Opinion of the Economic and Social Committee on "The future of cohesion policy in the context of enlargement and the transition to a learning society"
Date: 2002-07-17
Institutions: European Economic and Social Committee
Subjects: EU action, EU aid, Structural Funds, economic and social cohesion, enlargement of the Union, structural adjustment, structural policy

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Opinion of the Economic and Social Committee on ‘The future of cohesion policy in the context
of enlargement and the transition to a learning society’

(2002/C 241/13)

On 1 March 2001, the Economic and Social Committee, acting under Rule 23(2) of its Rules of Procedure,
decided to draw up an additional own-initiative opinion to the own-initiative opinion on the Second
Report on economic and social cohesion, concerning ‘The future of cohesion policy in the context of
enlargement and the transition to a learning society’.

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 additional opinion on 25 June
2002. The rapporteur was Mr Malosse.

At its 392nd Plenary Session (meeting of 17 July 2002), the Economic and Social Committee adopted the
following opinion by 127 votes to one with one abstention.

1. Summary

A.

B.

C.

D.

E.

F.

The prospect of EU enlargement to the countries of
central and eastern Europe and the transition of our
society to a knowledge-based economy are creating a new
context for implementing cohesion policy at European
Union level.

That new context provides even stronger reasons for a
more ambitious cohesion policy with the aim of making
the enlarged Union the most competitive knowledge-
based economy in the world by 2010.

The Study Group of the Section for Economic and
Monetary Union and Economic and Social Cohesion,
which has been asked to prepare the Committee’s work
on this subject, visited one EU Objective 1 region
(Andalusia) and one applicant country (Eastern Slovakia)
in order to talk to local economic and social players and
so to compare its analysis with the situation on the
ground.

The Committee is convinced of the need for radical
reform of the principles, general conditions, priorities
and terms of cohesion policy.

Such a reform must also include revision of the eligibility
criteria, to take account of factors such as remoteness,
isolation,
lack of education and entrepreneurship and
absence of civil society structures, in addition to the usual
criteria.

It should be possible to prepare the reform on the basis
of a reference document providing an overall picture of
the economic and social situation of the regions and
Member States after enlargement. This prospective analy-
sis by the Commission should be available from early
2004.

G. Without aiming at uniformity, cohesion policy must
promote local and national measures to overcome struc-
tural disadvantages and develop a climate favourable to
growth and prosperity. Such measures must consist of
more than just
they must specifically
promote entrepreneurship and public-private partner-
ships. They must also avoid creating a mentality of
dependence and distortions of competition.

financial aid;

H. Close involvement of economic and social players, start-
ing with better information provision, should improve
the matching of EU measures to real needs. European
Union action to promote cohesion must have a higher
profile.

I.

J.

K.

Developing good governance,
including the role of
organised civil society, education in the broadest sense
and basic infrastructure should be the three major
priorities of a new cohesion policy. These should take
into account the imperative of sustainable development.

It is essential to simplify European procedures. The
Committee has drawn up concrete proposals for new
approaches based on the principles of
transparency,
participation and modernisation.

Setting up a single fund which is flexible enough to adapt
to grassroots needs would be more user-friendly while
also ensuring a higher profile. This would be complement-
ed by a system to promote partnership and to disseminate
best practice, to which stakeholders would have direct
access. Separate instruments could be introduced for
other policies without a territorial dimension or designed
to address specific issues.

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L. Over-rigid programming should give way to contracts
focusing on objectives, to incude contributions from
national and local resources along with private invest-
ment and refundable aid.

general EU objective set out at the Lisbon Summit in March
2000 of becoming ‘the most successful knowledge-based
economy in the world’ by 2010.

M. The Committee calls for adequate resources to be allo-
cated to cohesion policy, but in a flexible enough way
to encourage high-quality projects. It is important to
undertake a comparative assessment of quality as well as
to ensure consistency with the main priorities of the EU
and respect for the principles of good management of
public funds.

2. Background to the additional own-initiative opinion:

a new environment for cohesion policy

2.1.
In a preliminary opinion adopted at the plenary session
of 25 April 2001 (1), the Committee presented a first political
response and so contributed to the Cohesion Forum held by
the Commission on 21 and 22 May 2001. That opinion
strongly endorsed the principle of a revised cohesion policy
for which sufficient funds would be earmarked to cope with
enlargement.

2.2.
The aim of this additional opinion is to continue and
develop the Committee’s discussion on the basis of information
contained in the Second Cohesion Report (2) and in the First
Progress Report on Economic and Social Cohesion (3). It also
takes account of the Commission’s regular reports on the
applicant countries. The enlargement of the European Union
in 2004 to 25 countries (and probably more in the longer
term) raises the basic issue of the benchmarks, objectives,
priorities and methods of a cohesion policy, given that nearly
all the applicant countries lag behind the present member
states considerably in their development. Per capita income in
the current applicant countries is in most cases well below the
EU average, in some regions or countries equivalent to barely
one quarter of the Community average.

2.3.
Another aim of this additional opinion is to develop
the debate on the implications for cohesion policy of the
transition to a learning society. The Committee upholds the

In this context the Committee also sets great store by
2.3.1.
the so-called Cardiff, Luxembourg and Gothenburg Processes,
which broaden the idea of territorial and economic cohesion
to include a social dimension, measures to promote employ-
ment and sustainable development.

2.3.2.
The Committee also includes among its priorities the
European Charter for Small Enterprises adopted at the Feira
summit, emphasising the crucial importance of entrepreneur-
ship for the potential growth of Europe. Here the Committee
would stress the need to support and strengthen existing
enterprises.

The Committee’s discussion should also be part of the
2.4.
broader work of the European Convention on the future of
Europe which was launched on 28 February 2002. The
Committee, which is represented at the Convention by three
observers,
intends to make a particular contribution by
expressing the views of economic and social organisations of
European civil society,
including those in the applicant
countries with which it has very regular contacts.

2.5.
In order to deepen its discussion and hear the views of
local civil society organisations, the Study Group of the Section
for Economic and Monetary Union and Economic and Social
Cohesion, which was responsible for preparing the Com-
mittee’s work, visited Andalusia on 20 and 21 September
2001 — a region which is currently eligible for Objective 1
assistance under the structural policies and the Cohesion Fund,
and which is one of the regions in Europe most affected by
cohesion policy — to hold a joint hearing with the Economic
and Social Council of Andalusia (4).

2.6.
For the same reasons, the Study Group visited Presov
in the Slovak Republic on 7 and 8 March 2002, where it talked
to local economic and social and civil society organisations in
order to establish how well informed they are about Com-
munity policy and their experience of the pre-accession funds,
and to assess what they expect of cohesion policy once their
country joins the European Union (5).

( 1) OJ C 193 of 10.7.2001.
( 2) COM(2001) 24 final.
( 3) COM(2002) 46 final.

(4) See questionnaire on which the hearing was based in Appendix 1.
(5) See questionnaire on which the hearing was based in Appendix 2.

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3. Observations

3.1.

The key role of cohesion policy

3.1.1.
The role of cohesion policy will be crucial for the
applicant countries of central and eastern Europe. Their lag in
development and ageing infrastructure, where it exists, of, are
now familiar issues which fully justify the application of
cohesion policy once these countries accede to the EU. But it
should be ensured that European aid is geared towards
sustainable development and does not become a type of
subsidy or encourage dependency.

3.1.2.
There is also an increase in regional disparities within
applicant countries like Poland, Hungary, the Czech Republic
and Slovakia. In Slovakia, for example, per capita GDP in the
Bratislava region is close to the Community average (95 %),
and unemployment is low (6.6 %), whereas in the eastern part
of the country, where Presov is situated, per capita GDP is only
39 % of the EU average and unemployment exceeds 50 % in
certain sectors.

Cohesion policy is still very important for the current
3.1.3.
member states. Firstly, the commitment of Objective 1 regions
to cohesion policy is a major political factor. Thus in Andalusia,
although economic and social interest groups recognise the
need for radical changes in cohesion policies, they still regard
them as a fundamental aspect of the EU and cannot imagine
being deprived of them while they still lag substantially behind
other EU regions in structural terms.

3.1.4.
Furthermore, some regions currently benefiting from
cohesion policy, which risk being excluded from it in the
future, are still facing serious internal problems of territorial
cohesion, even though their development lag compared with
the Community average has narrowed considerably. Thus the
traditional eligibility criteria (GDP per capita, unemployment,
etc.) do not take sufficient account of structural, geographical
or cultural problems.

At

3.1.5.
five years the
the same time, over the past
development gap within certain countries, and not the smaller
ones (Spain, the United Kingdom), is tending to widen. These
disparities would have been even wider without the structural
and cohesion policies, given the strong tendency for economic
development to be concentrated in the most prosperous
regions. Structural policy must also be transparent, which is
far from the case at the moment in many countries, owing in
part
is very complex and often even
impenetrable. It is essential to ask what the real ‘added value’
of European cohesion policy is for these regions. To start with,
EU action could be justified on grounds of partnership,
networking and pooling of experience outside the purely
national context.

to the fact that it

3.1.6.
There is a consensus in the Committee that social
cohesion is as vital as territorial cohesion. In this context, the
second annual report and the first progress report contain
rather worrying statistics, showing a growth in disparities and
especially social exclusion. The fact that during 1997 a large
percentage of the population was living below the international
poverty line — even around 20 % in some Member States
(22 % in the United Kingdom, 22 % in Greece and 23 % in
Portugal) — should be a greater cause for alarm to those
responsible for EU policy. How can we aspire to be the world’s
biggest knowledge-based economy when the level of exclusion
is so high?

Finally, — with respect to Objectives 2 and 3 of
3.1.7.
cohesion policy — it seems appropriate to involve the regions
of all the Member States, given the aim of greater grassroots
participation in European integration. However, questions of
visibility and Community added value seem much more
important here than the amount of actual European aid that
might be proposed.

3.2. Refusing assistance

3.2.1.
It should be clearly stated at this point that the
objective of cohesion policy cannot be to eliminate differences
or equalise levels of development. Objectively and subjectively
speaking, some regions will always be more prosperous than
others. The objective of cohesion policy must still be on
the one hand to relieve structural handicaps (remoteness,
insularity, etc.) and on the other to optimise economic
potential and local initiatives. Real development is in the hands
of local communities, civil society organisations, public players
and business.

3.2.2.
It should still be ensured that European aid provides
an incentive for action and does not develop into a type of
subsidy or encourage dependency. The experience of some of
the current Member States prompts us to make it clear to the
applicant countries that their future depends entirely on
themselves and on the initiative of their citizens and economic
and social players, even if Community assistance may acceler-
ate and catalyse their efforts.

The question of appropriate use of aid also seems to
3.2.3.
be critical for countries with particularly weak administrative
structures, which face very serious corruption problems.

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The evaluation and monitoring of Union actions should be
reinforced, and sanctions should be contemplated for the most
serious cases, provided they do not harm the general public.

that is favourable to economic activity and innovation: firstly
through providing basic material and non-material infrastruc-
ture in the broadest sense, and then through improving human
resources.

3.3. A major weakness: lack of involvement of economic and social

players

3.3.1.
Good practice in structural policy with a view to
sustainable regional development requires the active partici-
pation of civil society and strengthening its organisations.
There must be effective involvement of non-governmental
players at all stages of the programmes introduced, from
framing through implementation and evaluation. The record
of Community policy is obviously disappointing in this regard.
There have been many complaints of inadequate involvement
in Community policies, and this has a negative effect on the
visibility, transparency and effectiveness of cohesion policy.

3.3.2.
It should be noted that this observation applies just
as much to the applicant countries, where the inadequate
development of local organisations is used as an excuse for
lack of transparency and virtual absence of involvement of
non-governmental players in implementing pre-accession aid.
Moreover,
the use of pre-accession
programmes, whose launch has already been considerably
these players are not
delayed, will be further slowed if
mobilised in time to prepare projects.

there is a risk that

3.4.

The need for new priorities

to articulate. The commitments of

3.4.1.
It is essential to align cohesion policy with the broad
strategic objectives of the European Union — such as the
Cardiff, Luxembourg, Lisbon and Gothenburg Processes —
which the last European summit in Barcelona in March 2002
sought
the European
Charter for Small Enterprises and issues relating to the quality
of public services, which were emphasised again in Barcelona,
must also be included in the debate on priorities. The
Committee favours mandatory guidelines incorporating the
Union’s political priorities and drawn up jointly by the Member
States,
the Committee of the Regions and the European
Economic and Social Committee.

3.4.2.
In view of the more or less ubiquitous tendency for
governments to refocus on their statutory role at the expense
of direct economic intervention, Community action should
also focus on what is essential, i.e. creating an environment

3.4.3.
Direct subsidies to businesses may have negative
effects, e.g. obliging companies to relocate, ‘subsidy chasing’
and distortions of competition. Innovation depends much
more on people’s abilities and the general environment than
on subsidies. Businesses, especially SMEs, now want high-
quality basic infrastructure, and well-trained staff with qualifi-
cations adapted to their needs.

Social consensus based on dialogue and the existence
3.4.4.
of independent and well-organised intermediary organisations
in society that can provide services of general interest such as
representation and provision of information, can today be
considered much more likely than aid to promote economic
growth.

The goal of sustainable development that is central
3.4.5.
to the new strategy adopted at the European Council
in
Gothenburg in spring 2001 is endorsed in principle by
economic and social interest groups. It is necessary to under-
stand all the implications of this. On the one hand, choice of
transport modes and communication routes must take into
account the need for development to be sustainable. Road
transport can no longer be presented as the sole solution to
problems of accessibility and opening-up. Rail and water
transport, especially for goods, should be promoted as much
as possible. On the other hand, the forced march towards mass
tourism in some regions, with the need to construct expensive
infrastructure that is only used during a short period of the
year, can provoke a negative response from the general public.
Tourism activities should be accompanied by more thorough
evaluations of how they fit in with the local framework and
their impact on the environment.

3.4.6.
It is important to evaluate the EU’s priorities and
means of action in relation to the knowledge-based economy.
According to the second cohesion report, 50 % of the Union’s
wealth production and 75 % of research and development
spending are concentrated in 14 % of its territory. One of the
challenges for cohesion policy could be to facilitate the spread
of the new technologies and thus to increase the opportunities
for the most disadvantaged regions to gain entry to the
knowledge economy. In a region like Andalusia there is a
broad consensus between the social partners that priority
should be given to concerted efforts to avoid falling behind in

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the use of information technologies and repeating past mis-
takes, when this region lacked the knowledge or capacity to
adapt to the industrial age.

3.5.4.
Crucial changes are also necessary with respect to
transparency. Effective permanent information systems and
policies must be established alongside any Community
measures.

Education and training are key factors in the know-
3.4.7.
ledge-based economy. The traditional distinction between
vocational training, which is eligible for European Social Fund
aid, and education, which is not, has become quite obsolete
now that the European Union is rightly promoting lifelong
learning/training. The question is particularly pertinent in the
applicant countries where there is a considerable need for
retraining and further training. Nowadays it is often universiti-
es, rather than natural resources,
that attract businesses.
Education and training could well become the linchpins of a
revised cohesion policy to encourage the development of a
virtuous circle of prosperity.

3.5.

The need for new methods

3.5.1.
The plethora of instruments existing for cohesion
policy (EAGFF, ESF, ERDF, Cohesion Funds) encourages dupli-
cation. The same mistake seems to have been made with the
applicant countries, for which a mass of instruments exist
(ISPA, Sapard, Phare, as well as Tempus, Leonardo, etc.),
creating confusion and exacerbating the perplexity of a general
public that is largely ignorant of European procedures. This
multiplicity of instruments also causes local stakeholders to
differentiate projects according to European procedures instead
of adopting a global approach to their needs and defining their
projects on an integrated, cross-sectoral basis. In order to
simplify the system and make EU measures more comprehen-
sible and coherent, the different European structural instru-
ments should be merged to form a single instrument that is
flexible enough to be adapted to local needs and priorities.

3.5.2.
Over the years, European procedures have tended
towards complexity, resulting in very elaborate procedures at
the expense of transparency and accessibility. The same
problems can already be seen in the applicant countries with
implementing pre-accession aid.

4. The need for a major reform of the principles and

general conditions of cohesion policy

4.1. New principles

4.1.1.
Enlarging the EU to countries experiencing totally
unprecedented situations, and the advent of the knowledge-
based economy, call for far-reaching reform of a policy that is
tried and tested, but has also shown profound weaknesses.

4.1.2.
The Committee reaffirms its support for a Com-
munity cohesion policy in principle, both as an expression of
a commitment to the values of solidarity and as a practical
means of improving competitiveness and economic cohesion,
which the EU would not achieve if regions and social groups
were left behind. This support also means that cohesion policy,
by whatever means, should aim to reduce both disparities
between regions and disparities between social groups. The
aim of this policy is not really to eliminate differences, but
rather to give assets (infrastructure, education, civil society
organisations)
to the less advantaged regions and areas,
enabling them to overcome their disadvantages and to catch
up.

4.1.3.
Cohesion policy should be a mind-set as much as a
set of available resources. As far as measures are concerned, it
is clear that priorities must be set and that budgetary allocations
alone are not enough. Greater emphasis must be placed in this
context on structural reform, initiatives from the private and
voluntary sectors, skills transfer and dissemination of best
practice. EU budgetary resources should be used only to
support essential priorities relating to the most serious handi-
caps,
to develop partnerships and to build networks for
cooperating, pooling experiences and disseminating best prac-
tice.

3.5.3.
Thus radical changes are needed in order to simplify
procedures. It is also necessary to step up technical assistance
to national and local authorities in the applicant countries, and
to economic and social players, who should be called upon to
play a key role in implementing programmes.

To implement

4.1.4.
essential priorities, Community
funding should supplement and support national and local
resources, which includes more systematic recourse to private
funding. On principle, aid should also be tapered so as not to
encourage a passive attitude resulting in perpetual assistance.
Every public euro spent must have a catalyst effect. As far as
business is concerned, competition-distorting subsidies must

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be banned. Above all
it is important to promote services
supporting small and medium-sized companies and start-ups,
as well as facilitating access to financial markets. The principle
of additionality of resources (EU, Member State, region, local
and private players) is fundamental to ensure that potential is
mobilised and partnership promoted. But this must not make
procedures excessively complicated or reduce the profile of
Community measures.

4.2.4.
Schemes for experience-sharing and cooperation
between regions are still too closed and do not have a really
significant impact. It is unfortunate that backward regions
cannot benefit more from the positive experience of other
European regions. Such schemes must therefore be stepped
up, e.g. by establishing a specific instrument that would be
directly accessible to local authorities and economic and social
players.

4.1.5.
Analyses of new needs and priorities should also
mean that other eligibility criteria besides per capita GDP are
taken into account, for the current Member States in particular,
such as remote or ‘peripheral’ location, difficult access, short-
comings in education, absence of an enterprise culture,
capacity and potential to manage services of general interest,
weak civil society structures and capacity of civil society to
generate local development, public-private partnership and
training to manage the social economy.

4.2.5.
The Committee would like EU action to have a high
profile at grassroots level. This requires not just a systematic
information policy, but enabling the European Commission to
have a presence in the beneficiary region, e.g. by delegating EU
tasks to politically autonomous agencies or civil society
organisations.

4.2.6.
It is crucial for the future of cohesion policy, and for
its acceptance by those who do not benefit from it, that the
measures carried out be evaluated. Proper evaluation means
not just monitoring legality or budgetary compliance. It means
above all measuring the actual impact of measures both with
to the initial objectives and with respect to the
respect
economic and social
impact. It also means looking at the
overall impact of cohesion policy on a given region or social
group. It cannot take place without the active involvement of
the economic and social players that represent those con-
cerned. For evaluation purposes, the Committee would like to
see regular meetings organised in the regions at which local
organisations can speak directly and without constraint on the
basis of a questionnaire drawn up beforehand with the help of
the local organisations in question. The EESC could be involved
in such meetings along the lines of the hearings it organised in
Seville and Presov.

4.2. New implementation conditions

It

4.2.1.
To date civil society players have not received enough
is essential
information or been sufficiently involved.
to ensure complete transparency when implementing the
cohesion policies and to abandon the secretive practices of
the past. The Committee calls for structured information
programmes based on awareness-raising meetings, practical
guides, and information on the internet and in the media. Every
project must henceforth be accompanied by an information
programme conducted at local
level by local civil society
organisations, acting as intermediaries.

Before any European programme is implemented, an
4.2.2.
analysis of needs must be carried out at regional level with the
help of economic and social stakeholders, e.g. through regional
steering groups. This phase must be supported by the EU and
regarded as a prerequisite for any Community action.

5. New priorities and new methods of implementing

Community cohesion policy

Economic and social players from civil society,
4.2.3.
chosen for their representativeness and legitimacy, as well as
local elected officials, must be fully and unreservedly involved
in framing, implementing and evaluating the measures taken.
The Committee thus advocates general use of global subsidies
granted to local organisations, enabling them for example to
conduct small-scale projects, which are often well geared to
needs.

5.1. New priorities

Developing the ability to practise good governance, education
in the broadest sense and basic infrastructure should be the
three main priorities for a new cohesion policy.

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5.1.1.
Enhancing the ability to practise good governance:
Enhancing authorities’ ability to practise good governance and
promoting the development of organised civil society seem to
be new key priorities for the applicant countries. On a
temporary basis, the European Commission could compensate
for shortcomings by direct management through a specialised
agency. In the beneficiary regions, measures could also be
taken to increase the take-up of new technology by authorities,
with a view to simplification and transparency, both for
companies and economic and social players, and for the
general public. It is also crucial to promote the potential of
local economic and social organisations, not in their routine
operations, but in relation to projects designed to strengthen
their consultative role or to develop services of general interest
for their members. It would be helpful to promote twinning
projects through programmes to step up direct cooperation
between regions in these spheres.

5.1.2.
Strengthening education, training and research. In
line with the major priorities of the EU, such as the conclusions
of the Lisbon Summit, promotion of global economic competi-
tiveness through introducing technologies should be con-
sidered a key objective for the decade 2000-2010. Basic
education, should thus represent a major priority of the
cohesion programmes. The European Union could stipulate
under the multiannual guidelines that at least 25 % of project
support should be allocated to education capacity, as well as
to research and training. Education and training should be
interpreted in the widest sense here, as including all measures
introducing people to information technologies, both within
companies, especially the smallest, and among the general
public.

5.1.2.1.
On the strength of improved education — both
basic education and lifelong vocational training — the EU will
be able help to combat the causes of exclusion. It could
make a real contribution here by sharing information about
successful efforts across the EU.

5.1.2.2.
A major concern in certain applicant countries is
the fate of ethnic minorities like the Roma people, who
are often marginalised, unemployed and have no access to
education. In preference to subsidies, which rarely have a real
impact, experience should be shared on the basis of tried-
and-tested methods, combined with the promotion of ‘best
practice’.

telecommunications networks, e.g.
to facilitate access to
new technologies, systems for improving education, training,
research and the dissemination of innovation, and systems for
protecting the environment. Sustainable development must be
central to development decisions, especially in the case of
transport links.

5.2. New methods:
coherence

transparency, participation, modernisation,

5.2.1.
The impact and effectiveness of cohesion policy are
bound to be improved by seeking greater transparency,
providing the general public regularly with information on
decisions taken and systematically involving the most represen-
tative economic and social organisations. The Committee
recommends that regional steering groups be set up composed
mainly of local elected officials and economic and social
stakeholders.

5.2.2.
It would be useful to develop modern and flexible
management methods — such as global subsidies for economic
and social organisations, financial engineering and employ-
ment of public-private partnerships — to replace a multiannual
programme that now seems obsolete. Contracts setting out
objectives could be used instead of detailed — sometimes
excessively detailed — programming.

It is particularly important for Community policy to
5.2.3.
be made consistent, as with each European summit
the
Union sets new priorities — competitiveness, social cohesion,
sustainable development and employment. In addition to
setting up a single fund, a new, sufficiently flexible, method
should be recommended for reconciling the priorities of the
cohesion programmes with the EU’s horizontal objectives. The
objective would thus be to promote a bottom-up approach:
local projects developed at grassroots level, consensus reached
by the regional steering groups, negotiation of contracts of
objectives with various partners (EU, national government,
regions, civil society, private investors and financial intermedi-
aries) and flexible management of measures.

5.2.4.
The concept of additionality could be interpreted
flexibly here, by generalising the system of cross-financing, i.e.
the EU supporting one initiative and the member state another.
Rigorous application of additionality, project by project,
complicates matters and decreases visibility.

Strengthening basic infrastructure while permitting
5.1.3.
sustainable development. The third major priority relates
to basic infrastructure in the broad sense: transport links,

5.2.5.
The imminent creation of a single market of 400 to
500 million consumers is liable to lead to changes in the

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located in several of

strategies of businesses
the 25-
27 countries. With this in mind, it would be useful to have a
reference document — similar to the 1986 Padoa-Schioppa
Report — giving a medium-term forecast of
the overall
economic and social situation in the regions and member
states after enlargement. Such a document would enable
current and future regions of the EU to put their aspirations
more in context and would serve as an objective basis for
negotiating the 2007 package.

period 2004-2006 and to continue providing financial aid to
regions in the current Member States whose per capita GDP is
less than 75 % of the Community average. After 2006, while
priority will be given to less-developed regions primarily in
the new member states, it is important that certain regions
currently receiving aid whose real level of development has
shown little improvement should not be abruptly excluded
without an adjustment period.

5.2.6.
It is impossible at the moment for the Commission
to administer European programmes directly. Since delegating
sole responsibility to the Member States is risky, the setting up
of implementing agencies with a temporary remit should be
considered, especially for the applicant countries. One of these
agencies’ tasks could be to encourage benchmarking of best
performance and achievements to help promote such practices.
In all cases EU action should have a higher profile and greater
visibility for citizens. As opposed to posters displaying the
largely arcane symbols or acronyms of European instruments,
the presence on the ground of EU representatives or local
authorities acting on their behalf would be the most tangible
manifestation of visibility.

5.3.2.
The Committee cannot accept that the future of
cohesion policy should be determined by budgetary consider-
ations alone. It therefore asks that the resources mobilised
should allow an ambitious cohesion policy to be set up that
meets the challenge of enlargement, enables the new regions to
achieve their industrial and agricultural restructuring, addresses
the need to adapt to the knowledge-based economy, guarantees
a balanced distribution of activities across European territory
and contributes more effectively to reducing existing disparities
within the current Europe of 15. It would not welcome any
evasive approach to the issue that would entail constantly
increasing expenditure without effective results.

5.2.7.
Europeans are rightly paying more and more
attention to how EU funding is used and they will not accept
it being squandered. The same applies to the image of the
European Union and the credibility of the enlargement process.
It is important to introduce a comparative assessment of
quality and to improve the EU’s auditing. The situation in
certain applicant countries with respect to management of
public funds is very worrying (1). European assistance must
be completely transparent and we suggest
that long-term
monitoring of ‘good management of public funds’ should be
introduced under the responsibility of an independent body in
conjunction with the economic and social players in each
region receiving funds under cohesion policy. Temporary
suspension of programmes or introduction of direct manage-
ment are the appropriate responses in the event of irregu-
larities.

A revised,

5.3.3.
transparent, coherent and simplified
cohesion policy must also make more efficient use of the
resources available in the context of a difficult economic
outlook necessitating greater budgetary discipline.

5.3.4. A r g u m e n t s i n f a v o u r o f a s i n g l e f u n d

5.3. A single Structural Fund

5.3.1.
The European Commission seems to consider that it
will be possible to absorb the impact of enlargement over the

( 1) Opinion of

the European Economic and Social Committee:
‘Combating tax evasion in the single market’ (CES 808/2000)
and opinions presented to the EU/Bulgaria Joint Consultative
Committees, refs.

5.3.4.1.
In the interests of simplification and integration,
the Committee advocates establishing a single fund. The
existence of different instruments for implementing cohesion
policy clearly impairs the visibility of the Union’s measures,
and may also be a reason for lack of coherence. The Committee
therefore recommends that a single fund be set up for those
countries and regions whose development lags behind. The
fund would be complemented by an instrument intended for
all stakeholders — including economic and social organis-
ations — across the EU, in order to develop partnerships and
cooperation networks and to spread best practice. Other
instruments could be created to administer other policies – e.g.
fighting exclusion, developing trans-European networks or
addressing specific issues such as long-term natural disadvan-
tages.

C 241/74

EN

Official Journal of the European Communities

7.10.2002

5.3.4.2.
The single fund would continue to function on a
multiannual basis, a system that has helped to promote the
stability of development projects. However , experience has
shown that the system of ‘budgetary envelopes’ granted to
each country has the disadvantage of freezing a situation for
several years without taking account of political, economic
and social developments, and of implying that the amounts
granted are automatic entitlements. The Committee therefore
calls for consideration of a new method of allocation under
the single fund, with national multiannual indicative envelopes,
but with no guaranteed right to draw assistance. An adjustment
could be made each year in accordance with the additional
budget available. Funds would be allocated according to the
ability of regions or players to propose good projects in line
with the contracts of objectives. When contracts of priority
objectives are being drawn up, contributions from national
and local resources, along with private sector investment and
private sector refundable aid, should be considered, depending
on the measures proposed and using a method of calculation
that takes into account the public budgetary capacity and
overall level of development of the country in question.

Brussels, 17 July 2002.

5.3.4.3.
The Committee suggests that one option to con-
sider should be fixing the total multiannual budget of the
single fund at a minimum level and using any surplus due to
growth, lack of good quality programmes presented or pay-
ment delays could be used to build up reserves for more
difficult
additional
measures) or for future enlargements. This option would form
part of the more radical reform of the Union’s system of own
resources, ensuring more visibility for the general public and
accountability of the European Parliament for revenues.

economic

situations

requiring

(i.e.

The single Structural Fund would be complemented
5.3.5.
by a system intended for all
interest groups — including
economic and social organisations — across the EU to develop
partnerships and cooperation networks and disseminate best
practice.

The President

of the Economic and Social Committee

Göke FRERICHS