Opinion of the Committee of the Regions on 'The Structural Funds and their coordination with the Cohesion Fund Guidance for programmes in the period 2000-2006'
Date: 1999-11-18
Institutions: European Committee of the Regions
Subjects: Cohesion Fund, Structural Funds, regional aid

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Official Journal of the European Communities

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

(2000/C 57/08)

THE COMMITTEE OF THE REGIONS,

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

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

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

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

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

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

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

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

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

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

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

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

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

(1) OJ C 64 of 27.2.1998, p. 40.
(2) OJ C 51 of 22.2.1999, p. 1.
(3) OJ C 51 of 22.2.1999, p. 48.
(4) OJ C 51 of 22.2.1999, p. 10.
(5) OJ C 93 of 6.4.1999, p. 1.
(6) OJ C 93 of 6.4.1999, p. 9.
(7) OJ C 251 of 10.8.1998, p. 11.
(8) OJ C 93 of 6.4.1999, p. 36.

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

1. General comments

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

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

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

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

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

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

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

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

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

2. Specific comments

2.1. Conditions for growth and employment: regional competitive-

ness

1.4.
The Committee believes that the Structural and Cohe-
sion Fund programmes should be developed and implemented

The Committee of the Regions endorses the line
2.1.1.
taken by the Commission on creating the basic conditions for
regional competitiveness in terms of transport infrastructure,

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energy, telecommunications, infrastructure for a high-quality
environment, and research, technological development and
innovation. However, it would have liked this statement of
how to create the basic conditions for competitiveness to be
taken further with the framing of practical development
measures, which are the main aim of the exercise.

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

i.e. companies at regional

infrastructure: efficiency,

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

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

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

The Committee endorses all three aspects of impro-
2.1.6.
ving the quality of the environment: water supply and waste
water management, waste management and the reclamation

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

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

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

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

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

Community

2.2.1.
The Committee of the Regions believes that the
Commission can never lay enough emphasis on the importan-
ce of ensuring complementarity between national action
programmes receiving support from the ESF operating regio-
nally and regionally-planned programmes financed by the
ERDF. Consistency of action by all the Community’s Structural

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Funds depends on this. The Committee would point out that
the public funds needed to trigger ESF assistance are generally
put up by local and regional authorities, as these are usually
the bodies responsible for education, training, apprenticeships
and job-finding.

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

In this connection the Committee is pleased that the Communi-
ty’s ‘Urban’ programme is continuing.

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

The Committee stresses the importance of

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

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

3. Conclusions

2.3. Urban and rural development and their contribution to

balanced territorial development

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

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

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

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

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

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

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

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

the competitiveness of

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

The Committee of the Regions stresses that the Structu-
3.5.
ral Funds ought to be able to intervene in Objective 2 regions
in such matters as transport infrastructure and interoperability,

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tele-communications infrastructure and its provision in, espe-
cially, outlying and extremely remote regions. The Committee
would underline that this also applies to energy and environ-
mental programmes, particularly those concerning research
and development and aid to firms. In all these areas it would
point out that regional and local authorities are best placed to
identify economic and social needs.

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

Brussels, 18 November 1999.

technological development and innovation, particularly in
management,
is best able to secure the establishment of
durable industrial and service enterprises.
3.7.
The Committee of the Regions approves the principle
of complementarity between the development of urban and
rural areas. In this respect, it proposes an integrated develop-
ment approach such as advocated by the ESDP, whereby a
driving force is created for the economic and cultural develop-
ment of urban areas, networks of towns and rural areas
surrounding them. It should be possible to run pilot schemes
along these lines under the Urban Community Initiative.
In general, the cooperation being sought between the
3.8.
Cohesion Fund and the Structural Fund ought to provide an
opportunity to demonstrate the effectiveness of decentralised
partnerships and a bottom-up approach to the use of the
Community Funds.

The President

of the Committee of the Regions

Manfred DAMMEYER