Opinion of the European Economic and Social Committee on the Proposal for a Council Regulation laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund (COM(2004) 492 final — 2004/0163 (AVC))
Date: 2005-04-06
Institutions: European Economic and Social Committee
Subjects: Cohesion Fund, EU financing arrangements, European Regional Development Fund, European Social Fund, accession to the European Union, economic and social cohesion, less-favoured region, multiannual financial framework, regional cooperation

14.10.2005

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Official Journal of the European Union

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Opinion of the European Economic and Social Committee on the Proposal for a Council Regu-
lation laying down general provisions on the European Regional Development Fund, the European
Social Fund and the Cohesion Fund

(COM(2004) 492 final — 2004/0163 (AVC))

(2005/C 255/16)

On 21 December 2004 the Council of the European Union decided to consult the European 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 18 March 2005. The rappor-
teur was Mr Malosse.

At its 416th plenary session on 6 and 7 April 2005 (meeting of 6 April), the European Economic and
Social Committee adopted the following opinion by 126 votes to three with seven abstentions:

1. Preamble

1.1
The European Economic and Social Committee has
often and emphatically spoken out in favour of a European
policy for ‘economic, social and territorial cohesion’, as the
Constitutional Treaty puts it. The EESC reaffirmed its support
for cohesion in its opinion on the financial perspective for
2007–2013 (1), and advocated more funding for structural
policy and the Cohesion Fund, particularly in order to reflect
the impact of new and future Member States without exposing
the most severely disadvantaged countries and regions in the
EU-15 to adverse consequences.

1.2
The proposal under review sets the tone for possible
programming activity during the 2007-2013 period and lays
down a framework. The proposal comes halfway through the
current programming cycle of the Structural Funds, which has
not yet been fully evaluated or assessed, particularly with
regard to structural measures in new Member States.

1.4
On the specific subject of the future of cohesion policy,
during the last four years the EESC has made over 70 sugges-
tions in no fewer than 12 opinions (2). An exploratory opinion
on the implementation of partnership (3) was requested by the
Commission; in 2003, in the course of preparations for the
informal Council of Ministers meeting on 20 October 2003 in
Rome of ministers responsible for cohesion policy, an EESC
opinion (4) was also requested by the Council presidency. The
EESC's numerous opinions on the subject contain some very
innovative proposals for improving implementation of cohe-
sion policy.

1.5
The Commission's overall track record of responding to
EESC proposals is generally positive, except with regard to the
the majority (39 of a total of
key issue of partnership:

it

Under such circumstances,

1.2.1
represents a general
financial and technical framework, in which the ground rules
are laid down; however, a considerable amount of negotiation,
particularly between Member States, is still needed to work out
detailed implementation procedures and budgetary implica-
tions. It should also be borne in mind that during the 2007-
2013 period, the EU will undergo further enlargement, with
the accession in 2007 of two countries in particular, Bulgaria
and Romania, which are likely to derive considerable benefit
from cohesion policy due to their economic and social situa-
tion.

In its proposal, the Commission announces its intention
1.3
of maintaining the key principles of cohesion policy —
programming, partnership, co-financing and evaluation, while
delegating more responsibilities to Member States and local
authorities, simplifying procedures and introducing ‘clear and
more rigorous monitoring mechanisms’.

(1) OJ C 74, 23.3.2005, p.32.

(2) European policy on crossfrontier cooperation and experience with

the INTERREG programme, OJ C 155, 29.5.2001, p. 12
Second Report on Economic and Social Cohesion, OJ C 193,
7.8.2001, p. 70
The future of cohesion policy in the context of enlargement and the
transition to a learning society, OJ C 241, 7.10.2002, p. 66
Future strategy for the outermost regions of the European Union,
OJ C 221, 17.9.2002, p. 37
The future of upland areas in the EU, OJ C 61, 14.3.2003, p. 113
The contribution of other Community policies to economic and
social cohesion, OJ C 10, 14.1.2004, p. 92
URBAN 2000-2006, OJ C 133, 6.6.2003, p. 53
Second progress report on economic and social cohesion, OJ C 234,
30.9.2003, p. 45
Partnership for
14.1.2004, p. 21
Economic and social cohesion: regional competitiveness, governance
and cooperation, OJ C 10. 14.1.2004, p. 88
European Metropolitan Areas:
Europe's future, OJ C 302, 7.12.2004, p. 101
Third report on economic and social cohesion – A new partnership
for cohesion: convergence, competitiveness, cooperation, OJ C 302,
7.12.2004, p. 60

implementing the Structural Funds, OJ C 10,

socio-economic implications

for

(3) EESC opinion on the Partnership for implementing the Structural Funds,

OJ C 10, 14.1.2004, p. 21

(4) Exploratory EESC opinion on Economic and social cohesion: regional
competitiveness, governance and cooperation, OJ C 10, 14.1.2004, p. 88.

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70 specific proposals) were followed up, and in eight cases
cohesion policy rules were modified to reflect EESC proposals.
Thus, a large majority (47 of a total of 72) of EESC proposals
were acted on by the Commission.

2. The challenge to cohesion policy posed by enlargement

2.1 Building a powerful new entity

Following the accession of 10 new countries,

2.1.1
the
enlarged European Union is the third most populous political
entity in the world: with 455 million inhabitants its population
is considerably smaller than that of China or India, but larger
than that of the United States (300 million) and Russia (140
million). With a GDP of EUR 10 billion, the EU has one-third
of the world's wealth and controls one-fifth of world trade, and
therefore has the potential to be a major player on the current
global stage.

Although they are less developed than older Member
2.1.2
States, the new countries can contribute an economic impetus,
with average economic growth in 2003 of 3.6 % in the 10
accession countries compared to 0.4 % in the EU-15, a differ-
ence which is bound to have a profound and favourable impact
on economic trends and growth in the European Union as a
whole.

2.2 Facing new challenges

2.2.1
As in the case of any significant change, institutions,
inevitably have to be adapted to
policies and budgets will
reflect the new dimensions of the European Union. After the
previous four enlargements of the EU — in 1973 (United
Kingdom,
Ireland, Denmark), 1981/1986 (Greece, Spain,
Portugal), 1989 (German reunification) and 1995 (Sweden,
Finland, Austria), major changes were necessary.

2.2.2
Given the exceptionally large number of accession
countries and the relative weakness of their economies, the
current enlargement poses the EU with a series of specific
problems.

2.3 Expanding borders

2.4 Economic disparities

2.4.1
The ten accession countries in 2004 have an average
per capita income (in terms of purchasing power) that is less
than 76 % of the average for the EU-15. The two countries
which are expected to join in 2007 (Romania and Bulgaria) are
even further behind, with per capita incomes of less than 30 %
of the Community average. The European Union must there-
fore address the budgetary implications of this situation, not
least in the debate on adoption of the financial perspective for
the 2007-2013 period.

2.4.2
Changes to the funds will need to take these factors
into account, so that the Commission has the resources to
support a sustainable financial policy for the EU and Member
States. In this context, the ceiling of 4 % of GDP which limits
total access to Community funds reflects the need for fairness
and for economic efficiency. However, disparities in develop-
ment levels which were already present in the EU-15 will not
simply disappear as a result of integration of new Member
States. In view of this, policies for economic, social and terri-
torial cohesion need to embrace the whole of the European
Union, and to be backed up by the requisite funding.

2.5 A mixed picture

2.5.1
There is no doubt that appropriations by the EU have
helped to narrow the gaps between countries. However, the
overall positive impact should not be allowed to obscure the
fact that there are many shortcomings. The need for radical
reforms of cohesion policy is backed up by analysis of imple-
mentation:

the lack of convincing results

— Objective 1 has achieved a fair degree of success in
narrowing the gaps between Member States and regions;
in terms of
however,
narrowing gaps within some large EU countries reflects the
difficulty of making an overall success of a policy of terri-
torial cohesion. Besides, progress in narrowing the gaps
between Member States has as much to do with macro-
intervention. At the
economic policies as with structural
level of interregional disparities, where structural measures
do have a decisive impact, European intervention does not
always target key activities where there would be genuine
leverage potential. The lack of consultation and effective
involvement of civil society actors has often been cited as
the main cause of this relative lack of success. Given that
these deficiencies are even more pronounced in the new
Member States, tackling this issue is especially important;

in stone. Further enlargement

Now that the geographical, cultural, religious and historical
identity of the EU is being questioned, the borders of Europe
are no longer set
is already
scheduled (for Romania and Bulgaria) or being discussed
(Turkey, Croatia), and it is quite possible that other countries
will apply to join. There is no doubt that such developments
will necessitate greater cohesion, and, at the same time, respect
for different identities.

— thanks to intervention in numerous European regions,
Objective 2 has had the advantage of giving the European
Union a higher profile and promoting quite close coopera-
tion with economic and social actors, although that does
vary from Member State to Member State. However, Objec-
tive 2 has come under attack, mainly due to the limited
availability of funding;

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— Objective 3 has often been used to co-finance national
measures which neither generate added value nor enhance
the visibility of EU action;

objectives of competitiveness in a knowledge-based economy,
full employment and sustainable development.

— thanks to effective networking and technical support, and
in spite of a disproportionate amount of red tape, Com-
munity initiative programmes and innovative measures
have made a genuine contribution;

3. The draft regulation should be brought into line with

the objectives of radical reform

— the Cohesion Fund, which is linked to Objective 1 support,
is acknowledged to have made a decisive contribution to
the financing of many major investment projects.

3.1 The new objectives of the draft regulation

2.6 Results which call for radical reform of cohesion policy

An analysis of the overall economic impact of the
2.6.1
Structural Funds reveals that there is considerable variation in
terms of measures. What is clear, however, is that they do not
represent some kind of magic formula for regional economic
development. The Structural Funds are not a passport
for
growth for the countries and regions that qualify for funding.
Although they back up the work of actors at regional and
national levels in the least developed parts of Europe, the risk is
that, unless priorities are set in close collaboration with all the
local stakeholders, the funds can only have a limited impact in
overcoming natural and structural handicaps. They should
therefore be seen as a tool to assist strategies implemented by
development players, with the widest possible involvement of
the appropriate grassroots stakeholders. Thus, a significant
proportion of European funding should be set aside for innova-
tive measures to support the development of local capacity, in
order to make underdeveloped regions more attractive and
competitive. The EU plays a key role in facilitating the sharing
of best practice among the relevant actors.

2.6.2
Reforms of cohesion policy should aim to strike a
better balance between investments in the requisite infrastruc-
ture and investments in human resources, which are currently
under-supported and play a key role in enhancing the potential
of underdeveloped regions.

2.6.3
Greater efficiency and higher standards are thus essen-
tial if the European public are to accept and support a cohesion
policy that is more ambitious and more in tune with regional
and local concerns.

3.1.1
The new Objective 1 of Convergence, which
combines the Cohesion Fund and the existing Objective 1
of the Structural Funds. Appropriations relating to phasing
out on statistical grounds are also covered by this objective.

3.1.1.1
Eligible areas: regions with per capita GDP < 75 %
of the EU average, ‘cohesion’ countries, i.e. countries with gross
income < 90 % of the EU average, regions which
national
qualify under the current Objective 1 but would lose their elig-
ibility due to the statistical effect of enlargement, and, as an
additional benefit outermost regions.

3.1.1.2
Financial aspects: total financial appropriation: 78 %
of budget allocated to cohesion policy (as envisaged by the
Financial Perspective for 2007-2013); support for programmes
under the new Objective 1 by the ERDF, the ESF and the Cohe-
sion Fund.

3.1.1.3 Main areas of funding:

— under the ERDF: R&TD, innovation and entrepreneurship,
levels of
the information society: development at
content,
environment,
the
tourism, energy, direct financing of investment by SMEs
contributing to job protection and job creation;

and services,

applications

local

— under the ESF: enhancing the adaptability of companies and
employees, stimulating investments in human resources;

— under

the Cohesion Fund:

trans-European transport
networks, environmental protection, activities which are
conducive to sustainable development and have an environ-
mental dimension.

3.1.2
New Objective 2, dedicated to regional competi-
tiveness and employment, replacing the current Objectives 2
(regions facing structural difficulties) and 3 (employment and
training).

2.7 Outline of the new cohesion policy

3.1.2.1

There are two priorities for intervention:

In this context, the Commission's proposal on cohe-
2.7.1
sion policy should, on the one hand, address the need for terri-
torial cohesion in an enlarged Europe with 25 Member States
and, on the other, contribute to achieving the major European

— regional competitiveness,

supported through regional
programmes,
funded solely by the ERDF. The emphasis
here is on tackling problems rural and urban areas face
because of economic restructuring and the difficulties of
regions with natural and structural handicaps especially
islands and sparsely populated areas;

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— employment,

supported through national programmes
which are solely funded by the ESF; here, the emphasis is
on supporting policies aimed at ensuring full employment,
quality and productivity, and social inclusion.

— support for interregional cooperation networks: inno-
vation and the knowledge-based economy, the environment
and risk prevention, the urban dimension.

This objective is in line with the strategy put forward by the
Lisbon European Council of supporting employment, economic
reform and social cohesion in the context of a knowledge-
based economy and the needs of sustainable development.

3.1.2.2
covered by the new Objective 1.

Eligible areas: generally, all regions which are not

3.1.2.3
Financial aspects: total financial appropriation: 18 %
of budget allocated to cohesion policy (as envisaged by the
Financial Perspective for 2007-2013). This appropriation is
split equally between the two priorities for intervention.

3.1.2.4 Main areas of funding:

— under the ERDF:

firstly,

innovation and the knowledge-
based economy, access to transport and telecommunica-
facilitating
tions services of general economic interest,
access by SMEs to ICT; secondly, the environment and risk
prevention;

— under the ESF: enhancing the adaptability of businesses and

employees.

3.1.3
New Objective 3, European territorial coopera-
tion, dedicated to interregional and European cooperation, and
replacing
initiative
Interreg
programme.

Community

current

the

Eligible areas: Member States and regions are to
3.1.3.1
propose transnational cooperation zones based on 13 existing
cooperation zones defined under INTERREG III B; the Commis-
sion will then decide on cooperation zones in partnership with
Member States and regions. Eligible measures:
to
measures under INTERREG III B, with an emphasis on the
Lisbon and Gothenburg priorities. Support for interregional
cooperation networks. Applies
the European
Union.

throughout

similar

3.1.3.2
Financial aspects: total financial appropriation: 4 %
of budget allocated to cohesion policy (as envisaged by the
Financial Perspective for 2007-2013). Relevant fund: the ERDF.

3.1.3.3 Main areas of funding: this objective relates to three
types of territorial cooperation:

— cross-border cooperation: development of entrepreneur-
ship, SMEs and tourism, overcoming isolation through
better access to services and transport,
information and
communication networks;

— transnational

cooperation:
supporting technological development and R&D;

improving

accessibility,

3.2 A comprehensive approach to cohesion policy

3.2.1
Insofar as it is essentially concerned with promoting
‘harmonious development of the Community’ as a whole, in
particular by aiming to reduce ‘disparities between the levels of
development of the various regions’, cohesion policy has par-
ticular features which make it a priority for negotiation, parti-
cularly in the context of the new budgetary negotiations.

3.2.2
In this connection, the role of cohesion policy will be
crucial for new and future Member States. Their lag in develop-
ment and ageing infrastructure are now familiar issues which
fully justify the application of cohesion policy once these coun-
tries accede to the EU.

3.2.3
At the same time, it should not be forgotten that cohe-
sion policy is still very important for the current Member
States. Firstly, the commitment of Objective 1 regions to cohe-
sion policy is a major political
factor. 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.

3.2.3.1
The Third Cohesion Report has rightly emphasised
that, while disparities between countries have been partially
overcome, the differences between regions within the same
country have persisted or even widened in some countries, thus
demonstrating the very real nature of natural and structural
handicaps. These disparities would have been even wider
without the impact of structural and cohesion policies, given
the strong tendency for economic development to be concen-
trated in the most prosperous regions.

3.2.4
Finally, it seems appropriate to involve the regions of
all the Member States, given the aim of securing greater grass-
impor-
roots support for European integration. The political
tance of
these appropriations, which help to bridge the
communication gap between the EU and ordinary Europeans,
should not be forgotten. Many observers have noted that the
EU is often perceived as being both remote and restrictive;
however, European funding can help to bring Europe closer to
its citizens.

3.2.5 Moreover, territorial cohesion has been enshrined by
the Treaty establishing a Constitution for Europe as a funda-
mental principle of EU action. Therefore, structural instruments
should underpin this policy by intervening on the behalf of the
EU, and hence, must, in one way or another, rally the resources
of all the Member States, both financially — to reflect Com-
munity solidarity — and in terms of
ideas, expertise and
projects. Structural Fund measures not only give the EU a

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higher profile; they also bring added European value to any
project, not so much financially as in terms of EU-facilitated
joint strategies, exchanges, cooperation and transfer of exper-
tise.

3.3 Closer involvement of economic and social players

Although the EESC,

in its exploratory opinion (5)
3.3.1
recommended strengthening the role of economic and social
partners by conferring voting rights in bodies involved in
preparation and follow-up, providing technical assistance,
introducing rigorous selection procedures for partners and
working out a detailed role for follow-up committees, these
recommendations were not followed by the Commission. The
EESC is disappointed that the European Commission is lacking
in political courage in this area, given that the effectiveness of
cohesion policy is closely dependent on involvement of
economic and social actors, and other civil society organisa-
tions concerned.
In the EESC's view, this failure to include
economic and social actors is at odds with the principles of
participatory democracy set out in the Constitutional Treaty. In
the light of the gap that exists between the institutions and the
public, this is a practical opportunity to better respond to civil
society's expectations. Experience of genuine consultation with
economic and social players (for example, in Northern Ireland)
has shown that considerable benefits can be reaped in terms of
quality and effectiveness;
the Commission should therefore
more actively promote effective partnerships.

3.3.1.1
Complaints about inadequate involvement in struc-
tural policies and the consequent adverse effects on the visibi-
transparency and effectiveness of cohesion policy are
lity,
becoming increasingly common. The EESC is concerned about
the growing criticism of this lack of partnership, much of
which originates
in new
Member States.
the EESC recommends
setting up national and regional economic and social councils
or similar bodies able to serve as autonomous, open and trans-
parent forums for consultation and monitoring.

society organisations

In this connection,

from civil

Significantly,

3.3.1.2
the European Commission has not
assessed or commented on the fundamental principle of invol-
ving economic and social partners. Too few rules and standards
are in place at both Community and national levels to secure
the involvement of the social partners and other civil society
organisations concerned in all stages of
implementing the
Structural Funds.

3.3.1.3
The European Commission should advocate capacity
building of local and regional authorities and players and of
civil society stakeholders. It is surprising that regulations on the

ERDF and the EAFRD ignore the contribution of administrative
capacity building to good governance, even though the
Commission's White paper on European governance (6) has empha-
sised that civil society has a fundamental role to play in this
respect. The EESC specifically proposes that all programmes
should include measures to support capacity building for local
and regional economic and social players (as is done in the
draft ESF regulation which allocates 2 % of resources for that
purpose), but backed up by more adequate funding (at least
it also asks that the eligibility of
5 % for each programme);
economic and social
interest groups for technical assistance
should explicitly be mentioned (Article 43).

3.3.1.4
For the EESC, the quality of partnership is central to
how cohesion policy is implemented and perceived. The EESC
therefore requests that the Commission draw up a report on
how partnership works in practice, and offers its support in
sounding out the views of civil society organisations. The EESC
requests that the European Parliament assess the proposals for
regulations on the basis of how they address the need for part-
nership; the weakness of this aspect is a reflection of the lack
of interest on the part of EU authorities.

3.4 Setting new priorities at European level

The EESC endorses the Commission's proposal

3.4.1
to
align cohesion policy with the broad strategic objectives of the
European Union, such as the Cardiff, Luxembourg, Lisbon and
the European
Gothenburg Processes. The commitments of
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 EESC
favours mandatory guidelines incorporating the Union's poli-
tical priorities and drawn up jointly by the Member States, the
Committee of the Regions and the European Economic and
Social Committee.

3.4.2
The EESC would like the draft regulation to refer to
these broad guidelines more specifically. A considered choice
should be made to give greater priority to education and
training as well as instruments favouring the knowledge-based
society and sustainable development.

3.4.3
Basic infrastructure, not only in terms of transport but
also educational and research institutions, as well as infrastruc-
ture connected with environmental improvement, is vital for
the least developed regions in order to compensate for their
disadvantages.

as

As

far

regions with natural handicaps

3.4.4
are
concerned, permanent support should be provided in order to
overcome disparities within Europe and ensure equal opportu-
nities.

(5) EESC opinion on the Partnership for implementing the Structural Funds,

OJ C 10, 14.1.2004, p. 21

(6) White Paper on European Governance, COM(2001) 428 final.

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3.4.5 With regard to state aid for business, the EESC feels
that distortions of competition should be avoided, and notes
that such aid rarely has much of an impact due to considerable
delays in allocation. In the EESC's view, there should be greater
emphasis on creating a favourable environment for business
start-up and development (training, infrastructure, joint action).
With regard to aid, subject to the reservations expressed above,
the EESC is pleased to note that the development of small and
medium-sized enterprises has been made a priority, and that
the period during which a company which has received such
aid must commit to maintaining its investment in the recipient
region has been set at seven years.

The EESC draws attention to the importance of
3.4.6
building up research and innovation capacities which,
like
education and training, are catalysts for local development and
chime in with the Lisbon objectives. Indeed, the conclusions of
the Lisbon Summit envisage building up educational capacity
both for basic training and lifelong vocational training.

3.4.9
Priorities should include a strategy for locally gener-
ated development based on optimum knowledge of the areas
concerned through observation tools that involve a local part-
nership of all stakeholders. As discussed in a recently adopted
EESC own-initiative opinion, particular attention should be
paid to the situation in large cities. (7)

It is important that the regulation should provide for
3.4.10
procedures to support
innovative action in terms of both
methods and types of operation. In this connection, the EU
must play a key role in supporting and propagating innovation
in economic, social and territorial cohesion policy, bringing
genuine European added value to measures planned and imple-
mented at local, regional, national and international levels.

3.5 Bringing procedures into line with European developments

3.4.7
Cohesion policy should also support development of
health infrastructure in the least developed regions, as well as
helping to remedy the causes of exclusion. It could make a real
contribution here by sharing information about successful
efforts across the EU. Particular emphasis should be given in
this context to the situation of marginalised groups such as
migrants and ethnic minorities, which are deprived of access to
employment or 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 promo-
tion of ‘best practice’.

Over the years, European procedures have tended
3.5.1
towards complexity, resulting in very elaborate procedures at
the expense of
transparency and accessibility. The same
problems can already be seen in the implementation of pre-
accession aid to applicant countries. It is vital that the presenta-
the
implementation and management arrangement of
tion,
Structural Funds should be kept straightforward, with shorter
cycles and processing times that match actual programme
needs.

3.4.8 With specific regard to the issue of social inclusion,
the EESC feels that it is important that non-discrimination be
acknowledged across the board in activities financed under the
Structural Funds, and that Structural Funds should not cause
the creation of additional barriers to access by disabled persons.
Given that the Structural Funds are a vital tool in reducing and
mitigating social exclusion and in combating discrimination
against disabled people, the Member States and the Commis-
sion must act
these funds are used as an
economic instrument to:

to ensure that

— improve access to employment by jobseekers and increase

participation in the labour market,

— enhance social inclusion and combat discrimination, and

— undertake reforms in the field of employment that also

benefit disabled persons.

The Commission's current proposals do not

3.4.8.1
take
social aspects sufficiently into account. The Structural Funds,
and the European Social Fund in particular, must be a tool for
employment, and also for the European strategy on social
inclusion, by encouraging the development of labour markets
specifically geared to that end.

3.5.2
Thus radical changes are needed in order to simplify
procedures. It often happens that national legislation is super-
imposed onto European legislation, which can create problems;
these can be particularly difficult to overcome in the case of
cross-border or transnational cooperation. With this in mind,
the EESC views the Commission's proposal to delegate the
choice of eligibility criteria to national level — with the excep-
tion of Objective 3, and subject to request by the Member State
concerned — with considerable concern, and questions the
underlying reasons for doing so. In order for structural policy
to remain consistent, the EESC calls for a common base for
eligibility criteria.

3.5.3
Selecting eligible regions: The EESC fundamentally
disagrees with the Commission's intention to delegate to
Member States selection of the regions to benefit from the
Structural Funds. In the EESC's view, regions should be selected
jointly by the Commission and the Member State concerned. In
this connection, high priority should be given to regions with
structural and natural handicaps;
the
Commission should be very closely involved in selection to
ensure equitable treatment at European level. For example, it
would not be right for one island to be declared eligible in one
country while a neighbouring island with similar characteristics

regions,

these

for

(7) EESC own-initiative opinion on European metropolitan areas: socio-
economic implications for Europe's future OJ C 302, 7.12.2004, p. 101.

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were excluded in another country. In the event of such deci-
sions,
the public would be entitled to wonder what had
happened to consistency within Europe and to the European
dimension.

3.5.4 Defining priorities: It is also important to give the
EU a stronger role in this connection in order to enable the
Funds to be used as a catalyst for measures which are in
keeping with EU priorities, including the Lisbon strategy and
the main European networks.

3.5.4.1
At all events, the greatest vigilance will be needed to
combat the ever-present risk of ‘renationalising’ Structural Fund
policies. Implementation methods should reinforce the Euro-
pean dimension, never weaken it.

nership in order to help projects to succeed through a range of
measures designed to boost legitimacy, coordination, effective-
ness and transparency. With this in mind, the Committee is
concerned about the impact of the changes introduced by the
European Commission, which will only allow co-financing to
be supported by public expenditure. Enforcement of
this
requirement could ultimately reduce or even eliminate the
private component of such partnerships, an outcome which
contradicts the objective of encouraging private sector involve-
ment. The EESC calls on the European Commission to
conduct an impact analysis of this new measure before
implementation. The EESC would also like dispensation
from this rule for all technical support measures targeted
at economic and social actors, in order to ensure that EU
support is not tied to that of national authorities.
It
should be possible for organisations' own funds to serve
as a basis for contributions from European Structural
Funds.

terms,

In overall

3.5.4.2
the Commission document on
general provisions on the three funds is very ambitious. With
an approach that lumps together all aspects of research, inno-
vation, educational investment, the information society, trans-
port investments, the environment, etc., without identifying
priorities,
there is a risk that the programme might prove
impossible to implement due to resources that are — poten-
tially — insufficient for the task.

3.5.4.3
In the EESC's view, the text must — in terms of
both arguments and content — make more reference to the
priorities that are to be set. This recommendation will be taken
up and built upon in specific opinions drawn up for each of
the funds.

3.5.5
Cooperation between Member States, regions and
actors representing civil society: The EESC is disappointed
that new arrangements have shifted responsibility for strategies
and means of action to the Member States. Not enough
emphasis has been given to opportunities for cooperation
between Member States, even though this aspect is an essential
part of
the Lisbon strategy (innovation, education, major
networks, dissemination of knowledge). It is thus important to
promote — and make more flexible — conditions for access to
the resources needed for cooperation across borders and
between Member States.

3.5.5.1
Given the pressing need for a uniform European
measure on cooperation between regions and Member States,
the EESC strongly supports the establishment of European
groupings of cross-border cooperation.

‘the programming and management of

Single fund: In Recital 35, the draft regulation states
3.5.7
the Structural
that
Funds
should be simplified by providing for operational
programmes to be financed by either the ERDF or the ESF’.
Although this innovation simplifies the way the programmes
operate, it has yet to be seen whether it will actually improve
the coordination and comprehensibility of the funds at regional
level. The EESC would have preferred a single fund to cover the
whole of cohesion policy; however, this was not the option
chosen by the Commission.

National

3.5.8
strategic framework: The Commission
proposes that an overall strategic document for cohesion policy
should be adopted by the Council, after an opinion from the
EP,
in advance of the new programming period. Thus, each
Member State would prepare a policy document on its develop-
ment strategy, which would be negotiated with the Commis-
sion. In order to ensure genuine consistency in the approach to
issues of shared concern, the EESC would like the European
Commission to act as coordinator, so that Member States can
confer together on the objectives of these strategic documents.
Encouragement should be given to incorporating European
considerations and strategies — including those of a cross-
border nature — into these national strategic frameworks.

3.5.5.2
However, it is worth considering whether this instru-
ment, which is solely intended for cross-border cooperation,
should not in practice be more tightly defined,
including in
terms of project management requirements for each kind of
cooperation. This concern is taken up and built upon in the
opinion on the specific subject of EGCCs.

3.5.6
Public/private partnership: In its exploratory opinion
on the partnership for implementing the Structural Funds, the
Committee recommends strengthening the public/private part-

3.5.9
Follow-up committees: With this in mind, the EESC
does not look favourably on the proposal to make attendance
by the European Commission at follow-up committee meetings
optional; rather, it feels that EU action needs to be made more
visible for the public, and instead of undermining the role of
follow-up committees through an additional procedure, their
position needs to be strengthened. The absence of the Commis-
sion will leave the economic and social partners and other civil
society organisations concerned to their own devices in dealing
with government departments, disappointing them in their
expectations of the Commission acting as custodian of the part-
nership principle.

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3.5.10
Additionality: The EESC endorses the additionality
principle, provided that it is interpreted flexibly — i.e. in the
context of the actual objectives and programmes rather than
from project to project.

3.5.15
Evaluation: As far as evaluation of programmes is
concerned, the EESC reiterates its statement that a qualitative
evaluation of the impact of programmes should be conducted,
rather than just a financial and administrative evaluation as is
largely the case today. In particular, civil society actors must be
involved in this procedure.

Adjusting the level of participation: The EESC
3.5.11
supports proposals which envisage adjusting the level of EU
participation to reflect geographical handicaps in the regions
concerned. It suggests that such additional support could be
cumulative in the case of regions suffering from more than one
handicap (e.g. thinly populated islands with rural and/or moun-
tainous zones). The Committee feels that it is important to
emphasise that
the priority objectives of structural policy
always apply to such thinly populated regions, with their
permanent natural handicaps: ‘Regional policy and rural devel-
opment policy must reflect this in the way in which they are
implemented, not least by proposing a higher level of co-finan-
cing to take account of these constraints’. (8)

3.5.12 Making decentralised management more effec-
tive: The EESC feels that permanently delegating responsibility
to Member States and local authorities is too risky, besides
making EU action considerably less comprehensible. It there-
fore suggests that 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 achieve-
ments to help promote such practices. In all cases EU action
should have a higher profile and greater visibility for the
public. 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.

3.5.13
Promoting the method of global grants: The EESC
is pleased to note that the draft regulation confirms the proce-
dure of awarding global grants to grassroots organisations. This
approach is particularly suited to measures promoting micro-
businesses. It is gratified that the Commission has heeded its
call for more flexible rules on the award of such global grants.
However, although this approach has proven to be effective,
the Committee is disappointed that its proposal for a minimum
threshold of 15 % of interventions in this form has not been
followed up. It therefore reiterates its request.

3.5.14 Wherever possible, the EU needs to boost its
profile in order to ensure that its intervention has a Euro-
pean dimension. In order to enhance effectiveness, priorities
and methods should be worked out through European partner-
ships. The success of cohesion policy is less dependent on the
amount of funding paid out than on the choice of priorities
and the standard of working procedures. There is no point in
solidarity unless it goes hand in hand with cooperation.

(8) EESC opinion on The CAP second pillar: outlook for change in develop-
ment policy for rural areas (follow-up to the Salzburg Conference) OJ C
302, 7.12.2004, p. 53.

3.5.16
In the draft regulation, providing ‘the human and
financial resources necessary for carrying out evaluations’ is the
responsibility of Member States, but it is also up to them to
‘draw up, under the 'Convergence' objective, an evaluation plan
to improve the management of operational programmes and
their evaluation capacity’ (Article 46(1)). It is all very well for
the Commission to delegate responsibility for monitoring
implementation of programmes to Member States. However, at
the same time, the Commission should take a strong line on its
right to conduct ongoing supervision of the use of Structural
and Cohesion Funds within Member States. Given the frequent
problems which have arisen, the EESC feels that withdrawal of
inevitably
the Commission from evaluation procedures will
give rise to situations that are detrimental to the interests of all.

3.5.17
Cancellation of appropriations which have not
been committed: The EESC is sceptical of the value of the
‘N+2’
rule, which stipulates cancellation of appropriations
which have not been committed by two years after the planned
programming period. Experience shows that, in order to get
round this rule, national authorities are inclined to make hasty
decisions on projects of dubious value, sometimes with the
tacit cooperation of
the European Commission. The EESC
considers that rigorous evaluation of projects by the EU in rela-
tion to the objectives which have been set should be the usual
procedure and the only permanent procedure. The EESC thinks
that funding which has not been used by the given deadlines
should be recycled rather than used up in a hasty and superfi-
cial way merely to avert the threat of automatic decommit-
ment.

3.5.18 Moreover, a number of reports by the Court of Audi-
tors have pointed out that the Member States in question do
not have the capacity to make use of funding which has been
allocated to them. In future, the emphasis will be on the new
Member States. That fact should be taken into account, and
appropriate corrective measures taken.

A new audit authority: Creation of an audit
3.5.19
authority is intended to reinforce monitoring structures,
in
addition to the existing management and certification authori-
ties (Articles 59 and 60 respectively). The draft regulation intro-
duces a requirement for submission of an audit strategy (Article
61(1)(c)): the audit authority is to present ‘to the Commission
within six months of
the operational
programme an audit strategy covering the bodies which will
perform the audits (…), the method to be used, the sampling
method (…)’. In addition, the audit authority is required to
issue an annual opinion for each operational programme,
similar in content to the final statement of validity. As Article
61.1 states, the audit authority should provide ‘a declaration at

approval of

the

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C 255/87

the application for payment of

the closure of the operational programme assessing the validity
of
the final balance (…)
supported by a final control report.’ The EESC reiterates its
recommendations that auditing and monitoring procedures for
the implementation of programmes should focus not merely
on quantitative aspects but also on qualitative issues as well.
Also, the EESC is again disappointed that auditing responsibil-
ities have been delegated to national level, yet another indica-
tion of the EU's lack of interest in its responsibilities. The EESC
is awaiting the European Court of Auditors' opinion on this
proposal; whatever the outcome, the Committee would like to
be involved in any auditing arrangements that are introduced.

4. The performance and quality reserve and the contin-

gency reserve

4.1
The EESC reiterates the proposals which were put
forward in its exploratory opinion on Economic and social

Brussels, 6 April 2005.

regional competitiveness, governance and cooperation (9).
cohesion:
However, the EESC feels that these provisions should be rede-
fined and amended in line with the proposals which it has
already put forward, i.e.:

— with regard to the performance and quality reserve: the
criteria for eligibility should be expanded to include an
analysis, not in quantitative or administrative terms, but in
impact of the results
terms of the economic and social
achieved. Another useful criterion which should be applied
here is implementation of the Lisbon strategy, as set out in
Wim Kok's recommendations;

— with regard to the contingency reserve, the EESC supports
the Commission's proposal, provided that the regulation
offers explicit scope for the involvement of economic and
social partners. The EESC reiterates its view that responding
to the economic and social implications of major changes
such as enlargement, globalisation, and the introduction of
new technologies should be a priority of the Structural
Funds.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

(9) OJ C 10, 14/01/2004, p. 88, point 3.8.