Opinion of the European Economic and Social Committee on the "Communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions — The programming of the Structural Funds 2000-2006: an initial assessment of the Urban Initiative" (COM(2002) 308 final)
Date: 2003-03-26
Institutions: European Economic and Social Committee
Subjects: EU programme, Structural Funds, economic planning, town

6.6.2003

EN

Official Journal of the European Union

C 133/53

Opinion of the European Economic and Social Committee on the ‘Communication from the
Commission to the Council, the European Parliament, the Economic and Social Committee and
the Committee of the Regions — The programming of the Structural Funds 2000-2006: an initial
assessment of the Urban Initiative’

(COM(2002) 308 final)

(2003/C 133/12)

On 14 June 2002 the Commission decided to consult the Economic and Social Committee, under
Article 262 of the Treaty establishing the European Community, on the above-mentioned communication.

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 6 March 2003.
The rapporteur was Mr Di Odoardo.

At its 398th plenary session on 26 and 27 March 2003 (meeting of 26 March), the Economic and Social
Committee unanimously adopted the following opinion.

1.

Introduction

instruments for building up a Community urban policy, and
can serve as a model for national policies.

1.1.
The Communication from the Commission provides
a preliminary analysis of Urban II Initiative developments
concerning economic and social regeneration of cities and
neighbourhoods in crisis in order to promote sustainable
urban development. This assessment is in response to the
document of 28 April 2000 on the guidelines for the
Community programme (1) and provides a snapshot of the
situation at the end of the selection phase for new programmes.
All the Urban II programmes were in fact adopted at the end
of 2001.

1.2.
Urban is one of the four Community initiatives under
the EU Structural Funds directed to support for urban areas in
crisis. The three main axes of spending are: environmental
inclusion, and entrepreneurship and
regeneration,
employment.

social

The communication points out that the Second report
1.3.
on cohesion (2) described the urban question as fundamental
to Europe’s economic and social cohesion. Similarly, the
European Parliament’s resolution on Urban II (3) stressed that
an integrated approach — a key feature of Urban programmes
— looked to be the only way to address problems in urban
zones.

1.4.

The Urban initiative is therefore one of the strategic

2. Key points of the Commission proposal

70 programmes have been selected, with an overall
2.1.
ERDF contribution of some EUR 730 million. A population of
some 2,2 million is covered. Although the overall allocation is
smaller than for the preceding programme, intensity of aid —
per inhabitant and per programme — is higher. The relatively
small size of the geographical areas covered by the programmes
has also produced a high level of funding per km2.

2.2.
One of the main novelties of Urban II is the inclusion
of medium and small-sized cities: the Urban I population limit
of 100 000 for the city as a whole has been abolished. The
only factor linking the areas under the new programmes is the
presence of at least 20 000 inhabitants (100 000 in exceptional
cases).

The Commission emphasises that the Member States
2.3.
have been able to select their own areas in accordance with
their respective local and national priorities and needs. At the
same time, the adoption of explicit and objective identification
criteria laid down by the Commission has ensured greater
transparency in the selection procedures, and greater consist-
ency between the programmes and EU objectives.

( 1) Communication from the Commission to the Member States of
28.4.2000 laying down guidelines for a Community initiative
concerning economic and social regeneration of cities and neigh-
bourhoods in crisis in order to promote sustainable urban
development (Urban II), in OJ C 141, 19.5.2000.

( 2) Unity, solidarity, diversity for Europe, its people and its territory
— Second report on economic and social cohesion — European
Commission (2001).

( 3) OJ C 339, 29.11.2000, pp. 44-47.

Broadly speaking, the sites of the 70 programmes have
2.4.
been evenly split between Objective 1 areas (30 %), Objective 2
areas (27 %), and areas outside the mainstream objectives
(34 %). Of the total programmes, 31 are located in inner city
areas, 27 in peripheral areas, eight cover entire small or
medium-sized cities and four concern a mix of central and
peripheral areas, in an attempt to improve linkages between
the two types of area.

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2.5.
The Urban II programmes focus on severely deprived
areas, marked by levels of unemployment, poverty, crime and
immigration which are significantly higher than the EU
average.

3.2.
The decision to increase the number of programmes
covered by Urban II from the planned 54 to 70 — as requested
by the EESC — is also welcomed.

Analysis of the spending priorities of the selected
2.6.
programmes reveals that 40 % of planned expenditure is
earmarked for environmental and physical regeneration, 21 %
for social inclusion, another 21 % for fostering entrepreneur-
ship and employment, 8 % for transport improvements and
4 % for information and telecommunications technology.

3.3.
In contrast, the reduction in the overall resources
allocated to Urban, from EUR 950 million for the 1994-1999
period (spread over 118 sites) to the present EUR 743,6 million
is disappointing. Convinced of the importance of Urban as an
instrument
for supporting the Union’s urban policy, the
Committee considers that efforts need to be stepped up to
increase Urban resources in the future.

2.7.
The communication points to a high level of partner-
ship with both local authorities and representatives of civil
society within the programmes, and stresses that this aspect is
one of the features distinguishing Urban II from the other
Structural Funds.
local
authorities are the management authority; in another third,
local authorities play a key role in partnership with central
government; and in fully 57 of the 70 programmes, local
partners were consulted in the drafting of the programme
document.

the programmes,

In one third of

2.8.
Urban II has mobilised overall investment of some
EUR 1 600 million, double the ERDF resources. This was
possible due to the use of additional funds largely originating
from national and local public sources.
the
contribution from the private sector was far smaller.

In contrast,

2.9.
The results of the procedural and administrative simpli-
fication under Urban II were particularly encouraging. In
particular, the Commission considers the decision to finance
programmes only through the ERDF, and the creation within
the Commission of a dedicated unit for Urban II, to be
helpful. These simplifications have made it possible to define
programmes much more quickly than the general Structural
Funds programmes.

2.10.
Of the funds provided under the initiative, 2 % is
reserved for exchange of experience between cities benefiting
from Urban. For the first time, this exchange is structured as a
Community programme.

3. General comments

In general terms, the Commission’s choice to continue
3.1.
with the Urban initiative is to be warmly welcomed. The
initiative’s earlier version, launched in 1994 (the final evalu-
ation of which is expected in 2003), had already achieved
impressive results. Both the Urban Pilot Project and Urban I
demonstrated their ability as effective tools for implementing
policies to boost the quality of the urban environment and
citizens’ well-being.

The work to simplify administrative procedures, which
3.4.
gave rise to management problems under Urban I, is also
greatly appreciated, and the Committee agrees with the
Commission’s positive assessment of it. It also agrees with the
decision both to use a single fund (ERDF), and to set up a
specialist unit within the Commission, enabling the specific
know-how and experience gained in urban regeneration to be
maximised.

3.4.1.
In this respect, the EESC would echo the call for
work on simplifying administrative procedures to press ahead,
made by a number of mayors of European cities at the London
conference of 8 and 9 July 2002 on Cities for Cohesion:
Lessons from the European Urban programmes (1). This is all
the more necessary given the growing involvement of medium
and small-sized urban centres.

3.5.
The creation of a network to promote exchange of best
practices tried out under Urban and the intention to expand a
culture of urban indicators and statistics are of great import-
ance if Urban II objectives are to be fully met.

The fact that exchange of experience between cities
3.5.1.
benefiting from Urban has, for the first time, been structured
as a Community programme is a significant step forward.

3.6.
The decision to channel 40 % of planned expenditure
to physical and environmental regeneration is to be welcomed.
This confirms that the quality of the built environment, open
spaces and the architectural heritage have a decisive role to
play in any process of revitalisation and socio-economic
development in run-down urban areas. Programmes which,
like those in France, attach strategic importance to architectural
quality and, more broadly, to the quality of spatial development
actions, should be encouraged.

(1) Conclusions of the conference Cities for Cohesion: Lessons from
the European Urban programmes — London, 8 and 9.7.2002.

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4. Specific comments

4.1.

Local partnership

Partnership with local authorities and communities
4.1.1.
is considered to be one of the main challenges and best sources
of added value for the Urban programmes: it is recognised that
this choice represents the best means of promoting the
European model of governance and involvement of civil
society.

4.1.2.
The London conference referred to earlier empha-
sised the need for ever-greater direct involvement of cities in
planning and managing the programmes which concern them.

4.1.3. While highlighting the progress made, the Com-
mittee regrets that a very high percentage of the programmes
are still officially managed by national authorities.

The Committee believes that in the future, it must be
4.1.4.
specifically demanded that local authorities always be the
managing authority. Experience to date indicates that this
would also contribute to the administrative simplification of
the programmes.

4.1.5. Moreover, at least the presence of local authority
representatives should be guaranteed on all the monitoring
committees under Article 35 of the general Council Regulation
on the Structural Funds (1).

sufficient information to gauge the real involvement of such
players, offering only general comments on the participation
of local community groups.

The EESC therefore believes that a framework must
4.1.9.
be devised for analysing how many and which of
the
70 programmes have effectively involved civil society represen-
tatives in the project design and selection phases and during
the implementation stage, and for analysing the practical form
taken by such participation.

4.1.10.
Definite rules also need to be drawn up to ensure
real consultation, so that this does not remain a recommen-
dation, but becomes a prerequisite for the Urban programmes.
The purpose would be to put into practice the right of local
communities and social representatives to play a part in
shaping the programming choices having an impact on the
quality of life and prospects for development. This right was
enshrined by the UN Habitat II conference in 1995 (3).

4.1.11.
The EESC also calls for social representation to have
a guaranteed presence on the monitoring committees and any
management committees.

4.1.12.
This would contribute significantly to achieving the
objective of bringing Europe closer to its citizens, and would
give a higher profile to the Urban programmes.

4.2. Harnessing private resources

The EESC has frequently drawn attention to the
4.1.6.
importance of directly involving organised social
special
interest groups, specifically in its opinion on the Commission’s
communication to the Member States on the Urban II guide-
lines (2).

4.2.1.
The Commission’s document examines the leverage
effect generated by the Urban programmes, describing its
ability to mobilise additional
investment and financial
resources in both the public and private sectors.

4.1.7.
In its opinion, the Committee highlighted the valu-
able and unique contribution made by the social partners in
programmes such as Urban,
in which employment and
economic issues are to the fore, and recommended broad-
based and effective partnerships including economic and social
players, NGOs and local groupings.

The present communication summarises the main
4.1.8.
points of the Urban II programmes, but fails to provide

( 1) Council Regulation (EC) No 1260/1999 of 21.6.1999 laying
down general provisions on the Structural Funds, in OJ L 161,
26.6.1999.

( 2) ESC Opinion on the Draft Communication from the Commission
to the Member States laying down guidelines for a Community
initiative concerning economic and social regeneration of cities
and of neighbourhoods in crisis in order to promote sustainable
urban development — Urban, in OJ C 51, 23.2.2000, p. 89.

4.2.2.
The outcome with public sector partners has been a
clear success, mobilising resources representing more than
double those provided by the ERDF.

4.2.3.
However, the results where private resources are
concerned are far from satisfactory, concerning only 35 of the
70 Urban programmes, and contributing the equivalent of
only 8 % of the programme’s funding. The Commission
explains this result by the fact that Urban II areas find it
difficult to attract private investment on account of their high
levels of deprivation, although this explanation may however
be judged incomplete.

(3) United Nations General Assembly, Preparatory Committee for the
United Nations Conference on human settlements (Habitat II) —
draft version of the declaration of principles, commitments and
Global Plan of Action — Habitat agenda, 26.10.1995.

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The EESC believes that the low level of private
4.2.4.
investment
is also due to the inadequate involvement,
especially at the design stage, of local private economic players,
particularly SMEs and the craft sector which, especially in
medium and smaller cities, represent the main source of job
and wealth creation.

A more detailed analysis should therefore be made
4.2.5.
of the 70 programmes,
in order to understand their real
capacity to attract resources from the private sector. Provided
it is compatible with other Community objectives and, more
generally, can reconcile the aims of economic efficiency and
competitiveness with those of social
justice, this capacity
represents a decisive factor in the economic and social
regeneration of run-down areas, as well as providing a means
of verifying the effectiveness of public action. Moreover,
the most advanced research into planning instruments has
revealed, over recent years, that integrated, consultation-based
spatial planning is an efficient means of generating public-
private synergies capable of ensuring that urban regeneration
schemes are feasible and achieve real results.

4.3. Housing policy and Urban programmes

4.3.1.
The ERDF cannot directly fund housing projects.
However, issues relating to urban decline are inseparable from
the question of housing, seen in terms of both providing new
housing and renovating existing stock.

4.3.2.
Annex I to the Commission’s document on the
guidelines for Urban II (1) recognises that if it is essential for
action on urban development to address the issue of improving
housing stock, then the programmes must provide appropriate
additional financial allocations from national and/or local
authorities.
the EESC thinks that the
Commission should extend the VAT concessions on housing
renovation work to all the EU Member States.

In this connection,

4.3.3.
In its opinion on the guidelines, the EESC welcomed
this clarification, pointing out that this could prevent the risk
of actions proving ineffective because they lack a key ingredient
such as housing.

4.3.4.
It should be ascertained in which of the 70 Urban II
programmes local and national authorities have provided
additional funds specifically earmarked for housing.

The question nevertheless remains as to why there is
4.3.5.
no possibility for the ERDF to intervene in the public housing
sector, even in largely experimental Community-sponsored
projects.

in terms of

for example,

Such a mechanism would be of particular import-
4.3.6.
ance,
integrating immigrants,
especially in Urban project areas, where the presence of ethnic
minorities, immigrants and refugees is four times higher than
for the EU as a whole. Run-down living conditions figure
among the difficulties they most frequently mention as facing
them.

4.4.

Services as an indicator of urban quality

4.4.1.
The deprivation of many urban environments is
clearly linked to the lack of services, particularly concerning
social welfare. Achieving a proper level of service is one of the
most efficient means of achieving fairer distribution of them.
In its opinion on the Commission Communication: Towards
an urban agenda in the European Union (2), the EESC empha-
sised the ‘vital role which public services play in urban
development, for instance for the production of socially useful
products and services and in strengthening social cohesion’,
and argued that
‘deciding on priorities for infrastructure
and services is an important aspect of urban and spatial
administration’.

4.4.2.
This aspect should be explicitly included among the
socio-economic indicators for Urban II areas. Qualitative and
quantitative analysis of services — especially public ones —
and their degree of accessibility is an important parameter for
identifying the level and causes of deprivation.

4.4.3.
The EESC therefore underlines the need to include
specific monitoring of Urban’s ability to help enhance the
quality and range of services in the relevant areas, especially in
the interim assessments.

( 1) Communication from the Commission to the Member States of
28.4.2000 laying down guidelines for a Community initiative
concerning economic and social regeneration of cities and neigh-
bourhoods in crisis in order to promote sustainable urban
development (Urban II), in OJ C 141, 19.5.2000.

(2) ESC opinion of 28.1.1998, in OJ C 95, 30.3.1998, p. 89.

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4.5.

Sustainable urban development and an ageing population

4.5.1.
The progressive ageing of the population touches all
the countries of the European Union, and presents a key
challenge for future development policies, starting with urban
policy. Neglected areas (frequently in run-down city centres)
often place traditional elderly residents, who are often particu-
larly unwilling to move away from where they have always
lived, side-by-side with immigrants, who are concentrated in
the most deprived urban areas. The elderly are also among
those most seriously affected by poor urban conditions, lack
of services and widespread crime.

4.5.2. More generally, the growing number of over-70s in
the European population requires a strategic shift in urban
policy and action, aimed not only at an immediate improve-
ment
in living conditions for the elderly, but also at a
fundamental re-think of how to organise our cities for an
ageing population.

This issue should figure among the Union’s cohesion
4.5.3.
policy priorities, on the same footing as integration of
immigrants, equal opportunities and unemployment.

4.5.4.
The Commission’s analysis of the Urban II pro-
grammes only acknowledges this aspect in general terms,
recalling that the age structure in Urban areas reveals a slightly
higher percentage of old people than in the cities sampled in
the Urban Audit.

4.5.5.
A more detailed analysis should be made of the
measures planned under the programmes and specifically
targeting the older population and, most importantly, the
problem should be included among Urban’s priority actions
and among the criteria for selecting urban areas.

4.6. Urban sprawl

4.6.1.
The Community’s Urban programme is intended for
‘neighbourhoods in crisis’ and is based on the traditional
categories describing urban areas: cities, neighbourhoods,
centres, peripheral or suburban areas.

One of the main strategic innovations of Urban II
4.6.2.
is that it addresses medium and small-sized cities.
In its
communication, the Commission explains that in addition to
population, the small size of the areas covered also helped to
increase the intensity of aid per km2. It is pointed out that
territorial concentration of actions has positive effects on local
planning and on opportunities for upgrading urban areas.

4.6.3.
The most recent research in the area of urban studies
has however highlighted that traditional ways of understanding
urban situations have, over recent years, started to break down
across large areas of Europe. A look at the map of many parts
of the Union — or, even more, travel or residence in them —
reveals a picture which challenges many of the conventional
categories for viewing urban models.

Urban sprawl and the growth of ‘dispersed cities’
4.6.4.
have been accelerated by the huge growth of
individual
mobility and of transport and communications infrastructure
networks, the increasing decentralisation of production and
the internationalisation of distribution, and new strategies of
industrial and commercial relocation. Increasingly invasive
forms of spatial occupation are on the rise, spreading across
what had previously been considered as the countryside.
This only serves to multiply the characteristic environmental
pressures of urban areas.

Urban sprawl

4.6.5.
is often marked by high levels of
deprivation, poverty and low physical and environmental
standards, as well as a loss of
identity: new challenges
thus arise. Many of
the Urban programmes’ criteria for
interpretation and action appear ineffective in this context.
The concepts of the city, of neighbourhoods, of centre and
suburb are undermined: above all,
the parameter of the
physical size of the geographical areas covered by Urban
becomes meaningless. The intensity of aid in areas of urban
sprawl clearly cannot be measured in terms of resources
brought to bear per km2.

The EESC has previously drawn attention to this
4.6.6.
problem. More specifically,
in its opinion on sustainable
urban development in the European Union: a framework for
action (1), the Committee argued that the growth in the third
millennium of bloated, sprawling cities with no real centre
represented a further challenge to the EU to come up with
an alternative, competitive form of government which is
compatible with urban and regional development.

4.6.7.
It is important to make sure that in the future the
Urban programme effectively addresses in an experimental
and innovative way the new forms assumed by the urban
question, with action designed to bring urban sprawl under
control and to introduce policies for regenerating such areas.

(1) ESC opinion of 20.10.1999, in OJ C 368, 20.12.1999, p. 62.

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4.7. Conclusions

The communication from the Commission closes
4.7.1.
with a question concerning the future of the Urban initiative.
The EESC recommends that these innovative programmes be
continued and be stepped up, and that greater economic
resources be brought to bear on them, and also calls for many
of the methods and practices created through the Urban
programmes to be applied to the more general management
of the Structural Funds.

Once the specific nature of urban questions has
4.7.2.
been highlighted,
there will be an increasing need to
implement action strategies which can effectively link the
intervention approaches to a culture of
necessary sectoral
integration between economic development,
social and
economic cohesion, employment, the importance of involv-
ing economic and social players, and restoring and protec-
ting the quality of the environment and the built heritage,
within a framework of developmental compatibility and
consistency.

Brussels, 26 March 2003.

The President

of the European Economic and Social Committee

Roger BRIESCH

Opinion of the European Economic and Social Committee on the ‘Proposal for a Council
Directive amending Directive 77/388/EEC as regards the rules on the place of supply of electricity
and gas’

(COM(2002) 688 final — 2002/0286 (CNS))

(2003/C 133/13)

On 16 December 2002 the Council decided to consult the Economic and Social Committee, under
Article 262 of the Treaty establishing the European Community, on the above-mentioned proposal.

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 6 March 2003.
The rapporteur was Mr Pezzini.

At its 398th plenary session on 26 and 27 March 2003 (meeting of 26 March), the Economic and Social
Committee adopted the following opinion by 97 votes to one with four abstentions.

1.

Introduction

laying down the following requirements for Member

cess,
States:

1.1.
Following the establishment of the EU internal market,
the electricity and gas market in the Member States has been
gradually liberalised in order to increase efficiency in this
sector. The European Council meeting in Lisbon on 23-
24 March 2000 called for ‘rapid work’ to complete the internal
market and asked ‘the Commission ... to speed up liberalisation’
in areas such as gas and electricity. The Energy Council of
30 May 2000 invited the Commission ‘to present timely
proposals for further action’.

— liberalisation of non-household markets for energy and

gas by 1 July 2004;

— liberalisation of household markets by 1 July 2007;

— compulsory legal separation between network operating

companies and energy production companies;

1.2.
The Energy Council of 25 November 2002 gave
further impetus to the gas and electricity liberalisation pro-

— public service obligations (including provision of energy

at reasonable prices);