Opinion of the European Economic and Social Committee on the Communication from the Commission: Cohesion Policy in Support of Growth and Jobs: Community Strategic Guidelines, 2007-2013  COM(2005) 299 final — SEC(2005) 904
Date: 2006-04-21
Institutions: European Economic and Social Committee
Subjects: ESC opinion, Structural Funds, economic and social cohesion, economic growth, employment policy, enlargement of the Union, structural policy

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Opinion of the European Economic and Social Committee on the Communication from the
Commission: Cohesion Policy in Support of Growth and Jobs: Community Strategic Guidelines,
2007-2013

COM(2005) 299 final — SEC(2005) 904

(2006/C 185/11)

On 5 July 2005 the European Commission decided to consult the European Economic and Social
Committee, under Article 262 of the Treaty establishing the European Community, on the abovementioned
proposal.

The Section for Economic and Monetary Union and Economic and Social Cohesion, which was responsible
for preparing the Committee's work on the subject, adopted its opinion on 23 March 2006. The rapporteur
was Mr Vever.

At its 426th plenary session, held on 20 and 21 April 2006 (meeting of 21 April 2006), the European
Economic and Social Committee adopted the following opinion by 47 votes to 0 with one abstention.

1. Summary

1.1
The European Economic and Social Committee deplores
the fact that the cohesion policy strategic guidelines 2007-
2013 were presented one year after the proposals for budgetary
programming and Structural Funds regulations for that period,
instead of being presented jointly or earlier. In these circum-
stances, the guidelines are more like supplementary provisions
than the real guidance documents which they should be.

1.2
This time-lag is all the more regrettable given the urgent
need for such guidelines in the face of cohesion issues which
are as varied as they are complex for 2007-2013: measures to
accompany enlargements, consolidation of the euro, making up
the delays to the Lisbon strategy against the background of
accelerating globalisation. Faced with the difficulties of insuffi-
cient growth, considerable disparities between Member States
and a Community budget which is too limited, the Union has
its strong points but they remain more potential than estab-
lished (consolidation of the enlarged single market, infrastruc-
ture designed for the future, reforms for adaptation).

1.3
The EESC takes the view that the links between the prio-
rities of the strategic guidelines and the objectives of the Struc-
tural Funds are not explained, and that the conditions for their
the first priority,
implementation should be clarified. Thus,
seeking to make investments more attractive, raises the central
question of the necessary strengthening of confidence in the
development of
the Union itself. The second priority, of
support for innovation and entrepreneurship, raises the ques-
tion of the continuing unsuitability of Community resources
(lack of progress on the Community patent, gaps in the legal
status of the European company, measures under the Funds too
limited to subsidies). The third priority, seeking to create more
jobs, raises the question of making up the delays to the Lisbon
strategy and a still distant optimisation of the economic and
social operation of the single market in the face of the pres-
sures of globalisation.

1.4
Like the European Parliament, the EESC is preoccupied
by the limited scale of the Community budget programmed by
the European Council of December 2005 for 2007-2013: its
fixed ceiling of 1.045 % of the gross national
income (only
0.36 % for the cohesion budget) places it at a lower level than
before the enlargement from 15 to 25 members, at a time
when the challenges of internal disparities and international
competition have considerably increased. Thus the central ques-
tion which the 2007-2013 strategic guidelines for cohesion
policy should answer is: how to do better with less? As an
answer, the EESC recommends diversifying the resources of
cohesion policy, concentrating its measures more and moder-
nising its management methods.

1.5
The EESC recommends diversifying the resources of
cohesion policy through an innovative machinery in the
Union's financial measures.

1.5.1
The Structural Funds should be able to use instru-
ments other than subsidies and develop, in direct contact with
the EIB and the EIF, loans, interest relief, loan guarantees and
support in the form of investment capital and risk capital.

1.5.2
A redeployment of this kind, on a much larger scale
than the JEREMIE programme alone, would have a multiplier
effect on under the Funds which would better complement
investment of public and private capital, making up for the
modest scale of the budget.

1.5.3
To this end, the EESC is in favour of a substantial
increase in the Union's loan and guarantee capacities, of a
strengthened partnership with the banking and financial sector,
and of corresponding adjustments to the new regulations of the
Structural Funds. These three conditions would require urgent
proposals on these lines on the part of the European Commis-
sion.

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1.6
The EESC recommends that measures under the Struc-
tural Funds should be more concentrated according to the
priority interests of Europe.

1.6.1
Going beyond direct support for the most disadvan-
taged states and regions, which must be continued and intensi-
fied, this implies strengthening the financing of trans-European
regions, partly
infrastructure networks and aid to border
through public/private partnerships.

1.6.2
To this end, the EESC calls for a significant reassess-
ment of the budget of the trans-European networks, which has
been ignored in the December 2005 programming despite the
objectives of the Lisbon strategy.

It also assumes that Community aid is used more to
1.6.3
help Member States better to implement Community guide-
lines, decisions and commitments, whether this involves trans-
posing directives or implementing the Lisbon strategy. In par-
ticular, the training aid budget, also minimised in December
2005, should be reassessed.

1.7
Finally, the EESC recommends modernising the manage-
ment methods of cohesion policy in order to promote more
transparency and interactivity.

1.7.1
This assumes that Community aid, like state aid, can
be shown to be fully compatible with European competition
policy.

This also requires greater involvement of the actors of
1.7.2
organised civil society, primarily the social partners,
in the
formulation, management and follow-up of European cohesion
policy.

1.7.3
The EESC therefore asks that the involvement of the
socio-occupational actors should be made the subject of explicit
provisions integrated with the strategic guidelines. The condi-
tions for their implementation in each of the Member States
should be specified in annexes to the programming and review
documents.

2. Introduction

2.1
The Communication from the Commission on the Stra-
tegic Guidelines 2007-2013, adopted on 5 July 2005, follows
on from a series of previous proposals.

2.1.1
The Community budget guidelines for 2007-2013,
presented on 17 February 2004, were drawn up on the basis of
a rate of 1.14 % of Gross National Income (GNI).

2.1.2
The draft Regulations amending the provisions of the
Structural Funds (ERDF, ESF, Cohesion Fund) for 2007-2013,
which were presented on 14 July 2004 (1): The Commission
decided to set three objectives for those Funds:

(1) EESC Opinions on the Funds (general provisions), Cohesion Fund
Fund, OJ C 255 of

and European Regional Development
14.10.2005, pages 79, 88 and 91.

2.1.2.1
a convergence objective, the successor of the current
Objective 1, which would benefit less developed regions in the
Union, especially those where GDP is lower than 75 % of the
EU average: 78.54 % of funds would be allocated to this objec-
tive;

a regional competitiveness and employment objec-
2.1.2.2
tive, to succeed the current Objective 2, which would benefit
other regions in the EU. This targets, in particular, the imple-
mentation of the Lisbon Strategy and improving employment:
17.22 % of Fund resources would be allocated to this objective;

a European territorial cooperation objective,

2.1.2.3
succeed the current
resources would be allocated to this objective.

to
Interreg programme: 3.94 % of Fund

2.1.3
On 14 July 2004 the Commission also presented a
draft statute for European groupings of cross-border coopera-
tion, aimed at facilitating such intra-Community initiatives (2)

2.2
The Strategic Guidelines on cohesion policy 2007-2013,
presented by the Commission on 5 July 2005, set out three
priorities. These are different from the abovementioned Struc-
tural Fund objectives, but tie in with them:

2.2.1
improve Europe's attractiveness to investment;

the first priority of

the strategic guidelines is to

2.2.2
entrepreneurship;

the second priority is to encourage innovation and

2.2.3

the third priority is to support job creation.

2.3
These strategic guidelines are to be implemented by
means of National Strategic Reference Frameworks to be
prepared by the Commission, Member States and regions at a
later date.

The presentation of the strategic guidelines represents
2.4
in the discussions on an overall
the final missing element
it would
package for cohesion policy 2007-2013. However,
have been more logical
if the Commission had initiated the
discussion on cohesion policy by presenting these strategic
guidelines, which are intended to establish an overall policy
framework. Instead it first presented the draft Regulations on
the Funds, which contain the
implementing provisions.
Without better coordination between the strategic guidelines
and the Fund Regulations, ensuring that it is the former which
clearly play the guiding role and are not just an adjunct to the
latter, there is a risk of diluting the added value of European
cohesion policy and encouraging a ‘renationalisation’ of devel-
opment strategies. This would be detrimental to coherence,
competitiveness and economic and social efficiency in the
Union.

(2) EESC Opinion: OJ C 255 of 14.10.2005, p. 76.

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The discussions on the budget guidelines and the Fund
2.5
Regulations
for 2007-2013 began under difficult circum-
stances, marked by obvious differences in opinion between the
25 Member States as to what the sums involved should be and
how they should be allocated. After an initial setback in June
2005, the European Council reached a budgetary agreement on
17 December 2005 on a much more modest basis: it placed a
ceiling of 1.045 % of the GNI, with 252 billion euro (82 %)
allocated to the convergence objective, 48.5 billion (15.5 %)
allocated to the competitiveness and employment objective,
and 7.5 billion (less than 2.5 %) allocated to the European terri-
torial cooperation objective.

2.6
On 18 January 2006 the European Parliament rejected
this budget programming which fell short of its expectations.
Discussions therefore resumed between the Council and the
Parliament,
resulting on 4 April 2006 in a compromise
providing for EUR 4 billion (of which EUR 2 billion in
reserve) to be added to this package. This compromise has still
to be ratified by both sides.

3. Observations on the challenges for cohesion policy

2007-2013

The 2007-2013 period covered by the strategic cohe-

3.1
sion guidelines will be marked by major challenges:

3.1.1
In the first instance, the process of enlargement will
have to be continued and consolidated. Having grown from 15
Member States to 25 in 2004,
the European Union will
welcome two additional countries in 2007. Others could follow
after 2013, if not before, given that the list of candidates for
accession is far from exhausted. In all likelihood, even if the
enlargements strengthen the single market and its capacities for
growth, employment,
trade, production, consumption and
competitiveness in the face of globalisation, ever increasing
economic and social disparities will require a major qualitative
leap forward in the coordination of European and national poli-
cies, the management and consolidation of the Single Market,
and EU spatial planning.

3.1.2
The euro zone also needs to be successfully enlarged,
and at the same time strengthened and made more attractive
and more efficient in terms of growth and jobs. Only 12 out of
the 25 Member States are currently members of that zone. By
2013 it should include a majority of Member States, provided
that they have met all the conditions for entry. As with the
enlargement of the Union, the extension of the euro zone will
require increased convergence, in an environment of competi-
tion, mainly at an economic level, but also in a number of
other related areas, ranging from taxation, particularly harmo-
nisation of tax bases, to social policy.

3.1.3.1
globalisation and the growing strength of newly
emergent economic powers will increase competitive pressures
and intensify company relocation;

3.1.3.2
the innovations of a globalised information society;

technological change will accelerate, spurred on by

3.1.3.3
the effects of the ageing of the European population
will become even more apparent, especially when the ‘baby
boom’ generation of the post war years moves into retirement.
This will impact on living and employment conditions and the
equilibrium of Member States' social benefit systems;

3.1.3.4
the migratory pressures from less developed third
countries will probably continue to increase. There is a need to
regulate them better, partly by improving adaptation to the
Union's needs and integration capacities, and partly by
increasing very significantly the effectiveness of development
aid for the countries of origin, in order to create more jobs and
more economic and social progress in those countries. It will
also be necessary better to integrate the need for adaptation to
immigration into schooling and training programmes at the
various levels.

3.1.3.5
The struggle against social exclusion and poverty,
whether affecting job seekers or ‘poor workers’, will remain an
important requirement for European cohesion policy. If a solu-
tion is not found to problems of this type, which go beyond
employment questions as such, it will be difficult in practice to
ensure cohesion in both social and economic terms.

The Lisbon Strategy's 2010 deadline, as set by the
3.1.4
European Council
in 2000, will come in the midst of this
period of profound change. Yet, implementation of this strategy
is behind schedule. Catching up on Europe's failure to maintain
competitiveness will become more urgent, but at the same time
more difficult.

3.2
In dealing with these challenges over the coming years,
European cohesion policy can fall back on several important
factors which work in its favour:

the scale of

the European internal market, which
3.2.1
comprises more than half a billion Europeans, and its
economic, commercial and human potential which is still
under-exploited in terms of both economic supply and demand
and the labour market;

3.2.2
the European model of social relations and the Euro-
pean social dialogue, which emphasise making the most of
human resources in the face of the challenges of employment,
development, health and quality of life in the context of globa-
lisation;

3.1.3
throughout the period:

Structural

change will

continue

to

accelerate

dynamic economic growth in the new Member States,
3.2.3
which in many cases is double the Community average, should
help close the substantial gaps in development and boost the
Union's economic and commercial growth;

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3.2.4
new opportunities for planning and investment which
unification of the whole European continent will open up,
making it possible to revamp its internal economic organisation
and implement innovative infrastructure and spatial planning
programmes;

the economic and social

the Lisbon
3.2.5
Strategy, insofar as they take root and have a knock-on effect,
with an active contribution by the social partners, should also
give crucial support to cohesion policy.

reforms of

3.2.6
In short, aid under the European cohesion policy
should above all seek to promote a virtuous circle of growth
and employment by developing positive interactions between
these various factors (deepening and broadening of the internal
market, investments and regional development, reforms in the
Member States).

3.3
However, European cohesion policy also faces substan-
tial difficulties, which will make it harder for its objectives to
be achieved.

First

3.3.1
there is the continuing difficulty in reviving
strong economic growth in Europe. Far from catching up on
its competitors,
the European Union is continuing to lose
ground. Economic growth is generally lacklustre, unemploy-
ment is high in numerous Member States, affecting both young
and old, too few jobs are being created, the research deficit
persists, ever more companies are relocating. Europe's current
ranking in global economic performance hardly reflects the
ambitious targets that were set five years ago and no significant
improvement in the situation seems to be in sight.

Another major challenge for cohesion policy lies in
3.3.2
the scale of the economic and social disparities following enlar-
gement. These will take a long time to iron out. An innovative
approach is needed in cohesion policy compared with previous
years when the development differentials between the Member
States were not as great.

to 0.36 % of

3.3.5
Compared with the ever-increasing needs, the Euro-
pean Funds are still and will remain relatively modest. The
agreement of 17 December 2005 limiting the European budget
to 1.045 % of the gross national income reduces the cohesion
policy budget
the GNI. European budgetary
resources are thus reduced to a level below that which
prevailed before the enlargement from 15 to 25 members,
which concerns the EESC as it does the European Parliament.
Such a low percentage figure, which of course has nothing in
common with that of a federal budget (the US budget repre-
sents more than 20 % of GDP), also seems excessively small in
relation to the Union's cohesion objectives.

3.3.6
Thus the central question which the strategic guide-
lines for 2007-2013 have to answer is: how to do better with
less? The very limited funds that are available will therefore
have to be put to best possible use, by ensuring not perennial
assistance but
the conditions for autonomous, sustainable
development. This will require, firstly, a maximum of conver-
gence and complementarity with national budgets. Secondly, it
means that funds will have to play a pump-priming role and
support market forces. Together public funding and market
forces can mobilise resources on the scale required for the
development of Europe as a whole.

To meet all these challenges,

it will be advisable to
3.3.7
diversify the resources of cohesion policy, to concentrate its
measures more effectively and to modernise its management
methods. These various aspects are developed in the following
paragraphs.

4. Observations on the priorities for cohesion policy

2007-2013

3.3.3
Cohesion policy is weakened by inadequate economic
policy coordination, including fiscal policy coordination, which
is still too lax, even between countries that have adopted the
euro. The increase in the number of Member States makes a
solution to this problem both more urgent and more difficult.
Greater economic coordination should be accompanied by
better- structured consultation on social approaches.

4.1
The main priority of the 2007-2013 cohesion policy
guidelines is ‘growth and employment’. They refer to the part-
nership for growth and employment proposed by the European
Council
in March 2005 and to the integrated guidelines
proposed by the Commission in June 2005, which also focus
on growth and employment.

3.3.4
The dysfunctions to be corrected include insufficient
involvement of civil society actors in a process where public
administrations take the leading role and cohesion policy is
largely managed bilaterally by the Commission and the
Member States (3).

(3) EESC Opinion on the Communication from the Commission to the
Council and the European Parliament — Building our common
future: Policy challenges and budgetary means of
the enlarged
Union 2007-2013, OJ C 74 of 23.3.2005, p. 32.

So that cohesion policy contributes to the general
4.2
‘growth and employment’ priority, the Commission Communi-
cation highlights three specific priorities: Improving the attrac-
tiveness of Europe to investment, encouraging innovation and
entrepreneurship, boosting employment and training. These
three priorities are complemented by a cross-cutting concern to
improve spatial planning in the Union, both in rural and urban
areas, and in terms of cross-border, national and regional link-
ups.

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The first priority, which is to make Europe more attrac-
4.3
tive to investment, seems to be particularly appropriate.
It
should be pursued particularly in the less developed regions of
the enlarged Union which deserve to be given priority, while
making sure that
there are transitional measures to assist
former priority regions. In view of the inherent limits on the
European Funds,
the requirement has to be to encourage
capital investment in priority areas for the development of the
European economy, especially by the private sector.

4.3.1
Despite the progress already achieved in completing
the internal market, in implementing economic and monetary
union, and in some of the Lisbon Strategy reforms, the Euro-
pean Union has nonetheless not yet succeeded in developing
an autonomous and effective mechanism for growth that capi-
talises on the synergies and complementarity between national
economies. It will therefore be difficult to pursue an effective
cohesion policy without first restoring confidence on the part
of all the groups concerned (businessmen, employees, investors)
both in the future direction of economic and social develop-
ment in the Union, and in its political and institutional future.

4.3.2
Hence the need, over the coming years, to dispel some
of the uncertainty that currently hangs over such crucial issues
as completing the internal market, consolidating the competi-
tiveness of an economy integrated around the euro, strength-
ening growth and employment,
improving living conditions,
successfully implementing the Lisbon Strategy, effective govern-
ance of the Union's institutions, and optimal and sustainable
planning in the enlarged Europe with a view to harmonisation
of economic, social and environmental progress.

in particular

The Commission Communication focuses on invest-
4.3.3
transport.
in infrastructure networks,
ments
However,
it does not examine the reasons for the persistent
delays in these projects. To address these delays, greater priority
needs to be given to the financing of trans-European infrastruc-
ture for transport, energy and telecommunications, which influ-
ence the Union's cohesion. One can only deplore at this point
the drastic reduction in the financing of these networks under
the 17 December 2005 agreement: the fact that this priority
was sacrificed by the European Council is in direct contradic-
tion with the Lisbon commitments which were intended to be
met by the middle of the 2007-2013 period. The EESC there-
fore asks, in line with the views expressed by the European
Parliament, that a clearly reassessed budget be agreed to finance
the trans-European networks.

4.3.4
investment areas
investment
in the
Europe's energy self-sufficiency.

The Communication also highlights two other priority
firstly, encouraging
strengthening

for cohesion policy:
environment,

secondly,

4.3.4.1
A direct link needs to be established between these
priorities and the abovementioned support for European infra-
structure networks.

4.3.4.2
environmental requirements.

Beneficiaries of European aid must also comply with

4.4
The second priority for cohesion policy is to improve
innovation and entrepreneurship. By doing so the Commission
is directly incorporating the priorities set out in the Lisbon
Strategy as regards the promotion of a European knowledge
society.

4.4.1
require an increase in research investment.

Achieving this priority will,

in the first

instance,

4.4.1.1
However, Europe as a whole is losing ground in this
area compared to its major technological partners. Member
States' research funding, which is often more than a third
below the target of 3 % of GDP set by the Lisbon Strategy, has
not risen but plateaued, in some cases even been cut over the
last few years. The European budget for the R & D Framework
Programme (RDFP)
remains weak in comparison to the
research budgets of Member States, and fails to provide
adequate coordination of national programmes. Moreover,
there are still major bottlenecks in the Community institutional
process, some at the highest level. This sends out the wrong
signal. The persistent failure over the past thirty years to intro-
duce a Community patent points to a worrying inability on the
part of the Union to give itself the means to fulfil its ambitions.

is needed is a genuine, credible
4.4.1.2
Therefore, what
European research policy. This will
require a substantial
increase in European research funding, with the Community
the same time this
budget being adjusted accordingly. At
funding must lead to more effective coordination of national
programmes. The way has finally to be cleared for the Com-
munity patent, even if, initially, it is not adopted by all Member
States for want of unanimity. Where would the euro, Schengen
or European social policy be if in the same way their introduc-
tion had been dependent on unanimous implementation?

Another need highlighted

4.4.2
the Commission
Communication is to encourage the creation and development
of enterprises, especially at the cutting edge of technology, and
to support networking at European level.

by

4.4.2.1
It is regrettable that small companies still lack the
option of a simplified European statute facilitating their cross-
border activities.

4.4.2.2
The EESC therefore reiterates the call it made in its
own-initiative opinion on a ‘European Company Statute for
SMEs’ (4) for the Commission to present and adopt such a Euro-
pean statute for small and medium-sized companies without
further delay.

(4) OJ C 125 of 27.5.2002, p. 100.

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4.4.2.3
The EESC also deplores the Commission's with-
drawal in autumn 2005 of the proposals on a European statute
for mutual insurance companies and European associations, the
need for which is greater than ever.

The Commission Communication also stresses the
4.4.3
important issue of company financing and the need to make
access to financing easier, especially for innovative businesses.

4.5.1
The first prerequisite for boosting employment is to
strengthen economic growth and against this background to
facilitate job creation. This objective presupposes a more
dynamic economy in terms of both supply and demand,
combined with an administrative, fiscal and social environment
more favourable to job creation, especially as regards the situa-
tion for small companies, the self-employed, craftsmen and
occupations which promote vocational
skills. As already
mentioned above, the Structural Funds can have only a limited
direct effect in such areas, and are most useful in supporting
targeted initiatives and pilot projects, while promoting best
practice.

4.4.3.1
It needs to be emphasised here that the capacity of
the Structural Funds to significantly improve companies' access
to financing inevitably remains limited and, indeed, marginal,
under the current arrangements. However, limited support and
co-funding for pilot projects has proven to be useful in suffi-
ciently targeted areas where they have a real demonstration
value. The EESC is pleased to note the launching of
the
JASPERS and JEREMIE initiatives,
in partnership between the
the European
the European Investment Bank,
Commission,
Investment Fund and the European Bank for Reconstruction
and Development. The JASPERS initiative is intended to help
the national and regional authorities of states eligible for the
convergence objective in preparing large infrastructure projects.
The JEREMIE programme aims to improve access to financing
for small enterprises. The EESC hopes that these initiatives are
made effectively operational and prominent at local level, so
that this new framework for action has maximum effect in
terms of economic development and creation of activities and
hence jobs on the spot.

In order for the Funds to have a more direct and
4.4.3.2
noticeable impact on company financing, their remit has to be
widened to encompass facilities for bank loans, for making risk
capital more available and for giving small companies better
access to micro-credit and guarantees. This would mean taking
a new look at the Funds' resources and their financial engi-
neering — currently limited to the granting of subsidies. It
would be a matter, along the lines of the JEREMIE programme
but on a much larger scale, of transforming these subsidies into
financial products: one euro set aside to guarantee a risk capital
loan would thus make it possible to finance five to ten euro of
an SME's investment, thus ensuring that the measures taken
under the European Funds have a multiplier effect. The EESC's
recommendations on this key issue are developed further in
chapter 5 of this opinion.

Swift and effective completion of the single financial
4.4.3.3
market in Europe, together with an efficient competition policy
and consolidation of economic and monetary union, would
lead to a decisive improvement
in access to financing for
companies of all sizes. However, this issue is barely referred to
in the Communication, even though it is one of the Commis-
sion's main responsibilities to ensure that these objectives are
met in the coming years.

4.5.2
As the Commission emphasises, adjustments to the
labour market are a key requirement. The Structural Funds
should focus in particular on improving the functioning of the
Single Market in this area. This requires strengthening mobility,
including the transferability of pension schemes, and removing
barriers to the European employment market, especially in the
services sector (5) where more than two thirds of new employ-
ment is created, while respecting social conditions laid down in
laws and collective agreements.

The Commission highlights

4.5.3
the need to improve
training for jobs. The EESC is nonetheless very concerned by
the halving, decided in December 2005, of the lifelong learning
budget proposed by the Commission. The EESC calls for it to
be raised to a level appropriate to the Lisbon strategy commit-
ments. In this field, new skills will be needed, with increased
responsibilities and calling for more initiative. With this in
mind, future programmes will have to allow regional priorities
it is essential for funding
to be taken into account. Indeed,
under the European Social Fund to be as well adapted as
possible to regional needs and not limited to the cofinancing of
national policies.

In general,

the EESC emphasises that no efforts
4.5.3.1
should be spared to make the provisions as complementary
and efficient as possible and to mobilise public and private
players in a long-term partnership centring upon regional stra-
tegies based on the following priorities: promoting access for
all to innovation and life-long training, improving the manage-
ment and development of human resources in all companies,
increasing the percentage of women employed, improving the
level of activity up to retirement, gearing career guidance and
training policy to the needs of the economy, promoting voca-
tional training and apprenticeship at all levels, particularly in
those trades which have recruitment difficulties, and focusing
on training courses which lead to active involvement in the
economy of a growing number of excluded people.

The third priority set out in the Communication is to

4.5
generate employment and improve the quality of jobs.

(5) EESC Opinion on the Proposal for a Directive of the European
Parliament and of the Council on services in the internal market, OJ
C 221 of 8.9.2005, p. 113.

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4.5.3.2
The Structural Funds should also prioritise the cofi-
nancing of training programmes at European level along the
lines of the successful Erasmus and Leonardo programmes.
These programmes should henceforth shift into a higher gear,
to enable them to support two to three times as many young
Europeans.

out. This represents a major shortcoming: the strategic guide-
lines should act as a framework for the use of Funds, not
merely flank them.
In other words, the strategic guidelines
appear more like collateral implementing instructions than the
blueprint they are meant to be.

There should also be a special mention of the ageing
4.5.4
of the population, which requires special adaptation of the
various aspects mentioned above linked to job creation and
welfare systems (administrative,
fiscal and social conditions,
child care including childminding at a reasonable price, labour
market, training and human resources).

The three priorities of

4.6
the strategic guidelines are
rounded off by a cross-sectoral call for the territorial dimension
of cohesion policy to be taken into account. This constitutes a
kind of fourth priority.

The Communication refers to the contribution of
4.6.1
cities to growth and employment (better economic, social and
environmental management of urbanisation). It also advocates
the diversification of the economy in rural areas (maintaining
services of public interest, development of networks, promoting
It would have been worth
local development
explaining more fully the interactions between these require-
ments and the three priorities of the strategic guidelines.

clusters).

4.6.2
torial cooperation on three levels:

The Communication also stresses the need for terri-

4.6.2.1
cross-border cooperation, especially for the purpose
of developing mutual exchanges and promoting economic and
social integration;

transnational cooperation,

4.6.2.2
in order to encourage
joint action by Member States in areas of strategic importance
(transport, research, social integration);

4.6.2.3
best economic, social and environmental practices.

interregional cooperation to encourage the spread of

4.6.3
However, the EESC regrets that this reference to the
need for European territorial cooperation appears to be only
complementary, even accessory, to the priorities of the strategic
guidelines, instead of being explicitly integrated with them.

Overall, this assessment of the three priorities of the
4.7
strategic guidelines, along with the territorial dimension, raises
several major questions:

Firstly, the priorities lack the precision required of a
4.7.1
genuine ‘strategic’
the implementation and
management of cohesion policy. Rather, they appear to serve
as reminder of good practices to be applied throughout the
different policy areas.

framework for

4.7.2
In particular, the links between the priorities of the
strategic guidelines and the three Fund objectives are not spelt

For the strategic guidelines to live up to their name
4.7.3
and perform their function effectively, they need to set out
more precisely how priority objectives in the following areas
are to be achieved:

4.7.3.1
provides over and above national and local policies;

the ‘added value’

that European cohesion policy

‘territorial concentration’

4.7.3.2
development clusters and axes,
knock-on effect;

in and along European
in order to create an overall

providing an overall blueprint

4.7.3.3
for the European
Funds, ensuring that the strategic guidelines constitute an effi-
cient and coherent framework, and are not just implementing
instructions.

5. Comments on the resources for cohesion policy 2007-

2013

5.1
As support for cohesion policy, the Commission draws
special attention to the role of the Structural Funds (Regional
Fund and Social Fund) and of the Cohesion Fund. It points out
that their use, in line with the strategic objectives mentioned
earlier, must make it possible to stimulate growth, make better
use of the opportunities of the Single Market, promote greater
convergence between the Member States, strengthen regional
competitiveness and improve the economic, social and cultural
integration of the Union.

The first point to note is that the European Union will
5.2
be faced with an increasing gap between the limitations on the
Funds and the scale of the needs (disparities in development
between Member States, delays in setting up infrastructure,
delays in the Single Market, lagging competitiveness, delays in
implementing the Lisbon Strategy). Internal reorganisation of
Community budget priorities is necessary, partly by continuing
the current reform of the Common Agricultural Policy. But this
will provide only limited scope for increasing the appropria-
tions of the Structural Funds, since the overall amount of the
Community budget will remain very limited. At all events, with
the Community budget limited to a ceiling of 1.045 % of GDP,
the 0.36 % (EUR 308 billion of a budget of EUR 862 billion,
subject to the supplement of EUR 4 billion agreed on 4 April
2006, yet to be ratified by the Parliament and the Council)
which should go to cohesion policy does not seem to the EESC
sufficient in itself to enable the Union to achieve its cohesion
objectives for 2007-2013.

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5.3

The most careful attention should therefore be given to:

5.3.1
the methods of intervention under the Funds, which
should have an increased gearing effect on investment, invol-
ving more innovation than in the past in this area;

the real concentration of

5.3.2
the
Funds, which should have more of a restructuring effect parti-
cularly on a transnational and cross-border scale.

intervention under

On the methods of

5.4
number of points deserve to be emphasised:

intervention under the Funds, a

Firstly,

instrument.

5.4.1
intervention under the Structural Funds can
only accompany the Union's cohesion policy. It cannot be its
exclusive or even dominant
It must essentially
promote, in the service of common goals, a mobilisation of the
capital available on the markets and more convergent use of
national and regional budgets. It is thus above all a matter of
ensuring a gearing effect. In this context, the structural instru-
ments of the Union must constitute a central planning tool for
the European territory, accompanying Community policies and
current economic and social changes.

5.4.2
To this end, the use of EU Funds and of the European
Investment Bank should be based on a more flexible and inno-
vative concept of financial engineering. As the Commission
rightly acknowledges,
the Funds should no longer confine
themselves to grants but should support other instruments
such as loans, loan guarantees, convertible instruments, invest-
ment capital and risk capital. The EESC not only supports this
view, but asks that all the appropriate consequences be drawn
from it and that the Union's methods of financial intervention
be thoroughly reformed.

The EESC takes the view that the development of
5.4.2.1
such alternative methods of intervention on the part of the
Structural Funds,
in close cooperation with the European
Investment Fund and the European Investment Bank, would
help to increase the impact of Community action considerably,
and make it possible to combine it with the investment of
public and private capital in a better way. In particular, they
would contribute to a public/private sharing of the financing of
investments, particularly in SMEs, which are regarded as risky
by the traditional financial partners and for which the loan
conditions may become even stricter in future following the
Basel II agreements. They would be an effective way of miti-
gating the limitations of the European budget. Indeed, each
euro of subsidy would often have been better used to guarantee
five to ten euro of loan. This would make it possible in particu-
lar to increase the number of beneficiaries, while giving them
more responsibility than would granting non-refundable subsi-
dies.

5.4.2.2
These new methods of intervention should be imple-
mented as close as possible to the beneficiaries, to ensure a
maximum gearing effect on economic and social development.
Other resources could also be mobilised through better coordi-
nation of measures between the Structural Funds and other
institutions already active in European development, such as
the EBRD. One priority field of action should be to promote in
a much wider and more active way the public/private partner-
in conditions of transparent, open
ships at European level,
competition, particularly to finance the large-scale infrastruc-
ture projects which are essential both to the overall cohesion
and to the collective competitiveness of Europe. As mentioned
earlier (6), the budget allocation of the trans-European networks
should in any case be raised substantially, because the public/
private partnerships for European infrastructure cannot succeed
without an adequate commitment on the part of the public
Community Funds.

5.4.2.3
A reform of this kind in the intervention methods of
the Community funds would call for an increase in the Euro-
pean Union's borrowing and loans capacity.
It would also
involve greater coordination with the EIB and other financial
institutions, entering into a real partnership with the European
banking and financial network, and strengthening the condi-
tionality of aid for Member States and for the direct benefici-
aries. Finally, it would be desirable to add this aspect to the
reform of the regulations of the European funds for 2007-
2013,
in order to make the new systems of financial engi-
neering fully operational. The EESC therefore calls upon the
European Commission to make new proposals in these three
areas.

5.4.3 Moreover, it is regrettable that the management of the
Structural Funds has itself in recent years been too opaque and
too much dominated by bilateral relations between the Com-
munity administration and national administrations, with no
sign of effective overall coordination or of adequate control or
monitoring of the proper use of the Funds. The Union's Court
of Auditors has often deplored this situation, but the isolated
measures which followed have remained too limited. The
general principle of greater transparency in the formulation,
adoption and implementation of Community policies has not
yet been extended, as it should have been, to the operation and
management of the Funds. The strategic guidelines of cohesion
policy should henceforth be the basis for a definite change in
this direction.

5.4.4
Among the innovations needed to ensure this better
governance of European aid, one should mention the need for
more systematic checks on the compatibility of Community aid
with competition rules. Some poorly monitored measures using
the Funds in the past, intended to reduce regional disparities,
have caused serious and damaging distortions to the principles
of fair competition, although it is perfectly possible to reconcile
these two objectives. The Union's subsidies are public ones,
comparable to state subsidies, and should therefore be subject
to the same checks. This principle also leads to the necessary

(6) See point 4.3.3.

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aim of better mutual coordination between European subsidies
and national and regional subsidies. The Commission's annual
competition report should therefore include in future a chapter
on the conditions for monitoring Community aid in accordance
with the Union's competition policy. The EESC has made this
recommendation on previous occasions, but so far with no
result.

5.5
On the concentration of intervention, the Commission
should seek to ensure that the European Funds' intervention is
driven by a more European dimension of spatial planning in
the Union, which is far from being the case at present, apart
from isolated progress initiated by Community action plans.

5.5.1
Indeed, the Structural Funds have so far hardly sought
to encourage a transnational dimension in their measures,
despite the regulatory and economic establishment of the large
European internal market, now covering 25 Member States.
The Structural Funds have been managed mainly by the
Commission on the basis of the national priorities presented by
the Member States, with no direct reference to the new coop-
eration needs resulting from the removal of physical, technical
and fiscal barriers to trade, at the same time as economic and
social disparities have increased, making it necessary to
strengthen transnational links and networks.

This

5.5.2
situation should be remedied by developing
clearer intervention priorities to consolidate the links between
Member States at transnational, interregional and cross-border
levels. The apt comments made on these aspects by the
Commission deserve to be reassessed, developed and incorpo-
rated in the priorities for intervention under the Funds, instead
of being added on as a supplement to them.

6. Comments on integration in national and regional poli-

cies

Integration of cohesion policy into national and regional
imperative, rightly emphasised by the

6.1
policies is a central
Commission. There is a need to make progress in two areas:

Firstly, it must be ensured that Community aid is effec-
6.2
tively used to support the optimal
implementation of Com-
munity guidelines, decisions and commitments in the various
Member States. The main priorities are:

more effective implementation of the Lisbon Strategy. Special
mention should be made of:

6.3.1
reforms;

assisting economic, social and administrative structural

6.3.2
European approaches
which deserves to be supported (7);

simplifying the regulatory framework and developing
self-regulation
to socio-occupational

6.3.3
area, thereby optimising the advantages of the euro;

speeding up the completion of the European financial

6.3.4
convergence of tax systems on a basis which is attrac-
tive to investment and innovation, to provide a better frame-
the Member States' different
work for competition under
systems.

6.4
Finally, one should as far as possible avoid adding
further national or regional criteria to the framework laid down
by the EU, in order to retain the necessary flexibility in defining
the content of future programmes. By the same token, one
should avoid setting up procedures likely to fix a priori the
allocation of appropriations for a period of seven years or to
current
preclude
programmes.

easily adapting the

the possibility of

6.5
The EESC hopes that Community aid will help to
promote a European industrial approach, making it possible to
coordinate at
(European, national and
levels
regional) the public authorities and the actors of organised civil
society (8).

the various

6.6
Finally, the EESC is pleased that the European Council of
December 2005 gave its agreement in principle to the setting
up of a European Globalisation adjustment Fund ‘designed to
provide additional support for workers made redundant as a
result of major structural changes in world trade patterns, to
assist them with their re-training and job search efforts.’ The
Heads of State or Government invited the Council to define the
eligibility criteria for this Fund. The EESC takes the view that
the European social partners could be involved in their defini-
tion on an interprofessional or even a sectoral basis.

correct and timely transposition of European direc-

tional actors

6.2.1
tives;

7. Comments on the involvement of the socio-occupa-

strengthening of administrative cooperation at Euro-
6.2.2
pean level, particularly to ensure the proper functioning of the
Single Market;

better application of both components of the stability
6.2.3
and growth pact, which should not remain merely a restraint
on deficits but should open the way to common economic
governance.

6.3
Secondly, steps should be taken to ensure that Com-
munity aid does indeed help to strengthen consistency between
European and national policies, particularly with a view to

7.1
It is very necessary to involve the socio-occupational
actors in cohesion policy. The EESC has called for this involve-
ment to be strengthened, e.g. in its opinion of 2003 on the
partnership for the implementation of the Structural Funds (9).
The Commission acknowledges this need, emphasising that it is
playing a decisive role in ensuring better adoption of this
policy at local level. However, it does not present any proposals
for organising ways of doing this and integrating them in the
strategic guidelines for cohesion.

(7) Information Report of the Section for the Single Market, Production
and Consumption on the Current state of co-regulation andself-
regulation in the Single Market.

(8) See EESC opinion on Modern Industrial Policy, OJ C 110, 9.5.2006.
(9) OJ C 10 of 14.1.2004, p. 21.

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7.2
The EESC therefore proposes that the strategic guide-
lines for cohesion policy 2007-2013 be supplemented by speci-
fying a real framework for the involvement of socio-occupa-
tional actors. Like the provisions of the Cotonou Agreement in
favour of the non-state actors of the African, Caribbean and
Pacific countries, explicitly consulted and associated with the
management of European subsidies, this framework should be
fully integrated in the strategic guidelines, and be binding on
the Member States.

7.3

The framework should include the following objectives:

involving the socio-occupational

7.3.1
interest groups and
the social partners in the European definition of the main
guidelines (particularly the overall strategic document) and
their decentralised implementation at national level (particularly
the national strategic reference framework established by the
Member States), and at regional and local levels;

7.3.2
deepening the economic, social and environmental
components of this dialogue, in the service of effective, partici-
patory and lasting development;

involving the socio-occupational actors directly in
7.3.3
improving employment, especially through contractual arrange-
ments between the social partners aimed particularly at moder-
nising vocational training systems and facilitating a better adap-
tation of the labour market;

7.3.4
encouraging the actors of civil society to make better
use of the European Single Market by intensifying trans-Euro-
pean production, trade and infrastructure networks and setting
up
co-regulation
arrangements which help to complete the Single Market;

socio-occupational

self-regulation

and

7.3.5
defining with the socio-occupational actors effective
models of public/private partnership, with adapted arrange-
ments for concessions,
incentives, guarantees and subcon-
tracting;

7.3.6
developing on this basis more public/private partner-
ship programmes, particularly for infrastructure and financing
SMEs at local level;

encouraging the socio-occupational actors to intensify
7.3.7
European cooperation initiatives on research and technological
innovation;

Brussels, 21 April 2006

7.3.8
supporting the innovative approaches of the socio-
occupational actors who contribute to the outlook for sustain-
able development.

7.4
To be effective, such a dialogue will have to be better
organised and better structured, both in Brussels and in the
various Member States and regions. The framework for involve-
ment should thus include the following provisions:

7.4.1
basing the dialogue on effective information, well
communicated by the public authorities of the Member States,
on the strategic guidelines and their implementing arrange-
ments;

7.4.2
beginning consultations at a sufficiently early stage,
allowing for the socio-occupational actors to be involved in the
impact studies;

7.4.3
up given to the consultations and to their proposals;

informing the socio-occupational actors on the follow-

7.4.4
enclosing with the official programming or revision
documents a summary of the conditions for consulting the
socio-occupational actors;

7.4.5
programmes,
nerships which are also cross-border or interregional;

promoting, in the case of cross-border or interregional
joint consultations and socio-occupational part-

7.4.6
encouraging in particular social dialogue initiatives on
these cross-border and interregional plans, particularly by
setting up the optional transnational framework for collective
negotiation as announced in the 2005-2010 social agenda.

7.5
The EESC also reiterates its support for the Commission
proposal to devote 2 % of the European Social Fund's resources
to the development of capacities and activities undertaken
jointly by the social partners.

7.6
The EESC has agreed, with the explicit support of the
European Council of March 2005, to develop a European infor-
mation and support network for the initiatives of civil society
actors taking part in the implementation of the Lisbon Strategy.
This network will fully incorporate the initiatives which these
actors will take to make European cohesion policy more effec-
tive in the 2007-2013 period.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND