Opinion of the European Economic and Social Committee on the Fourth Report on Economic and Social Cohesion COM(2007) 273 final
Date: 2007-12-13
Institutions: European Economic and Social Committee
Subjects: Community budget, economic and social cohesion, fund (EU), report

16.5.2008

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Official Journal of the European Union

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Opinion of the European Economic and Social Committee on the ‘Fourth Report on Economic and
Social Cohesion’

COM(2007) 273 final

(2008/C 120/17)

On 30 May 2007 the Commission decided to consult the European Economic and Social Committee, under
Article 262 of the Treaty establishing the European Community, on the

Fourth Report on Economic and Social Cohesion.

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 8 November 2007. The rappor-
teur was Mr Derruine.

At its 440th plenary session, held on 12 and 13 December 2007 (meeting of 13 December), the European
Economic and Social Committee adopted the following opinion by 88 votes nem. con. with no abstentions.

1. Introduction

Under

the terms of Article 159 of

1.1
Commission is required to publish at
status report on economic and social cohesion in Europe.

the
the Treaty,
three-year intervals a

the Lisbon Strategy Integrated Guidelines (IG),

As the report is published in the year prior to the update
1.2
of
the EESC
hopes that — as it has already requested — its ideas will be
taken on board not only in the next generation regional policy
but as and when the new IG are framed (1).

The new amending Treaty provides innovation with the
1.3
inclusion of territorial cohesion as one of the general objectives
of the EU (Article 3); this was missing until it was added by the
Convention on the Future of Europe and confirmed by the
2007 Intergovernmental Conference (IGC).

2. General comments

2.1
The communication accompanying the report launches a
debate on the future of structural policy by posing a series of
questions. In the EESC's view, two questions of major interest
needing concrete answers have been omitted:

— it seems pointless to discuss cohesion policy, which accounts
for almost a third of the EU budget, if at the same time
there is no consideration given to the resources available to
implement it. The EESC would point out that the EU budget,
as approved in the agreement on the financial perspectives,
is insufficient to match Europe's ambitions. With specific
regard to structural policy, the same applies: 0,36 % of GDP
is insufficient
to ensure economic, social and territorial
cohesion in Europe (2);

(1) See § 1.4 of the EESC opinion on the ‘Impact and consequences of structural

policies on EU cohesion’, (OJ C 93, 27.4.2007, p. 6.

— regarding the role of the social partners and organised civil
society: while a group of questions do address the issue of
governance, this is limited to a purely political perspective.
Yet, regrettably, there is no mention of the social partners or
organised civil society, although their role is essential to
ensuring that projects meet grassroots needs and enjoy
broad public support, and although they contribute to trans-
parency in the use of resources.

2.2
A close reading of the figures presented in the report
may be confusing as it is not always clear whether they refer to
the EU-15 -25 or -27. When it comes to trends, the reference
dates may also lead to confusion. The report often discusses
EU-27 cohesion while taking 1996 as the reference date, a time
when the number of Member States had just increased to 15. It
emerges that the trends outlined do not concern the EU alone,
but take in countries that were not — or only slightly —
affected (given their trade situation) by EU sectoral policies
(internal market, competition, regional policy). In other words,
although the contribution of the structural policies is not in
doubt, this makes it difficult to draw clear conclusions about
their specific contribution to greater cohesion (3).

2.3
The criterion of 75 % of GDP per capita, which is used
to define whether or not a region is lagging behind, has been
clouded, given that since the recent enlargements, GDP per
capita has decreased with the accession of much less prosperous
countries than those that joined previously (the statistical effect).
It is also the case with the accession of Bulgaria and Romania.
We cannot, therefore, directly compare the situation regarding
cohesion before 2004 with the current situation. The perfor-
mance of the twelve regions that have risen above this threshold
must be put in context given that we cannot be sure that it is
not due to the statistical effect.

(2) Without wishing to pre-empt the EESC's own-initiative opinion on this

(3) EESC Opinion on the Impact and consequences of structural policies on

issue, some previous proposals are discussed below.

EU cohesion, OJ C 93, 27.4.2007, p. 6.

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The report states that by the beginning of

2.4
the next
programming period, 9 of the 12 Member States that joined the
EU in 2004 and 2007 will have risen above the threshold of
75 % of EU GDP per capita. As a result, this benchmark will
lose relevance. This issue should be addressed right away.

2.7
The EESC feels that several aspects of economic, social
and territorial cohesion should be further explored or reviewed,
such as equal opportunities in the labour market.

2.5 While the report contains a wealth of detailed informa-
tion, it is regrettable that this information is not always joined
up.

— Thus, for example, reading the following paragraphs together
(of Appendix 1): 2.1.3, 3.2, 2.2.4 (in particular, the graph)
and 2.2.6, points up the difficulty of combining economic
growth with harmonious development (in this case, job crea-
tion that benefits all regions). This is a real challenge, parti-
cularly for
(Poland,
Hungary, Romania, Bulgaria and the Czech Republic).

the new Member States

some of

— While it is true that the former cohesion countries Ireland,
Greece and Spain have fully or partly caught up, what about
the sustainability of their growth? How can we be optimistic
about future developments when there has been a decline in
hourly productivity for the past ten years in relation to the
EU average or when the growth is based largely on property
(Spain)? How can we explain the fact that despite Ireland's
strong growth, which has catapulted it to 2nd in the rank-
ings of real GDP per capita, and which has allowed the
country to achieve full employment, almost one in five
people is at risk of poverty?

— The aspect of quality jobs, which was recognised as a key
Lisbon objective in 2000, is conspicuous by its absence in
this extensive report (4). We take the view that each Member
jobs
verify unambiguously whether
State must
supported or created by the Structural Funds are jobs that
enabled the integration of people into the labour market,
decent living conditions and adequate pay.

the

2.6
The EESC also points to the lack of any reference to the
social economy, which accounts for 10 % of EU businesses, or
to its role in cohesion (particularly the assistance given to the
most vulnerable groups in the labour market). This sector gener-
ates quality jobs and contributes to sustainable development
insofar as it anchors employment at local level, energises rural
areas, creates social capital and provides for the sectoral and
territorial restructuring process.
it would be
useful to have statistics of comparable quantity and quality for
the Member States so as to improve our understanding of this
sector.

In this regard,

(4) It is mentioned, but the only information provided refers to education
and training, whereas COM(2003) 728 identified 10 dimensions of job
quality, which it analysed in terms of a whole range of indicators.

If we remain to be convinced as to the usefulness of the
the report makes the following new

2.8
EU's cohesion policy,
points:

— market forces favour capital cities; workers and the unem-
ployed converge on them, while the Eldorado that they seem
to promise is often misleading. This aspect must not be
underestimated in the debate aimed at promoting mobility
as a way of combating unemployment;

— capital cities are often the only motors of growth; only three
countries have economically sustainable secondary growth
poles with an international profile. This helps to explain
why the average regional growth rate varies from 0 % to
8,6 % (1997-2004);

— while a country as a whole may reach the critical threshold
of 75 %, driven by its capital city, many regions take a lot
longer to get there.

Hence the urgent need for territorial cohesion, which seems to
the very foundation of
be increasingly asserting itself as
economic and social cohesion,
to be fully recognised as a
general EU objective.

2.9
The EESC welcomes the new light shed on cohesion in
Europe by comparing it with its global competitors and by high-
lighting the role of capital cities, the implications in terms of
sustainable development (notably imbalanced development and
environmental pressures) and the regional
repercussions of
climate change.

2.10
The EESC supports the European Union's objective to
if the
take the lead in fighting climate change. Nevertheless,
countries outside the EU do not follow suit, this will jeopardise
competitiveness and have an impact on the Union's cohesion
policy. Distortion of competition would have the effect of
favouring relocation to countries not involved in climate change
policy.

2.11
The EESC also welcomes the renewed focus on the
territorial dimension of cohesion, which, despite the adoption of
the European Spatial Development Perspective (ESDP) (1999),
has until now been sidelined. The Urban Development Strategy,
the Territorial Agenda and the Leipzig Charter all list a range of
key urban development principles, while the EESC has high-
lighted the role of metropolitan areas and clusters in the context
of industrial policy and innovation.

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2.12
The final chapter, which explores the link between EU
policies and cohesion, is the least convincing: it lists a catalogue
of measures taken under the Lisbon Strategy without providing
any reliable evidence of their actual impact on cohesion.

3.1.2.1
The EESC has often criticised the VAT system within
the EU budget, on account of its excessively high collection,
administrative and monitoring costs (7). These costs must be
reduced, thereby freeing up resources for joint projects.

3. Recommendations

3.1 Without wishing to pre-empt its forthcoming own-initia-
tive opinion in response to the Commission's public consulta-
tion on the future of the EU budget, the EESC reiterates some of
its previous recommendations.

In a previous opinion (5),

The Structural Funds are currently limited to the
3.1.1
granting of subsidies.
the EESC
proposed revising their financial engineering to create a multi-
plier effect through the involvement of the European Investment
Fund and the EIB. It proposed transforming these subsidies into
financial products to create a leverage effect. For example, one
euro set aside to guarantee a risk capital loan would make it
possible to finance five to ten euro of a SME's investment. The
JEREMIE model must be extended (6).

Additional resources could also be freed up, without
3.1.2
increasing Member States' contributions, to be channelled into
projects with European added value (notably the missing links
in the trans-European networks (TEN) and the European Globa-
lisation Adjustment Fund (EGF)).

3.1.2.2
The practice of refunding Member States unused
appropriations of an already meagre EU budget should be
ended. These appropriations represent only a very small percen-
the period
annual budget. However, over
tage of
2000-2005, they amounted to almost EUR 45 billion, which
could have been put to productive use (8).

the

3.1.2.3
In view of the fact that all Member States are faced
with ageing populations entailing increased social security costs
while also being subject to budgetary constraints under the
Stability and Growth Pact, public-private partnerships could
provide an alternative solution. Such partnerships would hinge
on the ability of public administrations (particularly at subna-
tional level) to negotiate balanced agreements with the private
sector, which would require administrative capacities to be
strengthened.

3.2
The strategic guidelines directing regional policy are
aligned with the Lisbon Strategy. The EESC proposes that
regional policy take a more balanced approach to the Sustain-
able Development Strategy, which is devoted to all aspects of
cohesion, since the Lisbon Strategy, which ties in with it, focuses
on competitiveness (9).

Timeframe

2010

No deadline; long term

LISBON

SUSTAINABLE DEVELOPMENT

Sphere of action

European Union

Priorities (1)

Increase growth and jobs; ensure a dynamic and
well-functioning euro area; make Europe a more
attractive place to invest and work; knowledge
and innovation for growth; attract and retain
more people in employment and modernise
improve adaptability
social protection systems;
of workers and enterprises and the flexibility of
labour markets;
increase investment in human
capital through better education and skills

Goes beyond the EU sphere because of its external
dimension

Address climate change; promote good health —
public health; combat social exclusion and address
demographic
change; better management of
natural resources; make transport more sustain-
able; fight global poverty, promote development

(1) COM(2005) 141 final Integrated guidelines for growth and jobs (2005-2008); COM(2005) 658 final Communication from the Commission to

the Council and the European Parliament on the review of the Sustainable Development Strategy — a platform for action.

(5) EESC opinion on the Strategic guidelines cohesion policy 2007-2013,

OJ C 185, 8.8.2006.

(6) EESC opinion on the Communication from the Commission: Cohesion Policy
of Growth and Jobs: Community Strategic Guidelines

in Support
(2007-2013), OJ C 185, 8.8.2006, p. 52.

(7) EESC opinion on the Own resources system, OJ C 267, 27.10.2005,

p. 57.

(8) EESC opinion on the Impact and consequences of structural policies on

EU cohesion, OJ C 93, 27.4.2007, p. 6.

(9) ‘When it relaunched the Lisbon strategy in March 2005, the European Council
reaffirmed that the strategy was to be seen in the wider context of sustainable
development whereby present needs should be met without compromising the
ability of future generations to meet theirs. The European Council reiterates its
attachment to sustainable development as a key principle governing all the
Union's policies and activities’. Conclusions of the European Council of
June 2005.

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The

3.2.1
following maps drawn up by ESPON (the
European Spatial Planning Observation Network) illustrate the
polarisation and increasing metropolitanisation that would occur
by 2030 should the Lisbon strategy be further developed along
current lines. A cohesion-oriented scenario would enable the
economic hub to be extended and, above all, foster the emer-
gence of other growth poles (the Baltic regions; an area to the
East taking in Vienna, Berlin, Warsaw and Budapest; the South
of France and Catalonia).

The EESC reaffirms (10) the importance of developing
3.2.2
and implementing dual-level polycentrism in the context of
harmonious development,
in order to avoid the detrimental
effects of polarisation (11). The first level facilitates the emer-
to
gence of development hubs spread throughout Europe,
disperse growth and jobs beyond the economic hub (the
pentagon); the second level consolidates the links and synergies
between the large urban centres and the (quasi-)rural areas,
mainly to avoid territorial divisions within NUTS itself
(the
Nomenclature of Territorial Units for Statistics).

Given the increasing dominance of capital cities as places
3.3
that generate wealth, industry and jobs, particularly in certain
new Member States (12) and the strong correlation between GDP
growth rates and inflation, the governments and civil society of
the countries set to join the euro area should give particular
the transition to the single
consideration to the impact of
currency on their internal cohesion. This may come under pres-
sure where the various regions of an individual country develop
unevenly. Therefore, while not disregarding the benefits of the
euro (13), though pointing out that the single interest rate policy
could fail to meet the specific needs of their national economy,
its impact will vary across the large industrial centres (including
the capital) and the other regions. To complement this, the
Member States' economic policies will need to be coordinated
more closely in order to ease this problem (14).

The importance of services of general

interest (SGI) is
3.4
again stressed in the report. In view of the new protocol on
general
interest services to be defined by the 2007 IGC, the
EESC repeats its call for ‘common benchmarks and standards’ to be
defined at Community level ‘for all services of general interest (both
services of general
economic and non-economic),

including social

(10) See the EESC opinions on European metropolitan areas: socio-economic
implications for Europe's future, OJ C 168, 20.7.2007, p. 10; on the
Impact and consequences of structural policies on EU cohesion, OJ C 93,
27.4.2007, p. 6; and on the Territorial Agenda, OJ C 168, 20.7.2007,
p. 16.

(11) See in this regard the study drawn up by the European Parliament's
REGI committee, Regional disparities and cohesion: what strategies for the
future?, May 2007.

(12) This issue will be considered in a forthcoming opinion to mark

10 years of EMU in 2008.

(13) This issue will be considered in a forthcoming opinion to mark

10 years of EMU in 2008.

(14) ‘When it relaunched the Lisbon strategy in March 2005, the European
Council reaffirmed that the strategy was to be seen in the wider context of
sustainable development whereby present needs should be met without
compromising the ability of future generations to meet theirs. The European
Council reiterates its attachment to sustainable development as a key principle
governing all
the Union's policies and activities’. Conclusions of the
European Council of June 2005.

interest, to be set out in a framework directive, adopted under the
co-decision procedure, whereby a Community framework can be estab-
lished which reflects their specific characteristics’ (15).

3.5
‘In the Committee's view [a view that has been echoed by
the European Parliament in its recent reports], cohesion should
not be understood solely in terms of GDP. It therefore calls for a more
representative indication of cohesion [which should include] in addition
to GDP, parameters such as employment and unemployment levels, the
extent of social protection, the level of access to general interest services
etc. (16)’. These indicators should also be complemented by indi-
cators of income inequality (Gini coefficient or inter-quintile
ratio) and of CO2 emissions (per inhabitant or change since
1990). In general terms, it is vital to build up the EU's statistical
tools, particularly at NUTS level, and to forge closer links
between Eurostat and national statistics offices in order to gain
access as soon as possible to the most comprehensive and accu-
rate data available (17).

3.6
The EESC proposes considering whether it would be
more pertinent, during the next Structural Fund allocation
phase, to use the economic indicator of Gross National Income
(GNI) rather than GDP, as is already the case for the Cohesion
Fund. This would enable commuters to be taken into account,
whose economic impact helps close the gaps, as highlighted in a
section of the report, while encouraging mobility at all levels, as
well as foreign direct investment (FDI) flows, from which part
of the revenue returns to the country of origin. Thus, GNI,
unlike GDP, takes account of inflows and outflows. There is a
considerable difference between the two in certain countries
the Czech Republic, Estonia, Cyprus,
(Luxembourg,
Hungary and to a lesser extent Poland and Romania) which
could result in a sub-optimal allocation of Structural Funds. It
should also be noted that this data is not available at NUTS
level, something which must be rectified as far as possible.

Ireland,

4. Answers to certain consultation questions

4.1 How can the regions react to restructuring pressures from dynamic

competitors in low-and medium-tech sectors?

4.1.1 With regard to the qualitative upgrading of EU busi-
nesses, it is clear that the 7th Research and Development Frame-
work Programme (RDFP) and the Competitiveness and Innova-
tion Framework Programme (CIP), which are both aimed at
boosting SMEs and the regions of knowledge, remain too top-
down in their approach. Links with ‘networks of centres of techno-
logical and scientific excellence’ and industrial parks should be
promoted, as should ‘structured bridges between academia, industry
and government’. That said, it must be borne in mind that the
innovation mantra entails a risk of further fragmentation if new
areas of responsibility are not formed in order to guide the

(15) See the EESC opinion on the Communication from the Commission —
Implementing the Community Lisbon programme: Social services of general
interest in the European Union, OJ C 161, 13.7.2007, p. 80.

(16) See paragraph 1.3 of the EESC opinion on the Impact and consequences

of structural policies on EU cohesion, OJ C 93, 27.4.2007, p. 6.

(17) ‘When it relaunched the Lisbon strategy in March 2005, the European
Council reaffirmed that the strategy was to be seen in the wider context of
sustainable development whereby present needs should be met without
compromising the ability of future generations to meet theirs. The European
Council reiterates its attachment to sustainable development as a key principle
governing all
the Union's policies and activities’. Conclusions of the
European Council of June 2005.

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public through the changes (18). This requires a more serious
focus on the quality of jobs given that ‘as well as increases in R&D
investment and investment generally, and investment in education and
training in view of the requirements of the knowledge and information
society, improving the quality of working life is a key to increasing the
growth in productivity and innovativeness of businesses. This is proven
by studies into the relationship between quality of work and produc-
tivity and into the significance that “good work” has from the point of
view of the employees concerned for their job motivation and readiness
to enhance output’ (19).

4.1.8
Not all EU regions will be capable of being at the
leading edge of the knowledge economy for want of infrastruc-
ture or human capital, or because their size prohibits economies
of scale. These regions will have to position themselves in rela-
tion to neighbouring metropolitan areas by developing their
residential economy or by specialising in areas with less marked
agglomeration effects or where a lower critical mass is required.
The EESC is opposed to rural areas being assimilated into agri-
cultural areas, with no other prospects in view.

4.1.2 With regard to industrial policy, ‘identifying synergies and
involving stakeholders in achieving structural change […] can allow
industrial change to be managed in a socially acceptable way if the
social partners are systematically involved in anticipating and mana-
ging change, and the dual objective of making businesses competitive
and minimising the negative social impact is consistently pursued’ (20).

In cross-border regions,

industrial change could be
4.1.3
framework for
facilitated ‘by setting up the optional transnational
collective negotiation as announced in the 2005-2010 social
agenda’ (21).

‘The Committee supports the request made by the European
4.1.4
Parliament for an assessment of relocations and the follow-up given to
them at territorial level (jobs destroyed/created, types of job, impact on
economic, social and territorial cohesion) and to make specific propo-
sals in the form of periodic reports’ (22).

One tranche of

4.1.5
the unused budget appropriations
could serve to swell the coffers of the European Globalisation
Adjustment Fund (EGF) — the new instrument that provides
prompt temporary support to workers who have been made
redundant and who are ‘victims of globalisation’. We would also
propose that the eligibility threshold be revised downwards by
reducing the number of workers made redundant required to
trigger the fund, given that SMEs represent 99,8 % of companies
(of which 91,5 % are micro-enterprises) and 67,1 % of total
employment.

4.1.6
The stipulation within the general provisions on the
Structural Funds regarding the seven-year period during which a
company which has received such aid must commit to main-
taining its investment in the recipient region must be retained.

4.1.7
It appears from our initial assessment that the JEREMIE
initiative is overly concentrated in key sectors and that SMEs
outside of these sectors are not deriving sufficient benefit.

(18) EESC opinion on The territorial governance of industrial change: the role of
the social partners and the contribution of the Competitiveness and Innovation
Programme, OJ C 318, 23.12.2006, p. 12.

(19) EESC opinion on Quality of working life, productivity and employment in
the context of globalisation and demographic challenges, OJ C 318,
23.12.2006, p. 157.

(20) EESC own-initiative opinion on Social dialogue and employee participa-
tion, essential for anticipating and managing industrial change, OJ C 24,
31.1.2006, p. 90.

(21) EESC opinion on the Communication from the Commission: Cohesion
Policy in Support of Growth and Jobs: Community Strategic Guidelines
(2007-2013), OJ C 185, 8.8.2006, p. 52.

(22) Report on relocations in the context of regional development

(rapporteur: Hutchinson, 30 January 2006).

4.1.9
One possible alternative lies in tourism and related
activities. This requires that ‘new rural professions […] be created:
specialised trade in local products; traditional crafts and food products;
sports and environmental leisure services; audiovisual and virtual reality
facilities; cultural promotion; childcare, campsites and hostels; natural
medicine; aesthetic enhancement; traditional construction and revival of
trades; internet cafés; promotion of local property; advice on the new
activities; production of goods and services usually consumed in tourist
accommodation; specialised attention for the elderly’ (23). The utmost
attention should be paid to supporting ecotourism, which is
based on biological management. The goal of ecotourism is to
educate people towards development that is sustainable, respects
the environment and does not disturb the balance of nature.
The European Social Fund and the EAFRD have a contribution
to make here.

Cultural tourism can open up interesting opportu-
4.1.10
nities for many regions. To this end,
‘the European Union could
use competitions and reward schemes in its programmes in order to
promote best practices in the management of cultural tourism services,
particularly in the “European Capitals of Culture” programme and the
future “European destinations of excellence” programme. The EU could
also provide advice for cities and regions which decide to apply for these
two programmes, and grant them more substantial funding than at
present and maybe fast-track Structural Funds appropriations
for
them’ (24).

4.2 To what extent is climate change a challenge for cohesion policy?

The EESC shares the view of ESPON (25) that the conse-
4.2.1
quences of climate change will vary across the regions, requiring
differentiated responses. For regions within the economic hub,
‘the objective has to be to maintain their economic productivity while
reducing negative agglomeration economies such as air pollution and
CO2
transport
systems have to be developed and land use managed in a controlled
way. In the Southern European regions, but also in mountainous areas,
the main challenge will be […] the limitation of uncontrolled land use

Innovative and efficient

emissions

collective

[…].

(23) EESC opinion on The contribution of tourism to the socio-economic recovery

of areas in decline, OJ C 24, 31.1.2006, p. 1.

(24) EESC opinion on Tourism and culture: two forces for growth, OJ C 110,

9.5.2006, p. 1.

(25) ESPON: Scenarios on the territorial future of Europe, May 2007.

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and construction. Remote areas […] need innovative solutions to
provide for the necessary levels of accessibility […] [while avoiding
measures with] negative long-term effects’.

4.2.2
The EESC proposes complementing and bolstering the
budget of the Solidarity Fund, which currently provides rapid
aid in the event of a natural disaster. In order to further empha-
sise the EU's commitment to combating climate change, which
requires longer term measures, the EESC proposes that hence-
forth the Solidarity Fund should also co-finance preventive risk
management projects.

Clear and transparent criteria ought to be used for the
4.2.3
selection of projects to be financed under different budget head-
ings and programmes. These should include sustainability
criteria, such as the impact of the project on the environment,
health, creation or loss of jobs and EU competitiveness (26).

4.3 How can cohesion policy better promote harmonious, balanced
and sustainable development taking into account the diversity of
EU territories, such as least favoured areas,
islands, rural and
coastal areas but also cities, declining industrial regions, other
areas with particular geographic characteristics?

The EESC has repeatedly advocated the implementation
4.4
of polycentrism within the EU. The Fourth report highlights the
dominance of the economic hub (or pentagon) and the growing
importance of the capital cities, as well as the ensuing social
and environmental costs. The EESC also advocates fostering
secondary growth poles and metropolitan areas, and consoli-
dating synergies and complementarities between urban areas
and the more remote regions (27). There could be a regular
report on the socio-economic situation of metropolitan areas,
which would require the development of a statistical monitoring
tool (28). The EESC also feels that, to this end, territorial pacts
for development within the context of globalisation could prove
useful, especially where they form part of a forward-looking
approach to fostering the cultural growth of
society that
engages everyone (29).

The EESC advocates using the ‘Socially Responsible
4.4.1
Territories’ model (i.e. territories that, as stated in the Bristol
Accord (30) of December 2005, aim to develop sustainably,

(26) EESC opinion on The role of sustainable development within the forth-

coming financial perspectives, OJ C 267, 27.10.2005, p. 22.

(27) EESC opinion on the Impact and consequences of structural policies on

EU cohesion, OJ C 93, 27.4.2007, p. 6.

(28) See

the

two EESC opinions on European metropolitan areas:
socio-economic implications for Europe's future, OJ C 302, 7.12.2004,
p. 101 and OJ C 168, 20.7.2007, p. 10.

(29) EESC opinion on The territorial governance of industrial change: the role of
the social partners and the contribution of the Competitiveness and Innovation
Programme, OJ C 318, 23.12.2006, p. 12.

(30) www.odpm.gov.uk

taking into account the economic, social and environmental
aspects of their own activities as well as the socioeconomic
implications of an ageing population) for urban development. It
is thus essential to maintain and foster the involvement of
society stakeholders in agreeing on the direction to be taken, as
promoted by the 6th Framework Programme for Research and
Development (FPRD). The 7th FPRD provides for specific activ-
ities relevant to human development and ageing (31).

4.4.2
tial can go beyond the national sphere,
should be bolstered to promote cross-border cooperation (32).

Given that areas with job-creation and industrial poten-
the Interreg funds

As regards the outermost regions,

4.4.3
‘the EESC welcomes
the Commission's intention, within the convergence objective, to set up
a specific compensation mechanism covering all the handicaps of the
outermost regions, as well as regions with permanent structural handi-
caps’ (33). Given that 50 % of R&D expenditure is concentrated
in only a few regions, the EESC calls for ‘more incentives for tech-
nology transfer between the regions’. The EESC believes that
‘a
European policy for regions with permanent handicaps should be based
on three major principles’, namely: 1) permanence (the catch-up
concept not being relevant to these regions), 2) positive discri-
mination, designed to bring about real parity with the other
regions and 3) proportionality, to take account of the diversity
of the geographic, demographic and environmental characteris-
tics of the regions as well as the constraints that they face. To
eliminate the inequality,
interventionist measures of a social
nature could be envisaged, such as: ‘direct aid for certain commer-
cial activities or services providers, special fares for residents on sea or
air transport, the existence of high-quality public services’ (34) and so
on.

4.4.3.1
The Commission is right when saying that accessi-
bility constraints for islands can be translated into the fact that
‘travel time by car or train [is] increased by the sea crossing’.
Accessibility is ‘a particular problem’ that islands have to cope
with. And the Commission is also right when it stresses the
problem of the small size of their population. In fact, most of
the islands cannot rely on their domestic market. However,
other problems also determine their ‘long-term development
prospects’ for example the limitation of the resources, natural
risks and fragile environment.

(31) EESC opinion on the Communication from the Commission to the Council
and the European Parliament on a Thematic Strategy on the Urban Environ-
ment, OJ C 318, 23.12.2006, p. 86.

(32) See paragraph 3.4 of the EESC opinion on the Proposal for a Regulation
of the European Parliament and of the Council establishing a European
grouping of cross-border cooperation (EGCC), OJ C 255, 14.10.2005,
p. 76.

(33) EESC opinion on the Third report on economic and social cohesion — A
new partnership for cohesion: convergence, competitiveness, cooperation,
OJ C 302, 7.12.2004, p. 60.

(34) EESC opinion on How to achieve better integration of regions suffering from
permanent natural and structural handicaps, OJ C 221, 8.9.2005, p. 141.

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4.4.3.2
Article 16 TEC states that ‘… the Member States,
each within their respective powers and within the scope of
application of
this Treaty, shall take care that such services
operate on the basis of principles and conditions to enable
them to fulfil their mission’.

considering setting up a demographic fund. It would be aimed at
supporting national efforts to promote higher birth rates and
female participation in the labour market by making more EU
funds available for investment in facilities for childcare and care
of the elderly as well as in the renovation/modernisation of
schools, particularly in rural areas.

4.4.3.3
Another measure could be a universal service (US)
model for public services sectors whose application in these
areas is enshrined in European Union policy documents and
regulation. This measure is highlighted in the Green Paper on
Services of General Interest (35).

The EESC stresses the importance of penalising compa-
4.4.4
nies that receive EU aid but relocate within 7 years. Public
resources cannot be wasted through subsidising jobs cuts.

4.5 What are the impacts of the challenges identified in the report
for key elements of social cohesion such as inclusion, integration
and opportunity for all? Are further efforts needed to anticipate
and counteract these impacts?

Given wide differences in birth rates, death rates and migratory
flows at regional level, what is the role of cohesion policy in
responding to demographic change?

in the Structural

4.5.1
The cross-sectional dimension of gender equality is
Fund regulations.
mentioned explicitly
However, it seems that efforts made in this regard have been
almost exclusively focused on labour market
issues. The
Member States must be encouraged to adopt an integrated
approach (possibly by means of the Lisbon Strategy Integrated
Guidelines and, where appropriate, via individual recommenda-
tions). In order to assess operational programmes, data broken
down by gender is a crucial requirement.

4.5.2
To enable couples to decide how many children they
would like to have, the Member States should introduce a range
of measures such as ‘direct financial support, changes in taxation,
and the provision of economically viable public or private facilities
(e.g. crèches of various kinds,
including company or inter-company
crèches) all-day schooling and services; thus, it is the quality of facilities
that matters, not the quantity’ (36). Moreover, the EESC notes that
the
following the Barcelona European Council
Member States agreed ‘to provide child care by 2010 to at least
90 % of children between three years old and the mandatory school
age and at least 33 % of children under three years of age’. There is
also a need to establish ‘a fixed threshold for public funding for
family- and child-related policies — i.e. investments in the future —
so that available resources are not, potentially, subsumed in the overall
costs of an ageing society — costs which an ageing electorate may
consider a top priority’ (37).
it would be worth

In this regard,

(June 2002),

4.5.3
In tandem with demographic support, other measures
are needed, including ‘safeguarding and improving the health and
safety of children; providing quality education for all; proposing assis-
tance and support systems enabling parents to meet their needs and
difficulties. Special attention should be paid to families and children
living in extreme poverty, those needing specific support, and those
from migrant backgrounds. Although the EESC acknowledges the
the European population and believes that demographic
ageing of
renewal is essential for the survival of the continent, it points out that
a reduction in widescale unemployment, access to lasting employment
for 25-35 year-olds and real job security in general should make it
(whether active or not)’ (38). The
possible
European Social Fund must make a significant contribution to
this venture.

to finance

retirement

4.5.4
The EESC also believes that ‘a set of common objectives on
access to housing; minimum standards on the quality of housing which
define the concept of decent housing [should be established at EU
level]’ (39).

[should]

institutions

‘European financial

4.5.5
earmark
resources at very low rates for integrated building programmes
immigrants, older
for young people,
families with children,
people,
thus
the disabled, at-risk social groups and so on,
improving the social mix and
encouraging worker mobility,
providing affordable solutions for occupants.
(…) The EESC
notes that the use of the JESSICA programme will provide the
elements necessary to set up a guarantee fund for larger-scale
social housing projects and it calls for this question to be
considered during the mid-term review of
the Structural
Funds’ (40).

4.6 What are the key future skills that are essential for our citizens

in facing new challenges?

4.6.1
The territorial pacts for development referred to in the
answer to question 2.1, offer an interesting approach to addres-
sing this issue insofar as the range of different situations and
specific challenges requires the use of different instruments and
competences (cf. 1.1). The social partners, who each year since
2002 present a report to the Spring European Council on their
involvement in the lifelong learning initiative, must be actively
involved.

(35) COM(2003) 270 final.
(36) EESC opinion on The family and demographic change, OJ C 161,

(38) Ibid.
(39) EESC opinion on Housing and regional policy, OJ C 161, 13.7.2007,

13.7.2007, p. 66.

(37) Ibid.

p. 17.
(40) Ibid.

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4.6.2
The EESC would like to point out that ‘the key condition
for using ICT in lifelong learning, particularly in the Community's
rural areas and small towns, is support from the EU and the govern-
ments of Member States for broadband internet connections (41), that
provide access to e-learning systems (…) In this context, the EESC
appeals to the Commission to recognise access to broadband as part of
a wider strategy aimed at ensuring that eAccess is accorded the status
of general interest. (…) Special consideration must be given to the risk
of a generation gap emerging’ (42).

4.7 Given the need for efficient management of

programmes, what
between the Community, national and regional
multi-level governance system?

cohesion policy
is the optimum allocation of responsibility
levels within a

The EESC would firmly reiterate its opposition to any
4.7.1
attempt to renationalise Cohesion Policy, which incontestably
provides European added value in terms of solidarity, growth
and jobs, and whose impact on the ground is visible to the
European public.

The EESC points out

4.7.2
that, according to the Treaty
(Articles 2, 158 and 159), all policies — EU, national, hori-
zontal and sectoral — must contribute to the objective of cohe-
sion. Therefore, it is important that cohesion, and particularly
its territorial dimension, be taken into account in the integrated
guidelines and impact analyses (43).

4.7.3
The EESC welcomes the IGC's inclusion of territorial
cohesion as one of the objectives of the EU and the Commis-
sion's plan to set up a new territorial cohesion unit within DG
REGIO. This unit should ensure that sectoral policies do actually
converge towards the objective of cohesion. In particular,
in
view of the fact that projects eligible for EU funding need to be
co-funded by national governments, consideration should be
given to the budgetary criteria laid down by the Stability
and Growth Pact, and to their impact on the funding of
trans-European networks, and specifically on the missing
sections.

A number of general guidelines need to be called to mind.
Some were already included in the Treaties, others were intro-
duced following the 2007 Intergovernmental Conference. They
stipulate that: The Union must, in the definition and implementation
of its policies and actions:

(41) Broadband Internet access — Communications channel with high
capacity, enabling quick, easy access to information and e-learning
systems (source —
http://www.elearningeuropa.info/).

(42) EESC opinion on The contribution of IT-supported lifelong learning to
European competitiveness, industrial change and social capital development,
OJ C 318, 23.12.2006, p. 20.

(43) EESC opinion on the Impact and consequences of structural policies on

EU cohesion, OJ C 93, 27.4.2007, p. 6.

— take into account the requirements linked to the promotion of a
high level of employment, the guarantee of adequate social protec-
tion, the fight against social exclusion, and a high level of educa-
tion, training and protection of human health. (New Article 9 of
the Treaty on the Functioning of the European Union).

— aim to combat discrimination based on sex, racial or ethnic origin,
religion or belief, disability, age or
(New
Article 10 of the Treaty on the Functioning of the European
Union).

sexual orientation.

— integrate environmental protection requirements (…) in particular
with a view to promoting sustainable development (Article 6 of
the Treaty Establishing the European Community, main-
tained in the new Treaty).

The provisions set out in the Charter of Fundamental Rights,
recognised in the Treaty on European Union (Article 6) must
also be taken into consideration in defining and implementing
the structural policies.

this

that

The EESC strongly regrets

4.7.4
consultation
process does not address the role of the social partners and
organised civil society in the framing, development and imple-
mentation of the Structural Funds. They have a crucial role to
play in adapting co-funded projects to local conditions and
needs, insofar as these are in line with the strategic guidelines.
‘The Committee calls for guidelines to be drawn up in future for the
conduct of consultations on Member States' strategic and programming
documents. (…) The Member States should explain how they organise
feedback on how the partnership principle is implemented in the
context of the monitoring committees. The Committee believes that the
Member States and regional authorities should make greater use of the
potential existing within civil society organisations by involving them
in the preparation of promotion plans. Grass-roots initiatives should
also be supported by allocating adequate financial resources for this
purpose from the funds available for the promotion of and information
about the Structural Funds. In the case of cross-border or interregional
programmes, it would also be worth promoting joint consultations and
socio-occupational partnerships which are also cross-border or interre-
gional’ (44).

4.7.5
Economic Change initiative, the EESC strongly advocates:

Following on from the Open Days and the Regions for

— the creation of a European tourism agency which could act
as a monitoring centre and provide the Community, the
Member States and the regions with reliable and comparable
data on tourism (45);

(44) See the EESC opinions on the Communication from the Commission:
Cohesion Policy in Support of Growth and Jobs: Community Strategic Guide-
lines (2007-2013), OJ C 185, 8.8.2006, p. 52. and on the Impact and
consequences of structural policies on EU cohesion, OJ C 93, 27.4.2007,
p. 6.

(45) EESC opinion on Tourism and culture: two forces for growth, OJ C 110,

9.5.2006, p. 1.

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— the introduction of European green city awards in order to
encourage local communities and their public and private
players to optimise their efforts (46);

— the introduction of a technical assistance facility for housing
projects in cooperation with representatives and networks of
local
and supported by the
European Commission and the Member States (to build on
projects and methods for effectively integrating housing
projects in urban regeneration programmes) (47).

and regional

authorities

Particular emphasis should be put on the dissemination of
experience and best practices.

4.8 What are the new opportunities for co-operation between regions,

both within and outside the EU?

4.8.1
The EESC believes that a forum bringing together
metropolitan areas and the Commission could promote poly-
centrism and increase knowledge of
these areas. A working
party could be set up to identify and disseminate best prac-
tice (48).

Brussels, 13 December 2007.

(46) EESC opinion on the Communication from the Commission to the Council
and the European Parliament on a Thematic Strategy on the Urban Environ-
ment, OJ C 318, 23.12.2006, p. 86.

(47) EESC opinion on Housing and regional policy, OJ C 161, 13.7.2007,

p. 17.

(48) See

the

two EESC opinions on European metropolitan areas:
socio-economic implications for Europe's future, OJ C 302, 7.12.2004,
p. 101 and OJ C 168, 20.7.2007, p. 10.

4.8.2
Legal entities created both under the EGCC and other
Structural Funds must be responsible for coordinating the
various sources of financing, and for the preparation and realisa-
tion of fund projects supporting industrial policy in the given
region. This financing would be accessible to the representatives
of the various parties involved in the regions. The establishment
of such legal entities will create an incentive for cross-border
cooperation and give such regions a greater sense of identity
and increase their desire to harmonise their regulations (49).

In this context,

4.8.3
joint consultations and socio-occupa-
tional partnerships which are also cross-border or interregional
should be promoted, as should social dialogue initiatives at
these levels, particularly by setting up the optional transnational
framework for collective negotiation as announced in the
2005-2010 social agenda (50).

regional

Another

area where

4.8.4
cooperation could
promote cohesion is the energy sector, since it has an impact on
production costs,
families, and economic development. This
could be done through forms of interregional energy exchanges
between regions that have greater quantities and lower cost
resources vis-à-vis poorer regions. Nowadays, this can be done
via a regulated system of networks, which is, however, more
flexible and involves activating the ‘power exchange’.

The President

of the European Economic and Social Committee

Dimitris DIMITRIADIS

(49) EESC opinion on The management of industrial change in cross-border

regions following EU enlargement, OJ C 185, 8.8.2006, p. 24.

(50) EESC opinion on the Communication from the Commission: Cohesion
Policy in Support of Growth and Jobs: Community Strategic Guidelines
(2007-2013), OJ C 185, 8.8.2006, p. 52.