OPINION OF THE ECONOMIC AND SOCIAL COMMITTEE on the fourth annual report from the Commission on the implementation of the Reform of the Structural Funds - 1992
Date: 1994-04-27
Institutions: European Economic and Social Committee
Subjects: Structural Funds, activity report, implementation of the budget, regional development













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51994AC0559

OPINION OF THE ECONOMIC AND SOCIAL COMMITTEE on the fourth annual report from the Commission on the implementation of the Reform of the Structural Funds - 1992  


Official Journal C 195 , 18/07/1994 P. 0011 





Opinion on the fourth annual report from the Commission on the implementation of the Reform of the Structural Funds - 1992 (94/C 195/06)On 29 November 1993 the Commission decided to consult the Economic and Social Committee, under Article 198 of the Treaty establishing the European Economic Community, on the Fourth annual report from the Commission on the implementation of the Reform of the Structural Funds - 1992.The Section for Regional Development and Town and Country Planning, which was responsible for preparing the Committee's work on the subject, adopted its Opinion on 19 April 1994. The Rapporteur was Mr Little.At its 315th Plenary Session (meeting of 27 April 1994), the Economic and Social Committee unanimously adopted the following Opinion.1.  Introduction 1.1.  The Commission has submitted its fourth Annual Report as required by Council Regulations (EEC) No 2052/88 (Article 16) and No 4253/88 (Article 31).1.2.  Following the reform of the Structural Funds in 1988, the Commission has previously submitted three Annual Reports and a 'Mid-Term Review' [COM(92) 84 of 18 March 1992] on all of which the Committee issued Opinions.1.3.  The Commission's report on 1992 follows the general pattern established but is able, with the efflux of time, to deal more fully with assessment of the impact of Structural Funds' operations. Implementation, in terms of types of assistance approved and of budget funds committed, generally receives less emphasis and is dealt with in less detail than in previous reports, reflecting the satisfactory progress made by the end of the penultimate year of the programming period.2.  Implementation of the Reform in 1992 Certain features of implementation in 1992, as described in the Commission's Report, are set out briefly in the following sub-sections.2.1.   Financial AspectsThe amount of commitment appropriations executed during 1992 was MECU 16,925 for the Structural Funds' objectives as determined in 1988, together with MECU 1,046 for the New Länder. In accordance with the 1988 'Framework Regulation', commitment appropriations should double in real terms by 1993 compared with 1987 and they are on schedule so to do.Payment appropriations executed were MECU 15,816 plus MECU 1,237 for the New Länder. After the first four years of the 1989-93 programming period, just over three-quarters of the total 5-year spending level proposed in the CSFs has been executed. This rate of spending is also in line with the 1988 Framework Regulation.2.1.1.   Objective 1The countries and regions covered by Objective 1 took action so that it should be possible to take up all the assistance originally allocated and available: the last operational programmes were presented and subsequently adopted and necessary modifications were made to timetables. However, problems remain in Italy where the implementation of the CSF still met with difficulties in 1992, particularly as regards payments.The additional programmes adopted in 1991 for the New Länder and East Berlin have for the most part run smoothly. Indeed, the scale of the applications for aid required payments scheduled for later years to be brought forward to 1992.The targeted progression set out in the 1988 Framework Regulation, to double in real terms the 1987 Objective 1 commitment appropriations by 1992, has been comfortably achieved.2.1.2.   Objective 2For operations approved during the first programming phase (1989-91), the level of commitments was close to 100 % by 31 December 1992 and the majority of related final payments was expected to be made during 1993.For the CSFs adopted for the second programming phase, the majority of the corresponding operational programmes was presented by the Member States by the beginning of 1992. Commitment appropriations were executed during the year to the extent of MECU 1,620 which is 49 % of the assistance planned under the CSF's for the 2-year phase.2.1.3.   Objectives 3  and 4By the end of 1992, the implementation of the CSFs for the first phase (1990-92) was completed in terms of payment commitments.Nine CSFs for 1993 were established on 6 November 1992 in respect of Objectives 3 and 4 in areas outside the Objective 1 regions. The new CSFs, involving assistance of MECU 2.1, feature the same priorities as before but also introduce greater flexibility to cover persons unemployed for less than 12 months.2.1.4.   Objective 5(a)Measures under Objective 5(a) underwent no substantial changes in 1992. Compensatory allowances related to the efficiency of agricultural structures continued to account for the largest single portion of aid committed.2.1.5.   Objective 5(b)The final seven operating programmes were approved in 1992. Under the 73 programmes ultimately approved, Community assistance of MECU 2,607 (at 1989 prices) is available for the period 1989-93. The programme implementation rate accelerated during the year but remains variable by region.2.1.6.   Community  InitiativesThe operational phases of the twelve Community Initiatives adopted in 1990 and 1991 were all launched by December 1992. A new Initiative, 'Retex', intended to accelerate the diversification of economic activities in regions heavily dependent on textiles and clothing manufacture, was adopted in May 1992. Expenditure of MECU 1,970 was committed during 1992 for those Initiatives.2.2.   Implementation of the Principles of the 1988 ReformPrevious Commission reports painted a generally positive picture of the implementation of the principles of programming, concentration and partnership whereas verification of the principle of additionality proved to be a difficult task. The Commission states that there was no new evidence in 1992 to indicate a change in that assessment.2.3.   Assessment of the impact of Community assistanceThe methods of assessing the impact of Structural Funds' intervention were developed considerably during 1992, in particular by the use of thematic evaluations which are described quite extensively in the Report. The Commission acknowledges that the quality of the results, in terms of estimating the impact of Community assistance, has not always come up to expectations but it claims that thematic evaluations have contributed to guiding future priorities for assistance.3.  General Comments 3.1.   Overall AssessmentThe Committee welcomes the Commission's report which provides an extensive commentary and very useful data on the implementation of Structural Funds' operations during 1992 and on the cumulative position following the 1988 reform.The Committee is pleased to note that the financial aspects of Structural Funds' operations are on target and acknowledges that progress is being made towards implementing the principles of the 1988 reform.3.2.   Timing of Issue of ReportFollowing a recent major review of the Structural Funds, final decisions were taken in July 1993 on the legal and administrative framework within which the Structural Funds will operate during the period 1994-1999. The Committee notes with regret that the 1992 Report was not available in time to be given consideration before the new Structural Funds' Regulations were adopted and entered into force.3.3.   Previous Committee OpinionsIt is pleasing to note that several of the points raised by the Committee in its Opinion on the 1991 Report [Rapporteur: Mr Quevedo Rojo(1)] have been accepted by the Commission. However, the Committee is disappointed by the Commission's response regarding the involvement of economic and social partners: further reference is made to this point in section 4.1.3.4.  Pointers for the 1993 Report3.4.1.  The Commission's report on 1993, the final year of the phase following the 1988 reform, provides an opportunity to address the issue of implications of past experience for 1994 onwards. With this prospect in mind and conscious of the revised regulations which are now in force, the Committee suggests that the final year's report should have sections which try to draw together issues such as:- the degree of co-ordination achieved between the regional policies of individual Member States and the Community's regional policies, including, for example, information on the degree of convergence of geographic areas designated as eligible for regional support from each State and from Community funds.- the relationship of regional policies of the Community to other Community policies: reference to the overall impact on economic and social cohesion is made in Section 4.4.- the environmental consequences of Structural Funds' policies.Information on such issues should enable the ESC and others to review them in greater detail as has been done with issues such as the implementation of the principles of reform dealt with in Chapter III of the 1992 Report.3.4.2.  It is put forward that the inclusion of sections dealing with issue-related matters should not be at the expense of the parts of the report dealing with impact evaluation and with additionality, both of which are considered to be of particular interest. This proposition is felt not to be in conflict with the Commission's stated desire to achieve some reduction in the total length of the report and which aspiration is backed by the Committee.3.4.3.  The Committee welcomes the Commission's initial positive response to its proposal that it should participate in dialogue with the Commission on the structure and presentation of future reports.3.4.4.  Some of the other points which are dealt with in more detail in section 4 below also have implications for the 1993 and future reports.4.  Specific Comments 4.1.  Partnership and the involvement of the economic and social partners4.1.1.  Over a number of years, the Committee has drawn attention to the constructive role which could be played by the economic and social partners in all aspects of Structural Funds' operations. The Committee is disappointed in the brevity of the report under this heading (chapter 3.3) particularly in the light of the specific request made in the Committee's Opinion on the preceding Report(1) that an assessment should be provided of the practical involvement of socio-economic partners since 1989 within the various Member States. Such an assessment has, in fact, been carried out on behalf of the Committee itself and is described in a recent Opinion(2). Useful as it is, that assessment is no substitute for the independent and more comprehensive survey that could be undertaken by the Commission.4.1.2.  Very recently, the Committee issued an Own-Initiative Opinion (Rapporteur: Mr Masucci)(3) on the wider topic of Involvement in Community Regional Policy. In addition to developing, at some length, the positive contribution which can be made by the economic and social interest groups, the Opinion also makes it clear that they do not seek, in so doing, to usurp the decision-making powers of elected authorities.4.1.3.  The future involvement of the economic and social partners within the 'partnership' responsible for the operations of Community Structural Funds is prescribed in Article 4 of the new Framework Regulation [EEC No 2081/93]. It is made clear that the partnership has to cover the preparation of Community support frameworks as well as the appraisal, monitoring and evaluation of the operations. The wording of Article 4 represents a compromise reached by the Council on the Commission's proposal in this regard and which was more explicit and closer to the previously expressed wishes of the Committee.4.1.4.  The definitive wording of Article 4 is, nevertheless, interpreted by the Committee(4) as making mandatory the involvement of the socio-economic operators within the close consultations of the partnership, albeit 'within the framework of each Member State's national rules and practices'. The Committee,having drawn attention to the present unsatisfactory situation throughout the Community, has welcomed the new Article 4(5). However, at this time it is not known how the new rules will be applied in all Member States and preliminary indications are that, in at least one Member State (Ireland), the extent of participation appears to have lessened under the new arrangements. The Commission is called upon to monitor the application of the new partnership legislation.4.1.5.  In the course of preparing this Opinion, the Study Group visited Scotland and was able to gain some first-hand knowledge of Structural Funds operations there including the form of partnership arrangements. During the discussions which took place, it was ascertained that the partnership arrangements which applied in the 1989-1993 programming period were concerned primarily with project selection and implementation. It was acknowledged by all parties that those arrangements had been over-bureaucratic and unwieldy.From direct discussions with central government representatives, it became clear that the UK Government does not intend to designate, as formal 'partners', either employers' organizations at national or regional level or trade unions generally, i.e. they will not be invited to participate in the working committees of the new CSFs. [It is understood to be the UK Government's view that the detailed work of the various committees requires representation to be drawn from implementing agencies that have appropriate detailed knowledge and experience of economic development in the various local areas (there will be seven CSFs for Scotland alone in the new phase)]. On the other hand, it was made known that the UK Government has already entered into discussions with national/regional employers' organizations and trade unions- within a wider informal arrangement - on aspects of Structural Funds operation and, in particular at this point in the cycle, on the preparation of new regional plans.The new arrangements represent a major advance on the previous practice in providing a procedure which may, indeed, be suitable for consultation on strategic issues and for monitoring. Nevertheless, in the Committee's view, those wider arrangements fall short of the involvement specified in Article 4 and the formal partnership committees remain insufficiently independent.4.1.6.  The Committee calls for the Commission to provide a fuller explanation of its concept of Partnership and to include in annual reports, as soon as practicable, a description of how Partnership is applied in each Member State and an assessment of conformity with the new Article 4.4.2.   Additionality4.2.1.  Under the Coordination Regulation, as amended in July 1993, the rules to determine additionality have been revised in the expectation that the practical problems of verification will be reduced. Of particular benefit should be the requirements that the arrangements for verification will be agreed and base financial data will be provided by the Member State before any Community support framework is established.4.2.2.  The additionality principle is a vital prerequisite for the success of the European Union's Structural Fund measures. The Committee believes it to be vital to ensure compliance with the rule laid down in the Structural Fund Regulations that Member States are to maintain their public structural expenditure, in the whole of the territory concerned, at the same level as in the previous programming period. In addition, care should be taken to ensure that the Structural Funds' priorities tally by and large with each Member State's structural expenditure.4.2.3.  In embracing the arrangements to apply in future, the Committee trusts that the past period is not overlooked and that the co-operation now being given by Member States will lead to satisfactory verification being achieved ultimately in all cases.4.3.   ConcentrationThe Committee has consistently supported the principle of concentration of resources under the 1988 reform and, more recently, under the new Structural Funds regulations and other initiatives. In view of the importance of this aspect, it is felt to be inadequate for the Commission to deal with it so very briefly in the 1992 report. It would be of interest, for example, to know if concentration and other principles are maintained when switching of support from one to some other measure takes place at short notice.4.4.   Assessment of the impact of Structural Funds operationsThe extensive section of the report (chapter III.2) describing the evaluation of the impact made by Community assistance is commended by the Committee. Given the near impossibility of quantifying the effectiveness in pure economic terms, the examples of thematic evaluations and other technical assessments are decidedly useful in illustrating the effects. The Committee would encourage the Commission to undertake further case studies so that the impact may be illustrated over a wider spectrum. In the long-term, the most persuasive evidence of the impact of Structural Funds operations would be the eventual elimination of need of such assistance.4.5.   Impact of other policies4.5.1.  The Committee is very pleased to note that under the new Coordination Regulation and in accordance with the Maastricht Treaty, the Commission will be required to submit a report at three-yearly intervals on the progress made towards the fundamental aim of the Structural Funds viz. the strengthening of the Community's economic and social cohesion. The report is to deal with the contribution made by the Structural Funds and is to be accompanied by appropriate proposals regarding other Community policies affecting cohesion. The Committee assumes that it will be consulted on its reaction to the new report in due course.4.5.2.  As the Committee has stated before - regional policy may concentrate on regional development but it is not the case that regional development is solely dependent on regional policy. Thus, this initiative should meet an oft-stated request and is strongly embraced.4.6.   Impact on regions within Member States4.6.1.  The Committee has drawn attention previously to widening economic gaps between regions within Member States and it is disappointing that the report gives no indication of whether this situation has improved as a result of Community policy or has deteriorated further.4.6.2.  In cases of both improvement and deterioration, the degree to which Community policies are coordinated with, regional and other policies of individual Member States may well be an important factor but such information is not given in the Report. The Committee calls on the Commission to provide data on the regional incidence within Member States of Community spending on regional policies. A comparison of the pattern of such spending with that by each member state would be even more useful.4.7.   Take-up of aid for investment under Objective 5(a)4.7.1.  The Committee notes that the award of compensatory allowances for farmers in less-favoured regions continues to be the most important Objective 5a measure in financial terms.4.7.2.  The limited take-up of aid for investment appears to be due to uncertainty surrounding the CAP reform and the outcome of the GATT negotiations. The Committee trusts that investment will be able to play a more dynamic and effective role in the future.Done at Brussels, 27 April 1994.The Chairmanof the Economic and Social CommitteeSusanne TIEMANN(1) OJ No C 161, 14. 6. 1993, pp. 46-50.(2) OJ No C 127, 7. 5. 1994.