, territorial cooperation will continue to play its role in helping regions overcome the disadvantages of their location on internal or external borders, in contributing to an ambitious neighbourhood policy and addressing shared cross-border and transnational challenges.
The cohesion instruments will be used to pursue distinct but complementary objectives:
•European Regional Development Fund
The ERDF aims to strengthen economic and social cohesion in the European Union by correcting imbalances between its regions. The ERDF supports regional and local development by co-financing investments in R&D and innovation; climate change and environment; business support to SMEs; services of general economic interests; telecommunication, energy and transport infrastructures; health, education and social infrastructures; and sustainable urban development.
Contrary to the current period, all these types of investment will in future be able to be financed not only by grants but also by financial instruments (risk capital risk funds, local development funds, etc.).
•European Social Fund
The European Social Fund aims to strengthen economic and social cohesion by supporting employment promotion; investment in skills, education and life-long learning; social inclusion and the fight against poverty; and enhancing institutional capacity and efficient public administration.
Minimum shares for the European Social Fund will be established for each category of regions (25% for convergence regions; 40% for transition; and 52% for competiveness regions) and the scope of the European Social Fund will be extended to cover the cost of equipment linked to investments in social and human capital
•Cohesion Fund
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 (see also separate fiche). 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.

IMPLEMENTATION
>Shared management
The support provided through cohesion policy will continue to be subject to shared management by the European Commission and the Member States (except for the Connecting Europe Facility which will be centrally managed), which will be required to provide co-financing. Countries receiving financial assistance in accordance of Article 136 or 143 TFEU will have the possibility of benefitting from a higher rate of co-financing.

>Partnership Contracts
Partnership Contracts between the Commission and each Member State will set out the commitments of partners at national and regional level and the Commission. They will be linked to the objectives of the Europe 2020 strategy and the National Reform Programmes. They will set out an integrated strategy for territorial development supported by all of the relevant EU structural funds and include objectives based on agreed indicators, strategic investments and a number of conditionalities. They will contain commitments to give yearly account of progress in the annual reports on cohesion policy and in other public reporting.

>Integrated programming
Member States will in the future be encouraged to use multi-fund programmes with common processes for preparation, negotiation, management and implementation, in particular where the need for improved coordination of human capital and infrastructure investments is greatest.
Where appropriate, a “lead fund” will be established, linked to the policy domain(s) of the programme. The lead fund’s interventions would be complemented by interventions from the other structural funds so to ensure coherent support for the different thematic objectives under cohesion policy.

>Conditionality
New conditionality provisions will be introduced to ensure that EU funding is focussed on results and creates strong incentives for Member States to ensure the effective delivery of Europe 2020 objectives and targets through Cohesion policy. And to ensure that the effectiveness of cohesion expenditure is not undermined by unsound macro-fiscal policies, conditionality linked to the new economic governance will complement the sector specific ex ante conditionalities set out in each contract.
Conditionality will take the form both of ‘ex ante’ conditions that must be in place before funds are disbursed and ‘ex post’ conditions that will make the release of additional funds contingent on the achievement of pre-specified results. To facilitate this, clear milestones and indicators will be specified and progress monitored rigorously through annual reporting. Lack of progress will give rise to the suspension or cancellation of funding,

>Performance reserve
In order to strengthen the focus on results and the achievement of the Europe 2020 objectives, 5% of the cohesion budget will be set aside and allocated, during a mid-term review, to the Member States and regions whose programmes have met their milestones in relation to the achievement of the programme’s objectives related to Europe 2020 targets and objectives. The milestones will be defined in accordance with the regulations for cohesion policy.

>Innovative financing
In addition to grant funding, it is proposed that cohesion support for enterprises and projects expected to generate substantial financial returns will be delivered primarily through innovative financial instruments. (See also separate fiche on innovative financial instruments)

PROPOSED BUDGET ALLOCATION FOR 2014-2020
All figures in constant 2011 prices
Total proposed budget 2014-2020 €376 bn
Of which
•Convergence regions €162.6 bn
•Transition regions €39 bn
•Competitiveness regions €53.1 bn
•Territorial cooperation €11.7 bn
•Cohesion fund €68.7 bn
•Extra allocation for outermost and sparsely populated regions €926 million
•Connecting Europe Facility for transport, energy and ICT €40 bn plus €10 bn ring fenced inside the Cohesion Fund

Position adopted on 3 June 2011 by the CPMR Political Bureau on conditionality in the framework of the European Cohesion Policy after 2013

The Peripheral Maritime Regions of Europe reject the principle of a macro-economic conditionality, however they welcome positively the principle of an internal conditionality intended to strengthen the effectiveness and added value of cohesion policy, and thus its legitimacy in the medium-term.

They believe that such conditionality has to go hand in hand with a reinforcement of regional partnership. In this context, they urge that a political agreement be drawn up, signed by each Member State between the central government and its regional authorities, on the identification of the thematic priorities of cohesion policy and the delivery of the partnership, to be considered as one of the horizontal ex-ante conditions of the future.

The 3083rd General Affairs Council in its conclusion at meeting held on 23 April 2011 stated:
Conclusions of 13 April 2011, points 19/21 : “19. CALLS UPON the Member States concerned and the Commission to ensure full transparency and visibility as far as the implementation process and further development of the Strategy is concerned and to disseminate to all Member States information, good practices and lessons learned, on the basis of experiences acquired, in view of possible future macro-regional
strategies.
20. Considering the results achieved as well as experiences and good practices acquired during the implementation of existing macro-regional strategies, INVITES the Commission to clarify the concept of macro-regional strategies, to evaluate their value added and submit the outcomes to the Council and the European Parliament by June 2013.
21. INVITES the Member States in cooperation with the Commission to continue to work on possible future macro-regional strategies.”

Furthermore, European Council in its conclusion on 23 June stated:
Conclusions of 23 June 2011, other points – third : “The European Council: (…) endorsed the EU Strategy for the Danube Region and called on all relevant actors to
implement it without delay, as outlined in the Council’s conclusions of 13 April 2011;
Member States are invited to continue work in cooperation with the Commission on possible
future macro-regional strategies, in particular as regards the Adriatic and Ionian region;”

Moving from “Maritime Strategy”, the concept behind the Adriatic and Ioanian Sea Region was endorsed by Maria Damanaki, the EU commissioner for maritime affairs and fisherieson last 24th of May.

“The Adriatic Ionian countries are bound not only by historical links and a common cultural heritage, but also by a shared responsibility for their sea,” she said.
Addressing ministers from the eight countries, Damanaki said she had instructed her staff to work with them on a ‘Maritime Strategy for the Adriatic and Ionian’.
“I extend a special welcome to the non-EU countries and I gladly invite you all to work with us in the coming year, so as to have a proposal ready in 2012,” she concluded.

In the same occasion, Environment Commissioner Janez Potočnik also expressed his backing for the macro-region.
“I am convinced that cooperation will be essential for identifying and addressing the specific challenges for the marine environment in the Adriatic and Ionian Seas and implementing successfully the ecosystem-based approach to the management of human activities”.

Furthermore, the president of the EU’s Committee of the Regions (CoR), Mercedes Bresso, gave her strong support to the demand for a new macro-regional strategy.
“From overfishing to chemical pollution, the Adriatic and Ionian face many challenges that can only be solved if all neighbouring countries pull in the same direction,” said Bresso.
“A European strategy for the entire Adriatic-Ionian ‘macro-region’ would give us the means to tackle these issues together,” the Italian explained.
According to Bresso, participating in a macro-regional strategy would also be a way for the candidate countries and potential candidates in the Western Balkans to strengthen their cooperation with the European Union.
“Proper involvement of local authorities keeps citizens close to the accession process and informed about its concrete advantages,” she added.
Bresso called for a macro-regional strategy to be launched “right now, at a crucial time for defining priorities on future funding programmes for post-2013”.

The CoR is currently preparing an own-initiative opinion on “Territorial cooperation in the Mediterranean through an Adriatic and Ionian Macro-region”. The opinion, drafted by the president of Italy’s Marche Region, Gian Mario Spacca, is due to be adopted at a CoR plenary session in October.

The “Adriatic and Ionian Sea Macro-region” would involve national and regional authorities in 3 EU member states – Italy, Slovenia, Greece – and 6 countries that are preparing to join the EU – Croatia, Bosnia and Herzegovina, Serbia, Montenegro, Albania and Kosovo.

“Future accession of Croatia brings new momentum to the European vocation of the countries of the Western Balkans”, said yesterday EU President Herman Van Rompuy

Map of the Danube Region

The European Commission adopted a Communication on the EU Strategy for the Danube Sea Region on 9 december 2010.
This followed a very precise request from EU Member States asking – in its conclusions of 19 June 2009 – for:
“an EU strategy for the Danube region before the end of 2010”.
Finally, in its conclusion adopted on23 Junethe European Council stated:
European Council Conclusions of 23 June 2011, other points – third : “The European Council: (…) endorsed the EU Strategy for the Danube Region and called on all relevant actors to
implement it without delay, as outlined in the Council’s conclusions of 13 April 2011;
Member States are invited to continue work in cooperation with the Commission on possible
future macro-regional strategies, in particular as regards the Adriatic and Ionian region;”

The Danube Strategy aims at coordinating action by Member States (National Contact-Points), regions, the EU, pan-Danubian organisations, financing institutions and non-governmental bodies. It is NOT an EU internal strategy as amongst States around the Danube area, having the responsibility to take the lead on an integrated approach to identify needs, solutions and match them to available resources,6 States are NOT Members (Croatia, Serbia, Bosnia and Herzegovina, Montenegro, Ukraine and Moldova) while other 8 are EU Members (Austria, Czech Republic, Slovak Republic, Slovenia, Germany, Hungary, Romania, Bulgaria).

Targets will apply to Member States; non Member States will be encouraged to strive towards them in the light of their specific circumstances.

The Governance and Implementation system includes:
i) Action Plan mainly EC/Member States-led, based on 11 priority areas
ii) Policy orientation and prioritisation up to a High Level Group of all Member States. Non Member States should be invited to the Group as appropriate
iii) Strategy and Action Plan to be updated by the Commission, in consultation with the Group
iv) Policy-level coordination to the European Commissionassisted by the Group
v) Implementation on the ground up to:
– Member State (together with non Member States or regions, except for topics which the EU addresses at State level, such as security, serious and organised crime), in consultation with the Commission to coordinate Priority Areas;
– relevant EU agencies and regional bodies;
vi) reports and monitoring to the Commission, in consultation with the Group. Annual Forum, to discuss the work, to consult on revised actions, and to develop new approaches. Countries, the EU institutions, and the stakeholders (especially inter-governmental bodies, the private sector and civil society) participate.
vii) facilitation role of the Commission is assisted by National Contact Points. These ensure co-ordination in each country, identify the relevant contacts, and above all advance practical aspects of the work

On 3 February 2011 in Budapest, Commissioner for Regional Policy, Johannes Hahn, together with Hungarian Foreign Minister Janos Martonyi, announced which countries and regions will coordinate the priority areas of work for the EU Strategy for the Danube Region.

The main 6 challenges this Strategy is supposed to face are:
1) environmental threats (water pollution, floods, climate change)
2) untapped shipping potential and lack of road and rail transport connections
3) insufficient energy connections
4) uneven socio-economic development
5) uncoordinated education, research and innovation systems
6) shortcomings in safety and security

The concept set up by the Commission within the launching and implementation proccess was:
A) No new structures. The implementation is through existing bodies, whose complementarity must be maximised. No overall impact is envisaged on Commission resources
B) – No new EU funds, no new EU legislation.The Strategy provides no new EU funds. There could be additional international, national, regional or private funds, although better use of existing funds is emphasised. Furthermore the Strategy requires no changes to EU legislation, since the EU legislates for the EU27 and not for a macro-region alone. If agreed, there could be changes at national or other levels, to address specific objectives;
C) Consistency with EU legislation and policies is at the core of the Strategy. It addresses implementation gaps, and practical or organisational difficulties leading to lack of results. It supports better implementation of EU legal obligations, especially in relation to the Single Market and the environment. It also contributes to policies such as transport (TEN-T currently under revision, as well as the future transport policy for countries), energy (TEN-E) networks, the strategy for the Single Market (Single Market Act) and the Digital Agenda.
D) since the Danube flows into the Black Sea, it should be coherent with Black Sea perspectives
E) “Priority Area Coordinators” have to deminstrate Danube-wide commitment, acceptance and expertise, ensure implementation (e.g. by agreeing on planning, with targets, indicators and timetables, and by ensuring wide contacts between project promoters, programmes and funding sources, providing technical assistance and advice). This work will be trans-national, inter-sectoral and inter-institutional.
F) Implementation of actions is the responsibility of all, at country, regional, urban and local level. Actions (which state the objective to be reached) must be transformed into concrete projects (which are detailed and require a project leader, a timeframe and financing). These should, while respecting the autonomy of programme decision-making, be actively facilitated in submitting proposals.
G) One example of activity to carry one within the new context is the drawning up of effective management plans for all Natura 2000 sites;
H) Other exemples mentioned are:
– The establishing of benchmarks for e-government and reducing excessive bureaucracy by 2012;
– Maximum 4 weeks for business start-up permissions by 2015;
– Efficient exchange of information between relevant law enforcement actors by 2015 with the aim of improving security and tackling serious and organised crime in the 14 countries;
– Effective co-operation between relevant law enforcement actors by 2015.
I) Particular attention is needed, since the Danube Region includes Member States, which have joined at different moments, as well as countries applying for EU membership, and other third countries. Most face similar problems, but with different resources available

Map of the Baltic Sea Region

The European Commission adopted a Communication on the EU Strategy for the Baltic Sea Region on 10 June 2009.
This followed a very precise request from EU Member States (under the Sweden Presidency), asking before and urging afterwards for:
I) European Council Conclusions of 14 December 2007, point 59: “Without prejudice to the integrated maritime policy, the European Council invites the Commission to present an EU strategy for the Baltic Sea region at the latest by June 2009. This strategy should inter alia help to address the urgent environmental challenges related to the Baltic Sea. The Northern Dimension framework provides the basis for the external aspects of cooperation in the Baltic Sea region.”
II) European Council Conclusions 29/30 October 2009, points 35 – 36 :”35. The European Council adopts the EU Strategy for the Baltic Sea Region and endorses the Council conclusions on the subject (13744/09). This Strategy constitutes an integrated framework to address common challenges, i.a. the urgent environmental challenges related to the Baltic Sea, and to contribute to the economic success of the region and to its social and territorial cohesion, as well as to the competitiveness of the EU.
36. The European Council calls upon all relevant actors to act speedily and ensure full implementation of the Strategy, which could constitute an example of a macro-regional strategy. It invites the Commission to present a progress report to the Council by June 2011.”

It was the first time that a comprehensive Strategy, covering several Community policies, was targeted on a ‘macro-region’.

The Baltic Strategy aims at coordinating action by Member States, regions, the EU, pan-Baltic organisations, financing institutions and non-governmental bodies to promote a more balanced development of the Region. It is is an EU internal strategy,  with 8 Member States (Danmark, Sweden, Finland, Germany, Poland, Lettony, Estony, Lithuany) around the Baltic the EU having the responsibility to take the lead on an integrated approach to identify needs, solutions and match them to available resources,

The Governance and Implementation system is very simple:
i) Policy development up to the European Council
ii) Action Plan mainly EC/Memberstates-led, based on 15 priority areas, actions and examples of flagship projects to be updated on a periodical basis, according to EU BSR Presidencies Calendar: First one is scheduled during the PL presidency in 2011, to be followed during later BSR presidencies: DK 2012 – LT 2013 – LV 2015
iii) Coordination, monitoring and follow-up to the European Commission
– Implementation on the ground up to:
– Member State or equivalent to coordinate Priority Areas;
– Ministry, agency, or other body to lead flagship projects;
iv) monitoring, annual Forum with stakeholders and periodical Analytical report

The 4 cornerstones of this Strategy are:
1) Environmentally sustainable (e.g. reducing pollution in the sea)
2) Prosperous (e.g. promoting innovation in small and medium enterprises);
3) Accessible and attractive (e.g. better transport links)
4) Safe and secure (e.g. improving accident response)

The clear concept set up by the Commission within the launching and implementation proccess was:
A) No new institutions. The Baltic Sea Region has many cooperative structures: EC wouldn’t like to create new ones that could have imposed added administrative overhead without contributing to
effective action
B) Not just a strategy. There must be actions – concrete, visible actions – to overcome the
challenges facing the region. In its action plan, therefore, the Commission insists that Member States and other stakeholders take responsibility as lead partners for specific priority areas and flagship projects, for example by developing integrated maritime governance structures in line with the Integrated Approach to Maritime Policy
C) European Commission involvement. This should go beyond monitoring the implementation of funding programmes and the transposition of Directives. The Commission could fulfil the need for an independent, multi-sector body that can guarantee the necessary co-ordination, monitoring and follow-up of the action plan, as well as a regular updating of the plan and strategy as necessary