Communication from the Commission - Third progress report on cohesion: Towards a new partnership for growth, jobs and cohesion {SEC(2005)632}
Date: 2005-05-17
Institutions: European Commission
Subjects: EU regional policy, economic and social cohesion, economic growth, enlargement of the Union, labour market, report

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 17.5.2005 
COM(2005) 192 final 

COMMUNICATION FROM THE COMMISSION 

Third progress report on cohesion: Towards a new partnership for growth, jobs and 
cohesion 

{SEC(2005)632} 

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TABLE OF CONTENTS 

Introduction ................................................................................................................................ 3 

1. 

ECONOMIC AND SOCIAL DISPARITIES IN THE ENLARGED EU ................... 3 

1.1. 

Disparity levels ............................................................................................................ 3 

1.1.1.  GDP: the gaps widen with enlargement....................................................................... 3 

1.1.2.  GDP in the regions ....................................................................................................... 4 

1.1.3.  Employment rates: much more progress required ....................................................... 4 

1.1.4.  Productivity: recent improvements .............................................................................. 4 

1.2. 

Trends in disparities ..................................................................................................... 5 

2. 

2.1. 

2.2. 

2.3. 

2.4. 

3. 

3.1. 

3.2. 

3.3. 

3.4. 

EU Cohesion policy and the Lisbon Strategy in the 2000-2006 Period ...................... 7 

Structural Funds and the Lisbon strategy: overlapping objectives .............................. 7 

The mid-term review: an opportunity to make adjustments ........................................ 7 

Cohesion policy in the new Member States: off to a good start .................................. 8 

Additionality ................................................................................................................ 9 

The future of Cohesion policy and the Growth and Jobs Agenda ............................... 9 

Opinions of other EU institutions and bodies ............................................................ 10 

Events on cohesion policy: a major mobilisation of the key actors........................... 10 

Spring European Council: the regions at the heart of the Lisbon process ................. 10 

Community Strategic Guidelines 2007-2013............................................................. 11 

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COMMUNICATION FROM THE COMMISSION 

Third progress report on cohesion: Towards a new partnership for growth, jobs and 
cohesion  

INTRODUCTION 

This  third  progress  report  presents  an  update  of  the  situation  and  trends  emerging  in  the 
regions since the publication of the Third Cohesion Report in February 2004. The report also 
addresses a number of important themes in the field of European regional and cohesion policy 
arising from the mid-term review of the Structural Funds. 

The Third Cohesion Report was important in that it set out the main principles for the reform 
of  the  Union’s  regional  and  cohesion  policies  for  the  period  2007-2013,  which  was  then 
followed by the presentation in July 2004 of the legislative proposals now under discussion in 
the Council and in the European Parliament.  

The period since the adoption of the Third Report  has been  marked by two other important 
events  for  cohesion  policy.  First,  the  historic  enlargement  that  took  place  in  May  2004 
expanding  the  Union  from  15  to  25  Member  States  has  highlighted  the  key  role  cohesion 
policy plays in the process of European integration by helping to promote the creation of new 
opportunities  throughout  the  territory  of  the  Union.  Second,  in  March  2005,  based  on  a 
proposal  of  the  Commission,  the  European  Council  launched  a  growth  and  jobs  strategy 
aimed at revitalizing the Lisbon agenda following the mixed results of the mid-term review. 
As discussed in this report, the themes of integration, growth and jobs which are emphasised 
by  this  strategy,  are  highly  relevant  to  the  proposed  reform  of  cohesion  policy,  as  the  final 
stages of the negotiations are entered.  

1. 

ECONOMIC AND SOCIAL DISPARITIES IN THE ENLARGED EU 

In  accordance  with  Article  158  of  the  Treaty,  the  prime  objective  of  cohesion  policy  is  to 
reduce disparities in the level of development between the regions. The recent enlargement to 
25  Member  States,  with  Bulgaria  and  Romania  also  set  to  join  the  Union  in  2007,  has 
dramatically increased disparity levels across the EU. The new Member States have markedly 
lower levels of income per head and employment rates than other EU countries. At the same 
time,  they  have  displayed  considerable  dynamism  in  recent  years,  achieving  high  rates  of 
growth  in  both  GDP  and  productivity  so  that  the  gaps  have  been  closing.  The  following 
section provides an updated analysis on levels and trends in disparities. 

1.1. 

Disparity levels 

1.1.1.  GDP: the gaps widen with enlargement  

Disparities in GDP per head between the 25 Member States are considerable. In 2003, levels 
of  GDP  per  capita  (measured  in  purchasing  power  parities)  range  from  41%  of  the  EU 
average in Latvia to 215% in Luxembourg. Ireland is the second most prosperous country in 
these terms with GDP 132% of the EU average. In all new Member States, GDP per head is 

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below  90%  of  the  EU25  average,  while  it  is  less  than  half  of  this  level  in  Poland,  Latvia, 
Lithuania and Estonia, as well as Romania and Bulgaria.  

1.1.2.  GDP in the regions  

In 2002, the most recent year for which regional data are available, levels of GDP per head 
ranged from 189% of the EU-25 average in the 10 most prosperous regions to 36% in the 10 
least prosperous ones. Over one quarter of the EU’s population in 64 regions have GDP per 
head below 75% of the average. In the new Member States this concerns 90% of their total 
population,  the  exceptions  being  the  regions  of  Prague,  Bratislava,  Budapest,  Cyprus  and 
Slovenia. In the EU15, this concerns only 13% of the population. Among the EU15, the low-
income regions are concentrated geographically in southern Greece, Portugal, southern parts 
of Spain and Italy, as well as in the new Länder in Germany.  

Average per capita GDP in the EU fell substantially with enlargement to ten relatively poorer 
new Member States. In certain regions, this has meant GDP per capita rising above 75% of 
the new EU25 average, although they remain below 75% of the average for the EU15. Around 
3½% of EU population lives in such regions. A further 4% live in regions which had GDP per 
head below 75% of the EU15 average in the 2000-2006 period but which have grown beyond 
this level even in the absence of the effect of enlargement.  

1.1.3.  Employment rates: much more progress required 

In general, employment rates in Member States remain well short of the 70% target set for the 
Lisbon Strategy by 2010 (or 67% target in 2005), averaging 62.9% for the EU25 in 2003. In 
only four Member States - Denmark, Sweden, the Netherlands and the UK – the rate reaches 
70%, while it falls as low as 51.2% in Poland. Some 22 million additional jobs are needed to 
meet the 70% target. In the new Member States, employment would have to increase by one 
quarter to reach 70%, equating to 7 million jobs.  

At  the  regional  level,  the  picture  is  again  more  diverse  than  at  the  national  level.  Only  one 
quarter of the EU25 population resides in regions where the 70% employment rate target has 
already  been  achieved  –  thus  200  of  the  254  EU  regions  are  below  the  target  rate.  Almost 
15% of the population lives in regions where the rate is below 55%. These are predominantly 
in the new Member States, and in southern parts of Spain and Italy.  

Employment  rates  remain  low  among  most  of  the  least  prosperous  regions.  Above  average 
employment rates are found in only a handful of regions with GDP per head below 75% of 
the average. Employment rates tend to be higher in more prosperous regions, although some 
very prosperous regions continue to have low employment rates (such as in the north of Italy).  

1.1.4.  Productivity: recent improvements 

Differences  in  productivity  between  Member  States  are  more  marked  than  for  employment 
rates.  International  comparisons  of  productivity  (measured  as  GDP  per  person  employed) 
usually  use  current  exchange  rates,  as  these  reflect  the  competitiveness  situation  most 
accurately. In these terms the differences between the Member States are stark - less than 30% 
of the EU25 average in Poland and the three Baltic states, but over 150% in Luxembourg and 
Ireland. The ten new members stand apart at the bottom end of the scale; productivity in all 
EU15 countries – except for Portugal – exceeds that in all new Member States. Thus, in spite 

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of  strong  productivity  growth  in  recent  years,  continued  growth  of  both  productivity  and 
employment will remain necessary for convergence to be achieved.  

Productivity  differences  in  PPS  terms  are  more  limited  (this  PPS  adjustment  is  common 
practice  for  comparing  GDP  data  in  order  to  reflect  living  standards  more  closely  in  the 
presence of differing price levels between countries).  

At  the  regional  level,  higher  regional  productivity  levels  are  associated  with  higher  GDP 
levels,  highlighting  the  key  role  this  variable  has  for  economic  performance  (these  data 
exclude regions in the Netherlands and Portugal). For employment rates, this association with 
GDP  is  less  strong,  although  a  positive  relationship  remains  clear.  Variation  in  productivity 
levels  around  the  EU  average  is  much  wider  than  for  employment  rates  –  productivity  was 
below 25% of the EU average in 15 regions, and even below 20% in two regions. At the other 
end of the scale, productivity exceeds the EU average in the vast majority of regions where 
this is also the case for GDP per head.  

1.2. 

Trends in disparities 

Since  the  mid-1990s,  growth  in  the  EU  has  been  disappointing,  averaging  just  over  2%  per 
year, although in Ireland, Luxembourg, Greece, Finland and Spain this rate was comfortably 
exceeded. The average rate of growth was affected by relatively poor performances in major 
economies  such  as  those  of  Italy  and  Germany.  The  economies  of  the  new  Member  States, 
however, grew at a much faster rate, reaching around 6% per annum in the Baltic States. 

The  high  growth  in  the  new  Member  States  has  been  associated  with  high  productivity 
growth,  which  has  generally  been  accompanied  by  employment  loss  at  worst  or  only  very 
limited  employment  growth  at  best.  This  is  a  reflection  of  a  process  of  restructuring, 
increasing  overall  productivity,  without  employment  growth  in  the  short-run.  Hence, 
relatively  high  rates  of  unemployment  are  often  combined  with  a  fall  in  employment  rates 
(most notably in Poland, the Czech Republic and Slovakia).  

On the other hand, relatively large employment increases have been achieved in Ireland and 
Luxembourg,  and  to  a  lesser  extent  in  Spain,  the  Netherlands  and  Finland  where  both 
employment and productivity increased. 

The regions with the highest GDP growth (over the period 1995-2002) are concentrated in the 
high  growth  countries,  such  as  Ireland,  the  Baltic  States,  Slovakia  and  Poland.  Low  growth 
regions  are  concentrated  in  Germany  and  Italy.  But  within  most  countries,  regional  growth 
rates  vary  markedly;  this  emerges  very  clearly  for  the  new  Member  States,  as  well  as  for 
countries such as the UK and Finland. In Germany, low growth at national level has also been 
associated with marked regional differences. In Italy, growth has been almost uniformly low 
across all of the regions.  

Overall, disparities have been falling across the EU since 1995. This fall has been more rapid 
between countries than between regions with internal regional disparities in several Member 
States increasing.  

Disparities  in  GDP  per  head  between  Member  States  remain  marked,  and  continued  high 
growth will be needed for more than a generation in many new Member States if this gap is to 
be  substantially  reduced.  This  process  has  started  as  high  growth  rates  have  improved  the 

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relative position of the least prosperous since 1995. As a consequence, summary measures of 
disparities in GDP per head have fallen1.  

Regional disparity levels are higher than national disparities, but they are also falling2. While 
growth  has  been  generally  higher  in  many  of  the  least  prosperous  regions,  it  is  noteworthy 
that the most prosperous regions have also performed well over this period. Thus the shares in 
total GDP accounted for by the least and the most prosperous regions both increased over this 
period.  

The 10% of EU25 population living in the least wealthy regions accounted for only 2.2% of 
total GDP in 2002, which compares to 1.5% in 1995. The most prosperous 10% of regional 
population, in contrast, accounted for 18.3% of GDP in 2002, which has increased from 18% 
since  1995.  Thus  the  ratio  between  the  GDP  shares  of,  respectively,  the  most  and  least 
prosperous regions has fallen from 12 to 8½ over this period.  

Decomposing  growth  between  1995  and  2001  into  its  productivity  and  employment 
components  suggests  that  productivity  has  been  the  principal  vehicle  for  a  good  economic 
performance.  Employment  growth  is  also  clearly  positively  related  to  GDP  growth,  but  this 
relationship  is  less  systematic  than  might  be  expected.  In  part  this  reflects  the  low 
employment  growth  achieved  by  high  growth  regions,  notably  in  the  new  Member  States, 
especially the three Baltic countries and Slovakia, but also in certain Greek regions. This may 
be an indication of a particular stage in the development and restructuring process. 

A  reasonably  comparable  picture  of  internal  disparities  within  Member  States  can  be 
established  using  the  same  calculation  approach.  Comparing  shares  in  national  GDP  of 
regions  accounting  for  20%  of  population  substantially  reduces  the  comparability  problems 
resulting from differing number and sizes of regions in the Member States. Four new Member 
States are included in this analysis.  

Viewed  in  this  way,  disparities  are  highest  in  Hungary,  where  the  most  prosperous  20%  of 
regional population accounted for 2.6 times the GDP share of the least wealthy. This figure 
has also increased most markedly in Hungary since 1995. The Czech Republic, Slovakia, the 
UK and Belgium also have high levels of internal disparities, while they are lowest in Greece, 
Germany, the Netherlands, Finland and Sweden.  

Italy is the only country where this measure has visibly declined over time, although in Spain 
and  Austria  it  also  fell  marginally.  Apart  from  Hungary,  internal  disparities  increased 
substantially in two of three remaining new Member States, excluding only Slovakia, as well 
as in the UK and Sweden (although to a relatively low level in the latter). In general, it is not 
unusual  for  economies  that  are  in  a  catching  up  process  to  experience  increases  in  internal 
disparities, reflecting an initial geographical concentration of growth, to be followed at a later 
stage by a more even pattern of development.  

It  is  also  to  be  noted  that  disparities  in  the  EU  between  urban  and  rural  areas  generally 
increased as a result of enlargement. 

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The standard error across the EU25 Member States, for example, has fallen from 22.8 in 1995 to 18.1 in 
2003. 
The standard error was 27.3 in 2002; but this is lower than the figure of 29.3 for the year 1995. 

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The prevailing disparity levels across the EU provide ample evidence of the need for an active 
cohesion  policy.  At  the  same  time,  the  focus  of  the  proposed  reform  of  cohesion  policy  as 
well  as  that  for  rural  development  policy  on  jobs  and  growth  is  acutely  relevant  to  the 
prevailing  policy  context.  It  should  help  to  remedy  the  inadequate  implementation  of  the 
Lisbon  Strategy,  which  has  weakened  the  Union’s  response  to  growth  of  GDP  and 
employment. Under the proposed reform an active cohesion policy is maintained outside the 
least prosperous regions, in order to provide a stimulus to the Lisbon strategy for growth and 
employment. This will not only  provide  a financial incentive for these policy measures, but 
also raise policy impetus at the local level. 

2. 

EU COHESION POLICY AND THE LISBON STRATEGY IN THE 2000-2006 PERIOD  

2.1. 

Structural Funds and the Lisbon strategy3: overlapping objectives 

A recent evaluation4 has stressed the similarities between the Lisbon strategy decided in the 
year  2000  and  cohesion  policy  expenditure  priorities.  The  analysis  shows  that  the  share  of 
Structural  Fund  support  for  Lisbon-type  investments  is  frequently  above  50%  in  the 
programmes  evaluated.  The  degree  of  congruity  appears  to  be  significantly  higher  in 
relatively more prosperous regions while it is lower in the less developed regions. The picture 
changes when investments in transport and energy are taken into account, which are part of 
the renewed Lisbon Strategy decided in March 2005 by the Member States on the basis of the 
Commission’s proposed growth and jobs agenda (see Section 3.3).  

With regard to governance, the decentralised delivery system of the Structural Funds was seen 
as allowing for greater synergies between global policy objectives set at EU level such as the 
Lisbon  strategy  with  the  specific  needs  and  conditions  on  the  ground  in  the  regions.  In 
addition, cohesion policy with its comprehensive variety of actors is capable of enhancing the 
ownership of the Lisbon strategy by the regions and of managing complex development tasks 
under different conditions on the ground.  

The main recommendations included in the evaluation were the following: 

•  A thematic concentration on specific priorities in order to have a direct positive influence 

on regional competitiveness.  

•  Exchanges  of  experience  in  order  to  promote  policy  learning  between  regions  as  an 
efficient  way  of  fostering  the  establishment  of  regional  innovation  systems.  The  study 
insists here that such policy learning does not take place automatically, it must be actively 
organised. 

2.2. 

The mid-term review: an opportunity to make adjustments 

The  year  2004  saw  the  end  of  the  mid-term  review  process  of  the  Structural  Funds  in  the 
current  programming  period  for  EU-15  which  included  the  allocation  of  the  performance 
reserve  following  the  mid-term  evaluations  carried  out  in  2003.  The  mid-term  evaluations 

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The  2001  European  Council  in  Gothenburg  incorporated  an  environmental  dimension  to  these 
objectives. 
“Thematic  Evaluation  of  the  Structural  Funds’  Contributions  to  the  Lisbon  Strategy”  published  by 
Danish Technological Institute, February 2005. 

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were carried out under the responsibility of the managing authorities but in partnership with 
the national authorities and the Commission. This process was in two stages: 

(1)  Mid-term  evaluations.  The  evaluation  of  the  contribution  of  the  Structural  Funds 
towards meeting the Lisbon objectives suggested that investment is generally targeted 
at sectors which are important for the achievement of the Lisbon objectives. 

(2) 

Allocation  of  the  performance  reserve.  The  performance  reserve  is  an  innovation  in 
the  2000-2006  programming  period.  Over  €8  billion  across  all  Objectives  were 
allocated  to  successful  programmes  or  priorities  by  the  Commission  in  close 
consultation with the Member State.  

The mid-term review provided an opportunity to adapt the different programmes while taking 
account of changes in the socio-economic situation or labour market. This led to qualitative 
shifts  in  a  number  of  priority  fields  and  provided  an  opportunity  to  better  contribute  to  the 
priorities of the revised European Employment Strategy (EES) and to the achievement of the 
Lisbon  targets  while  taking  into  account  the  experience  of  the  current  programming  period 
and the specificities of each Member State. 

Many  Member  States  used  the  performance  reserve  to  strengthen  their  support  of  the 
knowledge-based economy through co-operation between research institutes and businesses, 
the development of business clusters and research centres, investment in broad-band access, 
the development of regional innovation strategies and the training of researchers, as well as 
applied  research  projects.  The  performance  reserve  was  used  to  support  entrepreneurship 
through  grant  aid  to  start-up,  small  and  innovative  enterprises,  the  development  of  business 
parks,  consultancy  support  and  the  introduction  in  some  Member  States  of  risk  capital 
financing measures.  

Measures  promoting  economic  growth  and  competitiveness  seem  to  have  been  reinforced 
particularly  in  Objective  2  while  education  and  vocational  training  continues  to  be  an 
important  dimension  in  the  majority  of  Objective  1  and  2  programmes.  Objective  1 
programmes remain oriented towards traditional projects such as those in transport and other 
infrastructure although in some Member States with large Objective 1 areas, more emphasis 
seems to have been placed on research and innovation.  

Under  Objective  3,  the  initial  strategies  were  considered  to  be  still  valid  while  taking  into 
account 
and  Employment 
recommendations.  The  majority  of  the  changes  aimed  at  simplifying  the  programmes, 
increasing flexibility to respond to socio-economic challenges and taking account of needs. 

revised  European  Employment  Strategy 

(EES) 

the 

2.3. 

Cohesion policy in the new Member States: off to a good start 

In  June  2004,  the  European  Commission  formally  adopted  the  programmes  setting  out  the 
strategies to be supported by the Structural Funds for the ten new Member States. Together 
with Cohesion Fund allocations, the Structural Funds are making more than EUR 24 billion 
available from the European budget to the 10 new Member States between 2004 and 2006, of 
which  over  one  third  (EUR  8.5  billion)  has  been  allocated  to  the  Cohesion  Fund.  Thus,  the 
Cohesion Fund has taken on greater significance (from nearly one-tenth of overall structural 
assistance  to  one  third).  For  individual  Member  States  like  Cyprus,  Estonia,  Latvia  or 
Slovenia, Cohesion Fund assistance represents nearly half of overall structural assistance. 

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The  Funds  will  support  not  only  investment  in  economic  and  social  development,  but  also 
technical  assistance  measures  to  strengthen  administrative  capacity.  The  programmes  in  the 
new Member States have a range of priorities to reflect circumstances, including measures to 
improve  business  competitiveness  and  human  resource  development,  basic  infrastructure, 
environmental  conditions  and  rural  and/or  fisheries  development.  Rural  policies  pursue 
territorial cohesion objectives and the Lisbon goals. 

The  European  Social  Fund  is  providing  support  to  all  new  Member  States,  to  tackle  labour 
market and employment challenges in accordance with the European Employment Strategy. 
The labour market problems which should be addressed by each of the new Member States in 
order to make progress towards the EU employment objectives were identified in advance in 
the Joint Assessment Papers on employment policies (JAPs). The ESF translates the priorities 
identified in the framework of the European Employment Strategy into concrete priorities and 
measures for funding, including measures for social inclusion. These priorities are principally 
increasing employment and labour supply, adapting labour force skills to the changing labour 
markets  and  ensuring  that  the  functioning  of  the  labour  market  supports  the  on-going 
restructuring of the economy.  

2.4. 

Additionality 

The objective of the additionality principle is to ensure that the Structural Funds add to, rather 
than  substitute  for,  national  efforts  to  promote  economic  and  social  cohesion.  The  average 
annual  level  for  public  structural  expenditure  in  real  terms  had  to  be  at  least  equal  to  the 
established baseline.  

The mid-term verification of additionality for the 2000-2002 period was completed at the end 
of 2004 for the EU-15. Out of thirteen Member States covered at least in part by Objective 1, 
nine complied with the principle, while four did not (Germany, France, Ireland and Italy). In 
particular, countries such as the UK or Greece even exceeded their spending targets. Germany 
and  Italy,  with  the  highest  amounts  of  public  expenditure,  failed  to  meet  their  objectives  in 
this  respect,  due  to  deteriorating  macro-economic  conditions,  which  led  to  a  lower-than-
expected amount of public investment. However, in order to respect the additionality criteria, 
these two countries, as well as France and Ireland, will have to bring their public structural 
expenditure in the remaining years of the programming period back into line with the levels 
required by the Article 11 of the general Structural Funds regulation. In general, the Structural 
Funds are having a significant leverage effect in maintaining high levels of public investment 
compatible with their efforts to ensure sound public finances. 

The  9  new  Member  States  eligible  for  Objective  1  (Cyprus  being  classified  Objective  2) 
completed  the  ex-ante  exercise  by  late  2003.  The  results  showed  that  domestic  structural 
expenditure  will  be  maintained  or  even  increased  over  the  coming  period.  As  there  was  no 
reference data from the previous period to use as a baseline for public structural spending, the 
data  from  the  most  recent  years  for  which  there  was  an  out-turn  were  used.  This  served  to 
reproduce a target baseline figure for public structural spending in 2004/2006. The challenge 
in  the  coming  period  will  be  to  ensure  that  this  expenditure  schedule  is  is  maintained  in 
practice.  

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3. 

THE FUTURE OF COHESION POLICY AND THE GROWTH AND JOBS AGENDA 

Following the publication of the Third Cohesion Report in February 2004, and the proposed 
regulations  for  the  Structural  Funds  and  instruments  in  July,  the  debate  on  the  reform  of 
cohesion  policy  post-2006  became  more  focused  and  intensive  during  the  last  year.  The 
debate has also been given additional impetus with the approval by the European Council in 
March 2005 of the Commission’s proposals on the re-launch of the Lisbon strategy.  

3.1. 

Opinions of other EU institutions and bodies 

The discussion on the main elements of the Commission's legislative proposals on the reform 
of cohesion policy continued during 2005 in the European Parliament, the Committee of the 
Regions  and  the  European  Social  and  Economic  Committee.  Discussions  in  the  European 
Parliament  reflected  extensive  support  for  the  Commission's  proposals.  The  European 
Parliament  also  carried  out  a  thorough  analysis  on  the  financial  perspectives  for  the  2007-
2013  period,  particularly  through  the  report  of  the  Temporary  Committee  on  Policy 
Challenges  and  Budgetary  Means  of  the  Enlarged  Union  2007-2013  set  up  with  the  main 
objective  of  defining  the  EP’s  political  priorities  for  the  future  financial  perspectives.  This 
committee underlined the need for equipping an enlarged European Union with the means of 
ensuring social and territorial cohesion as well as economic growth and employment creation. 
The  Commission  on  Regional  Development  of  the  European  Parliament  (REGI)  was  also 
active  in  producing  several  reports  on  the  Commission’s  proposals  for  the  General,  ERDF, 
ESF, and Cohesion Fund Regulations.  

The  opinions  of  the  Committee  of  the  Regions  and  the  European  Social  and  Economic 
Committee have also been very positive in particular to the need to keep an adequate financial 
package for structural funds and to keep the structural policy at the European level, strongly 
resisting demands for its re-nationalisation. The perceived reinforcement in the Commission's 
proposals  of  the  coherence  between  cohesion  policy  and  the  Lisbon  strategy  was  also 
welcomed. 

3.2. 

Events on cohesion policy: a major mobilisation of the key actors  

The  Commission’s  proposals  were  discussed  and  largely  supported  in  a  series  of  debates 
organised  at  European,  national  and  regional  level.  All  players  continued  to  contribute  to  a 
high-quality  debate,  which  became  more  intensive  at  the  level  of  the  EU  institutions  in 
autumn 2004. The European Commission facilitated the ongoing debate through a number of 
activities  and  events,  of  which  some  are  highlighted  below.  This  approach  safeguarded  a 
transparent  and  lively  debate,  a  fact  widely  appreciated  by  all  parties  concerned  throughout 
the process. 

Details of the main events are given in the Annex (Table 8). 

3.3. 

Spring European Council: the regions at the heart of the Lisbon process 

As  indicated  above,  the  Spring  European  Council  of  22-23  March  2005  issued  several  key 
recommendations on re-launching the Lisbon strategy in its growth and jobs agenda. It was 
also a ground-breaking occasion for EU cohesion policy, with an explicit endorsement at the 
highest political level of its importance as an instrument for achieving the Lisbon strategy. 

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A  number  of  key  points  emerge  from  the  conclusions  of  the  Spring  Council.  First,  it 
recommended  that  the  EU  mobilise  the  appropriate  national  and  Community  resources, 
including cohesion policy, within the three dimensions of the strategy – economic, social and 
environmental.  Second,  it  urged  regional  and  local  actors,  among  others,  to  take  greater 
ownership of the strategy and actively participate in the achievement of the Lisbon objectives. 
In  areas  such  as  innovation,  support  for  SMEs  or  access  to  risk  capital  financing,  high-
technology  start-ups,  the  Spring  European  Council  concluded  that  innovation  poles  and 
partnerships at regional and local levels were needed. Similarly, the Spring European Council 
called for greater synergies between Community funds and the EIB in R&D projects.  

A  fourth  recommendation  was  that  a  reduction  in  the  general  level  of  state  aid  should  be 
accompanied by its redeployment in favour of certain horizontal objectives such as research, 
innovation, an inclusive information society and human capital allowing for a higher level of 
investment  and  a  reduction  of  disparities  in  line  with  the  Lisbon  objectives.  The  fifth 
recommendation  was  the  need  to  invest  in  infrastructure  to  foster  growth  and  convergence 
along economic, social and environmental lines. The importance of finalising the 30 priority 
projects of the Trans-European Transport network was also emphasised, as were measures to 
improve  energy  efficiency.  A  sixth  recommendation  was  the  need  to  create  more  jobs  with 
more active employment policies. Finally, the European Council concluded that on the basis 
of integrated guidelines issued at Community-level, Member States should establish national 
reform programmes on growth and jobs, in consultation with regional and national partners. 

3.4. 

Community Strategic Guidelines 2007-2013 

In addressing the Lisbon strategy under the next generation of cohesion policy programmes, 
the  Commission  has  proposed  a  more  strategic  approach  in  an  effort  to  ensure  that  their 
content  is  firmly  targeted  on  growth  and  jobs.  Strategic  Guidelines  would  be  established  at 
Community  level  by  decision  of  the  Council,  with  an  opinion  of  the  European  Parliament, 
setting  the  context  for  frameworks  at  the  level  of  each  Member  State  to  be  negotiated  in 
partnership  and  taking  account  of  differing  national  and  regional  needs  and  circumstances. 
The National Strategic Reference Framework is intended to define clear priorities for Member 
States  and  regions,  underpinning  the  synergies  between  cohesion  policy  and  the  Lisbon 
strategy and increasing the consistency with the Broad Economic Policy Guidelines and the 
European  Employment  Strategy.  Consistency  with  other  Community  policies  and  priorities 
would be enhanced in areas, inter alia, such as competition, research5, environment, transport 
and  energy  policy,  including  addressing  problems  of  restructuring  linked,  for  example,  to 
trade openness. 

A  similar  approach  to  strategic  planning  is  proposed  for  future  rural  development  policy. 
Rural  development  actions  will  seek  to  contribute  to  the  growth  and  jobs  agenda  of  the 
renewed  Lisbon  strategy,  to  sustainable  land  management  and  to  the  quality  of  life  in  rural 
areas. 

5 

Communication from the Commission "Building the ERA of Knowledge for Growth", COM(2005)118. 

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