Communication from the Commission - Cohesion Policy in Support of Growth and Jobs - Community Strategic Guidelines, 2007-2013 {SEC(2005) 904}
Date: 2005-07-05
Institutions: European Commission
Subjects: European Union, economic and social cohesion, economic growth, economic situation, employment policy

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 5.7.2005 
COM(2005) 299 final 

COMMUNICATION FROM THE COMMISSION 

Cohesion Policy in Support of Growth and Jobs: 
Community Strategic Guidelines, 2007-2013 

{SEC(2005) 904} 

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TABLE OF CONTENTS 

1. 

2. 

2.1. 

2.2. 

3. 

3.1. 

3.2. 

3.3. 

3.4. 

3.5. 

4. 

4.1. 

INTRODUCTION........................................................................................................ 4 

COHESION, GROWTH, JOBS................................................................................... 5 

The renewed Lisbon agenda......................................................................................... 5 

The contribution of cohesion policy to growth and jobs.............................................. 6 

THE FRAMEWORK FOR COHESION POLICY 2007-2013 ................................... 8 

Concentration ............................................................................................................... 8 

Convergence................................................................................................................. 8 

Regional competitiveness and employment................................................................. 9 

European territorial cooperation ................................................................................ 10 

Governance ................................................................................................................ 10 

GUIDELINES FOR COHESION POLICY, 2007-2013 ........................................... 12 

Guideline: Making Europe and its regions more attractive places to invest and work
.................................................................................................................................... 13 

4.1.1.  Expand and improve transport infrastructures ........................................................... 13 

4.1.2.  To strengthen the synergies between environmental protection and growth............. 15 

4.1.3.  Address Europe’s intensive use of traditional energy sources................................... 16 

4.2. 

GUIDELINE: Improving knowledge and innovation for growth.............................. 17 

4.2.1. 

Increase and improve investment in RTD.................................................................. 18 

4.2.2.  Facilitate innovation and promote entrepreneurship.................................................. 19 

4.2.3.  Promote the information society for all ..................................................................... 21 

4.2.4. 

Improve access to finance .......................................................................................... 22 

4.3. 

GUIDELINE : More and better jobs.......................................................................... 23 

4.3.1.  Attract and retain more people in employment and modernise social protection 

systems ....................................................................................................................... 23 

4.3.2. 

Improve adaptability of workers and enterprises and the flexibility of the labour 
market......................................................................................................................... 25 

4.3.3. 

Increase investment in human capital through better education and skills................ 26 

4.3.4.  Administrative Capacity............................................................................................. 27 

4.3.5.  Help maintain a healthy labour force ......................................................................... 28 

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5. 

5.1. 

5.2. 

5.3. 

5.4. 

5.5. 

5.6. 

6. 

TAKING ACCOUNT OF THE TERRITORIAL DIMENSION OF COHESION 
POLICY ..................................................................................................................... 29 

The contribution of cities to growth and jobs ............................................................ 29 

Supporting the economic diversification of rural areas ............................................. 30 

Cooperation ................................................................................................................ 31 

Cross-border cooperation ........................................................................................... 31 

Transnational cooperation.......................................................................................... 31 

Interregional cooperation ........................................................................................... 32 

NEXT STEPS............................................................................................................. 32 

ANNEX.................................................................................................................................... 34 

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COMMUNICATION FROM THE COMMISSION 

Cohesion Policy in Support of Growth and Jobs: 
Community Strategic Guidelines, 2007-2013 

“Europe must renew the basis of its competitiveness, increase its growth potential and its 
productivity  and  strengthen  social  cohesion,  placing  the  main  emphasis  on  knowledge, 
innovation and the optimisation of human capital. 

To  achieve  these  objectives,  the  Union  must  mobilise  all  appropriate  national  and 
Community resources – including the cohesion policy – in the Strategy’s three dimensions 
(economic,  social  and  environmental)  so  as  better  to  tap  into  their  synergies  in  a  general 
context of sustainable development”1. 

1. 

INTRODUCTION 

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 recently published Third Interim Report on Cohesion confirmed that the enlargement of 
the Union to 25 Member States, later to 27 or more, presents an unprecedented challenge for 
the  competitiveness  and  internal  cohesion  of  the  Union.  At  the  same  time,  the  report  noted 
that  some  of  the  poorest  parts  of  the  new  Member  States  have  some  of  the  highest  growth 
rates in the Union (see map in annex).  

In  meeting  the  objectives  set  out  in  the  Treaty2,  and  in  particular  that  of  fostering  real 
convergence,  the  actions  supported  with  the  limited  resources  available  to  cohesion  policy 
should  be  concentrated  on  promoting  sustainable  growth3,  competitiveness  and  employment 
as  set  out  in  the  renewed  Lisbon  strategy.  Clearly,  macroeconomic  stability  and  structural 
reforms  are  a  precondition  for  the  success  of  cohesion  policy  along  with  a  range  of  other 
conditions which favour investment (including effective implementation of the Single Market, 
administrative reforms, good governance, a business-friendly climate, and the availability of a 
highly skilled workforce)4. 

These  are  the  principles  governing  the  proposals  for  the  reform  of  cohesion  policy  for  the 
period  2007-2013  presented  by  the  Commission  in  the  Third  Cohesion  Report  of  February 
2004 and in budgetary and legislative form in July 2004. 

The  Commission’s  proposals  seek  improvements  in  two  main  areas.  First,  the  strategic 
dimension of cohesion policy is strengthened to ensure that Community priorities are better 
integrated  into  national  and  regional  development  programmes.  Second,  efforts  are  made  to 
ensure greater ownership of cohesion policy on the ground. This is reflected in a reinforced 
dialogue in the partnerships between the Commission, the Member States and the regions and 

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Presidency conclusions, European Council, March 2005. 
Article  158  of  the  Treaty  states  that,  in  order  to  strengthen  its  economic  and  social  cohesion,  the 
Community shall aim at reducing disparities between the levels of development of the various regions 
and the backwardness of the least favoured regions or islands, including rural areas. 
In line with the Göteborg Strategy adopted by the European Council in 2001. 
“The EU Economy: 2004 Review” - COM(2004) 723, 26.10.2004. 

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in  a  clearer  and  more  decentralised  sharing  of  responsibilities  in  areas  such  as  financial 
management  and  control.  The  proposals  also  create  a  clearer  division  of  responsibilities 
between the Commission, Member States and the Parliament.  

In  accordance  with  Article  23  of  the  draft  Council  Regulation  (EC)  laying  down  general 
provisions for the European Regional Development Funds (ERDF), the European Social Fund 
(ESF)  and  the  Cohesion  Fund5,  it  is  for  the  Council  to  establish,  after  the  adoption  of  the 
regulations and on the basis of a Commission  proposal, Community strategic guidelines for 
cohesion  policy  to  “give  effect  to  the  priorities  of  the  Community  with  a  view  to  promote 
balanced, harmonious and sustainable development”6. 

The Community Strategic Guidelines sketched out in this Communication have the following 
main characteristics: 

–  the financial instruments at the  disposal  of  Cohesion  policy are the Structural  Funds (the 
ERDF  and  the  ESF)  and  the  Cohesion  Fund.  In  the  guidelines  that  follow,  there  is 
deliberately  no  analysis  by  Fund.  The  question  of  the  appropriate  instrument  under  each 
heading is a matter for the programming phase and depends on the nature of the planned 
expenditures (infrastructure, productive investment, human resource development, etc); 

–  the  key  objective  is  to  identify  Community  priorities  for  support  under  cohesion  policy 
with a view to strengthening synergies with, and helping to deliver, the Lisbon strategy as 
defined by the integrated guidelines for growth and jobs; 

–  they  concern  only  the  part  of  national  and  regional  investments  co-financed  by  the 

Structural Funds and the Cohesion fund;  

–  they need to be read alongside the legislative proposals. The latter define the purpose and 
the  scope  of  assistance  of  each  Fund,  while  the  Community  Strategic  Guidelines  seek  to 
identify  within  that  scope  those  areas  where  the  cohesion  policy  can  most  effectively 
contribute  to  the  realisation  of  Community  priorities,  particularly  those  of  the  renewed 
Lisbon strategy; 

–  they  reflect  discussion  with  the  Member  States  and  within  the  different  Commission 

services.  

Once  adopted  by  the  Council,  the  Guidelines  will  form  the  basis  for  preparing  national 
strategic reference frameworks and the resulting operational programmes. 

2. 

COHESION, GROWTH, JOBS 

2.1. 

The renewed Lisbon agenda 

The conclusions of the March 2000 European Council in Lisbon7 – the basic text defining the 
Lisbon strategy – set out a strategy and a broad range of objectives and policy tools with the 

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COM(2004) 492, 14.7.2004. In the rest of the paper, “Funds” is used in relation to the three Funds and 
“Structural Funds” when reference is made to the ERDF and ESF only. 
COM(2004) 492, Article 23. 
Presidency Conclusions, Lisbon European Council, 23 and 24 March 2000. 

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aim  of  making  the  European  Union  more  dynamic  and  competitive.  The  2001  European 
Council in Göteborg incorporated an environmental dimension to these objectives. 

The  mid-term  review  of  the  process  concluded  that  results  so  far  were  mixed.  After  a 
promising start  in 2000, employment growth  slowed sharply,  while productivity growth  has 
been  disappointing  throughout,  owing  partly  to  the  failure  to  take  full  advantage  of  the 
knowledge economy and information and communication technologies (ICTs). Although the 
poor economic performance is partly due to the slowdown in the world economy, more needs 
to be done to raise growth potential and employment in Europe.  

In February 2005, the Commission proposed a new Partnership for Growth and Jobs8 to the 
European  Council  of  March  2005.  The  Council  confirmed  its  objectives  and  underlined  the 
need to re-launch the Lisbon Strategy.  

This  renewed  effort  requires  that  “the  Union  must  mobilise  all  appropriate  national  and 
Community  resources  –  including  cohesion  policy”9.  In  addition,  it  concluded  that  greater 
ownership of the Lisbon objectives on the ground was necessary, involving regional and local 
actors and social partners. This is of particular importance in areas where proximity matters, 
such  as 
the  knowledge  economy,  employment,  human  capital, 
entrepreneurship,  support  for  small  and  medium-sized  enterprises  (SMEs)  or  access  to  risk 
capital  financing.  Moreover,  national  policies  should  also  consistently  address  the  same 
strategic objectives in order to mobilise the largest amount of resources and avoid conflicting 
actions on the ground. 

innovation  and 

in 

In the period since the March 2005 European Council, the Commission has adopted integrated 
guidelines  for  the  growth  and  jobs10  agenda  in  order  to  assist  Member  States  in  developing 
national reform programmes. In parallel, the Commission will prepare a Lisbon Community 
Programme. 

2.2. 

The contribution of cohesion policy to growth and jobs 

Cohesion policy already contributes to the Lisbon strategy. Independent evaluations show that 
the  policy  has  had  a  substantial  macro-economic  impact,  especially  in  the  less-developed 
regions, with multiplier effects on the EU as a whole11. By mobilising the potential for growth 
that  exists  in  all  regions,  cohesion  policy  improves  the  geographical  balance  of  economic 
development and raises the potential rate of growth in the Union as a whole. If the EU is to 
achieve  its  Lisbon  targets,  all  regions  –  especially  those  where  the  potential  for  higher 
productivity and employment is greatest – have their part to play.  

Moreover,  cohesion  policy  contributes  to  strengthening  economic  and  political  integration 
through,  for  example,  developing  infrastructure  networks  and  access  to  services  of  general 
interest, raising the skills of the Community’s citizens, enhancing the accessibility of remote 
regions and promoting cooperation.  

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Communication to the Spring European Council “Working Together for growth and jobs – a new start 
for the Lisbon Strategy” - COM(2005) 24, 2.2.2005. 
Presidency conclusions, European Council, March 2005. 
COM(2005) 141. 
See Third Cohesion Report, p. 149. 

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There  are  several  ways  in  which  cohesion  policy  can  continue  to  make  a  significant 
contribution to the Lisbon priorities by: 

•  Investing in areas of high growth potential. High returns are available on investments in 
regions with the potential to catch up rapidly with the rest of the EU, but where domestic 
funds may be insufficient to pursue all available opportunities. 

•  Investing  in  the  drivers  of  growth  and  employment.  Cohesion  policy  is  focused  on 
investments  in  human  and  physical  capital  that  are  critical  to  growth  and  employment 
potential,  including  physical  and  ICT  infrastructure,  research  capacity  and  innovation, 
education and training and adaptability of workers. 

•  Supporting  the  implementation  of  coherent  strategies  over  the  medium  to  longer 
term.  Cohesion  policy  is  the  only  policy  to  provide  a  stable  seven-year  framework  of 
investment.  

•  Developing  synergies  and  complementarities  with  other  Community  policies. 
Cohesion  policy  acts  as  a  powerful  lever  for  the  implementation  of  other  Community 
policies.  For  example,  Trans  European  Network  projects  are  financed  directly  by  the 
Cohesion Fund in the cohesion countries, leading to substantial gains in accessibility to the 
rest  of  Europe;  compliance  with  the  environmental  acquis  and  with  the  broader  aims  of 
sustainable  development  is  strongly  supported  by  cohesion  policy;  RTD  policy  and  its 
concerns  with,  in  particular,  research  infrastructures  and  the  development  of  human 
resources in research is also supported by cohesion policy, as are Community innovation 
and SME policies. 

•  Mobilising additional resources. Activities co-financed by cohesion policy secure a high 
degree of additionality for EU funds, in particular by shifting resources for investment to 
areas  where  expenditure  can  have  the  greatest  impact  and  added  value.  They  leverage 
additional  national  resources,  both  public  and  private,  for  use  in  coherent  national  and 
regional development strategies. Each euro spent at the EU level by cohesion policy leads 
to further expenditure, averaging 0.9 euros, in less developed regions (current Objective 1) 
and 3 euros in regions undergoing restructuring (current Objective 2).  

•  Improving  governance.  The  unique  delivery  system  for  cohesion  programmes  favours 
improvements  in  institutional  capabilities  in  policy  design  and  implementation;  the 
dissemination  of  an  evaluation  culture;  public–private  partnership  arrangements; 
transparency; regional and cross-border cooperation; and the exchange of best practices. It 
also  contributes  to  better  governance  at  all  levels  by  improving  responsibility  and 
ownership of the Lisbon strategy at sub-national level. 

•  Promoting an integrated approach to territorial cohesion. Cohesion policy can help to 
create  sustainable  communities,  by  ensuring  that  economic,  social  and  environmental 
issues are tackled through integrated strategies for renewal, regeneration and development 
in both urban and rural areas 

In  the  light  of  the  different  ways  in  which  cohesion  policy  can  contribute  to  the  Lisbon 
agenda,  the  following  section  sets  out  the  key  aspects  of  the  new  framework  for  cohesion 
policy, 2007-2013. 

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3. 

THE FRAMEWORK FOR COHESION POLICY 2007-2013 

3.1. 

Concentration 

In this section, the new framework for cohesion policy is discussed in relation to the need for 
thematic  and  geographical  concentration.  Since  the  concentration  of  resources  is  also  a 
process issue, the governance dimension is also discussed. 

Growth  in  economic  output  is  essentially  composed  of  two  drivers:  employment  and 
productivity  growth.  They  are  intimately  related  and  must  be  boosted  simultaneously  to 
achieve maximum impact. In order to promote under the national and regional development 
programmes,  2007-2013,  a  sustainable  development  path  and  strengthen  competitiveness  in 
the knowledge-based economy, it is essential to concentrate resources on basic infrastructures, 
human  capital,  and  research  and  innovation,  including  access  to  and  strategic  use  of 
information and communication technologies (ICTs). Both tangible and intangible assets are 
required. 

The policy mix in order for a Member State or region to achieve an appropriate combination 
of investments for growth depends on its specific characteristics, the structure of its economic 
activity  and  the  nature  and  extent  of  its  structural  deficits,  and  its  potential  areas  of 
comparative advantage. The policy mix inevitably evolves over time, bringing a change in the 
type  of  policies  and  instruments  used.  Each  Member  State  and  region  has  to  find  the  right 
policy  mix  for  its  own  development  path  in  the  light  of  its  particular  economic,  social, 
environmental, cultural and institutional conditions.  

However, while the mix may vary according to context, concentration will be ensured at the 
level of programmes and projects by including only those elements that can contribute to the 
growth  and  jobs  agenda.  This  will  be  the  governing  principle  which  the  Commission  will 
bring to bear when negotiating the different national and regional programmes. 

Timing is also an issue with regard to cohesion policy in Member States where transfers from 
the Union take on a macroeconomic dimension. In the short-term, these transfers will create 
pressure on inflation, for example, in the construction sector while placing additional pressure 
on  the  current  account  (as  a  result  of  imports  of  capital  equipment,  etc.)  and  on  the  budget 
(due to co-financing arrangements). It is therefore important that Member States and regions 
organise their investment programmes in such a way as to address the supply-side bottlenecks 
and  increase  productivity  in  order  to  offset  the  demand-side  pressures  on  the  nominal 
economy. 

Account  also  needs  to  be  taken  of  other  Community  policy  priorities,  first  because  of  their 
potential  to  contribute  to  growth  and  jobs  within  the  framework  of  cohesion  policy 
programmes and, second, in order to foster synergies with other EU policies on the ground. 

3.2. 

Convergence  

For  regions  and  Member  States  eligible  for  cohesion  policy  support  under  the  new 
Convergence objective, the key objective will be to stimulate growth potential to maintain 
and achieve high growth rates. This objective should be seen in the light of the unprecedented 
increase in disparities within the enlarged Union, the long-term nature of the efforts that will 
be needed to reduce them and the contribution to the competitiveness of the whole Union.  

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Their  strategies  therefore  will  focus  on  the  investments  and  collective  services  which  are 
required  to  increase  long-term  competitiveness,  job  creation  and  sustainable  development. 
Basic infrastructures and services will need to be created, upgraded and expanded in order to 
open up regional and local economies, set up a proper business support framework and exploit 
the opportunities afforded by the Single Market. Moreover, substantial efforts are required to 
expand  investment  in  human  capital;  increase  access  to  employment;  strengthen  social 
inclusion; and introduce and implement reform in education and training systems.  

Along  with  efforts  directed  at  basic  infrastructure,  action  is  required  to  modernise  and 
restructure the productive capacity of regions by providing services to enterprises, particularly 
SMEs;  by  improving  access  to  finance;  by  promoting  RTD  and  innovation;  by  developing 
human resources; and by promoting the penetration, dissemination and take-up of ICTs. 

The strengthening of institutional capacities and the institutional order is essential to design 
and deliver effective policies. 

3.3. 

Regional competitiveness and employment 

The  need  for  concentration  on  a  limited  number  of  key  priorities,  and  in  particular  on 
research, innovation, accessibility and job creation, is compelling under this objective in order 
to  ensure  best  use  of  limited  financial  resources.  To  ensure  a  smooth  adaptation  following 
economic change and restructuring, investment in human capital can play an important role. 

The aim of the new regional competitiveness and employment objective is to anticipate and 
promote  economic  change  by  improving  the  competitiveness  and  attractiveness  of  EU 
regions  through  investments  in  the  knowledge  economy,  entrepreneurship,  research, 
university-enterprise cooperation and  innovation;  access  to  transport  and  telecommunication 
infrastructure,  energy,  and  health;  environment  and  risk  prevention;  supporting  the 
adaptability  of  workers  and  enterprises;  reinforcing  participation  in  the  labour  market;  and 
promoting social inclusion and sustainable communities. 

Industrial  regions  take  different  forms.  Many  are  characterised  by  the  presence  of  large 
manufacturing firms, high population densities and high economic growth rates while others 
combine modern industry, especially SMEs, and a relatively rapidly growing service sector. 
Both  types  of  region  may,  however,  be  confronted  by  pockets  of  deep-seated  urban  decline 
and  poverty,  by  congestion,  environmental  pressure  and  ill-health,  having  to  respond  to  the 
challenges  of  globalisation  and  the  need  to  adapt  to  accelerating  economic  change.  At  the 
other end of the scale, many industrial regions are only just beginning to adapt to change, and 
the run-down of the industrial base has not been offset to a sufficient degree by new activities.  

Meanwhile, in areas characterised by low population density, economic development is often 
driven by small firms, but the challenges facing them are similar. The low population density 
makes  it  more  difficult  to  respond  to  the  challenges  and  the  socio-economic  situation  has 
therefore not changed over the past decade. 

There is a wide variation in the economic situation of rural areas. Some have good links to 
urban  centres  and,  with  agriculture  continuing  to  play  a  significant  role,  are  experiencing 
increasing  economic  diversification  and  the  growth  of  activities  in  the  service  sector,  for 
example tourism. Other more remote rural areas have to contend with a highly dispersed and 
ageing  population,  poor  technical  and  social  infrastructures,  inadequate  services,  and  weak 
links with the rest of the economy. 

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Addressing  this  diversity  of  problems,  and  helping  regions  to  restructure  and  generate  new 
activities  in  accordance  with  the  renewed  Lisbon  agenda,  is  the  challenge  for  the  new 
generation of regional competitiveness and employment programmes.  

3.4. 

European territorial cooperation 

The aim of the new cooperation objective is to promote stronger integration of the territory 
of  the  Union  in  all  its  dimensions.  In  so  doing,  cohesion  policy  supports  the  balanced  and 
sustainable development of the territory of the Union at the level of its macro-regions and 
reduces  the  “barrier  effects”  through  cross-border  cooperation  and  the  exchange  of  best 
practices.  

These  actions  are  based  on  shared  development  strategies  of  the  territories  concerned 
(national, regional, local) and on the networking of the key stakeholders. As such, they have 
an  obvious  European  value  added  which  increases  even  more  in  the  enlarged  and  more 
diversified Union. 

3.5. 

Governance 

In the context of cohesion policy, the issue of governance has different dimensions. 

The first concerns a set of characteristics of public organisations related to the performance 
and  the  success  of  public  policies.  For  countries  and  regions,  in  particular  those  eligible 
under  the  Convergence  objective,  the  quality  and  productivity  of  the  public  sector  are 
essential  in  order  to  embrace  reforms  and  good  governance,  especially  in  the  economic, 
employment, social, educational, environmental and judicial fields. This will help not only to 
improve the implementation of EU cohesion policy, but also to raise economic performance 
overall. 

Strengthening institutional capacities  and  governance where they are  considered to be weak 
should be a key priority in less developed regions. Economic competitiveness and a stronger 
civil  society  depend  not  only  on  effective  infrastructure  networks,  but  also  on  the  non-
discriminatory,  predictable  and  transparent  enforcement  of  the  law;  the  assignment  and 
enforcement of tradable property rights, including intellectual property rights; an open public 
procurement  system;  and  an  administration  which  minimises  the  administrative  burden  on 
economic operators.  

Thus, when developing their national strategies, Member States should systematically analyse 
to  what  extent  a  more  efficient,  accountable  and  transparent  public  administration  can  help 
raise productivity levels. Capacity building for public administrations at national, regional and 
local  level,  to  improve  the  administrative  framework  for  economic  activity,  good  policy 
design  and  implementation,  including  better  lawmaking,  evaluation  and  impact  analysis  of 
policy  proposals,  and  regular  screening  of  delivery  mechanisms,  should  therefore  be 
supported by the Structural Funds. 

The second dimension refers to measures and actions that are specifically needed in order to 
improve the capacity of Member States in managing and implementing the cohesion policy. 
Sound and efficient management of the Funds requires appropriate, effective and transparent 
structures in central and regional administrations which are able to perform the tasks related 
to the implementation of the Funds, such as public procurement, financial control, monitoring, 
evaluation,  and  preventing  and  combating  fraud  and  corruption.  The  effective  use  of  the 

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Funds is also influenced by the capacities of project holders to develop and implement high-
quality  projects.  Where  resources  are  used  in  an  efficient  and  transparent  manner,  their 
visibility  in  itself  encourages  private  entrepreneurs  and  social  partners,  and  creates  the 
environment  for  the  former  to  take  their  own  investment  decisions.  Therefore,  action  is 
needed in this field too, and should be backed up by technical assistance. 

A related, and highly important, factor determining the effectiveness of cohesion policy is the 
quality  of  the  partnership  between  all  stakeholders,  including  those  at  regional  and  local 
level, in the preparation and implementation of programmes. In addition, a strong partnership 
between  the  Commission  and  the  Member  States  is  the  basis  for  determining  cohesion 
strategy and its ultimate implementation through the operational programme.  

Developing  innovative  projects  based  on  partnership,  promoting  civil  participation  in  the 
formulation and implementation of public policies, as well as improving interaction between 
and within the communities can contribute to the creation of human and social capital, leading 
to sustainable employment, growth, competitiveness and social cohesion. In this context, it is 
important  for  the  key  stakeholders  at  national,  regional  and  local  level  to  rally  behind  the 
reform agenda so that resources are genuinely concentrated on the growth and jobs agenda, 
and put in place the necessary partnership networks to that effect.  

Regions  are  encouraged  to  develop  regional  sustainable  development  strategies,  building 
consensus on the objectives to be achieved through regular and systematic dialogue with key 
stakeholders.  Partnership  is  essential  to  the  elaboration  and  the  implementation  of 
development  strategies,  and relies on  consultation  and  participation  of  stakeholders,  such  as 
competent  authorities,  economic  and  social  partners,  and  representatives  of  civil  society 
including  non-governmental  organisations.  Partnership  provides  a  basis  for  openness  and 
transparency in the preparation and implementation of programmes. 

Public-Private Partnerships 

Public-Private Partnership (PPP) may be an appropriate method of financing investment when 
there is significant scope  for involving the private sector,  especially in areas where it is not 
feasible or appropriate to move away from public ownership or market provision. Apart from 
the financial leverage it provides, public-private partnership at project level also improves the 
quality  of  the  implementation  and  subsequent  management  of  projects.  Member  States  are 
therefore  encouraged  to  opt  for  such  partnerships  where  they  are  available.  The  principal 
benefits of such PPP schemes are that: 

the public sector gains access to a range of private sector skills that should enable it to 

• 
provide a more efficient and cost-effective service 

the private sector takes on a range of risks that under traditional  public procurement 

• 
would be borne by the public sector 

greater  efficiency  can  be  generated  where  a  single  party  is  responsible  for  design, 

• 
construction, management and financing as a part of an integrated package. 

In considering whether to undertake a particular project as a PPP, it is important that certain 
conditions are met before contracting out the provision of goods and services, in particular the 
putting in place of an appropriate legal framework.  

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PPP  arrangements  work  best  where  there  is  an  explicit  policy  commitment  by  national 
governments  to  involve  the  private  sector  in  public  sector  projects.  Clear  and  specific 
frameworks  are  needed  for  PPP  in  different  policy  areas;  these  will  vary,  for  example, 
according  to  how  far  costs  can  be  recovered  through  user  charges  and  the  extent  of  social 
objectives.  

The EU will support these PPPs by providing finance, via the Structural and Cohesion funds, 
where  the  projects  meet  all  the  necessary  criteria.  For  larger  projects  the  Commission  will 
encourage MS to include assessment of its suitability for a PPP scheme. The EIB and the EIF 
could provide valuable input in this regard. 

4. 

GUIDELINES FOR COHESION POLICY, 2007-2013 

In light of the above and of the renewed Lisbon strategy for growth and jobs, programmes co-
financed  through  the  cohesion  policy  should  seek  to  target  resources  on  the  following  three 
priorities12:  

–  improving  the  attractiveness  of  Member  States,  regions  and  cities  by  improving 
accessibility,  ensuring  adequate  quality  and  level  of  services,  and  preserving  their 
environmental potential; 

–  encouraging innovation, entrepreneurship and the growth of the knowledge economy by 
research  and  innovation  capacities,  including  new  information  and  communication 
technologies; and  

–  creating  more  and  better  jobs  by  attracting  more  people  into  employment  or 
entrepreneurial activity, improving adaptability of workers and enterprises and increasing 
investment in human capital. 

In the following sections, key aspects of each of these broad areas are examined with specific 
guidelines  under  each  heading.  Naturally,  not  all  of  these  more  detailed  guidelines  will  be 
relevant  to  all  regions.  The  most  appropriate  mix  of  investments  ultimately  depends  on  the 
analysis  of the strengths  and weaknesses  of  each  Member  State  and  region. The guidelines 
rather represent a single framework which Member States and regions are invited to use 
when  developing  national  and  regional  programmes,  in  particular  with  a  view  to 
assessing their contribution to the objectives of the Union in terms of cohesion, growth 
and jobs. The Guidelines are a necessary condition, but not the only condition for achieving 
the  right  level  of  concentration  on  key  priorities  for  each  Member  State  and  region  in 
accordance with the renewed Lisbon agenda. 

In line with the re-launch of the Lisbon Strategy for Growth and Jobs, cohesion policy should 
focus  to  a  greater  extent  on  knowledge,  research  and  innovation,  and  human  capital. 
Accordingly,  the  overall  financial  effort  in  support  of  these  fields  of  action  should  be 
significantly increased. In addition, Member States should be inspired by best practice where 
this has delivered visibly positive results in terms of growth and jobs. 

12 

Communication to the Spring European Council “Working Together for growth and jobs – a new start 
for the Lisbon Strategy” - COM(2005) 24, 2.2.2005. 

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Member  States  and  regions  should  pursue  the  objective  of  equality  between  men  and 
women at all stages of the preparation and implementation of programmes and projects. This 
may be done through specific actions to promote equality or to combat discrimination, as well 
as  by  taking  careful  account  of  how  other  projects  and  the  management  of  the  funds  may 
affect women and men. 

4.1. 

GUIDELINE:  Making  Europe  and  its  regions  more  attractive  places  to  invest 
and work 

One  of  the  preconditions  for  growth  and  jobs  is  to  ensure  that  the  necessary  infrastructure 
(e.g. transport, environment, energy) is available to businesses. A modern infrastructure is an 
important  factor  in  the  performance  of  many  enterprises,  affecting  the  economic  and  social 
attractiveness  of  regions.  Infrastructure  investment  in  regions  that  are  lagging  behind, 
especially in the new Member States, will encourage growth and thus reinforce convergence 
with the rest of the Union. Resources should come not just from grants but also from loans, 
for  example  from  the  European  Investment  Bank  (EIB).  Member  States  will  have  an 
opportunity  to  make  greater  use  of  EIB  expertise  to  prepare  suitable  projects  for  European 
funding. 

4.1.1.  Expand and improve transport infrastructures 

The  provision  of  efficient,  flexible  and  safe  transport  infrastructure  can  be  regarded  as  a 
necessary  precondition  for  economic  development  as  it  boosts  productivity  and  thus,  the 
development prospects of the regions concerned by facilitating the movement of people and 
goods.  Transport  networks  boost  opportunities  for  trade,  while  increasing  efficiency. 
Furthermore, the development of Europe-wide transport infrastructures (notably the relevant 
parts of the thirty priority projects for Trans-European Transport Networks), with a particular 
focus  on  cross-border  projects,  is  essential  to  achieving  greater  integration  of  national 
markets, especially within the context of an expanded Union. 

Infrastructure  investment  needs  to  be  adapted  to  the  specific  needs  and  level  of  economic 
development of the regions and countries concerned. Typically, infrastructure investments (as 
with other investments) show diminishing rates of return above a certain level of funding. The 
economic  returns  on  such  investments  are  high  when  infrastructure  is  scarce  and  basic 
networks  have  not  been  completed,  but  they  are  likely  to  decrease  once  a  certain  level  has 
been reached. 

The  level  of  regional  economic  development  and  the  existence  of  large  infrastructure 
endowments should thus be taken into account. In the least developed regions and countries, 
international  and  interregional  connections  may  offer  higher  returns  over  the  longer  term  in 
the  form  of  increased  business  competitiveness  and  also  facilitate  labour  mobility.  On  the 
other hand, for regions with a dispersed, small-scale economic base and a settlement pattern 
based  on  small  towns,  the  construction  of  a  regional  transport  infrastructure  may  be  more 
appropriate.  In  convergence  regions,  and  to  a  lesser  extent  in  phasing  out  regions,  with 
inadequate road networks, funding should also be available to build economically vital road 
links. 

In  order  to  maximise  the  benefits  deriving  from  transport  investments,  assistance  from  the 
Funds must be based on a number of principles. 

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First, objective criteria should be used to determine the level and nature of the infrastructure 
investment to be undertaken. For instance, potential rates of return should be measured by the 
level  of  economic  development  and  the  nature  of  economic  activities  of  the  regions 
concerned,  the  prevailing  density  of  infrastructures  or  the  degree  of  congestion.  When 
determining the social rates of return, due account must also be taken of environmental and 
social implications of prospective infrastructure projects. 

Second,  the  principle  of  environmental  sustainability  should  be  respected  to  the  greatest 
possible  extent,  in  accordance  with  the  White  Paper13.  Balancing  the  dominance  of  road 
transport in Europe by promoting alternative modes and combined transport should be a key 
concern.  

Third,  particular  attention  should  be  paid  in  the  Convergence  regions  to  modernising  the 
railway  system  by  carefully  selecting  the  priority  sections,  ensuring  their  interoperability 
within the framework of the European Rail Transport Management System (ERTMS).  

Fourth,  investments  in  transport  infrastructure  should  be  accompanied  by  proper  traffic 
management, with particular attention to safety, in accordance with national and Community 
standards.  National  or  regional  strategies  should  take  into  account  the  need  to  achieve  a 
balanced  (and  clean)  modal  split  that  serves  both  economic  and  environmental  needs. 
Strategies  should  include,  for  example,  intelligent  transport  systems,  multi-modal  platforms 
and,  in  particular,  technology  used  for  the  ERTMS  and  SESAME  (for  a  more  uniform  air 
traffic management system in Europe). 

Based on the above principles, the guidelines for action are as follows: 

(cid:190)  Member States should give priority to the 30 projects of European interest, located in 
Member  States  and  regions  eligible  under  the  Convergence  objective14.  Other  TEN 
projects should be supported where this is a strong case in terms of their contribution to 
growth  and  competitiveness.  Within  this  group  of  projects,  cross-border  links  and  those 
overseen by the specially designated European co-ordinators in the Member States merit 
special  attention.  Member  States  should  make  use  of  the  co-ordinators  as  a  means  of 
shortening the time that elapses between designation of the planning of the network and 
the physical construction 

(cid:190)  Complementary  investment  in  secondary  connections  will  also  be  important  in  the 
context  of  an  integrated  regional  transport  and  communications  strategy  covering  urban 
and rural areas, in order to ensure that the regions benefit from the opportunities created 
by the major networks. 

(cid:190)  Support  for  rail  infrastructure  should  seek  to  ensure  greater  access.  Track  fees  should 
facilitate  access  for  independent  operators.  They  should  also  enhance  the  creation  of  an 
EU-wide interoperable network. Compliance and applications of the interoperability and 
the fitting of ERTMS on board and on track should be part of all projects financed. 

(cid:190)  Promoting  environmentally  sustainable  transport  networks.  This  includes  public 
transport  facilities  (including  park-and-ride  infrastructures),  mobility  plans,  ring  roads, 

13 
14 

“European transport policy for 2010 : time to decide” - COM(2001) 370. 
Decision No 884/2004/EC of the European Parliament and of the Council, 29 April 2004. 

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increasing  safety  at  road  junctions,  soft  traffic  (cycle  lanes,  pedestrian  tracks).  It  also 
includes  actions  providing  for  accessibility  to  common  public  transport  services  for 
certain  target  groups  (the  elderly,  disabled  persons)  and  providing  distribution  networks 
for alternative vehicle fuels.  

(cid:190)  In  order  to  guarantee  the  optimum  efficiency  of  transport  infrastructures  for  promoting 
regional  development,  attention  should  be  paid  to  improving  the  connectivity  of 
landlocked territories to the Trans-European network (TEN-T) (see map in the annex). In 
this  respect,  the  development  of  secondary  links,  with  a  focus  on  inter-modality  and 
sustainable transport,  should be promoted. In  particular, harbours and airports should be 
connected to their hinterland. 

(cid:190)  More attention should be paid to developing the “motorways of the sea” and to short-sea 

shipping as a viable alternative to long-distance road and rail transport. 

Where Member States receive support from both the Cohesion Fund and the Structural Funds, 
a distinction should be made in the programmes between the types of actions funded by each 
of  the  Funds,  with  the  Cohesion  Fund  playing  the  key  role  in  support  of  Trans-European 
transport networks.  

to  measures 

In  turn,  the  Structural  Funds  should  generally  focus  on  the  development  of  infrastructure 
linked 
tourism  development, 
to  stimulate  economic  growth  (such  as 
improvements  to  increase  the  attractiveness  of  industrial  sites,  etc.).  With  regard  to  road 
infrastructure, investments shall also fit the overall goal of road safety. 

Co-financing from the Cohesion Fund and the Structural Funds should be complementary to 
grants from the budget for Trans-European Networks. Member States will need to determine 
in advance the instrument most suited to the planned projects. Cohesion policy funding can be 
combined with the loan guarantee part of the TEN instruments. 

4.1.2.  To strengthen the synergies between environmental protection and growth 

Environmental investments can contribute to the economy in three ways: they can ensure the 
long-term  sustainability  of  economic  growth,  they  decrease  external  environmental  costs  to 
the  economy  (e.g.  health  costs,  clean-up  costs  or  damage  recovery)  and  they  stimulate 
innovation and job creation. Future cohesion programmes should seek to strengthen potential 
synergies  between  environmental  protection  and  growth.  The  provision  of  environmental 
services  such  as  waste  and  waste-water  treatment  infrastructures,  management  of  natural 
resources,  the  decontamination  of  land  to  prepare  it  for  new  economic  activities,  and 
protection against certain environmental risks, should all have high priority in this context.  

In order to maximise economic benefits and minimise the costs, priority should be given to 
tackling environmental pollution at its sources. In the waste management sector, this implies 
focusing on waste prevention, recycling and biodegradation of waste which are cheaper and 
provide more jobs in comparison with landfill  and  incineration, the least  favourable end-of-
pipe solutions. 

Development  strategies  should  be  based  on  a  prior  evaluation  of  needs  and  specific  issues 
faced  by  regions,  where  possible  using  appropriate  indicators.  Efforts  should  be  made  to 
promote  the  internalisation  of  external  environmental  costs,  with  support  for  the  setting  up 

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and development of market-based instruments (see, for example, instruments proposed in the 
Environmental Technologies Action Plan). 

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Accordingly, the recommended guidelines for action are the following:  

(cid:190)  Addressing  the  significant  needs  for  investment  in  infrastructure,  particularly  in  the 
Convergence  regions,  particularly  in  the  new  Member  States,  to  comply  with 
environmental  legislation  in  the  fields  of  water,  waste,  air,  and  nature  and  species 
protection.  

(cid:190)  Ensuring that attractive conditions exist for businesses and their highly-skilled staff. 
This can be ensured by promoting land-use planning which reduces urban sprawl, and by 
rehabilitating the physical environment, including natural and cultural assets. Investments 
in  this  area  should  be  clearly  linked  to  the  development  of  innovative  and  job-creating 
businesses on the sites concerned. 

(cid:190)  Promoting,  in  addition  to  the  investments  in  sustainable  energy  and  transport  covered 

elsewhere, investments that contribute to the EU Kyoto commitments. 

(cid:190)  Undertaking  risk  prevention  measures  through  improved  management  of  natural 
resources,  more  targeted  research  and  better  use  of  ICTs,  and  more  innovative  public 
management policies (see map in annex).  

Where Member States receive support from both the Cohesion Fund and the Structural Funds, 
a distinction must be made in the programmes between the types of actions funded by each of 
the Funds. The Cohesion Fund should in general focus on infrastructure investments in water, 
waste and air pollution, while the Structural Funds should in general focus on the promotion 
of environmental management systems, on the dissemination of clean technologies in SMEs 
and the rehabilitation of contaminated sites. 

4.1.3.  Address Europe’s intensive use of traditional energy sources 

A related priority is the need to reduce traditional energy dependency through improvements 
in energy efficiency and renewable energies. Investments in these fields contribute to security 
of energy supply for long-term growth, while acting as a source of innovation and providing 
opportunities for exports.  

Investment in traditional sources of energy is also needed, so as to ensure security of supply. 
In  particular,  the  Funds  should  concentrate  –  where  there  is  evidence  of  market  failure  and 
where  it  does  not  go  against  the  liberalisation  of  the  market  –  on  the  completion  of 
interconnections, with special emphasis on the Trans-European networks, the improvement of 
electricity  grids  and  the  completion  and  improvement  of  gas  transmission  and  distribution 
networks.  

Guidelines for action under this heading are the following: 

(cid:190)  Supporting  projects  to  improve  energy  efficiency,  and  dissemination  of  low  energy 

intensity development models. 

(cid:190)  Supporting  the  development  of  renewable  and  alternative  technologies  (wind,  solar, 
biomass)  which  can  give  the  EU  a  leading  edge  and  thus  strengthen  its  competitive 
position.  Such  investments  also  contribute  to  the  Lisbon  objective  of  ensuring  that,  by 
2010, 21% of electricity is generated from renewable sources. 

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(cid:190)  Concentrating  investment  in  traditional  energy  sources  to  develop  the  networks  where 
there  is  evidence  of  market  failure.  These  investments  mostly  concern  the  Convergence 
regions.  

4.2. 

GUIDELINE: Improving knowledge and innovation for growth 

The  Union’s  aims  of  growth  and  job  creation  will  require  a  structural  shift  in  the  economy 
towards  knowledge-based  activities.  This  calls  for  action  on  a  number  of  fronts:  to  address 
low  levels  of  Research  and  Technological  Development  (RTD),  especially  in  the  private 
sector;  to  promote  innovation  through  new  or  improved  products,  processes  and  services 
which can withstand international competition; to increase regional capacity to generate and 
absorb new technologies (ICTs in particular); and to provide more support for risk-taking.  

RTD  expenditure  as  a  percentage  of  GDP  has  been  increasing,  but  only  marginally  and,  at 
1.9% of GDP, remains well short of the Lisbon target of 3%15. It is estimated that an increase 
in the share of RTD expenditure from 1.9% to 3% of GDP (in order to reach the Lisbon target 
by 2010) will result in an increase of 1.7% in the level of GDP by 201016. While the shortfall 
in business investment in RTD remains significant, there are signs that public investment in 
this  field  is  also  coming  under  pressure.  The  RTD  and  innovation  gap  within  and  between 
countries,  particularly  in  relation  to  business  expenditure  on  RTD,  is  much  bigger  than  the 
income  gap.  While  a  combination  of  national  and  Community  initiatives  have  been 
undertaken, more action is needed to match business needs with RTD supply from public and 
private RTD institutions. 

Europe’s innovation gap is widening: the European Innovation Scoreboard shows that Europe 
lags behind the US in 9 out of 11 Innovation indicators17. Also within Europe, the innovation 
gap  persists,  as  the  Union  too  often  fails  to  transform  technological  development  into 
commercial products and processes. Cohesion policy can help to address the main problems 
behind  Europe’s  underperformance  in  innovation,  including  ineffective  innovation  systems, 
insufficient entrepreneurial dynamism or slow business adoption of ICT.  

In  this  context,  it  is  necessary  to  enhance  national  and  regional  RTD  capacities,  to  support 
investment  in  ICT  infrastructure,  and  to  disseminate  technology  and  knowledge  through 
appropriate technology transfer and knowledge exchange mechanisms. Better use of existing 
RTD  potential  could  be  encouraged  by  regional  ‘foresight’  and  other  regional  strategic 
planning methods, involving regular and systematic dialogue with key stakeholders. It is also 
important to enhance the RTD absorption capacity of firms, particularly SMEs, to encourage 
the  creation  and  exploitation  of  a  larger  pool  of  high-quality  research  talent  in  Europe;  to 
increase  private  and  public  investment  in  RTD  and  innovation;  and  to  encourage  RTD 
partnerships across the different regions of the Union.  

While direct grants remain important, notably in Convergence regions, there is a need to focus 
on the provision of collective business and technology services to groups of firms, in order to 
help  them  improve  their  innovative  activity.  Direct  grants  to  individual  firms  should  be 
targeted at improving the RTD and innovation capacity of the firm, rather than at a temporary 
reduction  of  its  production  costs  generating  high  deadweight  effects.  This  is  particularly 

15 
16 
17 

“Investing in research: an action plan for Europe” - COM(2003) 226, 30.4.2003. 
“The economic costs of non-Lisbon” - SEC(2005) 385, 15.3.2005. 
SEC(2004) 1475. 

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important in traditional sectors, particularly those exposed to global competition which need 
additional efforts in order to remain competitive, as well as in SMEs which often represent the 
highest source of employment at the regional level. Most importantly, these policies need to 
be adapted to the particular conditions of each region, and in particular to the needs of SMEs. 
National  and  regional  strategies  must  be  based  on  a  comprehensive  analysis  of  RTD 
investment opportunities. 

Knowledge and innovation are at the centre of the Union’s efforts to promote faster growth 
and more jobs. Two related framework programmes are proposed at Union level: the Seventh 
Framework  programme  for  RTD  and  the  Framework  Competitiveness  and  Innovation 
Programme  (CIP).  Synergy  between  cohesion  policy  and  these  instruments  is  vital  and 
national and regional development strategies must show how this will be achieved. Cohesion 
policy can help all regions to build up research and innovation capacity, thus contributing to 
the effective participation of those regions in the European Research Area and research and 
innovation activities of the Union in general. In particular, it has two important roles to play. 
The  first  is  in  helping  regions  to  implement  regional  innovation  strategies  and  action  plans 
which potentially can have a significant impact on competitiveness, both at regional level and 
in the Union as a whole; the second is in contributing to raising the research and innovation 
capacity  in  the  region  up  to  a  level  where  it  can  participate  in  transnational  projects  for 
research. 

Regional  strategies  should  thus  concentrate  on  investing  in  RTD,  innovation  and 
entrepreneurship; ensuring that these investments respond to the economic development needs 
of  the  region  and  are  transformed  into  product,  process  and  service  innovation;  enhancing 
technology transfer and knowledge exchange; promoting the development, dissemination and 
uptake  of  ICTs  within  firms,  and  ensuring  that  enterprises  willing  to  invest  in  high  added 
value goods and services have access to finance. 

4.2.1. 

Increase and improve investment in RTD 

The competitiveness of European enterprises crucially depends on their ability to bring new 
knowledge to the market as quickly as possible. This ability is strengthened by public support 
for RTD, including support to companies where economic and market conditions justify it. In 
addition,  issues  of  ownership  of  research  results  and  the  need  to  achieve  critical  mass  in 
certain research sectors provide justification for government support for RTD.  

The  specific  nature  of  RTD  must  be  considered  when  implementing  regional  policy.  In 
particular, RTD requires close interaction between the players to encourage the formation of 
poles of excellence which are needed to reach critical mass. Geographical proximity through 
the existence of clusters of SMEs and innovation poles around public research institutions for 
instance,  must  play  a  key  role.  As  a  result,  RTD  activities  necessarily  have  to  be  spatially 
concentrated while the absorptive capacity of low RTD-intensive areas is fostered. 

RTD in the less developed Member States and regions should be developed around existing 
poles  of  excellence  and  avoid  the  excessive  spatial  dispersion  of  resources.  Investments 
should  also  complement  European  priorities  set  out  in  the  Seventh  Framework  Programme 
and  support  the  objectives  of  the  renewed  Lisbon  agenda.  Priority  should  be  given  to  the 
development of new and marketable products, services and skills. 

Actions in RTD should be aligned with EU RTD policy and the needs of regions in question. 
In terms of method, these need be based on a sound analytical approach, such as foresight; as 

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well as  use  of indicators,  such  as patents; human resources in  RTD;  location  of private and 
public research institutions; and on the existence of clusters of innovative businesses. 

The guidelines for action in the field of RTD can be identified as follows: 

(cid:190)  Strengthening  co-operation  among  businesses  and  between  businesses  and  public 
research/higher  education  institutions  by  supporting  the  creation  of  regional  and  trans-
regional clusters of excellence.  

(cid:190)  Supporting  RTD  activities  in  SMEs  and  enabling  SMEs  to  access  RTD  services  in 

publicly-funded research institutions. 

(cid:190)  Support for regional cross-border and transnational  initiatives aimed at strengthening 

research collaboration and capacity building in priority areas of EU research policy.  

(cid:190)  Strengthen  R&D  capacity  building,  including  ICT,  research  infrastructure  and  human 

capital in areas with significant growth potential. 

In  the  regions  eligible  under  the  Convergence  objective,  programmes  can  contribute  to 
developing  RTD  and  education  infrastructure  (including  regional  high-speed  data  networks 
between and within research establishments), equipment and instrumentation in both publicly 
funded  research  institutions  and  businesses,  provided  that  these  investments  are  directly 
linked to regional economic development objectives. This may include research infrastructure 
for  which  the  feasibility  studies  have  been  financed  from  earlier  Framework  Programmes. 
Support  for  Seventh  Framework  Programme  priorities  should  seek  to  develop  the  full 
potential of emerging and existing centres of excellence and to step up investment in human 
capital,  particularly  by  training  researchers  at  national  level  and  by  creating  conditions  to 
attract researchers trained abroad.  

4.2.2.  Facilitate innovation and promote entrepreneurship 

Innovation  is  the  result  of  complex  and  interactive  processes,  including  the  ability  of 
enterprises to connect to complementary knowledge from other market players, organisations 
and institutions. 

Investments  in  innovation  represent  an  overarching  priority  for  cohesion  policy  throughout 
the  Union.  Their  co-financing  should  be  the  main  priority  in  the  regions  covered  under  the 
new  Regional  competitiveness  and  employment  objective,  where  limited  financial  resources 
need to be concentrated so as to reach critical mass and generate a leverage effect. 

The main objective should be to promote a business climate which promotes the production, 
dissemination  and  use  of  new  knowledge  by  firms.  In  order  to  create  efficient  regional 
innovation systems, economic, social and political actors need to be brought into contact with 
the  leading  edge  of  technology  and  business  practice  in  the  world,  beyond  the  national  or 
local  levels.  To  this  respect,  co-operation  should  be  also  sought  with  the  Innovation  Relay 
centres and the Euro-Info-Centres which are financed under the CIP programme, especially in 
the field of trans-national technology and diffusion of information. 

Start-up companies, particularly those linked to RTD, need to be supported with the aim of 
developing  partnerships  with  research  institutions  based  on  a  longer-term  vision  and  clear 
market  orientation.  Cohesion  policy  should  seek  to  compensate  for  market  failure  that 

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hampers  innovation  and  entrepreneurship.  Actions should seek to build on existing poles of 
activity  in  order  to  exploit  regional  potential  for  RTD  and  to  foster  networking  and 
technological cooperation within and between regions. 

Public  authorities  should  ensure  that  research  institutions,  the  private  sector  and  the  public 
sector exploit to the full the potential synergies between them. 

In terms of method, economic development strategies could be informed by the collection of 
data  on  existing  innovative  activities  in  the  regions  concerned,  for  example,  on  private 
patenting or on the nature, scope and development potential of existing clusters of innovative 
activities,  including  those  which  involve  both  private  and  public  research  institutions.  The 
Community Innovation Surveys and the European Innovation Scoreboard are also helpful in 
this regard. 

The guidelines for action under this heading are the following: 

(cid:190)  Making  regional  RTD  innovation  and  education  supply  more  efficient  and  accessible  to 
firms,  in  particular  SMEs,  for  example  by  establishing  poles  of  excellence,  bringing 
together  high  technology  SMEs  around  research  and  technological  institutions,  or  by 
developing and creating regional clusters around large companies. 

(cid:190)  Providing  business  support  services  to  enable  enterprises,  and  in  particular  SMEs,  to 
increase competitiveness and to internationalise, in particular by seizing the opportunities 
created  by  the  Internal  Market.  Business  services  should  prioritise  the  exploitation  of 
synergies (e.g. technology transfer, science parks, ICT communication centres, incubators 
and related services, co-operation with clusters) and give more traditional support in the 
areas  of  management,  marketing,  technical  support,  recruitment,  and  other  professional 
and commercial services. 

(cid:190)  Ensuring  full  exploitation  of  European  strengths  in  the  area  of  eco-innovations.  Eco-
innovations should be promoted, together with the improvement of SME practices through 
the introduction of environmental management systems. By investing in this area now, EU 
businesses will be in a strong position in the near future when other regions appreciate the 
necessity  of  such  technologies.  This  is  an  area  with  a  clear  link  to  the  Framework 
Programme for Competitiveness and Innovation. 

(cid:190)  Promoting  entrepreneurship,  facilitating  the  creation  and  development  of  new  firms, 
and promoting spin-out and spin-off companies from research institutions or firms using a 
variety  of  techniques  (for  example,  awareness  raising;  prototyping;  tutoring  and  the 
provision of managerial and technological support to entrepreneurs-to-be). 

It  is  important  to  ensure  that  companies,  including  SMEs,  can  make  commercial  use  of 
research results.  

Business  services  should  preferably  be  delivered  by  the  private  sector  or  by  mixed  public-
private organisations. The services should be top-class, readily available, easy to access and 
responsive to the needs of SMEs. The quality of the services should be defined and monitored 
and there should be coherence between service providers, e.g. by establishing public-private 
partnerships and one-stop shops. 

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Administrative  procedures  are  often  too  complex.  Information  and  initial  support  should  be 
available  from  a  network  of  one-stop  shops,  which  could  provide  the  interface  between  the 
public  sector  and  the  grant  applicant;  this  should  include  the  various  actions  cofinanced  by 
Cohesion  Policy.  These  providers  should  have  competence  for  the  full  range  of  state  aids  - 
independently of national or regional responsibilities - and targets for the efficiency of their 
operation which are monitored regularly.  

Whenever  the  circumstances  are  appropriate,  tailored  support  should  be  made  available  to 
specific  categories  of  business  (e.g.  start-ups  or  recently  transferred  companies)  or 
entrepreneurs  (e.g.  young  people,  women,  older  workers  or  those  from  ethnic  minority 
communities). Entrepreneurship education should also be encouraged in schools. 

4.2.3.  Promote the information society for all 

The dissemination of ICT across the Union’s economy represents a major lever for improving 
both  productivity  levels  and  the  competitiveness  of  regions.  The  dissemination  of  ICT  also 
encourages the re-organisation of production methods and the emergence of new business and 
private  services.  The  efficient  and  effective  delivery  of  public  services  -  in  particular  e-
government and e-health – has a significant potential for economic growth and for enabling 
new services. Technology dissemination can contribute to regional development by favouring 
the creation and growth of poles of excellence in ICT activities and developing connectivity 
and  networking  among  enterprises  and  SMEs  in  particular.  Measures  should  encourage  the 
development  of  products  and  services  with  a  view  to  facilitating  and  stimulating  private 
investment in ICT while guaranteeing competition in the ICT sector. 

Policy measures should therefore focus on improving innovation support services for SMEs 
with the particular objective of boosting technology transfer between research institutions and 
enterprises.  Cohesion  policy  should  also  be  used  to  develop  skills  needed  in  the  knowledge 
economy and to develop content through the delivery of applications and services (such as e-
government, e-business, e-learning, e-health), which provide interesting alternatives to other, 
often  more  costly,  service  delivery  models.  This  is  particularly  relevant  for  remote  and 
sparsely-populated  areas.  Clearly  the  use  and  development  of  products  and  content-based 
services can only work if the appropriate infrastructure is available and capable of supporting 
broadband  services.  It  is  therefore  important  that  an  appropriate  broadband  communication 
infrastructure is available across the Union at an accessible cost.  

As  a  general  rule,  investment  in  ICT  infrastructure  should  take  into  account  rapid 
technological  development,  respect  for  the  principles  of  technological  neutrality  and  open 
access.  Compliance  with  competition  rules  and  with  the  implementation  of  the  regulatory 
framework for electronic communications is essential. 

Actions  need  to  be  based  on  context  indicators  related  to  the  existing  economic  structure 
(including industrial specialisation; level of economic development; quality of connectivity to 
ICTs and potential synergies between regional poles of economic activity). The identification 
of  regional  needs  should  take  into  account  existing  Union  initiatives  in  favour  of  ICTs,  in 
particular the i2010 – a European Information Society for growth and employment18.  

18 

COM(2005) 229. 

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Given that ICTs cut across all sectors of economy and society, it is imperative that Member 
States and regions develop compatible information society strategies which ensure coherence 
and  integration  among  sectors,  by  balancing  supply  and  demand  measures  on  the  basis  of 
local requirements, stakeholders’ participation, and strong public political support. 

The guidelines for action are as follow: 

(cid:190)  Ensuring uptake of ICTs by firms and households and promoting development through the 
balanced  support  for  the  supply  and  demand  of  ICT  products  and  both  public  and 
private services, as well as through increased investment in human capital. These actions 
should  increase  productivity,  promote  an  open  and  competitive  digital  economy  and  an 
inclusive  society  (for  example,  improving  accessibility  for  disabled  and  elderly  people), 
and thus boost growth and jobs. 

(cid:190)  Ensuring  availability  of  ICT  infrastructure  where  the  market  fails  to  provide  it  at  an 
affordable  cost  and  to  an  adequate  level  to  support  the  required  services,  especially  in 
remote and rural areas and in new Member States. 

4.2.4. 

Improve access to finance 

Another key ingredient for the promotion of knowledge and innovation is to facilitate access 
to finance. For the purpose of fostering growth and job creation, it must once again be made 
more rewarding for entrepreneurs and enterprises to invest in the development and production 
of goods and services than to focus efforts, for example, on rent-seeking activities.  

Access to finance in this context is often difficult, thus creating an obstacle to growth and job-
creation.  Improving  access  to  capital  both  for  RTD  activities  and  for  start-ups  is  important. 
risk capital markets related to innovation activities need to be developed in conjunction with a 
better regulatory environment that makes entrepreneurship easier.  

These  programmes  could  be  undertaken  in  close  cooperation  with  the  European  Investment 
Fund  (EIF)  in  order  to  develop  financial  resources  in  areas  where  entrepreneurship  is 
hampered  by  market  failures  owing  to  the  high  risks  associated  with  RTD  activities.  Due 
account  must  also  be  taken  of  the  impact  of  government  support  for  business  creation,  in 
order  to  avoid  the  crowding-out  of  private  investment  and  measures  that  are  damaging  to 
competition. 

Private equity and venture capital, and rotating funds for innovative start-ups should play the 
essential  role  as  an  engine  for  entrepreneurship,  innovation  and  job  creation;  public  sector 
institutions  are  not  always  best  suited  to  risk-taking.  The  priority  should  be  to  create  or 
expand  specialised  providers  of  risk  capital  and  bank  guarantees,  where  there  is  market 
failure.  Typically,  they  will  be  more  effective  if  they  provide  an  integrated  package  of 
support, starting with training prior to the business start-up or expansion. 

Based on these principles, the guidelines for action are: 

(cid:190)  Supporting non-grant instruments such as loans, secured debt financing for subordinate 
debt,  convertible  instruments  (mezzanine  debt)  and  risk  capital  (e.g.  seed  capital  and 
venture capital). Grants should be used to build and maintain infrastructures that facilitate 
access to finance (e.g. technology transfer offices, incubators, “business angels” networks, 
investment  readiness programmes). Guarantee  and mutual guarantee mechanisms should 

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also be supported, in particular to facilitate access to micro-credit by SMEs. The EIB and 
the EIF could provide valuable input in this regard. 

(cid:190)  Outreaching  to  specific  groups,  such  as  young  or  female  entrepreneurs  or  those  from 

disadvantaged groups, including ethnic minorities.  

It  is  particularly  important  to  work  closely  with  the  EIF  in  view  of  the  expertise  it  has 
developed  over  a  number  of  years,  in  order  to  give  SMEs  the  required  support,  while 
developing the European risk capital market at the same time.  

4.3. 

GUIDELINE : More and better jobs 

In relaunching the Lisbon strategy, the European Council endorsed a single set of Guidelines 
bringing together the Broad Economic Policy Guidelines and the Guidelines of the European 
Employment  Strategy19, 
integrating  macro-economic,  micro-economic  and 
employment policies for growth and jobs. In accordance with the draft Fund regulations20, in 
the  sphere  of  employment  and  human  resources  the  priorities  of  the  Community  Strategic 
Guidelines  on  cohesion  shall  be  those  of  the  European  Employment  Strategy21.  In  addition, 
the EU Employment Recommendations highlight country-specific challenges and priorities.  

thereby 

The drive for full employment and higher productivity depends on a wide variety of actions, 
including those already discussed above. Investment in infrastructure, business development 
and research improve job opportunities, both in the short run as a result of first round effects 
and  in  the  longer  run  as  a  result  of  their  positive  effect  on  competitiveness.  To  maximise 
employment from these investments, human capital must be further developed and enhanced. 

In terms of human capital development, the Employment Guidelines highlight three priorities 
for action for Member States' policies: 

–  attract and retain more people in employment and modernise social protection systems; 

–  improve adaptability of workers and enterprises and the flexibility of the labour markets; 

–  increase investment in human capital through better education and skills. 

In line with these priorities, appropriate attention should be given to investments to improve 
efficiency in public administration, as well as to education and health infrastructures.  

Cohesion  policy  should  focus  on  addressing  the  specific  challenges  of  the  European 
Employment  Strategy  in  each  Member  State,  by  supporting  actions  under  the  convergence 
and  the  regional  competitiveness  and  employment  objectives.  The  range  of  eligible  actions 
and  financial  resources  is  greater  for  the  former  objective.  For  the  latter,  EU  resources  will 
need to be much more focused to achieve a significant impact.  

Employment  and  human  resource  development  programmes  should  take  into  account  the 
the  Employment 
country-specific 

as  highlighted 

and  priorities, 

challenges 

in 

19 

20 

21 

Article 99 of the Treaty for the Broad Economic Policy Guidelines and Article 128 for the Employment 
Guidelines. 
Article  23  of  the  draft  Council  Regulation  (EC)  laying  down  general  provisions  for  the  European 
Regional Development Funds (ERDF), the European Social Fund (ESF) and the Cohesion Fund. 
COM(2005) 141,12.4.2005 

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Recommendations, and can be managed at national or regional level. In order to effectively 
address  regional  disparities,  national  programmes  should  have  a  regional  dimension,  if  no 
specific regional programmes are in place.  

4.3.1.  Attract  and  retain  more  people  in  employment  and  modernise  social  protection 

systems 

Widening  the  base  of  economic  activity,  raising  employment  levels  and  reducing 
unemployment are vital to sustain economic growth, promote socially inclusive societies and 
combat poverty. Increasing participation in employment is all the more necessary because of 
the  expected  decline  in  the  working  age  population.  In  the  framework  of  the  Employment 
Guidelines, Member States are called upon to: 

(cid:190)  Implement  employment  policies  aimed  at  achieving  full  employment,  improving  quality 

and productivity at work, and strengthening social and territorial cohesion 

(cid:190)  Promote a life-cycle approach to work  

(cid:190)  Ensure inclusive labour markets, enhance work attractiveness, and make work pay for job-

seekers, including disadvantaged people, and the inactive. 

(cid:190)  Improve matching of labour market needs. 

Actions must be based on prior identification of needs by, for instance, using relevant national 
and/or  regional  indicators  such  as  unemployment  and  participation  rates,  long-term 
unemployment rates, population at risk of poverty rates and level of income.  

The  presence  of  efficient  and  effective  labour  market  institutions,  notably  employment 
services  that  can  respond  to  the  challenges  of  rapid  economic  and  social  restructuring  and 
demographic  ageing  is  essential  in  order  to  support  service  delivery  to  job  seekers,  the 
unemployed and disadvantaged people and could be supported by the Structural Funds. These 
institutions  have  a  pivotal  role  to  play  in  implementing  Active  Labour  Market  Policies  and 
providing  services  on  a  personalised  basis  with  a  view  to  promoting  occupational  and 
geographical mobility and matching labour supply and demand, including at local level. They 
should help to anticipate shortages and bottlenecks in the labour market and occupational and 
skills requirements. Positive management of economic migration would also be assisted as a 
result.  Easy  access  to  and  transparency  of  the  services  on  offer  are  crucial.  The  EURES 
network is central to increasing occupational and geographic mobility, both at European level 
and nationally.  

An important priority should be to strengthen active and preventive labour market measures to 
overcome obstacles to entering or remaining in the labour market and to promote mobility for 
job seekers, the unemployed and inactive, older workers as well as those at risk of becoming 
unemployed.  Action  should  focus  on  the  provision  of  personalised  services,  including  job 
search assistance, training and job placement. The potential for self-employment and business 
creation,  ICT  skills  and  digital  literacy  should  be  fully  taken  into  account.  Special  attention 
should be paid to: 

–  implementing the European Youth Pact, by facilitating access to employment for young 
people, by easing the transition from education to work, including through career guidance, 
assistance in completing education, access to appropriate training and apprenticeships; 

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–  specific action to increase women’s participation in employment, to reduce occupational 
segregation  and  address  gender  pay  gaps  and  gender  stereotyping  and  to  promote  more 
family-friendly  working  environments,  and  the  reconciliation  of  professional  and  private 
life.  Facilitating  access  to  childcare  and  care  services  for  dependent  persons  is  crucial, 
alongside gender mainstreaming in policies and measures, awareness-raising and dialogue 
among stakeholders; 

–  specific  action  to  strengthen  access  of  migrants  to  the  labour  market  and  facilitate  their 
social  integration,  through  training  and  validation  of  competences  acquired  abroad, 
personalised  guidance,  language  training,  appropriate  support  for  entrepreneurship  and 
awareness  raising  among  employers  and  migrant  workers  about  their  rights  and 
obligations, and strengthening the enforcement of anti-discrimination rules. 

Another  important  priority  should  be  to  ensure  inclusive  labour  markets  for  people  at  a 
disadvantage  or  at  risk  of  social  exclusion,  such  as  early  school-leavers,  the  long-term 
unemployed, minorities and people with disabilities. This calls for an even broader range of 
support to build pathways to integration and combat discrimination. The aim should be to: 

–  improve  their  employability  by  enhancing  participation  in  vocational  education  and 
training, rehabilitation and appropriate incentives and working arrangements, as well as the 
necessary social support and care services, including through the development of the social 
economy; 

–  combat  discrimination  and  promote  the  acceptance  of  diversity  in  the  workplace  through 
diversity  training  and  awareness-raising  campaigns,  in  which  local  communities  and 
enterprises would be fully involved.  

4.3.2. 

Improve  adaptability  of  workers  and  enterprises  and  the  flexibility  of  the  labour 
market  

In the light of increasing pressures from globalisation, including sudden and unexpected trade 
shocks, and the continual introduction of new technologies, Europe must increase its capacity 
to  anticipate,  trigger  and  absorb  economic  and  social  change.  In  the  framework  of  the 
Employment Guidelines, Member States are called upon to: 

(cid:190)  Promote  flexibility  combined  with  employment  security,  and  reduce  labour  market 

segmentation, having due regard to the role of the social partners.  

(cid:190)  Ensure employment-friendly labour cost developments and wage-setting mechanisms. 

The  main  focus  should  be  on  actions  to  promote  investment  in  human  resources  by 
enterprises, especially SMEs, and workers through the provision of lifelong learning strategies 
and  systems  which  equips  employees,  in  particular  low-skilled  and  older  workers,  with  the 
necessary  skills  to  adapt  to  the  knowledge  economy  and  to  prolong  their  working  life. 
Attention should be given in particular to: 

–  the development of lifelong learning strategies and systems including mechanisms such as 
regional  and  sector  funds,  with  the  aim  of  increasing  investment  by  enterprises  and 
participation of workers in training; 

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26 

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–  Implementation of such strategies by contributing to the funding of schemes and training 
activities. Priority should be given to SMEs, including facilitating their access to external 
sources  of  competence  and  training  solutions  –with  emphasis  being  placed  on  ICT  and 
management skills- and to increasing the participation of the low-skilled and older workers 
in training and re-training.  

Better anticipation and positive management of economic restructuring, especially as a result 
of changes linked to the opening-up of trade, are particularly important. Consideration should 
be  given  to  creating  monitoring  systems  involving  the  social  partners,  enterprises  and  local 
communities, to scrutinising socio-economic changes at national, regional and local level, and 
assessing  future  economic  and  labour  market  trends.  Support  for  the  programmes  aimed  at 
modernisation of labour markets and anticipation of gradual changes throughout the Union in 
sectors such as agriculture, textiles and automobiles needs to be put in place, alongside active 
measures  to  reinforce  the  economic  well-being  of  regions.  There  is  also  a  role  for  specific 
employment, training and support services for workers in the context of company and sector 
restructuring, such as rapid response schemes in the case of collective lay-offs.  

Attention should also be given to developing and disseminating knowledge on innovative and 
adaptable  forms  of  work  organisation  to  take  advantage  of  new  technologies  -  including 
teleworking,  improving  health  and  safety  at  work,  increasing  productivity  and  promoting 
better  reconciliation  of  work  and  family  life.  This  may  also  include  raising  awareness  of 
corporate  social  responsibility  and  of  ways  to  transform  undeclared  work  into  regular 
employment. 

4.3.3. 

Increase investment in human capital through better education and skills 

Europe needs to invest more in human capital. Too many people do not enter or remain in the 
labour  market,  because  of  lack  of  skills,  or  due  to  skills  mismatches.  To  enhance  access  to 
employment for all ages and to raise productivity levels and quality at work, there is a need to 
step up investment in human capital and to develop and implement effective national lifelong 
learning strategies for the benefit of individuals, enterprises, the economy and society. In the 
framework of the Employment Guidelines, Member States are called upon to: 

(cid:190)  Expand and improve investment in human capital  

(cid:190)  Adapt education and training systems in response to new competence requirements. 

Reforms  in  labour  market  training  to  attract  more  people  into  employment  and  increase 
adaptability  of  workers  and  enterprises  need  to  be  coupled  with  reforms  in  education  and 
training  systems  -using  where  relevant  common  European  references  and  principles.  In 
previous programming periods, the Structural Funds have invested substantially in education 
and training systems. In the next programming period, the investment in human capital must 
be reinforced by focusing on the Lisbon objectives in line with the integrated guidelines for 
growth and employment. The following general priorities should be addressed: 

–  expanding  and  improving  investment  in  human  capital  including  the  development  of 
appropriate incentives and cost-sharing mechanisms for enterprises, public authorities and 
individuals; 

–  supporting  coherent  and  comprehensive  lifelong  learning  strategies,  with  particular 
attention given to addressing the skill needs of the knowledge economy, including support 

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to the establishment of partnerships between regions and cities in terms of education and 
training  to  facilitate  the  exchange  of  experience  and  good  practice.  Particular  attention 
should be given to addressing the needs of disadvantaged groups; 

–  supporting the development and introduction of reforms in education and training systems 

using where relevant common European references and principles; 

–  strengthening  the  links  between  universities,  research  and  technological  centres  and 

enterprises, in particular through networking activities and joint actions.  

Under  the  "Convergence"  objective,  many  Member  States  and  regions  are  faced  with  very 
significant education and training challenges. Financial resources should also be used for the 
implementation of reforms, which should address the following specific priorities:  

–  ensuring  an  adequate  supply  of  attractive,  accessible  and  high  quality  education  and 
training provision at all levels, including flexible learning pathways, a significant decline 
in early school-leaving and higher completion rates of upper secondary education; 

–  supporting the modernisation of higher education and the development of human potential 
in  research  and  innovation,  through  post-graduate  studies,  further  training  of  researchers, 
and attracting more young people into scientific and technical studies; 

–  promoting  the  quality  and  attractiveness  of  vocational  education  and  training,  including 

apprenticeships and entrepreneurship education; 

–  ensuring,  where  appropriate,  greater  mobility  at  regional,  national  or  transnational  level, 
and  promoting  frameworks  and  systems  to  support  the  transparency  and  recognition  of 
qualifications and the validation of non-formal and informal learning; 

–  investment in education and training infrastructure including ICTs, where such investments 
are  necessary  for  the  implementation  of  reform  and/or  where  they  can  significantly 
contribute to increasing the quality and effectiveness of the education and training system. 

4.3.4.  Administrative Capacity 

In previous programming periods, the Funds have, through technical assistance, reinforced the 
management  capacity  of  Member  States  and  managing  authorities  in  implementing  the 
regulations. This will also apply for the period 2007 to 2013. 

Above and beyond the management of the Funds, effective administrative capacity of public 
administrations and public services i.e. smart administration, is a fundamental requirement for 
economic  growth  and  jobs.  Thus  in  line  with  the  revised  Lisbon  Strategy  which  calls  for 
better legislation, policy design and delivery to create the conditions for economic growth and 
job  creation,  the  Funds  will  support  investment  in  the  human  capital  of  administrative  and 
public services at all territorial levels.  

For  countries  and  regions  under  the  Convergence  objective,  increasing  productivity  and 
quality  at  work  in  the  public  sector  -  especially  in  the  economic,  employment,  social, 
educational,  health,  environmental  and  judicial  areas,  is  essential  to  pursue  and  accelerate 
reforms,  to  raise  productivity  and  growth  in  the  wider  economy  and  to  promote  social  and 
territorial cohesion and sustainable development. The Structural Funds can play an important 

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role  in  supporting  effective  policy  design  and  implementation,  which  involves  all  relevant 
stakeholders, in a broad range of fields.  

Therefore,  under  the  Convergence  Objective,  Member  States  are  called  upon  to  build  up 
public administrations and public services at national, regional and local level. Actions in this 
field should take into account the specific situation of each Member State. Thus, in line with 
the principle of concentration, Member States are invited to conduct a comprehensive analysis 
to identify the policy areas requiring the most support for administrative capacity. Investment 
should  concentrate  on  those  policy  areas  where  there  are  the  greatest  obstacles  to  socio-
economic development and on the key elements of administrative reforms. 

Member States should ensure that the need to increase efficiency and transparency in public 
administrations and to modernise public services is adequately addressed. In particular, they 
should consider action to: 

(cid:190)  Support  good  policy  and  programme  design,  monitoring,  evaluation  and  impact 
for 

assessment, 
interdepartmental coordination and dialogue between relevant public and private bodies; 

statistics,  expertise,  and 

foresight, 

through 

studies, 

support 

(cid:190)  Enhance  capacity  building  in  the  delivery  of  policies  and  programmes,  including  with 
regard to the crime proofing and enforcement of legislation, especially through mapping 
of  training  needs,  career  development  review,  evaluation,  social  audit  procedures, 
implementation of open government principles, managerial and staff training and specific 
support to key services, inspectorates and socio-economic actors. 

4.3.5.  Help maintain a healthy labour force 

In the light of the EU’s demographic structure, and ageing population and a likely decline in 
the  labour  force,  it  is  essential  that  the  Union  takes  steps  to  increase  the  number  of  healthy 
years  of  work  for  members  of  its  workforce.  Investment  in  health  promotion  and  disease 
prevention  will  help  to  maintain  active  participation  in  society  for  as  many  workers  as 
possible, thus maintaining their economic contribution and reducing dependency levels. This 
has a direct effect on productivity and competitiveness.  

There  are  major  differences  in  health  status  and  access  to  health  care  between  European 
regions.  It  is  therefore  important  for  cohesion  policy  to  contribute  to  health  care  facilities, 
thereby  helping  to  increase  the  number  of  healthy  years  of  work.  Community-based  health 
improvement  and  preventive  action  have  an  important  role  to  play  in  reducing  health 
inequalities. Good health care translates into greater participation in the labour market, longer 
working life, higher productivity and lower healthcare and social costs. 

It is important for cohesion policy, especially in regions lagging behind, to contribute to the 
improvement  of  long-term  care  facilities  and  invest  in  the  improvement  of  health 
infrastructure, in particular when their absence or insufficient development represent a major 
barrier  to  economic  development.  Member  States  should  ensure  that  the  need  to  increase 
efficiency  in  health  care  systems  is  addressed  through  investment  in  ICT,  knowledge  and 
innovation. In particular, Member States are called upon to pay attention to:  

(cid:190)  Preventing  health  risks  by  means  of  generic  health  information  campaigns  and  by 
ensuring a transfer of knowledge and technology and ensure that health services have the 

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necessary  skills,  products  and  equipment  to  prevent  risks  and  minimise  their  potential 
damage. 

(cid:190)  Filling  the  gaps  in  health  infrastructure  and  promoting  efficient  provision  of  services 
where the economic development of regions eligible under the Convergence objective is 
being affected. This action must be based on a thorough analysis of the optimal level of 
services  provision  and  appropriate  technology,  such  as  telemedicine  and  the  cost-saving 
potential of e-health services. 

5. 

TAKING ACCOUNT OF THE TERRITORIAL DIMENSION OF COHESION 
POLICY  

One of the determining features of cohesion policy - by contrast with sectoral policies - is its 
capacity  to  adapt  to  the  particular  needs  and  characteristics  of  specific  geographical 
challenges  and  opportunities.  Accordingly,  when  developing 
their  programmes  and 
concentrating resources on the priorities presented in the preceding sections, Member States 
and regions should pay particular attention to these specific needs in order to prevent uneven 
regional development from hampering growth potential. 

The  territorial  dimension  is  of  particular  importance  for  urban  and  rural  areas  respectively. 
Cohesion  policy  can  also  play  a  central  role  in  improving  the  situation  of  cross  border  and 
broader  transnational  areas  as  well  as  regions  suffering  from  other  handicaps  due  to  their 
insularity,  remoteness  (such  as  the  outermost  or  Arctic  regions),  sparse  population  or 
mountain  character  by  promoting  better  accessibility,  notably  in  the  case  of  services  of 
general  economic  interest,  by  sustaining  economic  activity  and  by  promoting  economic 
diversification on the basis of their endogenous capacities and natural endowments. 

The  concept  of  territorial  cohesion  extends  beyond  the  notion  of  economic  and  social 
cohesion,  its  objective  being  to  help  achieve  a  more  balanced  development,  to  build 
sustainable communities in urban and rural areas and to seek greater consistency with other 
sectoral  policies  which  have  a  spatial  impact.  This  also  involves  improving  territorial 
integration and encouraging cooperation between and within regions. 

Improving territorial cohesion is a matter both of method – i.e. determining whether a multi-
disciplinary  or  integrated  approach  is  needed  –  and  of  recognising  the  particular  problems 
presented by different geographical circumstances. Success in the area of territorial cohesion 
therefore  depends  on  a  comprehensive  strategy  which  sets  the  framework  within  which 
specific objectives and actions are pursued. 

5.1. 

The contribution of cities to growth and jobs 

In  urban  areas,  the  focus  should  be  on  improving  competitiveness  (through  clustering  and 
networking)  and  achieving  more  balanced  development  between  the  economically  strongest 
cities and the rest of the urban network.  

Account must be taken of specific problems of the urban areas such as social exclusion, high 
and rising crime rates, and the general worsening of the quality of life in deprived urban areas. 
In general, support should focus on the development of participative and integrated strategies 
capable  of  tackling  the  high  concentration  of  economic,  environmental  and  social  problems 
affecting urban agglomerations.  

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Actions  supported  include  measures  to  promote  entrepreneurship,  local  employment  and 
community  development,  as  well  as  the  provision  of  services  to  the  population,  taking 
account of changing demographic structures. Attracting very highly skilled personnel is also 
important  (with  measures  relating  to  accessibility,  high  quality  education,  the  supply  of 
cultural services, and opportunities for RTD and innovation).  

Also important are measures to rehabilitate the physical environment, redevelop brownfield 
sites, and preserve and develop the historical and cultural heritage. The regeneration of public 
spaces and industrial sites can play an important role in helping to create the infrastructures 
necessary for sustainable economic development. 

In the light of the often deep-seated problems of social cohesion, it is important that actions 
should  strengthen  security,  promote  economic,  social  and  cultural  integration  of  the  least 
favoured, combat discrimination, and improve the availability of, and access to, key services.  

The key partners in the cities and local authorities have an important role to play in achieving 
these  objectives.  The  preparation  of  a  medium-  to  long-term  development  plan  for  urban 
regeneration  is  generally  a  precondition  for  success  as  it  ensures  the  coherence  of 
investments and of their environmental quality. This will also help to secure the commitment 
and participation of the private sector in urban renewal. 

5.2. 

Supporting the economic diversification of rural areas 

Cohesion  policy  can  also  play  a  key  role  in  support  of  the  economic  regeneration  of  rural 
areas,  complementing  the  actions  supported  by  the  new  rural  development  fund  (European 
Agricultural Fund for Rural Development).  

The  synergy  between  structural,  employment  and  rural  development  policies  needs  to  be 
encouraged.  In  this  context,  Member  States  should  ensure  complementarity  and  coherence 
between  actions  to  be  financed  by  the  ERDF,  Cohesion  Fund,  ESF,  EFF  and  EAFRD  on  a 
given  territory  and  in  a  given  field  of  activity.  The  main  guiding  principles  as  regards  the 
demarcation line and the coordination mechanisms between actions supported by the different 
Funds  should  be  defined  at  the  level  of  national  strategic  reference  framework/national 
strategy plan. 

For cohesion policy, action in favour of rural areas should contribute to ensuring a minimum 
level of access to services of general economic interest with a view to improving conditions 
in rural areas that is needed in order to attract firms and qualified personnel and to limit out-
migration.  Connectivity  to  the  main  national  and  European  networks  is  also  necessary.  In 
addition,  cohesion  policy  should  support  the  endogenous  capacity  of  rural  territories  by 
promoting, for example, product marketing at national and global level, and favouring process 
and product innovation in existing economic activities. 

Many  rural  regions  depend  heavily  on  tourism.  These  regions  require  an  integrated 
approach dedicated to quality, focusing on consumer satisfaction and based on the economic, 
social  and  environmental  dimensions  of  sustainable  development.  Actions  should  take 
advantage  of,  and  seek  to  preserve  natural  and  cultural  assets  which  can  have  important 
positive spin-offs by protecting habitats and supporting biodiversity. The integrated approach 
should  aim  to  have  a  positive  impact  on  the  tourism  sector,  the  local  economy,  the  people 
working  in  the  tourism  sector,  visitors  and  the  local  population,  as  well  as  the  natural  and 
cultural heritage. 

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It is also important to recognise the potential constraints of an integrated approach. Achieving 
the  necessary  critical  mass  to  deliver  services  efficiently  -  including  services  for  a  healthy 
workforce  referred  to  above  -  is  a  particular  challenge.  Ensuring  universal  access  to  all 
services,  particularly  in  very  sparsely  populated  areas,  may  be  achieved  by  investing  in 
development  poles  in  rural  areas  (for  example  in  small  and  medium-sized  towns)  and  by 
developing  economic  clusters  based  on  local  assets  combined  with  the  use  of  new 
information technologies. 

5.3. 

Cooperation 

Measures  to  promote  cross-border,  transnational,  and  interregional  cooperation  should 
complement the three priorities indicated above. As a consequence, closer cooperation across 
EU  regions  should  help  speed  up  economic  development  and  the  achievement  of  higher 
growth. National borders are often an obstacle to the development of European territory as a 
whole,  and  can  restrict  its  potential  for  full  competitiveness.  In  the  cross-border  and 
transnational  context,  transport,  water  management  and  environment  protection  are  clear 
examples of challenges requiring a focused and integrated approach that goes beyond national 
boundaries.  

5.4. 

Cross-border cooperation 

The ultimate objective of cross-border cooperation in Europe is to integrate areas divided by 
national  borders  that  face  common  problems  requiring  common  solutions.  Such  challenges 
are faced by all border regions in the Union and they are generally related to fragmentation of 
markets, the labour force, investment patterns, infrastructure, fiscal resources, institutions and 
including services of general interest. 

Though cooperation programmes should be tailored according to the particular situation faced 
by each border region, it is important that an effort is made to concentrate the assistance on 
the main priorities in support of growth and job creation.  

Generally  applicable  recommendations  for  future  cross-border  cooperation  are  not  always 
relevant owing to the large diversity of situations. At the same time, in view of the obstacles 
created  by  borders,  a  useful  starting  point  is  the  improvement  of  existing  transport  and 
communication infrastructure and the development, where necessary, of new links. These are 
pre-conditions for establishing or developing cross-border contacts. 

Cross-border  cooperation  should  focus  on  strengthening  the  competitiveness  of  the  border 
regions. In addition, it should contribute to economic and social integration, especially where 
there are wide economic disparities on either side. Actions include promoting knowledge and 
know-how  transfer,  the  development  of  cross-border  business  activities,  cross-border 
education/training  and  healthcare  potential  and  integrating  the  cross-border  labour  market; 
and  joint  management  of  the  environment  and  common  threats.  Where  the  basic  conditions 
for cross-border cooperation are already in place, cohesion policy should focus assistance on 
actions  that  bring  added  value  to  cross-border  activities:  e.g.  increasing  cross-border 
competitiveness  through  innovation  and  research  and  development;  connecting  intangible 
networks  (services)  or  physical  networks  (transport)  to  strengthen  cross-border  identity  as  a 
feature  of  European  citizenship;  the  promotion  of  cross-border  labour  market  integration; 
cross-border water management and flood control. 

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5.5. 

Transnational cooperation 

Transnational areas are macro-regions where there is a need to increase economic and social 
integration and cohesion. Transnational cooperation programmes seek to increase cooperation 
across Member States on matters of strategic importance.  

Support  should  therefore  be  given  to  actions  which  seek  to  improve  the  physical 
interconnection of territories (e.g. investments in sustainable transport) as well as intangible 
connections (networks, exchanges between regions and between the parties involved). 

The actions envisaged include the creation of European transport corridors (particularly cross-
border sections) for the prevention of natural hazards, water management at river basin level, 
integrated maritime cooperation and R&D/innovation networks.  

The  map  of  the  current  zones  for  transnational  cooperation  needs  to  be  re-examined.  The 
delineation  of  future  macro-regions  will  have  to  ensure  that  they  create  the  conditions  for 
implementing basic structural actions. They therefore need to be drawn up taking account of 
territorial coherence and functional criteria of a geographical nature, for example, sharing the 
same river basin or coastal zone, belonging to the same mountainous area, being crossed by a 
major transport corridor. Other criteria, such as history or institutional structures, or existing 
cooperation or Conventions, are also pertinent. 

Finally, the  successful  experience of the  EQUAL  Community  Initiative,  which  promotes  an 
inclusive  society  by  combating  discrimination  and  exclusion,  is  mainstreamed  across  all 
actions  to  further  build  on  partnership,  empowerment,  innovation  and  transnational 
cooperation,  allowing  Member  States  to  share  good  practices  and  develop  new  ways  to 
combat problems they are facing in the above mentioned areas.   

5.6. 

Interregional cooperation 

Interregional  cooperation  programmes  should  focus  on  the  Growth  and  Jobs  Agenda: 
strengthening  innovation,  SMEs  and  entrepreneurship,  the  environment  and  risk  prevention. 
In  addition,  exchange  of  experiences  and  best  practices  regarding  urban  development, 
modernisation  of  public  sector  services  (such  as  health  and  government  using  ICT)  and  the 
implementation  of  cooperation  programmes  as  well  as  studies  and  data  collection  will  be 
encouraged.  Interregional  cooperation  will  also  be  supported  within  programmes  for 
convergence  and  regional  competitiveness  and  employment.  In  addition,  exchange  of 
experiences  and  best  practices  regarding  urban  development,  social  inclusion,  relationship 
between  cities  and  rural  areas,  and  the  implementation  of  cooperation  programmes  will  be 
encouraged. 

6. 

NEXT STEPS 

Following  an  agreement  on  the  Financial  Perspectives  (2007-2013),  the  negotiations  on  the 
regulations for the Structural and Cohesion Funds need to be concluded as soon as possible in 
order  to  allow  maximum  preparation  time  for  the  new  programmes.  At  that  point,  the 
Commission  will  provide  the  final  version  of  the  Community  Strategic  Guidelines  for 
Cohesion  to  the  Council  for  approval  in  accordance  with  Article  24  of  the  draft  General 
Regulation. 

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The  Strategic  Guidelines  are  the  basis  for  the  National  Strategic  Reference  Frameworks, 
which  in  turn  determine  the  priorities  set  out  in  the  Operational  Programmes  in  accordance 
with Article 25 of the draft General Regulation. 

It is essential, therefore, to abide by the timetable for the adoption of the regulations for the 
Structural  and  Cohesion  Funds  2007-2013  in  order  to  allow  sufficient  time  for  the 
programming phase in 2006. 

Finally,  the  Commission  will  launch  a  public  consultation  at  the  time  of  adoption  of  this 
document in preparation for the final version of the Strategic Guidelines. 

Bearing  in  mind  the  limited  resources  available  for  cohesion  policy  programmes  in  the 
Member  States  and  regions,  the  consultation  is  intended  to  help  find  a  response  to  the 
following questions: 

•  To what extent should cohesion policy support the growth and jobs agenda and the Lisbon 

process? 

•  What new elements might be included in order to address this agenda? 

•  Which aspects do you consider to be less relevant to this agenda? 

The results of the consultation exercise will help to shape the final version of the Guidelines 
to be communicated by the Commission to the Council. The Commission therefore invites all 
relevant  stakeholders  to  participate  in  this  consultation  exercise  and  would  welcome 
comments before 30 September 2005. Comments can be posted on: 

http://europa.eu.int/comm/regional_policy/consultation/index_en.htm 

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ANNEX  

LIST OF MAPS 

Map 1   

GDP growth, 1995-2002 

Map 2   

Thematical regional classification of Europe - Competitiveness 

Map 3   

Potential accessibility, multimodal, 2001 

Map 4   

Thematical regional classification for Europe: Hazards 

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