Opinion of the Economic and Social Committee on the "11th Annual Report on the Structural Funds (1999)"

(2001/C 221/15)

On 24 and 25 January 2001 the Economic and Social Committee decided, under Rule 23(3) of its Rules of Procedure, to draw up an opinion on the 11th Annual Report on the Structural Funds (1999).

The Section for Economic and Monetary Union and Economic and Social Cohesion, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 15 May 2001. The rapporteur was Mr Burani.

At its 382nd plenary session (meeting of 30 May 2001) the Economic and Social Committee unanimously adopted the following opinion.

1. Introduction

1.1. In accordance with Article 16 of the Framework Regulation ((EEC) No. 2052/88) governing the Structural Funds, the Commission has drafted the 11th report on the Structural Funds, for 1999.

1.2. The report aims to "describe how the Structural Funds regulations were implemented during 1999, with a particular focus on Objectives 1 to 6 and the Community Initiatives". The seventh annual report (1995) introduced an innovation whereby every report is to feature a horizontal theme. The theme chosen for 1999 was equal opportunities for men and women.

1.3. In addition to a description of major structural policy-related events in the Union during 1999, the report provides a detailed picture of the key elements for each country using the funds available for each objective.

1.4. The document is completed by a series of interesting chapters evaluating and analysing the Structural Funds, verifying additionality, looking at coordination with other financial instruments, examining compatibility and complementarity with other Community policies and lastly studying the dialogue between the institutions and with the economic and social partners.

2. The results of the 1994-1999 programming period

2.1. The 1999 report is especially significant as it is the last for the 1994-1999 programming period. It is therefore in essence a final summing up of the use of appropriations during the period in question, before the entry into force of the new regulations which were approved on 21 June 1999 and applied from 2000 onwards.

2.2. A total of 1134 programmes were set up under the various objectives (610) and Community Initiative programmes (524); in 1999 programming was fully implemented, and for that reason few items of assistance were adopted during the year.

2.3. The final year of the 1994-1999 programming period featured the following results:

- a considerable acceleration in appropriations, as already noted for the previous two years, with a significant reduction in the backlogs that had accumulated during the first part of the period;

- 99 % of the total assistance from the funds for the CSFs (SPDs) had been committed by the end of the year;

- 75 % of payments were made and payments may continue to be made until the end of 2001;

- Objectives 1 and 3 performed best, with almost all available funds committed and 78 % paid; for Objectives 2, 4 and 5b, however, there were considerable payment backlogs;

- the best rates of implementation were recorded in the Cohesion Fund countries, while the more prosperous countries were less efficient;

- the commitment figures for the Community Initiatives (95 %) were also positive, while those for payments were less so (57 %).

2.4. Taking each objective individually, the report highlights major differences in backgrounds and results. In 1999, as in previous years, it was Objective 1 that recorded the best rates for use of the funds, with 100 % of commitments and 78 % of payments made.

2.4.1. The performances of Spain, Portugal, Ireland and Germany were especially good, with above average rates; the results for Belgium, the Netherlands and the United Kingdom, meanwhile, were less impressive. Italy caught up on most of its previous backlog, committing 100 % of appropriations, but it is still behind on payments.

2.5. There were a few problems with Objective 2, as some programmes were only adopted at the end of 1997 or even as late as 1998, and therefore implementation began only in 1999. As a result, the level of payments was lower, at 60 %.

2.6. In the case of Objective 3, relating to human resources and the labour market, financial reallocations were made during the final months of 1999 in order to allocate funds according to criteria that tied in more closely with the objectives of the European Employment Strategy, focusing for instance on young unemployed people, the long term unemployed and those threatened with exclusion from the labour market. Nevertheless, at the end of 1999, Objective 3 recorded commitment and payment rates of 80 %.

2.7. Results for Objective 4, aimed at improving job opportunities in the light of industrial change and new systems of production, confirmed the improvement already noted in 1998, with total commitment of appropriations and payments at 69 %.

2.8. There were improvements for Objective 5a (structural adjustment in agriculture and fisheries) with commitments at 96 % (agriculture) and 100 % (fisheries), and payments at 70 % and 73 % respectively.

2.9. Objective 5b, on the development of rural areas, accelerated considerably in 1999 with a resulting 99 % of commitments and 68 % of payments made.

2.10. The 1998 reallocation of finance among the Community Initiatives, conducted at the request of the European Parliament, brought about a considerable acceleration in implementation. Overall, the figures for the Community Initiatives at the end of 1999 were 95 % for commitments and 57 % for payments.

2.11. With regard to the horizontal theme of equal opportunities, the report describes the progress made over recent years on removing obstacles to genuine and complete equality between women and men in the workplace and with regard to political and social involvement. There are still underlying problems however, which led the Council of Ministers in 1996 to issue a resolution on mainstreaming equal opportunities into the Structural Funds.

2.12. Studies were carried out in 1997 and 1998 on the application of the principle of equal opportunities in the Structural Funds, and on examples of good practice. This served in part to raise the profile of the equality issue in the Funds for the 2000-2006 period.

3. General comments

3.1. As it has already stated in previous years(1), the Committee does not agree with the Commission's decision to simply "present" the report without formally requesting an opinion.

3.1.1. As this is one of the most important areas in European politics and given that the Treaty recognises the Committee's role in matters relating to economic and social cohesion, the ESC once again reiterates the need - and claims its right - to be formally consulted on future reports on the Structural Funds.

3.2. With regard to content, the report is unquestionably comprehensive in terms of information, assessments and data. It would, however, have been a good idea to change the approach and produce a report on the entire 1994-1999 programming period.

3.2.1. The Commission has announced the publication of a comprehensive report of this kind, but for it to be subject to an effective evaluation, not least for the purposes of the 2000-2006 programming period, it must be drafted as soon as possible. The Committee hopes that publication will be speeded up as much as possible, in order to provide useful pointers for future years.

3.3. The 11th report provides valuable summaries of the performance of each country, but it fails to give a clear and concise overview of Structural Fund management, the problems it raises for each country and for the Union as a whole, and the results obtained with regard to employment and economic and social development. There is no single, comprehensive framework to show the results obtained from Structural Fund use for the year in question or for the overall programming period that ended with 1999.

3.4. As far as the method of preparing and drafting the report is concerned, there is a wealth of quantitative information, but little in the way of analysis and insufficient evaluation.

3.5. Although the information provided in the report is important, it is insufficient and fails to properly illustrate the repercussions of structural policy in Europe and individual Member States.

3.6. As for assessing the degree to which each objective has been achieved, the report concentrates mainly on financial aspects, commitments and payments, without looking at the way spending has affected growth and progress towards economic and social cohesion in the EU as a whole and in individual Member States.

3.7. It would appear that the Commission's main concern is that of assessing the efficiency of the management of the Structural Funds as opposed to the effectiveness of the choices made. The only analysis is financial, whereas it is also important to ascertain what are the obstacles to better utilisation of the funds, whether there have been shortcomings in planning or implementation, and whether the rules and complex reporting methods have worked or if they have caused delays or even failure to use the funds.

3.8. In short, the Commission's reports seem to be concerned more with fulfilling its formal obligations than with responding to the needs of the public, who should be enabled to make a thorough assessment of the choices made by the Commission, national governments and regional authorities.

3.9. In this report as in the past, the Commission's primary preoccupation with accounts is quite clear from its emphasis on two key elements, the level of commitments and the level of payments, with no sufficient explanation of the reasons for positive or less satisfactory results.

3.9.1. This makes it impossible to understand why payment levels are higher in the cohesion countries, while "some of the most prosperous Member States in the Union had a lower rate of implementation of payments than the Community average".

3.10. There is no way of knowing whether the better results achieved by the less wealthy countries are the result of a greater need for finance, better planning, a more effective implementation system, or all these and other reasons.

3.10.1. These important points definitely require detailed attention, explanations and examples, but there are none to be found.

3.11. Furthermore, there is no mention whatsoever of the efficacy of the regulations that were nevertheless covered by the reform approved in Luxembourg in June 1999. The final report for the 1994-1999 period should have been an opportunity for the Commission to take a critical (and possibly also self-critical) look at monitoring and reporting procedures.

3.12. The Commission argues that it could not make comprehensive evaluations because it does not yet have all the data on spending, for which the deadline is the end of 2001. This does not seem acceptable however, as it is perfectly reasonable to conduct an evaluation of the results with over 70 % of the spending figures available.

3.13. The Commission could adopt more streamlined and concise report formats and complete them more rapidly, in order to enable the relevant institutions to make their assessments in good time, form opinions and suggest changes.

3.14. The results are lacking in terms of physical indicators that would have been very useful for assessing efficiency and impact. For instance, how many hectares of farmland were irrigated using the funds? What growth in national or regional GDP can be attributed to the Structural Funds? How have consumption and saving patterns changed in the region concerned?

4. Specific comments

4.1. Employment

4.1.1. More specifically, there is no evaluation of the number of jobs created or maintained, of the most important areas of progress in the various sectors concerned by the objectives, or of the commonest and most serious difficulties encountered in the various countries.

4.1.2. Conversely, the Committee does not see the need for almost all of Chapter 1, which devotes far more space to how things will be and what will be done (2000-2006 period) than to how things have been and what has been done (1999). The report digresses, describing the entire process of preparing for the 2000-2006 programme and detailing the characteristics of the new funds and new regulations.

4.1.2.1. The Committee has the impression that the Commission is simply going through the motions, using a ready-made format, without adding that extra something that from year to year would distinguish the approach or style of the report. The details on the thematic priorities for cohesion, given in Chapter 1.2, are however important, enabling a more comprehensive assessment of the impact of the Structural Funds.

4.2. The paragraphs on the European Employment Strategy, the new map of national regional aid and the ESDP (European spatial development perspective) provide a frame of reference that is essential in order to grasp the interactions and synergy between the various Community policies for economic and social development.

4.3. Useful data are also provided in the section on the territorial employment pacts, one of the most interesting and original initiatives of recent years.

4.4. An example of what the report could have been is actually given by the Commission itself in the section on Objective 2, which reports on the conclusions of an evaluation of the 1989-1999 period, conducted by an independent body.

4.5. This analysis provides an in-depth examination of conversion strategies and strategic options to support specific priorities (job creation, research and development, the environment and equal opportunities).

4.6. The study on Objective 2 showed that:

- significant progress has been made in the last decade, especially with strategic planning, the involvement of organisations and the focus on strategic priorities;

- there is still room for improvement;

- limitations included the fragmentation of programme management responsibilities, the lack of training and information, and the infrequent dissemination of best practice examples.

4.7. Evaluation of Objectives 1, 3 and 4 under ESF and the Adapt and Employment Community Initiatives was also entrusted by the States to third parties, and a number of interesting points were made:

- the transnational elements of projects should be encouraged as much as possible;

- administrative procedures should be simplified;

- closer cooperation is needed between those involved in the national labour-market system and those responsible for the Community Initiatives;

- the mainstreaming strategy should start at project level;

- monitoring procedures and a system of monitoring indicators should be developed to support evaluation processes.

4.8. Other evaluations relate to the rural development programmes and Leader II. Finally, interesting comments are made on the results of the thematic evaluation of the impact of investments made in transport infrastructure in Objective 1 regions in certain countries.

4.9. It would have been extremely useful to conduct a thorough and systematic analytical study on the results obtained from the use of the Structural Funds for all the objectives throughout the 1994-1999 period, as was done for Objective 2. A document of this kind would enable a more thorough evaluation of European policy as a whole and give the public, companies and research institutes a clearer understanding of the choices made by the Commission.

4.10. Additionality

4.10.1. Another important theme is additionality. The Commission stresses the importance of verifying additionality, in order to "prevent the resources of the Funds from serving to replace national structural aid".

4.10.2. But the report provides no specific information on the verification of additionality, and merely refers to comments made in the Court of Auditors' special report published in early 2000. In this report, the Court highlights shortcomings in the application of the principle, primarily the absence of a penalty system, for which the Commission is certainly not to blame.

4.10.3. The Committee is however concerned by the comment that "the Commission had to be much more pragmatic in the methodological requirements than for Objective 1, taking into consideration the specific situation in each Member State".

4.10.4. This comment, which is not supported by evidence or examples, appears to conceal some kind of "flexibility" on the part of the Commission that should have been more clearly explained and, more importantly, justified.

4.11. Equal opportunities

4.11.1. The report chooses equal opportunities as its horizontal theme, and the Commission states that it wishes to look at "the improvements made incorporating this political priority in the Fund's programmes".

4.11.2. The report gives useful general indications on the current gender gap in the workplace. For instance, for every Member State it describes the measures taken to promote equal opportunities between men and women in the various regions concerned by the Funds.

4.11.3. The Committee would make a general comment about the value of these horizontal analyses. The decision taken in the 1995 report to choose a horizontal theme to use as a yardstick for all the Structural Fund measures was certainly very important and could add considerable value.

4.11.4. However, the desired result has not been achieved because the approach taken is too general, and lacks detailed facts and figures.

4.11.5. The Commission outlines some of the objectives of the said strategy in each Member State but does not provide a proper background or adequate quantitative data on the results. The objectives therefore represent no more than a declaration of intent as neither the results nor the effects are analysed.

4.11.6. There is no impact assessment and no mention of the results achieved or of possible failures. As a result, the most interesting information - the causal link between structural policy measures and economic and social change - cannot be found. Neither is any comparison drawn between the various production sectors and social spheres in order to understand if and why results and impact vary.

4.11.7. No attention is given to factors that help or hinder equal opportunities, and no assessment is made of the level of part-time or temporary work, or the amount of female entrepreneurial activity encouraged by equal opportunities initiatives financed by the Structural Funds, etc.

4.11.8. It would have been useful to have further comments on the most important problems raised by the Commission when it refers to equality between men and women as a productive factor and regrets the fact that "the labour market remains very segregated" and that there is still a considerable wage gap (28 % on average in the EU)(2).

4.12. Partnership

4.12.1. Partnership is another key element that is not given any special attention in the report although it is a critical factor in the success of the structural policies.

4.12.2. Many questions remain unanswered: how many and which players were involved in using the Structural Funds? In which phases of selecting priorities, and preparing and implementing the structural measures were they involved? How were partnership and subsidiarity combined?

4.12.3. Furthermore, were the partners those closest to the final beneficiaries, enabling all concerned to develop their potential to the full in pursuit of a shared development objective?

4.12.4. Once again, information about the quantity and quality of partnerships would have enabled a more detailed assessment of the impact of the Structural Funds on economic and social trends, of changes in the industrial fabric resulting from the funds, and of the overall impact of Community policies on cohesion.

4.13. Structural Funds and European policies

4.13.1. The chapter on compatibility and complementarity with the other Community policies is of great interest as it makes the link between Structural Fund measures and the EU's sectoral policies.

4.13.2. The problem in this instance is not so much the reporting method as the content. Compatibility/complementarity between EU policies is often more theoretical than real. In some regions there is a lack of consistency between these policies, as they have different targets, methods and planning periods and concern different areas.

4.13.3. It is not surprising that this should be so because policies such as the reform of the CAP, the introduction of Economic and Monetary Union and the development of the Single European Market are all designed to achieve desirable broader policy objectives.

4.13.4. However, that having been said, it is important that the deployment of Structural Funds is seen as one of the important means by which the negative impact of these policies in disadvantaged regions can be mitigated. Without the use of Structural Funds these broader policy objectives might well have a damaging impact on fragile communities and this must be acknowledged when considering future cohesion policy.

4.13.5. Sometimes different European programmes are implemented in a single area with no coordination, and this can lead to confusion and overlaps.

4.13.6. It is true that harmonisation in this area is not easy, as the context in which decisions on the Structural Funds and the various sectoral policies are made commonly involves a multitude of sometimes conflicting players, interests and socio-economic situations.

5. Conclusions

5.1. Although the Committee has felt obliged to criticise the method and content of the report, it recognises the major effort made by the Commission to provide data for evaluating Structural Fund management and policy.

5.2. The Committee considers that the drafting of these reports should not be treated as just an annual ritual that the Commission goes through according to a ready-made format, without adding that extra something that would distinguish the style or approach of each report. The report should focus on evaluation and analysis, paying special attention to jobs generated or preserved, the effects in terms of innovation, and results in the area of equal opportunities and partnership. This approach would make it easier to assess the impact of structural policy.

5.3. Partnership is another important element that needs proper analysis, as it is a basic factor in the success of the structural policies.

5.4. As the representative of the social partners directly affected and concerned by the management of the Structural Funds, the Committee could make a useful input during the programming periods and not just at the reporting stage.

5.4.1. The Committee believes that it would be appropriate for it to be formally consulted on future Structural Funds reports and reiterates its view that it has a right to be consulted in this way.

5.5. The Committee would stress that it is open to opportunities for various forms of cooperation with the Commission, with a view to optimising structural and cohesion policies.

5.6. It meanwhile hopes that the report on the entire 1994-1999 programming period will be published as soon as possible, to allow for evaluation before the end of 2001.

5.7. The Committee is also of the view that a long-term evaluation of the Structural Funds would be very useful, not least in the light of forthcoming EU enlargement.

5.8. The Structural Funds will be crucial for these countries and their economies. It would therefore be useful to pass on experience of past Structural Fund successes and failures to those who will be responsible for administering enormous allocations in the years ahead. The aim should be to draw on successful methods and practices in order to avoid repeating previous mistakes.

5.9. The Committee believes that the principle of additionality should be upheld because, as the Commission itself remarks, it "is a general principle governing the Structural Funds' operations". The Committee therefore supports the Commission's efforts to apply the principle rigorously.

5.10. The Committee proposes to assess the feasibility of a public initiative, in conjunction with the Commission, the Parliament and the Committee of the Regions, to involve all those concerned with the management of the Structural Funds, including representatives of the applicant countries.

Brussels, 30 May 2001.

The President

of the Economic and Social Committee

Göke Frerichs

(1) OJ C 268, 19.9.2000.

(2) OJ C 155, 29.5.2001.