Opinion of the Economic and Social Committee on the "Second Report on Economic and Social Cohesion"
Date: 2001-04-26
Institutions: European Economic and Social Committee
Subjects: economic and social cohesion, report

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Official Journal of the European Communities

10.7.2001

Opinion of the Economic and Social Committee on the ‘Second Report on Economic and Social
Cohesion’

(2001/C 193/15)

On 25 January 2001 the Economic and Social Committee, acting under the third paragraph of Rule 23(3)
of its Rules of Procedure, decided to draw up an opinion on the ‘Second Report on Economic and Social
Cohesion’.

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 9 April 2001. The
rapporteur was Mr Christie.

At its 381st plenary session of 25 and 26 April 2001 (meeting of 25 April), the Economic and Social
Committee adopted the following opinion unanimously.

1.

Introduction

1.1.
The Second Report on Economic and Social Cohesion
marks the beginning of the discussion phase on the future of
the EU’s cohesion policies after 2006. By then, EU membership
will have increased by up to ten new countries from central
Europe. The hypothesis underpinning the Second Cohesion
Report
the
Commission addresses the challenges which this presents to
the Union’s cohesion efforts.

is a Union of 27 member states, and in it

1.2.
It is evident from the data reported in the Second
Report that the challenge which enlargement poses to intra-
EU cohesion efforts is considerable. With few exceptions, the
candidate countries from central and eastern Europe currently
record per capita income levels which are considerably below
(less than one half of) the current EU average. At the same
time, these countries are characterised by economic and social
infrastructures which are inadequate for the needs of a modern
market economy. It is inevitable that enlargement will, in the
context of
to ‘reducing disparities
between the levels of development of the various regions and
the backwardness of the least favoured regions or islands,
including rural areas’ (Article 158), pose a massive challenge
to the cohesion policies.

the EU’s commitment

However, as the Second Cohesion Report makes clear,
1.3.
enlargement is not the only challenge facing the cohesion
effort. A range of other economic, social, and territorial
changes are affecting the EU 15 (internal policy reforms,
economic and monetary union, financial considerations, etc.)
and raise important questions for the future orientation of
cohesion actions. Although the Union’s cohesion actions are
more or less settled for the period up to 2006, the Commission
surely is correct in its suggestion that the debate surrounding
cohesion policies post-2006 should begin with the publication
of this Second Cohesion Report.

In commenting on the Second Cohesion Report, the
1.4.
Economic and Social Committee has divided its work into two
parts. The first part, provided by this Opinion, considers the

broad principles of Community Cohesion actions post-2006,
and focuses on the questions which the Commission suggests
need to be addressed in preparation for policy post-2006. This
will provide the basis of the ESC contribution to the Cohesion
Forum to be convened by the Commission on 21 and 22 May
2001. The second part of the ESC work is to be presented in a
further, and a more detailed Opinion, which will review the
information and analysis presented by the Commission in the
Second Cohesion Report.

2.

The Role of Cohesion Policy

2.1.
The Second Cohesion Report sets out very clearly the
challenges that enlargement will pose to the cohesion efforts
of the European Union. Since the adoption of the Single
European Act, achieving a greater measure of economic and
social cohesion has been a fundamental principle of the
European Union, and considerable resources have been as-
signed to achieving this objective. Although challenging,
designing a cohesion policy to meet the needs of a European
Union of 27 countries should not diminish the Union’s
commitment to strengthening economic and social cohesion,
or providing support for the economic development efforts in
all the Union’s disadvantaged regions, as explicitly framed in
Article 158. In the light of the new challenges enlargement
poses, the Committee considers it is essential that the debate
about to begin concerning the future of cohesion policy is
conducted within the context of realising these objectives.

2.2.
Undoubtedly much of the debate on the future of
cohesion action will focus on the resource implications this
has: how much will cohesion policy cost and how will any
additional expenditure be financed? These are important
economic and political questions. However these questions
should not be permitted to mask the significant economic
gains that accrue — both directly and indirectly — from
improving the economic prospects and performance of the

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Union’s disadvantaged regions. While cohesion policy delivers
economic and social gains well beyond the confines of the
recipient regions, it must also help to boost the competitiveness
of the Union as a whole. This objective will only be achieved
if cohesion policy is firmly targeted at the economic and social
development of the areas concerned, and thereby strengthens
the economic capacity of the Union as a whole.

2.3.
As the Second Cohesion Report demonstrates, the
Cohesion actions have, since 1988, resulted in a significant
narrowing in economic disparities within the European Union.
In the three least prosperous Member States (Greece, Spain
and Portugal), per capita average income has risen from 68 %
of the EU average in 1988 to 79 % of the EU average in 1999;
a reduction of a third in the initial gap. This represents a
substantial improvement for the poorer Member States, and
demonstrates the importance that cohesion actions have had
in the past, and will continue to have in the future.

2.4.
The Structural Funds have also played the key role in
stimulating economic transformation outside of Objective 1
regions — that is, in the declining industrial regions, and the
rural and peripheral regions and provided support for human
resources in accordance with Objective 3 (formerly Objec-
tive 4). Although the exact impact of these measures is difficult
to quantify, their qualitative effect has been considerable. This
is because the regional economic development process which
has to be followed in order to qualify for EU cohesion support
has itself been a primary catalyst for improving the economic
performance in many regions. It has required Member States
to adopt an approach to regional economic development at
the core of which are concentration of effort, programming
interventions, partnership, and additionality — an approach
that may not otherwise have been followed and which has
been a source of significant economic and social benefits. In
this way EU cohesion actions have been a clear source of
‘added value’ in the economic transformation in the declining
industrial regions, and the rural and peripheral regions.

3.

Specific Themes

3.1. The role of cohesion policy in an enlarged Union of 27 Member
States in a world of rapid economic and social change

3.1.1.
Cohesion policy since 1988 has been a central plank
in the European Union’s drive towards the construction of an
‘ever closer union’ between its citizens. It is the view of the
Committee economic convergence between the regions of the
in
Union through active policy interventions is essential

preserving the European model of society. The cohesion
actions reflect and reinforce that model of society; one in
which both equality of opportunity and the provision of basic
social guarantees through the operation of national and Union-
wide public policies, represent core social and political values.
These actions are aimed principally at promoting opportunities
in the disadvantaged regions — regions whose relative econ-
omic disadvantage may well be increasing as both global and
Union-wide forces of economic integration intensify, and as
the pace of technological and social change increases. As
the Second Cohesion Report acknowledges,
these forces
collectively have a tendency to produce an uneven spatial
distribution of economic activity, with regions closest to the
market ‘core’ benefiting most, and those on the economic and
geographic ‘periphery’ benefiting least — if at all. In large
measure, the role of the Union’s cohesion efforts has been
to assist the disadvantaged regions counter the potentially
economically harmful and socially divisive consequences that
accompany the process of economic integration.

3.1.2.
Enlargement will pose fundamentally new economic,
political, and policy challenges to the Union’s cohesion efforts.
As is clear from the Second Cohesion Report, the regional
economic development needs within the candidate countries
are considerable. If these challenges are to be met, the Union
has to respond with sustained and targeted cohesion actions
that are tailored to the specific economic development needs
of the acceding countries. Particular attention should be given
to promoting the role of women in employment.

3.1.2.1. Moreover, the Commission should examine new
— and innovative — arrangements to meet the cohesion
challenges posed by enlargement. For instance, there may be
considerable scope in pursuing closer linkages between actions
under the EU Structural Funds, investment loans from the
European Investment Bank, and capital available from the
private sector. These links offer possibly considerable potential
for synergy which could produce greater productive invest-
ment activity within the candidate countries than otherwise.

3.1.3.
At the same time, the Union’s cohesion actions must
continue to address regional problems which persist in the
current EU 15 Member States. Although these actions have
recorded considerable success over the period since 1988,
support from the cohesion policies is likely to remain a
key element in the economic development of disadvantaged
EU 15 regions after 2006. However, just as cohesion policy
towards regions in the candidate countries should be designed
to meet the particular development needs of those countries,
needs which may be specific to their economic and social
circumstances, so too should cohesion support to EU 15
disadvantaged regions after 2006 be adapted to meet their
requirements and priorities at that time — requirements and
priorities that may be different from those assisted under
current cohesion actions.

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3.1.4. Many lessons have been learned regarding the effec-
tiveness of the cohesion actions over the period since 1988,
and successive cohesion regulations have been adjusted to
reflect these lessons. In the context of the challenges con-
fronting the Union, it is important that future cohesion policy
reflects the lessons of the past: that it embodies best-practice
as shown by past results; and that Regulations governing
cohesion policies are framed accordingly. As one element in
this, we urge the Commission to continue to develop and
improve its techniques for monitoring the effectiveness of
interventions made under the framework of the Structural
Funds.

3.2. Cohesion in the context of other Community policies

3.2.1.
It is essential that all Community policies should, as
far as is practicable, be congruent in terms of their objectives.
Otherwise policy in one area will need to adjust in order to
correct problems created by policy decisions made elsewhere.
There has to be proper coordination of policy decisions, and it
is therefore important that EU cohesion actions and other EU
policies are mutually consistent. Nonetheless, inevitably there
will be tensions between different policies. For instance,
although — as the Second Report notes — macroeconomic
stability helps to achieve economic convergence at the national
level, it is possible that, on occasion, constraints imposed on
national fiscal policies in pursuit of stability (e.g. through the
operation of the Stability and Growth Pact) will make it more
difficult for governments to finance policies aimed at achieving
economic convergence at the regional level. Similarly, although
the internal market has — and will continue to — delivered
benefits across the Union as a whole, it may contribute to
emergence of a core-periphery pattern of economic develop-
ment at the Union level.

3.2.2.
Conflicts between objectives of different EU policies
may become even more acute. There is, for instance, consider-
able anxiety within rural and fishing communities that current
reforms to agricultural and fisheries’ policies will create
significant economic and social problems within their respect-
ive communities. Not only will these reforms have adverse
effects in specific EU 15 regions, without question, they also
will contribute to regional problems in the candidate countries.

suggest that those benefiting directly from the policy reforms
taking place at the EU level — including enlargement —
should be prepared to compensate those regions that are
absolutely or relatively disadvantaged by the same policy
reforms, by increasing their financial contribution to the EU
cohesion efforts.

3.3. Cohesion in the context of national economic policies

3.3.1.
Domestic policies in Member States play a crucial
role in shaping the general environment which will influence
significantly EU regional economic prospects. It is, therefore,
important that Member States recognise the regional impact
which their economic policies have, and ensure that —
wherever possible — domestic policies are reinforcing rather
than undermining regional economic convergence. A persist-
ent theme in Commission regional studies has been evidence
that regional economic convergence has been occurring at the
level of the EU, but that regional economic divergence has
been occurring at the level of the Member State. Much of this
must reflect the adverse regional impact of domestic economic
policies. The Committee proposes that, in the forthcoming
review, closer attention be given to the regional impact of
domestic economic policies and that provisions be made to
take into account regional economic effects, where this does
not already occur, in the preparation of domestic economic
policies.

3.4. The reform of Cohesion Policies in preparation for enlargement

3.4.1.
Preparing the cohesion policies in anticipation of
enlargement represents a key challenge over the period up to
2006. In this section we focus on specific issues raised by the
Commission for consideration. We will develop these points
more fully in the next stage of our deliberations.

3.4.2. F u n d a m e n t a l P r i n c i p l e s o f C o h e s i o n

A c t i o n s

3.2.3.
It is accepted that developments across these policy
areas are required to achieve improvements in competitiveness,
environmental standards and productivity levels from which
the EU as a whole benefits. Moreover, specific reforms — e.g.
in the CAP — are necessary to meet the EU’s international
obligations. It would be both misguided and inefficient for the
EU to avoid certain policy decisions solely for reasons of their
effect on cohesion. At the same time, it is surely correct to

3.4.2.1.
It is the view of the Committee that the fundamen-
tal principles that have underpinned the operation of cohesion
actions since 1988 must continue to form the basis of cohesion
actions after enlargement — concentration, programming,
additionality and partnership. In each of the previous program-
ming periods, these principles have made a positive contri-
bution to the success of the Structural Funds in achieving their
objectives. Indeed, in the context of enlargement we urge the
Commission to investigate arrangements that might strengthen
the effectiveness of these principles.

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3.4.3. F i n a n c i a l i m p l i c a t i o n s o f E n l a r g e m e n t

3.4.3.1.
Extending EU cohesion policies to meet the obli-
gations that will arise in an enlarged Union will require an
increase in the financial resources assigned to these policies.
Whilst
the Committee acknowledges that an increase in
cohesion spending is likely to bear most heavily on the
richer Member States, increasing the cohesion budget is an
unavoidable consequence of enlargement. However, it is also
true that enlargement offers economic benefits to all Member
States — especially to the dynamic economies located at the
core of the internal market. Therefore some part of any
increased financial burden on these countries that arises with
enlargement will be offset by the economic benefits that will
accompany enlargement. The Committee agrees with the
Commission in its view that ‘... in order to remain credible,
regional and cohesion policy needs to deploy resources
commensurate with needs in the circumstances which pre-
vail’ (1).

— strict application of the 75 % threshold where those
regions eliminated from eligibility, but remaining in need
of assistance, may receive support from non-Objective 1
arrangements;

— the same as above, but where two-tiered transition
arrangements are established to assist those graduated
out of Objective 1 eligibility — one for those beyond the
75 % threshold as currently computed, and one for those
beyond it by dint of the enlargement-induced fall in the
average level of per capita incomes;

— the setting of a per capita GDP threshold above 75 % to
extend eligibility to lagging regions who remain below
the currently computed 75 % threshold;

— fixing two eligibility criteria; one for the current EU 15

regions and one for the candidate countries.

3.4.4. A s s i s t a n c e

t o

t h e

L a g g i n g R e g i o n s

( O b j e c t i v e 1 )

3.4.4.1.
One of the principal problems that enlargement
will cause concerns the criteria for eligibility for of Objective 1
support after 2006. The difficulty arises because of the change
in Objective 1 eligibility that will occur if the current eligibility
criteria are retained. Enlargement will result in a significant fall
in the EU average level of per capita income, and under a strict
enforcement of the 75 % per capita GDP rule many current
(EU 15) beneficiary regions will no longer be eligible for
assistance following the end of the current programming
period. Accordingly, a large part of the discussion leading up
to enlargement will involve how to design a cohesion policy
which will meet the specific needs of disadvantaged regions in
the acceding countries while also taking account of
the
continued economic development needs of the disadvantaged
regions in the current EU 15.

3.4.4.2.
The Committee agrees that priority in the cohesion
actions should continue to be given to those regions where
development is lagging the Union average. Moreover, the
Committee supports the retention of transparent, Union-
wide criteria for determining which regions are eligible for
Objective 1 assistance, and retaining the current arrangement
whereby the Commission alone designates those regions which
meet the criteria.

3.4.4.3.
In its report, the Commission presents four options
for the future of Objective 1 funding, each of which offer
different solutions to the difficulties that will arise post-
enlargement. These are:

(1) Second Cohesion Report, Conclusions and Recommendations,

p. XXXVII.

Each of these options have specific features which
3.4.4.4.
appeal to the Committee, although none appears to be ideally
addressing the problems that will arise. The Committee will
analyse these options in greater detail during the second phase
of its work on this Opinion, but in the meantime offers the
following observations:

— the Committee considers that the emergence of a two-
tier cohesion policy to be undesirable (as proposed under
Option 4). We are concerned that this would generate
undesirable political and social tensions within the EU,
and may suggest the emergence of two ‘classes’ of Union
membership;

— we do not consider it appropriate that regions currently
eligible for Objective 1 support, and that will continue to
require support after 2006, should lose entitlement solely
lower the EU
because enlargement automatically will
average per capita GDP. The Commission estimates that
the effect of a strict application of the 75 % threshold at
that stage would result in approximately one-half of
the EU 15 population who currently are eligible for
Objective 1 support loosing that entitlement;

— the option of raising the Objective 1 eligibility threshold
above the current 75 % per capita GDP has the advantage
transparency and objectivity. Moreover, it ensures that
regions with a continuing need for cohesion support will
receive this until a self-sustaining process of economic
development has begun. This is highly desirable. The
is to define a new threshold that
difficulty, however,
does not compromise the principle of concentration of
cohesion action. It is important that Member States do
not use the debate over the new threshold as an
opportunity to argue that it be set at a level which best
suits their own regions rather than reflecting EU-wide
considerations;

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— the Committee considers that the second option — to
retain the 75 % threshold, but to devise ‘phasing-out’
arrangements to protect the interests of currently eligible
regions — has some merit. It insures the regions con-
cerned against a sudden loss of development assistance,
with all that would imply for their economies. However,
it does mean that these regions will ultimately cease to be
eligible for assistance if their per capita GDP exceeds the
75 % threshold even although they continue to suffer
significant economic development disadvantages. We
consider this to be inappropriate;

— the Committee does not see the need to preclude the
possibility of specific and focused instruments of regional
assistance being devised to assist regions formerly eligible
under Objective 1 criteria but which no longer require
the type of support generally provided within that
framework — for instance, regions where basic infrastruc-
tural problems have been eliminated. This could be
achieved by extending the use of horizontal instruments
— for instance by increasing resources assigned to the
European Social Fund to intensify the human resource
development element of cohesion assistance (education,
training, and re-training policies), or by developing
Community Initiatives relevant to outstanding technology
or investment problems in those regions;

— the Commission asks whether the criteria for determining
the distribution of financial resources should be widened
to include the employment rate. The Committee is
concerned that using that indicator risks distorting the
regional picture as a whole because some centres within
a region may be experiencing (possibly temporarily) an
upturn in economic activity. The underlying danger is the
emergence of regional economies in which a relatively
small and successful core is surrounded by a large
periphery in which economic development opportunities
are poor. The ethos of Objective 1 support should
continue to be improving the opportunities for regions
to enjoy self-sustaining economic growth, and while the
rate of employment is an indicator of this it is one that
easily can present an incomplete — if not distorted —
picture.

3.4.5. E n l a r g e m e n t a n d f i n a n c i a l t r a n s f e r s

The economic development needs of

lagging
3.4.5.1.
regions within the candidate countries are,
in many key
respects, considerably different from those of many lagging
regions of the EU 15 — regions that, by 2006, will have
benefited from almost two decades of cohesion support.
Additionally,
there are considerations regarding both the
capacity of regions in the candidate countries to absorb the
cohesion support available under current the regulations, as
well as restrictions on the maximum level of cohesion support
agreed upon at the Berlin European Council, which suggest

that the current Objective 1 regulations that are suitable for
the EU 15 may not be appropriate for the new Member States.
The following issues should be noted:

— cohesion policy has to be tailored to the particular
conditions in the disadvantaged regions within the candi-
date countries eligible for support. The economic and
social conditions in the acceding countries are unique in
many ways, and the Commission should ensure that
policy is designed appropriate to these conditions;

— it is essential that the lessons learned from the experience
of 25 years of cohesion actions are reflected in the
cohesion policy that is to be developed to meet the new
situation post-2006;

— modulation in the rates of economic assistance available
to the regions in the acceding countries may be required
to take account of (a) the absorptive capacity of those
regions and (b) the availability of matching public and
private sector financing.

3.4.6. O u t e r m o s t , M o u n t a i n o u s

a n d I s l a n d

R e g i o n s

3.4.6.1.
The outermost, mountainous and island regions of
the Union — which have an extremely fragile economic
and social infrastructure — will continue to require special
consideration under Objective 1 of the cohesion actions.
Reforms to the cohesion actions following enlargement should
not result in a weakening of support for these extremely
vulnerable communities. The Committee welcomes the com-
mitment to improving the support given these regions made
in paragraphs 55 to 57 of the
by the European Council
conclusions to the Nice summit.

3.5. Support under Objective 2

3.5.1.
The Committee notes the Commission’s comments
faces administering cohesion
concerning the problems it
actions under Objective 2 — particularly the lack of flexibility
in the current arrangements, and the limitations of statistical
and other information which greatly complicates its involve-
ment in the process of defining eligible regions. The Com-
mission proposes moving to a system of ‘indirect zoning’ for
regions experiencing structural problems other than Objec-
tive 1. Under this system, eligible areas are decided by national
governments on the basis of a set of parameters established by
the Commission (as used in some Community Initiatives). The
ESC makes the following observations:

— while seeing the merit in this approach, if implemented it
must be framed in such a way that Member States are
required to verify that Union rules are being observed —
particularly with regard to partnership and additionality
for which appropriate guarantees would be needed.
Otherwise the risk is that the resources deployed will not
reflect adequately local economic needs and oppor-
tunities, or be sufficient to address the structural problems
in those regions;

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— economic development policies that have a wider Union
interest may need particular consideration because the
benefits do not accrue to only one Member State — for
instance, cross-border interventions.

3.6. Cohesion policy and Community value added

As noted in our Introduction, and as is clear from
3.6.1.
the statistics presented by the Commission, EU cohesion
actions have delivered substantial economic benefits to the
Objective 1 regions. There has been considerable ‘value-added’
to the lagging regions by collective efforts.

3.6.2.
‘value-
The Committee contends that significant
added’ has also resulted from the EU cohesion actions in
Objective 2 and Objective 3 regions, and through the operation
of Community Initiatives. Undoubtedly it is the case that EU
cohesion policy has required many Member States to adopt
new regional economic development practices which deliver
significant economic gains and thereby assist the process
of economic transformation. Observing the principles of
concentration, partnership, programming and additionality
has been an independent source of ‘value-added’ from EU
cohesion actions. It is imperative that this aspect be retained
in the future, and that cohesion policies generally continue to
be shaped by common regulations which embody best-practice
regional economic development techniques.

3.6.3.
It also is important to stress that EU cohesion efforts
do not only benefit the regional economies which are eligible
for support. Much of the assistance channelled into lagging
and adjusting regions will return to the more prosperous
regions by way of purchases of goods and services. Moreover,
as the lagging regions become more prosperous they will
become important additional markets for firms located in the
more prosperous regions. Under the twin influences of the
completion of the internal market and monetary union, the
overwhelming part of expenditure within the EU remains
inside the EU: imports from outside the EU as a percentage of
GDP are relatively low. Consequently, successful EU cohesion
efforts represent an additional source of aggregate demand for
the EU as a whole and therefore constitute an important
element in the process of economic growth across the EU as a
whole.

3.7. Community intervention: Horizontal Measures

stood (and promoted) the advantages of horizontal instru-
ments (including Community Initiatives) as means of counte-
ring regional economic disparities because they are inherently
flexible and can be targeted directly on specific regional
problems. Accordingly, and along the lines suggested in the
Second Report and as noted elsewhere in this Opinion, the
Committee can see value in a system of indirect zoning as a
way of disbursing cohesion support outside of regions whose
development is lagging (i.e. Objective 1 regions). In particular,
we consider that
the matter of encouraging the further
development of human resources should be treated as a
fundamental priority in those regions that graduate out of
Objective 1 eligibility post 2006, and that additional resources
be applied to this at the EU level.

3.8. The role of the EU in regional economic policy

3.8.1.
Responsibility for assisting economic development
in the EU’s disadvantaged regions currently is shared between
levels of governance and
the EU, national, and regional
administration. We remain convinced that this approach is the
correct one, and that cohesion actions should continue to
reflect the underlying aspirations of the whole of the European
Union, as stated in the Treaty. Cohesion actions is a policy
area where there is distinctive added-value by the development
of a uniform approach within a framework of common
financial responsibility. Although there are specific areas of
cohesion policy which, appropriately, may be left to Member
States to implement (subject to guidelines agreed at the Union
level), the overwhelming part of the total cohesion effort
should continue to be jointly managed between the EU,
national and local levels of government.

3.8.2.
The ‘partnership’ approach has been a key aspect
determining the success of cohesion actions since 1988.
Accordingly, we urge that this continues to lie at the heart of
cohesion action after 2006. Partnership combines the technical
benefits that a ‘bottom-up’ approach to regional development
can provide, with an approach which demonstrates an EU-
wide collective responsibility for improving the material living
standards for citizens in all the regions of the EU. Effective
partnership with the social partners at all programming stages
is vital
for the sound implementation of economic and
social cohesion policies. Any tendency to reduce the role of
partnership in cohesion actions will weaken cohesion policies.

3.7.1.
The Second Cohesion Report opens the debate
concerning territoriality (or ‘zoning’) of assistance versus
greater use of horizontal measures targeted at specific econ-
omic and social objectives and drawing from the lessons
learned from experience with Community Initiatives pro-
grammes (‘indirect zoning’). The Committee has long under-

It is self-evident that the process of widening and
3.8.3.
deepening the European Union benefits different economies in
different ways. Enlargement will increase considerably the size
of the EU internal market and consequently is bound to offer
considerable new economic opportunities for all EU Member
States. It is essential that both the acceding countries and
economically disadvantaged regions in the current EU 15 have

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an opportunity to share in these economic gains. This
provides the fundamental rationale for common EU financial
responsibility for cohesion actions. Any move to weaken this
notion of common financial responsibility is, in our view,
bound to weaken the economic and social cohesiveness of the
EU and must be avoided.

also offer considerable indirect benefits by reason of the
principles of concentration, programming, partnership and
additionality that Member States have to follow when applying
cohesion support. These actions should also observe the
principle of equality of opportunity with respect to the role of
women in employment.

At the same time, as evident under the Regulations
3.8.4.
governing the application of cohesion policies, much in the
implementation stage is — and should continue to be — left
to the Member State concerned. This conforms to the broad
principle of subsidiarity embedded at various places in the
Treaty. At
this should not be
permitted to compromise the ability of the Commission to
ensure that best-practice implementation arrangements are
followed in every Member State.

the same time, however,

4. Conclusions

4.1.
Enlargement poses enormous challenges to the com-
mitment to achieving Economic and Social Cohesion across
the European Union. Meeting this challenge will require that
more resources are assigned to EU cohesion policies. This is
an inevitable consequence of enlargement.

4.2.
The Committee supports the retention of Objective 1
territorial assistance and that a substantial part of EU cohesion
efforts should be targeted towards these regions. The principle
of concentration of effort should not be compromised.

4.3.
The Committee has examined the Commission’s
options with respect to the implications of enlargement for
regions currently eligible for support under Objective 1 of the
cohesion actions. The Committee’s position is that
the
revisions to Objective 1 eligibility criteria should not result in
the exclusion of those regions currently in receipt of funds and
whose economic development will continue to depend on
cohesion assistance. This may be best achieved by raising the
current threshold beyond the 75 % level.

EU cohesion actions deliver considerable value-added
4.4.
to the disadvantaged regions. Not only do these actions have a
direct impact on standards of living and employment, they

Brussels, 25 April 2001.

‘indirect zoning’

The Committee recognises the force of Commission
4.5.
arguments in favour of a regime of
to
deliver assistance outside of Objective 1 regions. However, if
implemented, this change must be accompanied by regulations
which ensure that the principles of concentration, program-
ming, partnership and additionality continue to be observed
by Member States — if necessary by intensifying monitoring
and appraisal arrangements.

The Committee recommends that the Commission
4.6.
seek ways in which the activities of the European Investment
Bank in conjunction with private sector capital might be
harnessed with a view to increasing the part they play in the
EU cohesion actions. There are likely to be considerable
synergies associated with a regional economic development
strategy which involves these partners.

4.7.
The cohesion policies must remain a matter of both
common financial responsibility and common Union interest.
The Committee wishes to ensure that Member State policies
continue to be shaped by jointly determined European Union
objectives.

4.8.
The operation of monitoring and partnership is central
to the continued success of the cohesion actions. The Com-
mittee considers these elements to be central in determining the
success of cohesion policies when extended to the candidate
countries. Accordingly, the Commission should take steps —
where necessary — to assist the candidate countries develop
and introduce the institutional arrangements needed to facili-
tate both monitoring and partnership.

The Committee agrees that

4.9.
the ten priorities for
economic and social cohesion which the Commission ident-
ifies should lie at the heart of cohesion efforts in the future. In
the context of enlargement and the impact of current policy
reforms on regions of the EU 15, these priorities should ensure
that cohesion actions are influenced by the key cohesion
challenges confronting the European Union.

The President

of the Economic and Social Committee

Göke FRERICHS