Opinion of the Committee of the Regions on the 'Views of the regions and local authorities on arrangements for European Structural Policy after 1999` (98/C 64/02)

THE COMMITTEE OF THE REGIONS,

having regard to its decision of 11 June 1997, pursuant to Article 198c(4) of the Treaty establishing the European Community, to issue an opinion on the Views of the Regions and Local Authorities on Arrangements for European Structural Policy after 1999 and to direct Commission 1 (Regional Development, Economic Development and Local and Regional Finances) to undertake the preparatory work;

having regard to the draft opinion (CdR 131/97 rev. 2) adopted by Commission 1 on 3 October 1997 (rapporteurs: Mr Behrendt and Mr Fraga Iribarne);

having regard to the proposals on economic and social cohesion set out in the European Commission's document entitled 'Agenda 2000: for a stronger and wider union` (COM(97) 2000 final);

having regard to Article B of the EU Treaty and Article 2 of the EC Treaty, which make the promotion of economic and social progress which is balanced and sustainable, the strengthening of economic and social cohesion and solidarity among the Member States, objectives and tasks of the European Union and the European Community;

having regard to the Community policy, formulated in Article 130a of the EC Treaty, for the strengthening of economic and social cohesion and the aim of reducing disparities between the levels of development of the various regions and the backwardness of the least-favoured regions, including rural areas;

having regard to the task of the Community, defined in Article 130b of the Treaty, of supporting the efforts of the Member States to strengthen economic and social cohesion via the European Structural Funds, the European Investment Bank and the other existing financial instruments;

having regard to the task of the European Fund for Regional Development, defined in Article 130c of the Treaty, of helping to redress the main regional imbalances in the Community, the task of the European Social Fund, defined in Article 123 of the Treaty, of improving employment opportunities for workers in the internal market, and the task of the guidance section of the European Agricultural Guidance and Guarantee Fund of achieving the objectives of the Common Agricultural Policy;

having regard to the right of the Committee of the Regions, laid down in Articles 130d and 130e of the Treaty, to be consulted on the definition of the tasks, priority objectives, organization, general rules and implementing provisions of the Structural Funds and on the reporting on progress on achieving economic and social cohesion,

adopted the following opinion at its 20th plenary session on 19 and 20 November 1997 (meeting of 19 November).

1. The current system of European structural policy

1.1. Theoretical basis

1.1.1. The Committee of the Regions subscribes to the values of the social market economy as a form of economic system which takes as a basis market forces and freedom to engage in entrepreneurial activity and, at the same time, sets out to shoulder social responsibility for members of society. The core of this social structure is solidarity between the stronger and weaker groups in society. This is based on the recognition that the free play of market forces does not automatically result in social justice. The Committee of the Regions considers that the development of Europe after the second world war is convincing proof of the effectiveness of this economic system.

1.1.2. Sharp economic and social disparities between the regions of the Community, eighteen million people unsuccessfully searching for jobs, the end of the cold war and the dramatic changes in the international division of labour occasioned by the development of modern information and communications technologies confront people in the Community with new challenges which are perceived by many as a threat. In view of these changes the Community is more than ever obliged to redefine the concept of solidarity and to demonstrate its capacity for reform.

1.1.3. European structural policy is part of these changes. Conceptually, structural policy is based on solidarity between the weaker and the more robust Member States and regions of the Community. European structural policy seeks to support those Member States and regions whose performance has fallen in relation to the Community average, enabling them to participate once again as equal partners in the economic and social processes of the Community. European structural policy complements the efforts made by the Member States, who carry the main responsibility for smoothing out regional differences. In this way, European structural policy helps ensure that competitiveness can be established or re-established and that there is a lasting improvement in economic development.

1.1.4. European structural policy is thus based on a long-term approach to development. Only on the basis of long-term development plans can the right conditions be established in problem regions for self-sustaining development which is also justified in terms of competitiveness. At the same time, this process of change has to promote new types of work organization and investments in human resources. There must be an optimum link between long-term employment policy and an active labour market policy along the lines set out in the new employment chapter of the Amsterdam Treaty. Measures to improve the job situation must involve action to combat unemployment, within the context of equal opportunities.

1.1.5. European structural policy provides aid for self-help over a limited period. The use of resources can be said to have succeeded when the beneficiary regions no longer fulfil the criteria for support. Regions once eligible for geographically-based support cannot thus automatically lay claim to continuing support from the Structural Funds. Loss of eligibility can be regarded as proof of the successful use of support. The Committee of the Regions does not however consider that this precludes limited transitional arrangements being agreed for regions no longer qualifying for support, in order to prevent serious disruption. In this way progress made can be safeguarded. The Committee of the Regions considers that ultimately the aim of the Structural Funds should be to make themselves superfluous; they should expire once the objective of support has been achieved.

1.1.6. The Committee of the Regions stresses that the main responsibility for achieving the objective of economic and social cohesion lies with the Member States of the Community. European structural policy is there to help the Member States and regions to achieve this objective. It does not however absolve the Member States of their responsibilities.

1.2. The Structural Funds

1.2.1. The Union's structural policies, which are the main instruments, although not the only ones, for the implementation of the objective of economic and social cohesion, make use of a number of financial instruments: the Regional Fund, the Social Fund, the guidance section of the EAGGF, the financial instrument for fisheries guidance, the Cohesion Fund and European Investment Bank loans.

1.2.2. It is important to point out that these six instruments, which are governed by separate regulations as well as the coordination directive, have different origins, both in time (they were adopted at different stages of the process of European integration) and in terms of their primary objectives. Their integration into the framework of structural policy is of more recent date, as are the multi-fund operational programmes. This empirical approach to integration and coordination does not necessarily produce the best results in terms of the practical arrangements for application. Although the Structural Funds operate in a common framework based on the principles of concentration, programming, cooperation and additionality, it should be borne in mind that their specific implementing regulations are different, and above all that the bodies responsible for their management at Community, national and sometimes regional level are different.

1.2.3. This does not make the programming and implementation procedures any easier where programmes are concerned involving more than one financial instrument, which is usually the case. Cohesion Fund and EIB support is based on a project approach governed by specific rules. The aim should be to simplify authorization, implementation and accounting procedures with regard to Structural Fund resources. Moreover, in accordance with the subsidiarity principle, Member States and/or regions should be able to determine appropriate measures autonomously.

1.2.4. The Structural Funds are at present concentrated on four regional policy objectives, which together account for 85 % of financing:

- Objective 1 for the development of regions whose development is lagging behind (about 70 % of the total). The population covered by Objective 1 currently amounts to 92,5 million or 26,6 % of the EU population. Overall, EU per capita financing in Objective 1 regions rose by about a third in real terms in 1994 when a new programming period began;

- Objective 2 for the conversion of regions seriously affected by industrial decline (11 % of the total). 16,4 % of the EU's population lives in areas currently eligible for Objective 2 financing, a little more than the 15 % recommended in the preamble to the regulation. Additional resources assigned to Objective 2 during the period 1994-1999 were used to increase the amount of aid paid per capita;

- Objective 5b for the structural adjustment of rural areas (4 % of the total). 8,1 % of the EU's population lives in areas currently eligible for Objective 5b financing, compared with 5 % in the previous period; as a result of the larger population covered aid per capita remains virtually unchanged;

- Objective 6 for the structural adjustment of regions with an extremely low population density (0,5 % of the total). This objective covers extensive areas which however account for only 0,4 % of the EU's total population. Per capita aid is lower than that for Objective 1.

1.2.5. Three objectives are not specifically regional and apply to the whole of the Union. Together they account for 15 % of the remaining funding:

- Objective 3 for youth and long-term unemployed;

- Objective 4 to help workers adapt to industrial change;

- Objective 5a for adjustment in the agriculture and fisheries sector.

1.2.6. The volume of structural support has risen steadily and significantly since the beginning of the 1980s. Leaving loans aside, financing available for structural support rose from ECU 3,7 billion a year in 1983 to ECU 18,3 billion in 1992 and is expected to reach ECU 33 billion by 1999. Total Structural Fund financing for the programming period 1994-1999 amounts to almost ECU 170 billion, about one third of the EU budget for this period or 0,4 % of Community GDP.

1.2.7. Around 90 % of these funds are used for measures taken on the initiative of the Member States. More than 300 operative programmes have therefore been approved jointly by the Member States and the Commission over the period 1994-1999, half of these being for Objective 1 areas.

1.2.8. The financing of Community initiatives is at present very diverse (13 initiatives and 7 themes). This represents about 9 % of available structural financing and relates to some 400 programmes. Finally, about 1 % of structural financing is reserved for technical assistance and innovatory measures, on which the Commission decides on the basis of public calls for tender.

1.2.9. Structural policy is concentrated on three main areas: infrastructure (30 % of funding goes on investment in transport, telecommunications, energy, water supply and environmental protection), human resources (30 % of funding is earmarked for education, training and support for labour-market measures) and productive investment (40 % of funding goes on the development of a dynamic environment for firms and support for assistance to industry and particularly SMEs).

1.3. The current situation of European structural policy

1.3.1. The first report on economic and social cohesion in the European Union submitted by the European Commission in November 1996 shows that structural policies have had a strong equalising effect.

1.3.2. This effect is estimated at ten times the amount of structural spending. For the current programming period (1994-1999) the reduction in per capita regional income disparities is estimated at approximately 5 % of GDP, with aid amounting to 0,45 % of GDP. This multiplier effect is particularly high and can be attributed to the fact that structural transfers are aimed primarily at reinforcing productive capacity in the beneficiary regions as a result of investment in physical and human capital.

1.3.3. The report analyses the economic cohesion of the Member States and regions on the basis of the development of per capita GDP. Particular attention is paid to the four cohesion countries which, thanks to above-average economic growth, were able to increase their per capita GDP from 66 % to 73 % of the EU average. The clearest progress was made by Ireland, which in 1995 attained about 90 % of the EU average, compared with 63,6 % in 1983.

1.3.4. Progress was also made by the regions in approaching the Community average, although this was not as clear-cut as at Member State level. Thus between 1983 and 1993 the Community's ten poorest regions raised their per capita GDP from 44 % to 48 % of the Community average. In relation to the 25 poorest regions the gain was 2 %, from 53 % to 55 %. Overall, the same welcome reduction in disparities was not evident at regional level as at Member State level. In some cases regional disparities actually increased.

1.3.5. Although the structural policies have made it possible to improve the situation of the least developed regions, disparities between the richest and poorest regions have not diminished. The per capita income of the 25 most prosperous regions increased from 140 % to 142 % of the Community average, whilst that of the 25 poorest regions grew from 53 % to 55 % of the same average.

1.3.6. From the point of view of the regions and local authorities this result needs to be taken very seriously and leads to the conclusion that Structural Fund interventions have not always achieved the desired objectives. The Committee of the Regions therefore expresses its concern that the regional and local authorities are not participating sufficiently in European structural policy. The Committee is convinced that the participation of regional players would have enhanced the positive impact associated with use of the Structural Funds on the ground. It was in this connection that the Opinion on the role of regional and local authorities in the partnership principle of the Structural Funds () pointed to the vital importance of the involvement of the regional and local authorities in the framework of the principle of partnership:

'The partnership principle is important since active and efficient partnerships will lead to the creation of effective programmes and the effective use of Structural Funds at local and regional level. The partnerships assemble the important actors, both regionally and locally, who have a detailed knowledge of their area and can identify the strengths and weaknesses in economic terms. Moreover, partnerships embody subsidiarity and give a sense of joint ownership of the programme.`

1.3.7. In relation to the labour market, the report concludes that despite a record unemployment rate of 11 % of the workforce (18 million unemployed) there was a net gain of 10 million jobs during the 1980s. However between 1991 and 1994 4,5 million jobs were again lost, reinforcing the tendency to unemployment disparities in the regions. At the same time the active population grew by 1 % annually, further exacerbating the labour market situation. Overall, economic growth in the EU was not as employment-intensive as in the USA, as it was mainly attributable to productivity gains which were, moreover, also in part brought about by structural changes attendant upon the removal of relatively labour-intensive production processes.

1.3.8. With regard to unemployment, regional disparities have intensified and the frequency of unemployment is much less equally distributed: in ten years the unemployment rate has fallen from 4,8 % to 4,6 % of the active population in the 25 least affected regions and has risen from 17,2 % to 22,4 % in the 25 worst affected regions.

1.3.9. However, the comparability of data is greatly influenced by the diversity of the labour market arrangements of the various Member States. This greatly restricts the usefulness of labour-market statistics, particularly with regard to EU-wide comparability.

1.3.10. The report also states that regional dependence on sectors has a considerable influence on the situation of the labour market. Thus unemployment in the regions most dependent on the agricultural sector is much higher than the EU average. Rising unemployment in cities is a growing problem. The existence side-by-side of prosperous and low-income districts is becoming increasingly common.

1.3.11. The COR position is that efforts to deepen European integration will succeed only if regional policy assists weak regions and consequently, if citizens see and feel improvements to their living standards. All the indicators used by the Commission in the Cohesion Report to measure regional disparities point to much more pronounced disparities at regional than at national level. And this applies independently of the level of prosperity of the various Member States. The Committee of the Regions feels that European integration and the principle of solidarity require that particular attention be paid to these problems in the Community. The Committee of the Regions is convinced that efforts to deepen European integration will succeed only if citizens can see and feel the improvements in their living standards.

1.3.12. These economic and social disparities reflect in particular the development gap between the central and peripheral regions of Europe. The tables showing the per capita GDP of the richest and poorest regions and the unemployment rates in the least and most affected regions show that the imbalance between the centre and the periphery has remained remarkably strong and constant.

1.3.13. The Committee of the Regions is concerned at the poverty in the EU revealed by the report. It is a sobering thought that if social transfers were to cease, 40 % of households would be below the poverty level. These are the people who should enjoy the Community's solidarity.

1.3.14. The report rightly points out that it is in the cities where social contrasts are the most striking. Here, the Committee feels, is a major future challenge for policy. The Committee also points out that the problems of cities cannot be considered in isolation from the development problems of the regions. Urban problems are not directly addressed by the Structural Funds, and the Community initiatives, although useful, do not offer comprehensive policy coverage and resources at EU level. The next set of programmes should include measures specific to the needs of urban areas. In cases where the interests of cities are not sufficiently integrated into the objectives, it must be ensured that sufficient account is taken of urban interests in the framework of partnership.

2. Challenges for future structural policy

There are two driving forces behind European unification: internal unification (economic, political, monetary, etc.) and the enlargement of the Community. Another driving force is the integration of Europe into the world economy via the process of globalization.

2.1. Globalization

2.1.1. In its Cohesion Report the European Commission comes to the important conclusion that economic globalization has a major impact on the development of regional disparities in Europe. A policy more focused on economic and social cohesion is needed for the Member States and regions to take account of this.

2.1.2. There is a real danger of polarization of society and the regions, leading to the exclusion of populations and areas unable to integrate into the globalized economy. The objective of cohesion, as pursued by the structural policies, is to limit such polarization. Europe's integration into a globalized economy is thus the most important strategic objective for the future of Europe's regions.

2.1.3. This gives rise to an urgent need to improve vocational skills and qualifications, to promote technical progress and research and to improve continuously the quality of regional business locations and competitiveness. The structural policies have an essential role to play in these areas.

2.1.4. The Committee of the Regions is convinced that in future particular attention must be paid to measures most likely to bring about a lasting improvement in the competitiveness of the regions and thus in people's living conditions. Improved productivity and consequent improved competitiveness is the essential factor in bringing about a long-term improvement in economic prosperity and contributing to a steadily rising standard of living and an improved quality of life. The Committee of the Regions endorses the view expressed in the Cohesion Report that research and development and the successful application of innovations are key factors in ensuring steadily increasing economic prosperity.

2.1.5. Agenda 2000 expressly underlines that Europe must adapt itself to ongoing economic globalization. The Committee of the Regions firmly believes that the implications for European structural policy are that it has to target improvements in supply conditions in the regions in a variety of ways; the goal of regional development is served by the development of infrastructure and opportunities for investment, particularly by SMEs, support for innovation and the transfer of knowledge to peripheral regions and the conservation and care of rural areas. By combining this with measures to raise workers' skills via further training, productivity will be increased overall and the conditions improved for a lasting increase in prosperity. The Member State bodies responsible under national arrangements, as well as the regional and local authorities, should continue to be involved here in shaping structural policies which affect them.

2.2. Combating unemployment

2.2.1. Unemployment is running at 18 million; this the Committee of the Regions considers to be a critical challenge and task for the policy of the EU and the regions. The inclusion in the Treaty of Amsterdam of a chapter on employment means that the problem of unemployment is given the appropriate high priority. The Committee of the Regions welcomes the inclusion of this new chapter on employment in the Treaty of Amsterdam. Agenda 2000 points out that the employment potential of the EU can only be fully realized if there is sufficient flexibility on the labour market. In accordance with the principle of subsidiarity, the Committee of the Regions takes the view that in this matter the responsible institutions have an obligation to strike a balance between making the necessary economic adjustments and taking account of the justified concerns of the public as regards social security.

In the coming programme period the employment-intensiveness of structural policy needs therefore to be further enhanced, without however abandoning the strategic approach. European structural policy is long-term support for self-help and helps develop economic potential in the regions in a sustainable and employment efficient way. It must be complemented by employment and labour market policy. The creation of long-term, competitive jobs is promoted by aid to SMEs. Such efforts must in future receive the closest attention, as it is SMEs which generate the largest number of new jobs. The development of this endogenous potential can help generate self-sustaining economic development in geographically delimited areas, which is not greatly vulnerable to changes in the international division of labour.

2.2.2. The new regional and local employment pacts are an innovative approach to tackling the Community's employment problem. They arose from the correct realization that using locally available knowledge and developing partnerships at local level is the best way of developing existing potential and of exploiting this for employment-generating projects. The pacts are particularly well suited for integrating projects at an early stage into a regional development strategy. It remains to be seen what new conclusions can be drawn from the implementation of the pacts for the shaping of the Structural Funds. The Committee of the Regions calls on the Commission to keep it informed of the results of the pacts.

2.3. Financial prospects

2.3.1. In view of the necessary consolidation of public sector budgets in the Member States and the Community, the Committee considers it unrealistic to expect a significant increase in the European Union's financial resources. The Committee backs retention of the ceiling of 1,27 % of Community GNP, together with the Structural Funds' existing share of 0,46 % of GNP.

2.3.2. Major increases in funding as in 1988 and 1993 are not, the Committee feels, a realistic prospect for the Structural Funds in the coming programme period. The Committee urges however that in the coming period the resources of the Structural Funds should not be allowed to fall in real terms below the level reached in 1999. In addition to economic growth, concentration of the instruments in regional terms and in terms of content also offers further financial scope.

2.3.3. The Committee of the Regions welcomes the intention set out in Agenda 2000 to continue the efforts to achieve cohesion in the coming programme period at the level reached in 1999 (0,46 % of EU GNP). Despite all the risks, the financial prospects attendant upon this approach provide the EU regions and the applicant states with a realistic outlook.

In pursuing this approach, the EU Commission will also help to bring about the necessary consolidation of Member States' budgets and will send out a clear message that the enlargement of the EU is not to be financed at the expense of the weakest regions facing the greatest number of problems.

2.4. Enlargement

2.4.1. The Committee of the Regions is entirely in favour of eastward enlargement of the European Union. In this it sees not only a way of enlarging the European internal market. Rather, the integration of the Eastern European countries is an expression of their people's choice of a social structure based on freedom and democracy. For the first time in Europe's recent history its peoples have almost unanimously adopted a common system of values and it is undeniable that the whole of Europe will benefit from the pacificatory effect of the process of integration. This is the real importance of the integration of the candidate countries into the European Union. This point is also expressly underlined in Agenda 2000.

2.4.2. It is to be expected that the new Member States will be among the regions with a development deficit. In times of scarce resources this means that the Structural Fund finance to which the future Member States will be entitled will have to come from existing resources and any increase in the Community budget allowed by economic growth. There are a number of possible ways of arranging financial support to the new Member States. One possibility would be to restructure the existing instruments or to increase their degree of geographical concentration in order to create the necessary scope.

2.4.3. Only in this way can it be ensured that solidarity within the Community and solidarity with the candidates for accession do not come into conflict. It will only be possible to solve the problems associated with eastward enlargement if the necessary adjustments with regard both to the present Community and its cohesion policy and to the candidate Member States are undertaken step by step and in line with the progress of the accession negotiations due to start at the beginning of 1998. There must be transitional arrangements both in the framework of the pre-accession strategy and during the early years of membership to ensure that the new Member States begin to enjoy the full benefits of Community cohesion policy as soon as possible and in keeping with their economic, budgetary and administrative capacity. For this reason, consideration should be given to whether it is expedient to place a ceiling of 4 % of national GDP on EU resources used for cohesion policy, as provided for in Agenda 2000.

2.4.4. The Committee of the Regions considers that Agenda 2000 opens up a realistic prospect for the states seeking to join the EU. The COR notes that the position set out in the opinion is largely in accordance with that adopted in Agenda 2000.

2.4.5. The COR expressly welcomes the fact that the first of the applicant states are due to become full members as early as the year 2002. European solidarity dictates that these regions should, in accordance with the principle of equal treatment, be fully covered by the provisions of the existing cohesion policy. On this point too, the COR gives its express support to Agenda 2000.

2.4.6. The COR would, however, point out that, in the interests of maintaining confidence-inspiring prospects for the remaining applicant countries, the policy to be pursued as part of the 'Europe Conference` needs to be honed still further.

2.5. Economic and Monetary Union

2.5.1. The impact of economic and monetary union will no doubt vary from country to country and region to region. The Member States which are at present most integrated into transnational trade flows will benefit most. The tight financial situation means that public budgets will have to be consolidated, leading to cuts in public expenditure. Such cuts could also limit the scope for national co-financing of EU structural fund resources. In the poorest Member States the objective of cohesion may therefore be impeded by the requirements of economic and monetary union. It is possible that during a transitional period regional disparities will increase as a result of introduction of the single currency. The Committee of the Regions feels that convergence should not be confused with cohesion. The effects of economic and monetary union on the regions are generally considered to be positive. There is, however, an urgent need for research into the likely impact of EMU on regional economies.

2.5.2. The COR is convinced that the achievement of the objectives of European structural policy would be seriously impeded if the allocation of resources were made subject to a procedure similar to that provided by Article 104c. This would be tantamount to turning the principle of solidarity between the regions on its head and penalizing the very regions which because of their particular problems are most dependent on aid.

3. The programme period after 2000

3.1. Proposals for arrangements for structural policy in the programme period after 2000

3.1.1. The Community's structural policy complements the work of the Member States. Its areas of activity are necessarily selective and reflect the specific priorities of the European Union, which means that it cannot be considered as a panacea. The Member States will in future have to continue to bear the main responsibility for dealing with structural change. European structural policy must be so designed that at the level of the regional and local authorities it provides clear European added value with regard to problems and their programmatic solutions, the dissemination of good practice and transnational cooperation, additionality and the efficient use of funds.

3.1.2. Structural policy reform must go hand in hand with reform of the CAP. The approach taken on such matters in Agenda 2000 is based on agreements with the World Trade Organization. Agricultural policy reform may generate significant resources to support structural policy. This is the only way to ensure a coherent strategy on economically and socially sustainable development of rural areas.

3.1.3. The Committee of the Regions stresses that it is the weakest regions, those with the most acute problems, which need Community solidarity. The Community's main challenge is still to help individuals and regions which have not been able to keep pace sufficiently with economic and social developments in the Community or which have lost the ability to do so.

3.1.4. The Committee of the Regions welcomes the view expressed by the EU Commission in Agenda 2000 that political priority must clearly continue to be given to economic and social cohesion. The need to maintain this priority is especially highlighted by the accession to the EU of states having very different levels of development. The COR also shares the view that the need for European solidarity will be greater than ever if we are to achieve the principal objective of economic and social cohesion in the face of these challenges.

3.1.5. In view of these new challenges, EU structural policy needs a new approach making it possible to establish more ambitious development strategies based on partnership and on territorial development projects, to apply the eligibility criteria more strictly and to introduce greater flexibility to the programming procedure. Because of the many positive effects of the EU Structural Funds in general and EU regional policy in particular, and given the political need to raise the profile of European policy, Structural Fund assistance should continue to be granted in all Member States, irrespective of economic strength, if the conditions for such assistance are met.

3.1.6. The multiplicity of financial support instruments is a source of complexity, bureaucracy and delay. This is a result not only of the many different regulations and implementing provisions governing the funds but also of the many bodies responsible for their management at various levels.

3.1.7. Simplification is essential. Care has to be taken to avoid spurious solutions however. Although it may at first sight appear to be an attractive option to replace the existing funds by a single fund, such a step is not to be recommended, as the various funds are to be regarded as an expression of the EU's political priorities. Careful consideration is required before any changes are made. If the funds are integrated, there is a very serious risk that the above aspect will be lost from sight in the midst of a financial and political debate. Many concerns can be met by taking the following steps: harmonization of the rules and procedures of the funds; the establishment of an integrated procedure in cases where several funds come into play in a programme; and allocation of aid from the various funds to the programme concerned.

3.1.8. The current programme period ends on 31 December 1999. By then the legal basis must be in place for the continuation of Europe structural policy in the next programme period in order to ensure a smooth transition. In the interests of planning certainty for the regions and project managers, and thus of economic and social cohesion, the Committee of the Regions calls on the Council and the Parliament to ensure at an early stage that agreement is reached on the revision of the relevant regulations before the beginning of the coming programme period. There must be no delay over programme authorizations at the beginning of the new programme period, as occurred in 1994.

3.2. Objectives of the Structural Funds: selection criteria and areas for support

3.2.1. Structural and regional policy must focus on the economically weakest regions of the Community. In the light of existing and persistent structural and employment problems, the Commission's planned reduction of the areas eligible for support will cause hardship. This must above all be judged against the background of the regional economic situation. The accent should be not on the establishment of general ceilings, but rather on the needs of the regions established according to objective and transparent criteria.

3.2.2. The Committee of the Regions calls for the concentration of resources on regions needing aid and on specific problem groups. The Committee therefore advocates continuation of Objective 1 support on the basis of strict application of the geographical delimitation indicator (75 % of EU average per capita GDP measured in purchasing power parity terms). Objective 1 support is designed to eliminate development problems on a large scale. In the interests of concentration of resources and the desired leverage effects, Objective 1 areas should continue to be defined mainly at NUTS II level, with special arrangements to be made for the outermost regions and for the northern regions with an extremely low population density.

3.2.3. The Committee of the Regions regards the observations in Agenda 2000 on future structural support measures as a good basis for discussion. In general terms the Committee can endorse the Commission's recommendations regarding the concentration and structure of the objectives and expects the implementation of these proposals to bring about a more efficient use of resources. The COR does, however, emphatically reject as impractical the EU Commission's proposal that a reserve be established comprising 10 % of the funds which are to be allocated to the most efficient regions in the wake of the mid-term assessment of the programme.

3.2.4. The Committee also argues that GDP should be retained as an indicator for delimitation of areas, as for reasons of statistical comparability it is the best way of measuring economic prosperity. A low GDP, being the product of employment and productivity, points to the causes of poor competitiveness and thus a low level of prosperity. This indicator should thus not be watered down by combining it with other economic criteria in weighted form. At most, other indicators of the economic situation could be used alongside GDP. In this context, the COR feels it is right and proper to pay particular attention to unemployment so as to enable assisted regions which are exceptionally badly affected by unemployment to receive additional structural policy aid. The COR takes the view that this will provide a means, in particular, of addressing the level of support.

3.2.5. Here the Committee would advocate equal treatment of the regions and strict application of the geographical delimitation indicators. In order to prevent disruption of regional development which might compromise results already achieved, the Committee advocates suitable transitional arrangements for regions which cease to qualify for support. The decisive criterion here must be the development problems of the areas in question.

3.2.6. Objective 2 measures have in the past served in particular to tackle the problems of structural adaptation experienced by regions affected by industrial decline. Many positive results have been achieved. The Committee argues therefore that support should be retained in its present form and targeted more specifically on tackling problems of industrial change, the effects of globalization of the world economy on industrial regions and the problems of urban population centres. In the light of the proposal to integrate the promotion of structural change into a common objective, new area delimitation indicators must be developed where appropriate.

3.2.7. The COR calls upon the Commission to enable areas in industrial decline to be eligible for regional development subsidies in addition to Structural Funds, in order to frame a coherent policy for economic development in the regions, with no contradiction between regional policy and competition law.

3.2.8. The Committee of the Regions feels that aid for rural areas and that for the conversion of agriculture and fisheries should be consolidated in line with restructuring requirements. The Cork Declaration on Rural Development (November 1996) states that 'sustainable rural development must be put at the top of the agenda of the European Union and become the fundamental principle which underpins all rural policy in the immediate future and after enlargement`. Whilst economic diversification is the main thrust of strategy, agriculture should not be neglected, as there are many factors for change in this sector. The Committee of the Regions also calls for the provisions of Objective 5a to be extended and for the horizontal implementation of this objective. Should this objective be (partially) removed from the list of objectives of the Structural Funds, steps should be taken to ensure that there is an orderly transition to the succeeding instruments.

3.2.9. In the interests of transparency, support for structural change in industrial regions and urban population centres, as well as rural areas, could be brought together in a territorial objective, which should preferably be defined, for example, at NUTS III level or in terms of specific geographical conditions. The COR would, however, point out that the transitional periods proposed by the EU Commission for the phasing-out of the existing aid under the old Objective 2 and 5b classifications is bound to come into conflict with the principle of concentrating aid unless the proposed transitional arrangements apply for a clearly limited period of time and are degressive. The new Objective 2 criteria should not disadvantage present Objective 2 and 5b areas. An abrupt end to a development process which is under way must of course be avoided. Hence the transitional arrangements should in principle involve a gradual end over a period of years, albeit with reduced financial support. The possibility of integrated harmonization at regional level in respect of programming and management in those regions that taken as a whole have serious structural adjustment problems should not be ruled out.

3.2.10. To judge from the track record of European Structural Fund support, it is difficult to demarcate areas for assistance within cities in any meaningful way because the problems in many districts can only be combated effectively by measures in other, more developed districts. Accordingly, it should be left up to the local authorities to decide, on the basis of Community-wide criteria, in which urban districts and for what purposes European Structural Fund support can be employed most effectively.

3.2.11. On grounds of efficiency, it is recommended that, as a precautionary measure, regions should also to a certain extent be involved in structural policy which already have to contend with or are threatened by negative changes brought on by socio-economic restructuring.

3.2.12. The Committee of the Regions also suggests that horizontal Objectives 3 and 4 be combined in a single horizontal objective. This objective should aim to provide effective support for workers' adaptation to changed work processes and the sustainable reintegration of the unemployed into the labour market.

3.2.13. The primary aim of this objective should be to promote people's fitness for employment. However, responsibility for this at the moment lies mainly with the national and regional authorities, particularly where education is concerned. The aim is to set in place measures providing real access to knowledge, promoting personal development and providing skills geared to the needs of the economy. It must be an effective and visible supporting instrument, involving national, regional and local authorities and social partners and, where measures for the development of human resources are concerned, the relevant bodies.

3.3. Community initiatives

3.3.1. The Committee of the Regions stresses the special importance of the Community initiatives as important instruments in innovative areas.

3.3.2. The Community initiatives play a particularly important role with regard to small-scale measures which are however of an experimental nature with importance for the future, particularly with a view to the process of European integration.

3.3.3. The Committee of the Regions urges that in the interests of efficiency initiatives be concentrated, as in many initiatives there is an overlap with the aims and content of objective programmes.

3.3.4. A first step could be to reduce drastically the number of Community initiatives. The Cohesion Report also points in this direction. In this context the Committee of the Regions welcomes the proposals put forward in Agenda 2000 for reducing the number of Community initiatives and concentrating the subjects involved and likewise welcomes the intention to set a budgetary ceiling for the Community initiatives of 5 % of the budget for the Structural Funds. There will, however, need to be scope for assistance with structural problems in certain sectors. The possibility should be looked at, particularly in Objective 1 regions, of integrating the content of Community initiatives into objective support, with due attention to opportunities for inter-regional cooperation. The same exercise could be carried out for areas falling under other objectives. The Community initiatives would thus remain the main structural policy instrument outside the objectives. The new 'generation` of Community initiatives should in particular address structural problems and embrace cross-border, transnational and inter-regional cooperation. In this context care will have to be taken to gear Community measures within the current EU States to inter-regional cooperation programmes under Phare and Tacis. The Phare/CBC and Tacis procedures should be adjusted - at least in the case of transnational measures in connection with the Structural Funds - to Structural Fund procedures.

3.4. Pilot projects

3.4.1. Pilot projects based on horizontal and trans-national cooperation, with regional and local authorities working together in innovative areas, are of interest to the regions insofar as they lead to cooperation with more developed regions and the transfer of development know-how. Such pilot projects are emphatically supported.

3.4.2. However the procedures and detailed arrangements are not transparent and the administrative workload is often not justified by the result. The Committee of the Regions would like to see this instrument radically reformed and in particular transparent procedures established.

3.5. Content of support

3.5.1. The Committee of the Regions feels that the principle of concentration should also be applied to the contents of support. In so doing the growth profile of European structural policy should be reinforced to enable regions with the most acute problems to develop their potential for productivity and as business locations to the greatest possible extent. At the same time, projects designed to boost sustainable jobs must be complemented and backed up by active labour-market measures.

3.5.2. With regard to concentration on certain thematic priorities, the regions should be given the opportunity to focus their programmes on targeted strategies. Thus for example, concentration on a problem such as the maritime economy would have a greater impact on the private sector than for example concentration on infrastructure and employment in general, although this is to some extent the same thing. Areas are developing an ever greater propensity to acquire their own personality and position in relation to the world market, based on their potential. Future regulations should be framed in such a way as to make it possible to define the themes to be concentrated on (those offering the best prospects for achieving the objective of cohesion) at a later stage.

3.5.3. The Committee of the Regions feels that, in view of the unacceptable level of unemployment in the Community, in the coming programme period particular attention should be paid to raising the employment impact of support and stepping up the use of resources in innovative fields. In this context it is stressed once again that European structural policy is above all designed to achieve long-term employment effects. Rather, it must be ensured that its use contributes to the creation of modern, competitive jobs.

3.5.4. Similar considerations apply to the promotion of innovative and R& D measures. Experience demonstrates the close correlation between successful innovation and regional development. Successful innovation is the driving force behind successful regional development and lasting improvements in the quality of life and standard of living. But these very innovative activities, particularly high-value services, are confined to only a few regions of Europe. It is of particular importance for progress in problem regions that R& D results obtained in the development centres can be exploited. This will facilitate the necessary structural change in problem regions and offer these regions the prospect of participating on an equal basis in the advantages of the internal market. Structural Fund support must in the future continue to offer sufficient flexibility for the implementation of measures of this kind in the eligible areas. Member States and regions have a special role to play in implementation. The principle of partnership is particularly valuable from this point of view.

3.5.5. The Committee of the Regions urges that, given the importance of European environment policy, the concept of partnership should bring together not only economic and social partners, but also partners from the environmental sector. The development of new environmental protection technologies will not only open up new markets and thus create jobs. It will be even more important to ensure that economic development is not at the expense of an intact environment. In particular the use of scarce resources must be regulated in such a way that a balance is struck between economic and ecological efficiency and a contribution made to sustainable development. The Committee of the Regions sees this as another important task for European structural policy.

3.5.6. Bearing in mind the principle of territorial cohesion, and in order not to promote strategically important sectors via the Structural Funds, the programmes must take account of land-use planning requirements. Where practicable, cooperation and close consultation between neighbouring regions is desirable.

3.5.7. The Committee of the Regions calls for the use of the Structural Funds to be concentrated in future on the following priority areas: regional infrastructure and productive investment, measures to support and implement research, development and innovation, the environment, access to the capital market and world market for SMEs, adaptation of human capital to economic change and support for endogenous development potential, urban issues, agriculture and rural areas and equality of opportunity.

3.6. Partnership

3.6.1. The Committee of the Regions believes that the principle of partnership should already be applied consistently when the programme basis of the use of resources is established provided this does not involve the establishment of any new organizational bodies. This view is also confirmed in Agenda 2000. This is not guaranteed under the present programming procedure, although negotiations do take place between the Commission and the responsible institutions on the detailed arrangement for the use of the Structural Funds. But the negotiating period culminates in a legal document drawn up by the Commission alone, which also determines to a considerable extent national and regional financial contributions and rules. This does not suggest that the use of Structural Fund support is determined on the basis of equal partnership. The Committee sees this as a clear breach of the principle of partnership.

3.6.2. The responsible individuals at local level confirm that partnership, in conjunction with national rules governing responsibility, has led to active and coordinated commitment on the part of those responsible in the regions. Community support is rendered more effective by the fact that regional players are involved at an early stage in the preparation and implementation of measures. In this way the Community's contribution to regional development can be highlighted. For these reasons the principle of partnership is for the regional and local authorities a basic feature of European structural policy. Experience shows that in regions and localities where the use of the Structural Funds is decided without consulting those involved, the success of projects is not guaranteed.

3.6.3. The Committee of the Regions urges that the principle of partnership be further strengthened, subject to subsidiarity. At Member State level it should be ensured that the instruments of European structural policy are used on the basis of development plans or action programmes drawn up and negotiated in the regions. This will promote the regional level as the programming basis in each of the Member States in accordance with their internal distribution of responsibilities. In this way the early involvement of the regional players in the preparation of use of the Structural Funds and the local effectiveness and acceptability of measures will be ensured. It would be a good idea to set up suitable institutions at regional level, where these do not already exist, and to bring the economic and social partners into the process.

3.7. Programming procedures

3.7.1. At the beginning of the current programme period the possibility was offered of combining the existing three programming steps on the basis of a single programming document (SPD). The Committee of the Regions believes that this can contribute significantly to the simplification of the programming procedure. And the practical experience accumulated confirms the Committee in its view. However experience also shows that there has been no noticeable simplification of the programming procedure; the three procedures have merely been brought together in a single document.

3.7.2. Objective 1 resources have continued to be used on the basis of the three-stage procedure laid down in the regulation. The fact that most approvals were granted only in the second half of 1994 shows that simplification is urgently needed and that a way of moving to a real single-stage procedure has to be found.

3.7.3. Against this background the Committee of the Regions suggests that the procedure be tightened up in the following way, restricting programming to the essential steps and leading to a genuine single-stage procedure:

a) It is recommended that programme contents be laid down in the form of a support contract, thus giving suitable expression to the principle of partnership. The Committee of the Regions believes that the programme documents proposed in Agenda 2000 can be taken on board in the form of a support contract. A contract of this kind should first be drafted, effectively bringing together the existing regional development plan and the Community support concept; it would however be limited to those points which were of real relevance to the implementation and objectives of support. This draft should be drawn up by the local, regional and national authorities and contain the following elements:

- analysis of the support area in its overall economic context;

- definition of the strategic development objectives;

- definition of the areas for support;

- definition of the rates of Community participation;

- provisions on the budgetary arrangements for use of the Structural Funds subject to subsidiarity;

- provisions on the impact of expenditure;

- indicative allocation of resources;

- provisions on the maintenance of Community policies and checks.

This draft would be the negotiating basis for the use of resources. All necessary approvals would be included in this agreement.

b) Practical implementation of Structural Fund financing would be on the basis of relevant national and/or regional provisions. These are the relevant administrative provisions, on the basis of which payment is made to eligible parties. The drawing up of operational programmes is thus otiose.

c) The Committee of the Regions suggests that more intensive use be made of the instrument of global subsidies, particularly in cases where the Community's participation does not exceed ECU 50 million. The detailed arrangements and duties of the management body would be separately agreed. Global subsidies are at present used in only a very few cases. The Committee of the Regions calls on the Commission to step up use of this instrument.

3.7.4. The Committee of the Regions welcomes the EU Commission's proposal to make provision for only one multiannual programme per region in the Objectives 1 and 2 regions during the new programme. This measure is welcomed as a step in the right direction. Attention should, however, be paid to ensuring that this measure does not merely comprise a formal combination of existing measures (in the case of Objective 1: the regional development plan, the Community aid plan and the operational programme) but involves real administrative simplification. The Commission document fails to make any observations on improved coordination and harmonization by the Commission of administrative procedures which have hitherto brought about considerably increased expenditure when the funds have been integrated at regional and project level. Until such time as the necessary preconditions are introduced by the Commission, the final balance sheet in respect of the individual funds is bound to remain unchanged even if single multiannual programmes are drawn up.

3.7.5. Flexibility should give programme designers and managers more room for manoeuvre when they carry out programme initiatives. This will enable them to respond more effectively to the economic reality of each region and will place more emphasis on the setting of strategic priorities for the programme.

3.8. Additionality

3.8.1. The principle of additionality is one of the main principles underlying use of the Structural Funds and it should be retained in the next programme period. In some cases however additionality will have to be applied flexibly to take account of specific situations. The Committee of the Regions stresses once again that the Structural Funds must in principle not be used to balance public-sector budgets. The Committee also stresses that conditionality of the Structural Funds along the lines of Article 104c of the EC Treaty, which is sometimes called for, would contradict this basic principle of support and would impede the progress of development in the regions. The additional impact of Community commitment would thus be called into question.

3.8.2. The Committee of the Regions is in favour of a radical simplification of the procedure for providing evidence of additionality.

3.9. Multiannual approach

Use of the Structural Funds is based on the programme period. This gives eligible regions and recipients of subsidies planning and financing certainty. This system has proved itself and should be retained. The Committee of the Regions recommends that the programme period be extended in all cases to six years. The system whereby measures end two years after the end of the programme period should remain unchanged.

3.10. Forms of support

3.10.1. The regulations provide for a broad, in the Committee's view sufficiently broad, spectrum of forms of support with equal status. The Committee would like to see this feature retained in the next programme period. In accordance with the principles of partnership and subsidiarity however it should be left up to the eligible region to select the most suitable form of support. A key question in making this selection must be the form of support or combination of forms which best meets the needs of regional and local operators.

3.10.2. The Committee of the Regions would like to see more intensive use made of public-private partnership in the coming programme period. It recommends however that the consequences of this be analysed in detail. The Committee points out that the interests of private and regional operators may well differ and that this could stand in the way of the implementation of such partnerships. Where there would be advantages for the development of the region, those responsible should have the opportunity to make use of this form of financing. In order to make structural policies more efficient and to promote the multiplier effect possible incentives for the participation of the private sector in the financing of projects, particularly infrastructure projects, should be investigated.

3.10.3. The current regulations allow the Community to contribute up to 75 % of total costs and generally at least 50 % of public expenditure for measures in Objective 1 regions. This is in recognition of the fact that the heaviest co-financing burdens cannot be placed on the poorest regions of the Community. The Committee of the Regions considers it essential that this scope be retained in the coming programme period as a tangible expression of solidarity. However, for consistency with the principle of additionality and good use of public funds, grant rates should be the minimum amount necessary to enable a project to proceed.

3.11. Integration

3.11.1. The integration of the funds must be seen in conjunction with restructuring of the objectives referred to above and the simplification of procedures.

3.11.2. Fund administrators are virtually unanimous that integration of the funds is a good way of carrying our complex development measures of the kind conducted under objective support and of exploiting existing synergies between the funds. In this way the efficiency of the use of the funds can be increased.

3.11.3. However at project level the conditions are often not right for applying the integrated approach with maximum efficiency. Rather, programmes need to be broken down if support under the specific aims of the funds is to be at all possible. At the same time the funds are subject to different and incompatible implementing provisions, which impede effective integration at project level. The introduction of the multi-fund approach at the beginning of the new programme period has significantly increased the administrative burden in many eligible regions.

3.11.4. The Committee of the Regions would like to see Fund support carried out on the basis of an integrated approach, particularly with a view to coordinating within a single region measures carried out under different objectives. It is accordingly in favour of promoting widespread use of integrated management of different general objectives - in those areas in which they exist - by means of a single multi-annual regional programme for the area concerned, in line with a comprehensive medium and long-term regional development strategy that accommodates the specific needs and features of each region. The Committee concurs with the criticisms of the current procedure and calls on the departments of the Commission first of all to coordinate the procedures internally and to prepare within the Commission for the establishment of an effective integrated approach by the beginning of the next programme period. The necessary revision of internal administrative procedures should be tackled by the departments in the near future.

3.12. Prior assessment, monitoring and ex-post evaluation

3.12.1. It is beyond dispute that the use of the Structural Funds must be subject to intensive monitoring and assessment. It is in the interests of Europe's citizens that value for money should be created with the help of the Structural Funds. It is also in citizens' interests that the financial control instruments be strictly applied in order to counter effectively any abuse of Structural Fund resources. The Committee of the Regions therefore recommends that, bearing in mind the cost-benefit relationship, evaluation and monitoring in future also be regarded as an expression of partnership. Experience has, however, shown that the current evaluation procedures are exceptionally complex. The reporting requirements are also constantly increasing. Hence streamlined monitoring arrangements should be devised. The Committee of the Regions calls for the reports to concentrate on the drawing-up of compact information. Necessary monitoring and evaluation measures should be conducted in partnership by the Commission and the eligible regions.

3.12.2. The methodology of prior assessment, which differs fundamentally in nature and objective from ex-post evaluation, should be revised and reinforced. The aim is not so much to set targets, quantifiable in advance, as to carry out detailed forecasting with regard to the region in question in order to form an impression of trends, strengths and weaknesses in relation to globalization of the economy, and anticipating the possible impact of the planned measures and projects.

3.12.3. The monitoring committees are a visible expression of the principle of partnership. The fund administrators feel that the work of these committees has in principle proved its worth and resulted in intensive programme monitoring. In order to improve this work further the monitoring committee should be given additional responsibilities, including decision-making powers, particularly with regard to financial implementation. The responsibilities of the elected representatives of the regions must not as a result be curtailed in contravention of democratic principles. Thus, changes in the funds' financial participation should no longer require the approval of the Commission in addition to that of the monitoring committee. Improvement is urgently needed here, particularly as Commission decisions now take a considerable time, impeding the speedy and smooth implementation of support.

3.12.4. In the framework of monitoring based on partnership the regulations provide for a mid-term review of the progress of support in the regions to pave the way for proposals for the further development of the programmes. The Committee of the Regions considers this a necessary measure in adapting support to changed economic and social conditions. However, the mid-term review should be carried out in line with the principles of economy and efficacy.

3.12.5. Ex-post evaluation makes it possible to draw conclusions with regard to use of Structural Fund resources. It should be adapted in line with the proposals on prior assessment.

3.12.6. The usefulness of the information obtained is at present limited. The provisions on the use of resources mean that meaningful data become available only when projects have been concluded. But this extends two years into the new programme period, making it impossible for the results of ex-post evaluation to be usefully included in the preparations for the new programme period.

3.13. Payments

The Committee of the Regions urges the European institutions to move to a regionalized system of payments, as [under the existing system] in some Member States payments to individual regions are dependent on developments in all the other regions of the Member State. The Committee is convinced that this would be conducive to sound management of the Funds, as there would be no dependence on developments in other regions.

4. Conclusions

4.1. The Committee of the Regions acknowledges the benefits of European structural policy to date. However, great efforts will also have to be made in future to strengthen economic and social cohesion in Europe.

4.2. The COR would also stress that while the basic approach of European structural policy must be maintained, adjustments must be made to meet the challenges posed in particular by growing economic globalization and the forthcoming enlargement of the Union.

4.3. The COR supports enlargement of the Union, but would point out that solidarity within the Community and solidarity with the candidates for accession should not come into conflict in the process.

4.4. The COR calls for the swift implementation of economic and monetary union and reaffirms that convergence policy should not clash with cohesion policy.

4.5. In the light of these challenges it calls for a new approach to European structural policy, drawing on the experience gained in the current programme period and permitting a bolder strategy, stricter application of the criteria and greater procedural flexibility.

4.6. The COR therefore thinks that the following adjustments should be made to European structural policy for the period after 1999:

4.6.1. Structural policy's share of the Community budget (Union GNP) and the resources of the individual funds and objectives should not be allowed to fall in real terms below the level reached in 1999.

4.6.2. Funding should be focused on the most needy regions and the most serious problems by redefining the objectives:

a) establishment of a territorial objective for assisting regions whose development lags behind, based on the strict application of the geographical delimitation indicators used for the current Objectives 1 and 6. Priority is to be given to support for these regions;

b) establishment of a territorial objective for supporting structural change in industrial regions, urban population centres and rural areas;

c) establishment of a horizontal objective for supporting the adaptation of workers to economic change, for increasing employment and for reintegrating the unemployed.

4.6.3. The content of support should be geared to regions' potential for development and their potential as business locations as well as their specific features.

4.6.4. The partnership principle should be developed further, leading to the establishment of a truly equal partnership. A support contract should be concluded between the Commission, the Member States and the recipient regions as the basis for the funding, and the powers of the monitoring committees should be extended.

4.6.5. The programming procedure should be radically simplified and made into a single-stage procedure. The support contract to be drafted by the Member States and recipient regions should be confined to the analyses and definitions required to implement the assistance. The practical implementation of the funding should be based on national/regional provisions. It is also necessary to strengthen the role of the subnational level as a basis for programming in the Member States. In those areas in which they co-exist, there should be widespread use of integrated management of different general objectives by means of a single multi-annual regional programme for the area concerned, in line with a comprehensive medium and long term regional development strategy that accommodates the specific needs and features of each region.

4.6.6. The choice of the optimum forms of assistance should be left to the recipient regions within the framework of the funds available. Higher rates of assistance should be provided in future for regions whose development is lagging behind.

4.6.7. Payments should be regionalized in all Member States in order to provide incentives for efficient fund management at regional level.

4.6.8. The new generation of Community initiatives should be streamlined by concentrating on innovative, cross-border and interregional sectors which help promote structural improvements, and basing the initiatives on the programmes for objective areas wherever possible. The administrative procedures for the pilot projects should also be simplified and made more transparent.

4.6.9. The Committee of the Regions calls on the Commission to present drafts for amending the Structural Fund regulations by the beginning of 1998 at the latest, and reserves the right to issue further opinions in the light of the proposals made.

Brussels, 19 November 1997.

The Chairman of the Committee of the Regions

Pasqual MARAGALL i MIRA

() OJ C 100, 2.4.1996, p. 72.