Opinion of the Committee of the Regions on "The Structural Funds and their coordination with the Cohesion Fund Guidance for programmes in the period 2000-2006"

(2000/C 57/08)

THE COMMITTEE OF THE REGIONS,

having regard to the Commission Communication on The Structural Funds and their coordination with the Cohesion Fund - Guidance for programmes in the period 2000-2006 [COM(1999) 344 final];

having regard to the decision of the Bureau of 2 June 1999 to draw up, in accordance with the fifth paragraph of Article 265 of the Treaty establishing the European Community, an opinion on the subject, and to instruct Commission 1 for Regional Policy, Structural Funds, Economic and Social Cohesion, Cross-Border and Inter-Regional Cooperation to prepare the Committee's work on the subject;

having regard to the draft opinion (CdR 217/99 rev. 1) adopted by Commission 1 on 6 October 1999 [rapporteurs: Mrs du Granrut (F/PPE) and Mr Pettitt (UK/PSE)];

having regard to the Proposal for a Council Regulation (EC) laying down general provisions on the Structural Funds [COM(1998) 131 final];

having regard to the sixth Periodic Report on the social and economic situation and development of the regions of the European Union;

having regard to its Opinion on Agenda 2000: the financing of the European Union after 1999 taking account of enlargement prospects and the challenges of the 21st century (CdR 303/97)(1);

having regard to its Opinion on the Proposal for a Council Regulation (EC) on the European Regional Development Fund (CdR 240/98 fin)(2);

having regard to its Opinion on the Proposal for a Council Regulation on the European Social Fund (CdR 155/98 fin)(3);

having regard to its Opinion on the Proposal for a Council Regulation (EC) amending Regulation (EC) No. 1164/94 establishing a Cohesion Fund and Proposal for a Council Regulation (EC) amending Annex II to Regulation (EC) No. 1164/94 establishing a Cohesion Fund (CdR 235/98 fin)(4);

having regard to its Opinion on Agenda 2000 - reform of the CAP (CdR 273/98 fin)(5);

having regard to its Opinion on the Proposal for a Council Regulation (EC) on support for rural development from the European Agriculture Guidance and Guarantee Fund (EAGGF) 98/0102 (CNS) (CdR 308/98 fin)(6);

having regard to its Opinion on the Commission Communication entitled: Towards an urban agenda in the European Union (CdR 316/97 fin)(7);

having regard to its Opinion on the European Spatial Development Perspective (CdR 266/98 fin)(8),

at its 31st plenary session of 17 and 18 November 1999 (meeting of 18 November) adopted the following opinion.

1. General comments

1.1. The Committee of the Regions welcomes the Commission's decision to produce some common guidance for the Structural Funds and the Cohesion Fund. This will help improve their effectiveness and further European economic and social cohesion.

The Committee notes however that the Commission does not adequately highlight the distinctive role of the Cohesion and Structural Funds and how they should work together to promote social and economic development and cohesion. Whereas the Cohesion Fund primarily supports macro-economic policies and development, the Structural Funds deal with the regional and local level of economic development. Effective coordination between the two Funds is essential if regional economic disparities are to be reduced.

The Committee further notes that the Commission does not bring out sufficiently clearly that reducing regional disparities and the general level of unemployment in the European Union calls for greater involvement of local and regional authorities in the preparation, follow-up and implementation of the new programmes for the period 2000-2006. Neither does the guidance mention the specific situation of mountain and hill areas, the outlying and most remote regions, and sparsely populated regions.

1.2. As it has already indicated in its opinion on the proposal for a Council Regulation laying down general provisions on the Structural Funds, the Committee feels that the "bottom-up" approach needs to be strongly emphasised, as does the binding nature of the programming documents for implementing Structural Fund assistance.

1.3. The Committee believes that employment and competitiveness should be a constant target for Structural Fund assistance but also for all public and private players at European, national, regional and local level. It welcomes the fact that local employment initiatives, such as the territorial employment pacts, are noted and recognised as examples of success, but regrets the fact that local and regional authorities are not more closely involved in the employment action priorities decided on at Community and national level.

1.4. The Committee believes that the Structural and Cohesion Fund programmes should be developed and implemented through strong local democratic partnerships. The Committee therefore welcomes the Commission's proposal that assistance from the Structural Funds and the Cohesion Fund should be based on the establishment of a broader, decentralised partnership, as the Committee believes this to be a key factor in the success of the programmes. However, the Committee recommends that suitable organisational conditions be created for such a partnership to be able to operate efficiently, and the Committee also advocates stronger monitoring of these conditions in all Member States to ensure that the subsidiarity principle is applied in an effective and meaningful manner.

1.5. The Committee welcomes the mainstreaming of sustainable development and equal opportunity. It calls for the observance of these principles to be guaranteed by means of standard indicators, to be defined by the Member States and local and regional authorities when programmes are being drawn up. These indicators will then make it easier to monitor and evaluate the programmes.

1.6. While maintaining flexibility in Structural Fund actions, the Committee mentions the importance of linkages to the European Spatial Development Perspective (ESDP); this could involve across-the-board coordination of sectoral policies and some sort of linkage between the various tiers of territorial authority involved in spatial planning and development.

1.7. The Committee would like to draw the Commission's attention to the effects of competition between regions within the Economic and Monetary Union, which will show up differences between local taxation and social security conditions. It will therefore be necessary to ensure that the Structural Funds do not increase the risk of company relocation. In this respect, the single currency will facilitate comparisons between the different taxation and social systems in each Member State. This could trigger tax competition in which taxes are driven down. If such a situation is to be avoided, a minimum level of harmonisation for capital taxation will be required. The Commission should also keep a close eye on the scope of tax incentives to ensure that these do not distort competition.

2. Specific comments

2.1. Conditions for growth and employment: regional competitiveness

2.1.1. The Committee of the Regions endorses the line taken by the Commission on creating the basic conditions for regional competitiveness in terms of transport infrastructure, energy, telecommunications, infrastructure for a high-quality environment, and research, technological development and innovation. However, it would have liked this statement of how to create the basic conditions for competitiveness to be taken further with the framing of practical development measures, which are the main aim of the exercise.

2.1.2. The Committee would draw the Commission's attention to the problem of linkage between the Structural Funds and State aid, as the areas of intervention and the objectives may be different and local and regional authorities are not involved in their definition. The Committee is also aware that the introduction of Economic and Monetary Union means that the free interplay of competitive forces will become less and less distorted by direct aid to companies. While the Committee is in favour of reducing capital subsidies to companies, it would urge that emphasis be placed on a wide range of aid capable of meeting the specific and varied needs of the regional economy, i.e. companies at regional level, especially those situated in the most disadvantaged regions.

2.1.3. The Committee endorses the priorities chosen for transport infrastructure: efficiency, interoperability, modal balance, accessibility and reducing environmental impact; it nevertheless recommends greater involvement of local and regional authorities in implementing these priorities, particularly in the area of urban and inter-city transport in the interests of polycentric development and town/country partnership. The Committee recognises that less developed regions have a more acute need for infrastructure development. However the Committee believes that Structural Funds in Objective 2 areas should be available to meet infrastructure needs where these can be demonstrated as necessary for regional competitiveness and promoting sustainability. Similarly, the Cohesion Fund and Structural Funds should if necessary be deployed in sustainable regional and local transport systems which are highly environment-friendly and widen access to trans-European networks for large sectors of the population, thus promoting intermodality.

2.1.4. In connection with the priorities mentioned for the energy sector, especially energy-saving, the Committee urges the development of renewable energy sources and wind and solar power as ways of meeting the needs of underdeveloped areas.

2.1.5. In the area of telecommunications, the Committee would point out that development of the information society hinges on members of the public having widespread access to these new tools in all their professional, personal and cultural activities.

2.1.6. The Committee endorses all three aspects of improving the quality of the environment: water supply and waste water management, waste management and the reclamation of contaminated sites, as well as the polluter-pays principle. It would point out that this type of action is generally of an inter-regional and sometimes transnational nature. The Committee strongly supports the reclamation of brownfield sites, as this contributes not only to the quality of the environment but also to the economic and social renewal of regions in decline. It therefore requests that environmental measures designed to rehabilitate brownfield sites be explicitly mentioned in the Community Support Frameworks and the programming documents.

2.1.7. The Committee stresses that promoting RTD and innovation capacities should be integrated in all areas of Fund intervention. It should be possible to marshal such capacities in each region by creating networks and centres of expertise involving universities, research centres and businesses. The Committee would also stress that the service sector should be included in the area of research and innovation.

2.1.8. On the question of business support, the Committee would like such support to be extended to very small businesses, especially with regard to their organisational aspects, integrated support and recourse to the private sector. It would draw attention to the role of local and regional authorities in the establishment and implementation of integrated business support services, as stated in 2.1.2.

2.1.9. Among the areas with particular job-creating potential, the Committee would highlight the services sector, culture, heritage restoration and tourism (which are closely interlinked and include reclaiming industrial sites) the knowledge economy and the social economy, development of which is in line with sociological and demographic trends in the EU Member States. Consequently, the evaluation aspect of structural assistance is especially important. Evaluation is not purely an obligation from an administrative point of view, but is also an analytical tool used to draw important conclusions from the measures introduced. Such conclusions can then be taken into account in future programming.

2.2. The European Employment Strategy: a key priority for the Community

2.2.1. The Committee of the Regions believes that the Commission can never lay enough emphasis on the importance of ensuring complementarity between national action programmes receiving support from the ESF operating regionally and regionally-planned programmes financed by the ERDF. Consistency of action by all the Community's Structural Funds depends on this. The Committee would point out that the public funds needed to trigger ESF assistance are generally put up by local and regional authorities, as these are usually the bodies responsible for education, training, apprenticeships and job-finding.

2.2.2. The Committee notes that the new measures proposed by the Commission to encourage active labour market policies and promote employment, to combat exclusion of the underprivileged and to develop labour-force adaptability and entrepreneurship are things which have often been tried out already by local and regional authorities, particularly in the territorial employment pacts. The Committee would like stock to be taken of this, in order to identify best practice and draw on this experience in preparing the programmes to be implemented in 2000-2006 in both objective 2 and objective 1 regions.

2.2.3. With regard to positive measures for women, the Committee recommends a tie-in with the Community's "Equal" programme and stresses the under-exploited potential of women for setting up their own businesses, and it may be appropriate to encourage such measures by setting higher co-financing rates.

2.3. Urban and rural development and their contribution to balanced territorial development

2.3.1. The Committee of the Regions welcomes the Commission's reference to the European Spatial Development Perspective which encourages integrated action to promote genuine synergy between urban and rural development, thereby ensuring balanced territorial development of the regions. However, this town/country partnership must be based on specific action targeting the particular problems of each within an integrated regional framework.

2.3.2. With regard to urban problems, and while endorsing the four interdependent goals set out in the Commission communication on urban development, the Committee wishes to place the emphasis on:

- the framework for action represented by the "functional urban area", a new area for action which calls for an association of local authorities;

- the role of urban areas as a melting-pot of cultures and of the social and technological innovation needed to maintain and further the dynamism of those areas;

- the experimental potential of urban areas, not only with regard to public transport, for example, but also with regard to public administration.

In this connection the Committee is pleased that the Community's "Urban" programme is continuing.

2.3.3. With regard to rural development, the Committee believes that rural areas are of prime importance in the EU's spatial and economic development. It feels the need here for a thorough renewal and genuine diversification of the economic set-up but is aware that this will only take place if local initiatives receive strong backing not only from the Structural Funds, including the EAGGF Guarantee Section, but also from neighbouring urban areas or town networks.

2.3.4. The Committee stresses the importance of this synergy, which is clearly described in the ESDP in the form of an integrated development initiative. The Committee would like this idea to be tried out by including it as often as possible in the programmes for objective 1 and objective 2 areas for the period 2000-2006.

3. Conclusions

3.1. The Committee of the Regions welcomes the fact that the Commission is proposing guidelines for coordinating Cohesion Fund action more closely with Structural Fund action. It would nevertheless point out that the guidance does not mention the specific situation of mountain and hill areas, the outlying and most remote regions, and sparsely populated regions.

3.2. To secure effective coordination and to promote economic growth and greater social cohesion, the Committee of the Regions advocates a more precise definition of the respective roles of the Funds and of how they are linked.

3.3. The Committee of the Regions stresses that local and regional authorities should be involved in the preparation, implementation and follow-up of the programmes. Such decentralised partnership, based on the democratic bottom-up approach, should be implemented in an effective manner, as it provides a guarantee for more effective job creation, regional competitiveness and sustainable development.

3.4. The Committee of the Regions notes that in a single, free and competitive market the competitiveness of the regions is rooted in an integrated investment and development approach at both decisionmaking and sectoral level. Attempts to achieve synergies between the different areas of action should be encouraged.

3.5. The Committee of the Regions stresses that the Structural Funds ought to be able to intervene in Objective 2 regions in such matters as transport infrastructure and interoperability, tele-communications infrastructure and its provision in, especially, outlying and extremely remote regions. The Committee would underline that this also applies to energy and environmental programmes, particularly those concerning research and development and aid to firms. In all these areas it would point out that regional and local authorities are best placed to identify economic and social needs.

3.6. The Committee of the Regions reiterates the pressing need to create jobs, and to this end it suggests that the ESF be allowed to back up ERDF-financial local and regional measures which have proved their effectiveness in this respect, such as the territorial employment pacts. It notes that it is most often the regional and local authorities who have responsibility for education and training. Such action, linked to research and technological development and innovation, particularly in management, is best able to secure the establishment of durable industrial and service enterprises.

3.7. The Committee of the Regions approves the principle of complementarity between the development of urban and rural areas. In this respect, it proposes an integrated development approach such as advocated by the ESDP, whereby a driving force is created for the economic and cultural development of urban areas, networks of towns and rural areas surrounding them. It should be possible to run pilot schemes along these lines under the Urban Community Initiative.

3.8. In general, the cooperation being sought between the Cohesion Fund and the Structural Fund ought to provide an opportunity to demonstrate the effectiveness of decentralised partnerships and a bottom-up approach to the use of the Community Funds.

Brussels, 18 November 1999.

The President

of the Committee of the Regions

Manfred DAMMEYER

(1) OJ C 64 of 27.2.1998, p. 40.

(2) OJ C 51 of 22.2.1999, p. 1.

(3) OJ C 51 of 22.2.1999, p. 48.

(4) OJ C 51 of 22.2.1999, p. 10.

(5) OJ C 93 of 6.4.1999, p. 1.

(6) OJ C 93 of 6.4.1999, p. 9.

(7) OJ C 251 of 10.8.1998, p. 11.

(8) OJ C 93 of 6.4.1999, p. 36.