8. 7. 85 Official Journal of the European Communities No C 169/1 
II 
(Preparatory Acts) 
ECONOMIC AND SOCIAL COMMITTEE 
Opinion on the ninth report from the Commission to the Council -
European Regional Development Fund 
(85/C 169/01) 
On 5 October 1984 the Commission of the European Communities decided to consult the Economic 
and Social Committee, under Article 198 of the Treaty establishing the European Economic 
Community, on the ninth report from the Commission to the Council - European Regional 
Development Fund. 
The Section for Regional Development, which was responsible for preparing the Committee's work 
on the subject, adopted its opinion on 15 March 1985 in the light of the report by 
Mrs Quigley. 
At its 226th plenary session (meeting of 24 april 1985) the Economic and Social Committee adopted 
the following opinion with no votes against, but with two abstentions: 
1. Introduction 
1.1. The Economic and Social Committee is pleased to 
note the clarity and presentation of the Ninth Annual Report 
of the European Regional Development Fund. It embodies a 
large amount of carefully structured information which is 
both readable and readily accessible. This reflects the 
organization of the text combined with numerous tables and 
figures: the Committee appreciates the many presentational 
improvements which have been introduced over the years in 
reaching this high standard. 
1.2. The report has to be considered in the context of the 
Fund's primary aim - to correct the principal regional 
imbalances within the Community. The Committee points 
out that since the Fund commenced in 1975, regional 
differences in unemployment and incomes, the principal 
manifestations of regional imbalances, have increased. 
1.3. The Committee also notes that the problem is likely 
to worsen in the future. Although the Community economy 
appears to have stabilized, growth is not expected to be 
sufficient to overcome the deterioration which has taken 
place since 1979. Thus, in addition to the general problem of 
regional unemployment arising from insufficient aggregate 
demand and underdevelopment of basic industries like 
agriculture, there will be a continuing need for structural 
adjustment in industries like textiles, shipbuilding, 
steelmaking and engineering. With the further enlargement of the Community in 1986, the regional problem will become 
larger and more serious. 
1.4. While welcoming the recognition given in the report 
to the needs of both underdeveloped regions and those in 
industrial decline, the Committee calls yet again for a more 
effective policy to deal with all regional problems, including 
allocation of financial resources commensurate with their 
increasing magnitude. 
1.5. The Committee considers that the more efficient use 
of resources, both human and financial, can help reduce 
regional imbalances: 
— firstly, the people of the regions must be permitted to play 
a major role in shaping their future. The new ERDF 
Regulation (*) with its provisions about regional 
involvement, indigenous potential and programming, 
provides a more adequate means to achieve this, but only 
if it is implemented in such a way as to foster development 
of regional self-reliance and local commitment, and if 
each region is treated for its own unique problems. The 
Committee feels that the Commission, which now has 
much greater opportunity to influence regional policy, 
must insist that actions under the Regulation are 
measured against such standards, rather than being 
geared to the achievement of more general national 
objectives; 
H OJNoL169, 28. 6. 1984. 
NoC 169/2 Official Journal of the European Communities 8. 7. 85 
— secondly, by carefully specifying Fund objectives and 
evaluating the success of allocations in achieving them, it 
should be possible to make much more effective use of 
financial resources. Action along these lines proposed in 
the new Regulation will represent a useful beginning. 
However, the Committee considers that the analytical 
function requires to be considerably extended and 
developed in order to obtain maximum value from Fund 
investment and to provide a basis for future policy 
formulation. 
2. Ninth report 
2.1. To help redress regional imbalances the Ninth 
Annual Report shows that ERDF allocations in 1983 
amounted to 2 010 million ECU, an increase of 7,5 % in real 
terms on the previous year. Of this, 100 million ECU were 
allocated to specific Community measures: this allocation 
was not fully taken up, and part was therefore transferred to 
support measures. Over 95 % of assistance went to five 
Member States (Italy, UK, France, Greece and Ireland) with 
one-fifth of the Community's regions receiving four-fifths of 
the total assistance. The six areas with priority regional 
policy status (Mezzogiorno, Greenland, Ireland, Northern 
Ireland, the French overseas departments and Greece) 
received 64,1 % of ERDF assistance in 1983 compared with 
60,6% in 1982. 
2.2. The Committee welcomes the increasing size and 
geographical concentration of the Fund on priority regions. 
It notes, however, that assistance per capita was higher in 
some non-priority regions. In principle this is undesirable 
and the Commission is asked to consider how this comes 
about. 
2.3. The Committee is also concerned that almost 
nine-tenths of ERDF allocations in 1983 went to finance 
infrastructure projects - mainly energy, water and 
transport. (The Committee records the change in emphasis in 
the nature of the works carried out during the period under 
review, with energy taking over the lead from transport. 
Movement of this kind underlines the need for a flexible 
approach to the matter of acceptable infrastructures.) In only 
one Member State was over half of Fund assistance devoted 
to productive investment in industry. The one-tenth of the 
Fund allocated to productive investment helped to create or 
maintain 62 000 jobs. In addition, 27 studies were financed 
and grants for these amounted to 0,27% of the Fund. 
2.4. During 1983 the Commission proposed under the 
revised new ERDF Regulation that the distinction between 
support (quota) and specific (quota-free) measures should be 
withdrawn. Instead, indicative ranges for allocations to Member States would be introduced, with a higher 
proportion of Fund resources being earmarked for 
Community and national programmes. 
2.5. This development is designed to facilitate more 
integrated use of the different Community instruments, 
greater selectivity, further concentration on priority areas 
and greater emphasis on productive investment - notably in 
small and medium-sized businesses. 
2.6. In particular, the Committee attaches great 
importance to the new programming proposals. However, it 
notes with concern the reported slowness in the take-up of 
specific measures assistance due to difficulties (presumably 
on the part of both the Commission and Member States) in 
coming to terms with the programming principle. The 
Committee therefore urges the Commission to consider, as a 
matter of extreme urgency, how this situation can be 
remedied. The conduct by the Commission of studies of 
methods of administration of fund allocations in Member 
States could provide a useful basis for improving efficiency of 
operating procedures. 
2.7. The ERDF accounted for 7,6% of the general 
Community budget in 1983, or 0,09% of GDP at market 
prices. The Commission proposes that the 1983 ERDF 
allocation should be doubled in real terms over the next five 
years. This would increase the Fund from 0,09% of 
Community GDP in 1983 to about 0,17% in 1988. 
However, the Committee notes that the fund allocation in 
1984 only increased by 6,5% in nominal terms to 2 140 
million ECU, or about 1,50 % in real terms: a feature which 
the Committee views with deep concern. 
2.8. Apart from this disturbing development, the 
Committee welcomes the changes foreshadowed in the 
report. They should go some way towards enabling the 
Community to deal more vigorously and effectively with its 
regional problems. However, it is the Committee's opinion 
that even the proposed doubling of financial resources and 
improved procedures will prove inadequate to deal with the 
regional imbalances which exist and are likely to develop 
over the next few years, especially those arising from 
enlargement. 
3. Analytical approach 
3.1. Nevertheless, the Committee suggests that it should 
be possible to make a greater impact on reducing regional 
imbalances by adopting a more analytical approach to 
problems and their solutions. This would involve a clearer 
definition of objectives, rigorous evaluation at the planning 
stage of the likely effectiveness of proposed allocations, and 
careful monitoring of projects and programmes. By 
supporting the most cost-effective projects or programmes 
8. 7. 85 Official Journal of the European Communities No C 169/3 
the efficiency of the Fund would be improved. More 
specifically, the main regional imbalance requiring 
Community action arises in the labour market and is 
reflected in unemployment rates. The Committee endorses 
the reduction in unemployment (or the generation of 
employment) as the common criterion against which most 
types of Fund expenditure might usefully be assessed. Some 
projects will of course generate employment in the short 
term. Others will improve growth potential, leading to job 
creation in the medium to long term. 
4. Issues 
4.1. The implications of the adoption of a more analytical 
approach can be illustrated by briefly considering a number 
of issues which arise in the report. While more detailed study 
and research would be required to come to more definitive 
conclusions, the guidelines suggested above give rise to some 
interesting policy implications. 
Infrastructure v. productive investment? 
4.2. The report comments that the allocation of 
nine-tenths of Fund assistance to infrastructure projects is 
too high: it would be desirable to increase productive 
investment to the three-tenths implied by Fund Regulations. 
In endorsing this conclusion the Committee realizes the very 
real difficulties involved in generation of productive 
investment at the present time, that the balance between the 
two types of activity will vary with circumstances and that 
the necessary and increasing concentration in particularly 
disadvantaged regions will tend to increase infrastructure 
take-up. 
4.3. However, the Committee considers that stricter 
application of cost/benefit and employment tests could effect 
useful controls on infrastructure expenditures. Not only does 
research show that as a general rule productive investment 
provides a much more cost-effective means of providing 
employment, but it can happen that infrastructures, once 
provided, are under-utilized. It must also be borne in mind, 
however, that there may be situations where existing 
infrastructure capacity is under-utilized, but highly 
expensive (e.g. oil-fired electricity generation), so that new 
investment could yield substantial benefits in the form of 
lower prices to industry and consumers. It is therefore a 
matter of closely studying the costs and benefits of individual 
projects. 
4.4. It is also important to recognize that industrial 
projects do not necessarily generate additional employment, 
i.e. some employment may arise in the absence of assistance. 
Thus productive investment should be always assessed in 
terms of estimates of real additional employment. Again, 
assistance to industry is often given on the assumption that the employment generated will last indefinitely. Investigation 
has demonstrated that employment duration is highly 
variable, with an average of about eight years. It is suggested 
that a higher rate of assistance would be justified to projects 
which embody research, product development and 
marketing functions than to branch manufacturing plants 
which are likely to be less durable. The additionality of 
employment criterion also fully justifies assistance to 
tradeable services and tourism. 
Job creation 
4.5. The Committee feels that intensified efforts to 
increase productive investment are called for. In the present 
circumstances of financial stringency, much could be 
achieved by adopting a more analytical approach to the 
whole question of job creation under the ERDF. Not enough 
is known about effectiveness of existing incentives and 
methods, the value for money which they represent, the 
durability of jobs which they create, the contribution made to 
job creation by different sectors and types of industry, or the 
impediments with which they have to contend. Close study of 
these and related factors should facilitate evolution of 
policies and operating techniques specifically designed to 
remedy deficiencies and to maximize the contribution made 
by productive investment to reduction of regional 
imbalance. 
4.6. The report reveals a shift towards increasing 
assistance for small and medium-sized enterprises (SMEs) -
a sector which the Committee is keen to see strongly 
supported because of the particular contribution which they 
are capable of making to development within a region. There 
is room for debate whether this shift of emphasis has 
occurred because access to capital markets is more difficult 
for smaller enterprises, or because they have a greater ability 
to generate employment, a tendency to produce a higher 
proportion of additional employment, or the ability to 
provide more durable employment than large enterprises. 
Definitive information on these issues obtained by in-depth 
analysis would permit formulation of policies specifically 
designed to realize the full potential of the small to 
medium-sized sector. ' 
Equally, as regards larger industry, which does not face the 
same operating difficulties as SMEs, and where job creation 
can often be extremely expensive, certain projects can none 
the less generate a large amount of direct and indirect 
employment - the latter largely in SMEs. Policy governing 
assistance for such activity should take account of relevant 
circumstances, including cost effectiveness, durability of 
employment and complementarity between fund investments 
and the existing economic and social structure of regions. 
No C 169/4 Official Journal of the European Communities 8. 7. 85 
4.7. The Committee considers that the Commission in 
supporting productive investment should discriminate in 
favour of those activities where a clear rationale backed by 
good supporting evidence can be established. One important 
consideration is the extent to which the different aspects of 
productive investment can be made to complement each 
other. The estimated fund cost per additional year of 
employment could provide a general criterion for assessing 
the effectiveness of expenditures. 
New initiatives 
4.8. A number of new initiatives are described in the 
report, which lays special emphasis on the benefits to be 
derived from coordinating activities under the various 
Structural Funds. The integrated operations pilot schemes in 
Belfast and Naples, the integrated development programmes 
for the Western Isles and Lozere, and the integrated 
Mediterranean programmes proposal, which is still running 
into difficulties even though the Committee has called for its 
implementation on more than one occasion, are among the 
most important developments in Regional Fund activities. 
The rationale for these is that, by developing a coherent 
programme in which the activities of different Community 
measures are coordinated, the combined impact should be 
greater than if they proceeded individually. However, the 
report contains no estimates of the synergy generated by 
integrated activity. The Committee suggests that studies of 
the economic impact of the various schemes should be 
undertaken, which would include estimates of the synergy 
effect, additional employment and Fund cost per 
employment year generated. The Economic and Social 
Committee, which has from the beginning taken 
considerable interest in the integrated proposals, may have a 
role here. 
4.9. The outcome of such studies would obviously be 
invaluable in deciding future policy in relation to integrated 
activities, the circumstances in which they are likely to prove 
most effective and how resources might be deployed to 
maximum effect. 
4.10. In addition, the Committee welcomes the 
increasing tendency indicated in the report for the conduct of 
studies preliminary to the commencement of integrated 
operations, and would suggest that in so far as such studies 
identify particular needs it would seem logical and desirable 
that appropriate powers and resources should be made 
available to ensure that any ensuing integrated operations 
programme can in fact meet those needs. 
Studies 
4.11. On the more general issue of studies, it is axiomatic 
that, as part of any policy designed to maximize benefit from 
ERDF resources, increasing use should be made of the facility to conduct studies before activities under the Fund are 
embarked upon. Additionally, the major thrust of this 
opinion has been to suggest the need for very much greater 
monitoring of results by the Commission and the translation 
of findings back into policy formulation. 
Demonstration projects 
4.12. With the proposed growth in Fund resources the 
Commission will be under pressure to take new initiatives in 
regional policy. Experience has shown that these can often 
have effects which were not foreseen at the outset. It is also 
difficult, in many cases, to predict the quantitative impact of 
such initiatives on employment and other relevant economic 
variables. Additionally, some regions or States may have 
developed a special expertise from which others could benefit 
in establishing particular kinds of project, e.g. in 
development of craft industries or co-operatives. In such 
situations the Committee suggests that the Commission 
should consider greater use of demonstration projects in a 
few suitable regions. These would be subject to close study 
and careful monitoring to highlight strengths and weaknesses 
and would be invaluable in formulating future policies at 
both programme and project levels. 
5. Conclusions 
5.1. In welcoming the report the Committee feels strongly 
that the information which it contains should be extended to 
include more analysis of Fund activities. A very much more 
precise specification of objectives under the Fund and more 
evaluation of the effectiveness of allocations in achieving 
goals is called for. 
5.2. This approach is in accordance with the spirit of the 
Fund, although it is recognized that it will take time and 
resources to develop fully. It is suggested that the Tenth 
Annual Report, which in generally rounding off activities 
under the former Regulation will mark the end of an era in 
the ERDF, will provide an ideal opportunity to commence 
reassessment along these lines. 
5.3. The Committee realizes that its suggestions will 
place an exceedingly heavy burden on the existing resources 
of DG XVI. It recommends in consequence that an adequate 
number of suitably qualified and experienced staff should be 
allocated to undertake the increased volume of work which is 
proposed. 
5.4. Finally, the Committee reiterates that regional 
unemployment differentials have widened substantially in 
recent years despite increased ERDF allocations. It has no 
8. 7. 85 Official Journal of the European Communities No C 169/5 
confidence that the planned expansion of the Fund over the 
next few years will be sufficient to offset these trends. More 
efficient use of existing provisions to meet the needs of local 
communities, allied to much closer involvement of those 
Done at Brussels, 24 April 1985. 
The Committee first stresses the importance of the draft 
Directive, which seeks to improve the safety of narrow-track 
tractors, as part of the process towards the abolition of 
technical barriers to trade. This type of tractor is most prone 
to lateral tilt. The Committee would point out that farming 
still has a very high incidence of occupational accidents and 
diseases, many of which prove fatal. 
One possible way to remedy this is to improve tractor safety. 
This is borne out by the significant fall in farm fatalities in 
various countries over the last few years. Needless to say, 
these safety conditions become ineffective if the user alters 
the protection structures. 
The Committee generally supports the present proposal, 
which complements the previous one which was confined to 
roll-over protection structures of the 'frame or cab' type 
mounted on narrow-track tractors. The Committee opinion 
of 6 July 1983 noted the Commission's intention to propose a 
further Directive on protection structures covering those 
with two pillars mounted at the front, as in the present 
proposal. The Committee accepted the idea of two separate 
directives, although it stressed the need to bring them communities in decision making, could bring about a 
positive and highly desirable improvement. Further intensive 
research could provide strong justification for very much 
increased financial allocations. 
The Chairman 
of the Economic and Social Committee 
Gerd MUHR 
into force simultaneously, in order to allow tractor 
manufacturers to decide which type of protection structure to 
mount on their vehicles. 
The Committee still supports this view. 
Article 1, first indent 
The Committee is pleased to note that the Commission has 
adopted its proposed wording for the ground clearance of 
narrow-track tractors. 
Article 1, second indent 
Unlike the previous Directive, which is currently before the 
Council, the present proposal specifies maximum track 
width as well as minimum. The Committee wonders why 
such an addition has been made, and proposes that the indent 
be reworded as follows: 
'minimum track width of both axles of less than 
1 150 mm.' Opinion on the proposal for a Council Directive on the approximation of the laws of the Member 
States relating to roll-over protection structures incorporating two pillars and mounted in front of the 
driver's seat on narrow-track, wheeled agricultural or forestry tractors 
(85/C 169/02) 
On 7 December 1984 the Council decided to consult the Economic and Social Committee, under 
Article 100 of the Treaty establishing the European Economic Community, on the abovementioned 
proposal. 
The Section for Industry, Commerce, Crafts and Services, which was responsible for preparing the 
Committee's work on the subject, adopted its opinion on 10 April 1985 in the light of the report by Mr 
Masprone. 
At its 226th plenary session (meeting of 24 April 1985) the Economic and Social Committee adopted 
the following opinion unanimously: