COMMISSION STAFF WORKING PAPER EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT
Date: 2011-10-06
Institutions: European Commission
Subjects: Cohesion Fund, European Regional Development Fund, European Social Fund, FIFG, added value, administrative formalities, administrative reform, economic and social cohesion, fund (EU), governance, operation of the Institutions, rural development

EUROPEAN COMMISSION 

Brussels, 6.10.2011 
SEC(2011) 1142 final 

COMMISSION STAFF WORKING PAPER 

EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT 

Accompanying the document 

Proposal for a 
REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

laying down common provisions on the European Regional Development Fund, the 
European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural 
Development and the European Maritime and Fisheries Fund covered by the Common 
Strategic Framework and laying down general provisions on the European Regional 
Development Fund, the European Social Fund and the Cohesion Fund and repealing 
Regulation (EC) No 1083/2006 

{COM(2011) 615 final} 
{SEC(2011) 1141 final} 

 
 
 
 
  
 
1.  EXECUTIVE SUMMARY 

This  is  the  Impact  Assessment  of  the  legislative  proposal  for  a  regulation  laying  down  common 
provisions on the European Regional Development Fund, the European Social Fund, the Cohesion 
Fund,  the  European  Agricultural  Fund  for  Rural  Development  and  the  European  Maritime  and 
Fisheries Fund covered by the Common Strategic Framework and laying down general provisions 
on  the  European  Regional  Development  Fund,  the  European  Social  Fund  and  the  Cohesion  Fund 
and  repealing  Regulation  (EC)  No  1083/2006.  (Common  provisions  regulation).  It  covers  issues 
related  to  the  European  Regional  Development  Fund  (ERDF),  European  Social  Fund  (ESF)  and 
Cohesion Fund for the post 2013 programming period. It is complemented by impact assessments 
for  the  European  Agricultural  Fund  for  Rural  Development  and  for  the  European  Maritime  and 
Fisheries  Fund.    It  is  part  of  a  package  of  Impact  Assessments  which  also  includes  the  Impact 
Assessment of the ERDF, Cohesion Fund and ETC Regulations, and the Impact Assessment of the 
ESF Regulation.  

Extensive  public  consultations  have  been  carried  out  such  as  the  High  Level  Group  on  future 
Cohesion Policy, a Task Force on Conditionality, and a public consultation between 12 November 
2010 and 31 January 2011 on the Conclusions of the Fifth Cohesion report.1  

The  5th  Cohesion  Report  and  the  ex-post  evaluations  of  the  different  2000-2006  programmes 
provide evidence that cohesion policy has made a significant contribution to spreading growth and 
prosperity across the Union delivering European policy priorities, while reducing economic, social 
and territorial disparities2. However, there are a number of problems which need to be addressed.  

1.1.  Problem related to the capacity to deliver European added value 

a)  Geographical distribution of support  

The problem relates to the optimal geographical coverage of cohesion policy. Some argue that full 
coverage needs to remain in place in order to support the Europe 2020 Strategy in all regions and 
further  reduce  disparities  across  the  Union.  Others  argue  that  with  ever  increasing  pressure  on 
public finances, better use can be made of resources allocated to richer regions.  

b)  Concentrate  on  a  limited  number  of  priorities  in  line  with  the  Europe  2020 

strategy  

There is a strong rationale for cohesion policy to concentrate on EU priorities. The Europe 2020 
strategy  provides  both  a  clear  set  of  common  objectives,  including  headline  targets  and  flagship 
initiatives and a clear framework for identification of funding priorities. Thus the explicit linkage of 
cohesion  policy  and  Europe  2020  provides  the  opportunity  both  to  continue  to  help  the  poorer 
regions of the EU to catch up, and to further develop cohesion policy into an important enabler of 
growth for the whole of the EU. For this to occur, a number of problems need to be addressed. 

a) 

Lack  of  concentration  on  strategic  objectives.  A  number  of  studies  and  ex-post 
evaluations have identified problems with insufficient concentration on strategic objectives, 

"Results  of  the  public  consultation  on  the  conclusions  of  the  fifth  report  on  economic,  social  and  territorial 

1  
cohesion Brussels", Commission Staff Working Paper, SEC(2011) 590 final, 13.5.2011. 
2   5th Report on Economic, Social and Territorial Cohesion, November 2010. Ex-Post Evaluation of Cohesion Policy 
programmes 2000-06 co-financed by the ERDF (Objective 1 & 2) Synthesis Report, prepared by Applica, Ismeri, The 
Vienna Institute for International Economic Studies, April 2010. A more elaborate discussion on the achievements and 
shortcomings in cohesion policy in reducing disparities is presented in Section 2.5. 

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b) 

c) 

insufficient  performance  orientation  and  lack  of  incentives  to  promote  concentration  on 
delivering results. There have been attempts to address the issue of greater concentration on 
strategic priorities and objectives in the 2007-2013 period, but with limited impact.  

Lack  of  predictability  of  funding  volumes  for  the  ESF.  Despite  the  importance  of  jobs 
and  skills  to  the  Europe  2020  Strategy,  over  the  last  four  programming  periods  the 
importance  of  the  ratio  of  ESF  to  (ESF,  ERDF  and  CF)  allocations  has  declined  steadily 
from 40% in 1989-1993 to 22% in the current programming period. 

Insufficient  coordination.  Related  to  the  two  problems  mentioned  above  is  the  issue  of 
insufficient coordination and complementarity between the different funds (ESF, ERDF and 
CF)  and  other  EU  policies  and  financial  instruments  as  well  as  Member  State  National 
Reform  Programmes.  On  coordination,  stakeholders  often  complain  about  the  complexity 
generated by overlapping schemes or by lack of coordination at strategic level.  

1.2.  Problems related to the performance of the policy 

As  a  policy  based  on  the  principles  of  shared  management,  cohesion  policy  has  often  been 
characterised by a tension between on the one hand focusing on delivering the best possible results 
and  on  the  other  having  a  predictable  financial  allocation  over  a  7  year  period  with  strict  time-
limited spending requirements. 

Policy, regulatory and institutional framework conditions 

The effectiveness  of  the  structural funds  depends  on  sound  macroeconomic  policies,  a  favourable 
microeconomic environment and a strong institutional framework.  

Macro-fiscal conditions 

The  current  regulatory  framework  foresees  macro-fiscal  conditionality  in  the  Cohesion  Fund  to 
reinforce  the  implementation  of  the  stability  and  convergence  programmes  and  avoid  excessive 
deficit. There is scope to revise existing rules and align it with the new SGP enforcement measures 
to be adopted as part of the Sixth Economic Governance Package. 

Performance in terms of reaching objectives and targets set 

Although  the  ex-post  evaluations  of  the  2000-2006  period  suggest  that  cohesion  policy  has 
generated  significant  and  immediate  spill-overs  to  domestic  policies,  particularly  in  areas  of 
strategic planning, evaluation culture, and performance orientation in national policies, a number of 
problems  still  exist  with  regard  to  monitoring  and  evaluation,  making  it  difficult  to  judge 
performance.  

1.3.  Problems related to the delivery of the policy 

Sound,  effective  and  efficient  management  of  the  delivery  of  cohesion  policy  resources  requires 
appropriate, effective and transparent structures in national and regional administrations. 

1.4.  Justification for EU action 

EU action is justified both on the grounds of the objectives laid out in Article 174 of the Treaty and 
on the subsidiarity principle. The right to act is constituted by Article 3 of the Treaty on European 
Union, which states that "[the Union] shall promote  economic, social and territorial cohesion and 

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solidarity among Member States", as well as by Article 175 of the TFEU which explicitly requests 
the Union to implement this policy by means of Structural Funds, and Article 177 which defines the 
role  of  the  Cohesion  Fund.  The  aims  of  European  Social  Fund  (ESF),  European  Regional 
Development Fund (ERDF) and Cohesion Fund (CF) are defined in Articles 162, 176 and 177. 

2.  OBJECTIVES  

The general objective is defined in the Treaty to promote balanced and harmonious development of 
Member States and regions and reduce disparities between the levels of development of the various 
regions and the backwardness of the least favoured regions.  

The specific objectives are to assist Member States and regions to promote smart, sustainable and 
inclusive growth in line with the Europe 2020 strategy by addressing the specific problems. Given 
the scope of this IA, the specific objectives are to ensure that the Structural Funds and the Cohesion 
Fund are spent in: 

• 

• 

• 

a way which provides a high European value added, 

an  effective  way  –  which  means  that  they  are  used  in  a  way  to  achieve  maximum 
impact, 

an  efficient  way  –  minimizing 
inefficiencies  by  unnecessary  administrative 
requirements  or  overly  complicated  procedures  and  incentivising  the  efficient  use  of 
resources.  

Such general issues translate into the following operational policy objectives: 

• 

• 

• 

• 

• 

concentrating  cohesion  policy  resources  on  developing  the  framework  conditions  for 
sustainable  development  and  growth  is  needed  to  achieve  the  highest  European  added 
value, 

providing the appropriate mechanisms within the regulations to allow for full alignment 
with the Europe 2020 strategy, objectives and headline targets, 

ensuring  the  optimal  coordination  between  the  Funds  themselves  and  with  other 
financial instruments, 

setting clear and measurable targets, 

the 

right  balance  between  on 

striking 
costs/administrative  burden 
minimising the risk to the EU budget.  

low  administrative 
for  managing  authorities  and  beneficiaries,  and 

the  one  hand, 

3.  OPTIONS, ANALYSIS AND COMPARISON 

On 29 June 2011, the Commission adopted a proposal for the multi-annual financial framework for 
the period 2014-2020 which called for strengthening the effectiveness of cohesion spending. A 
number of options reflect the proposal in their design.  

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3.1.  Delivering European added value 

Under  geographical  concentration  of  support,  Option  1  envisages  a  no-change  scenario  with 
concentration of support on less developed regions and current convergence regions which exceed 
the 75% threshold would benefit from phasing-out support. Option 2 would be similar but with the 
main difference that a new transition category would be established replacing the current statistical 
phasing-out  and  phasing-in  regimes.  Option  3  would  present  a  more  radical  approach,  with  no 
cohesion policy support outside Member States with an average GNI/head of less than 90% of the 
Union's average per capita. Under Option 3, phasing-in and statistical phasing-out regions as well as 
Competitiveness regions would not be eligible for cohesion policy interventions.  

Table 1: Budget allocation for each Option  

Option 1 

Option 2 

Option 3 

Less developed regions 

Transition regions 

70.3% 

8.4% 

More developed regions 

21.3% 

Total 

100% 

67.9% 

13.5% 

18.6% 

100% 

100% 

0% 

0% 

100% 

Options 1 and 2 would ensure coverage, at different aid intensities, of the entire population of the 
EU. Therefore, all EU regions would receive cohesion policy support, while Option 3 would ensure 
that  cohesion  policy  resources  are  concentrated  on  lagging  Member  States  only.  Only  Option  2 
provides  more  comprehensive  population  coverage  through  the  intermediate  region  category  and 
achieves the highest GDP growth of all options while at the same time providing high aid intensities 
to lagging regions.  

Under concentration on EU priorities, Option 1 envisages the earmarking of expenditure towards 
Europe  2020  objectives  with  the  Community  Strategic  Guidelines  at  EU  level.  Option  2  goes 
further with a menu of thematic objectives directly linked to the Europe 2020 strategy and defining 
investment  priorities  for  the  funds.  Concentration  on  EU  priorities  will  be  reinforced  by  setting 
minimum shares of structural funds support in certain policy areas. Given the limited geographical 
coverage  under  Option  3,  concentration  on  EU  priorities  only  occurs  in  less  developed  Member 
States. 

Option 1 presents a more flexible approach for Member States through the earmarking provisions, 
while  Option  2  provides  a  more  visible  and  comprehensive  link  with  the  Europe  2020  headline 
targets  and  Integrated  Guidelines.  Option  3  only  concentrates  on  EU  priorities  in  less  developed 
countries. Therefore, the Option 2 contributes most to the headline targets, while Option 1 would 
lead to a fragmentation of cohesion policy interventions.  

For the visibility and predictability of funding for the ESF, only Options 2 and 3 would ensure 
minimum shares for the ESF, while Option 1 would allow Member States the flexibility to negotiate 
their ESF allocation in line with their needs.  

Under  coordination  with  other  EU  policies  and  financial  instruments,  Options  1  through  2 
represent  a  graduated  approach  towards  strategic  alignment  with  Europe  2020.  While  Option  1 
provides  a  loose  alignment  based  on  non-binding  Community  Strategic  Guidelines,  Option  2 
provides a more comprehensive alignment with the Europe 2020 objectives through the Common 
Strategic  Framework  and  Partnership  Contract,  while  Option  3  provides  no  alignment  beyond 
formal compliance. The contribution to Europe 2020 headline targets is the highest in Option 2 due 
to its more binding strategic framework, while it is lower in Option 1 and the lowest in Option 3 
due to its non binding nature and the lower geographical coverage.  

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From  geographical  concentration  through  coordination  with  other  EU  policies  and  financial 
instruments, option 2 delivers the highest European added value.  

3.2.  Increasing the performance of the policy 

3.2.1.  Option 1 – Status quo 

Under the no policy change option, the following conditionalities would continue to exist: 

−  macro-fiscal  conditionality  under  the  Cohesion  Fund  (although  this  has  to  date  never 

− 

− 

been enforced), 

procedural compliance, 

compliance  with  sectoral  EU  legislation  directly  applicable  to  investment  and  some 
thematic conditionalities linked to strategic frameworks. 

The  main  advantage  of  this  option  is  no  new  requirements  for  managing  authorities.  The  main 
drawback  is  that  inefficiencies  linked  to  poor  institutional  capacity,  poor  compliance  with  EU 
legislation,  inadequate  fiscal  policies  and  strategic  frameworks  would  continue  to  exist.  Macro-
fiscal  conditionality  of  the  Cohesion  Fund  would  remain  discretionary.  The  lack  of  a  system  of 
rewarding and incentivising performance limits the impact on the effectiveness and efficiency of the 
policy. 

3.2.2.  Option 2 – Ex-ante conditionalities 

Ex-ante conditionality is linked to the fulfilment of preconditions related to strategic, regulatory and 
institutional frameworks as well as to the policy delivery in accordance with EU policy guidance. 
The  preconditions  may  often  be  in  place  before  the  new  generation  of  programmes  are  adopted. 
However, in some cases, depending on the specific context, further changes or adjustments might 
be  necessary  and  tied  to  a  binding  time  plan  by  Member  States  and  regions.  The  actual 
implementation of the commitments would be monitored.  

The main advantage of this option is that it would increase the effectiveness of cohesion spending 
by putting in place regulatory, strategic and institutional preconditions which are necessary for the 
investments to be effective. The main drawback of this option lies with the risk of delays in starting 
the programmes and increase in administrative burden. 

3.2.3.  Option 3 - Performance framework and performance reserve 

A performance framework would be established which would express the intended pace of progress 
towards the objectives and targets set at the beginning of the period by putting in place intermediate 
targets  –  "milestones".  They  would  be  linked  to  commitments,  outputs  and  where  appropriate, 
expenditure and results. The performance framework would be agreed in the Partnership Contracts 
and  programmes.  The  performance  reserve  would  be  allocated  to  the  Member  State  for 
programmes/priority axes which have achieved their milestones.  

The  main  advantage  of  this  option  is  that  it  introduces  a  mechanism  which  incentivizes  the 
contribution of the funds towards European objectives and targets and monitors and reports on the 
targets achieved. The main drawback is increase in administrative burden, the challenge of robust 
measurement techniques, as well as uncertainties created through suspension of programmes. 

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3.2.4.  Option 4 - Strengthened macro-fiscal conditionality 

Macro-fiscal conditionality of cohesion policy could be strengthened in two steps: 

(i) 

(ii) 

An effective application of the existing Cohesion Fund conditionality could be ensured by 
revising the current provisions for its implementation such as potentially earlier triggers in 
the EDP, progressive suspension of all or part of the committments in the case of repeated 
breaches of the SGP based on objective and transparent ex ante provisions.  

These revised rules on macro-fiscal conditionality of the Cohesion Fund could be extended 
to the Structural Funds as their effectiveness is also dependent on sound macroeconomic and 
fiscal policies which are conducive to growth. 

3.2.5.  Option 5 - Combination of option 2, option 3 and option 4 

This option combines all the elements of Option 2, Option 3 and Option 4, including the following 
elements  (i)  ex-ante  conditionality;  (ii)  the  performance  framework  and  the  performance  reserve 
and (iii) strengthened macro-fiscal conditionality, including extension to the structural funds. 

The main advantage of this option would be that it would address all problems identified in terms of 
the  performance  of  the  policy.  It  would  ensure  adequate  strategic,  regulatory  and  institutional 
conditions  as  well  as  sound  macro-fiscal  policies.  It  would  incentivize  and  monitor  the  actual 
performance of the programmes in terms of reaching objectives and targets linked to objectives and 
targets.  The  main  disadvantage  of  this  option  would  be  the  increased  administrative  burden 
generated  by  the  need  to  fulfil  the  necessary  conditions  and  put  in  place  the  performance 
framework.  

3.2.6.  Comparing the options on performance 

The options have been assessed on the basis of their contribution to addressing the problems related 
to  (i)  strategic,  regulatory  and  institutional  preconditions,  (ii)  macro-fiscal  conditions  and  (iii) 
performance in terms of achieving objectives and targets. To address the necessary conditions for 
effective  investment,  the  options  have  been  assessed  in  line  with  the  World  Bank  principles  on 
conditionalities3.  

Option  1  does  little  to  ensure  the  necessary  preconditions  needed  for  effective  support  and  to 
incentivize  the  performance  of  the  programmes;  Option  2  would  only  address  the  preconditions 
which  are  necessary  for  effective  support;  however  would  do  little  in  incentivizing  the  actual 
performance  of  the  programmes;  whilst  Option  3  would  only  focus  on  the  latter.  The  preferred 
option  is  the  combination  of  option 2, 3 and  4  which  would  address  all  problems  related  to 
performance.  

3   World Bank (2005), Review of World Bank Conditionality, Operations Policy and Country Services, The World 
Bank, Washington, DC, September. 

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3.3.  Streamlining delivery and minimising the error risk  

3.3.1.  Simplification – reducing administrative costs and minimising the risk of error 

3.3.1.1.  Option 1 – No policy change 

Reimbursements made on real costs; some optional simplified cost options 

No substantial guidance on e-Governance4 at EU level for cohesion policy implementation 

National accreditation of management and control systems with 100% review by Commission 

3.3.1.2.  Option 2 – Flexible approach  

Flexible payment options by operation to be determined by beneficiaries 

Guidance based approach to e-Governance 

− 

− 

− 

− 

− 

−  Member State responsibility for the ex-ante review of management and control systems (pure 

national accreditation) 

3.3.1.3.  Option 3 - Prescriptive approach  

− 

Payments based on deliverables of the project 

−  Mandatory E-Governance at EU level 

− 

Commission review of management and control systems 

3.3.1.4.  Option 4 – Proportional approach  

− 

Payments based on either real costs or simplified cost options 

−  Mandatory E-governance at MS or regional level 

− 

Proportional approach to the ex-ante review of management and control systems 

The  main  differences  between  the  options  relate  to  the  level  of  Commission  involvement  in  the 
assessment of management and control systems; to the availability of reimbursement options linked 
to results; and to the mechanisms for promoting e-governance in the context of cohesion policy. 

Option 4, the proportional approach, is preferred because it leads to a significant potential reduction 
in the cost of controls and a decline in workload; for administrations the proportional approach to 
assurance would represent a decline in workload by around 4% compared to the no change option. 

4   E-governance in cohesion policy would be to ensure that beneficiaries are not asked to submit the same information 
more than once, and that information is available and transmitted in electronic format.  

8/9 

 
 
 
  
                                                 
It  also  better  respects  the  subsidiarity  principle.  Furthermore,  an  additional  reduction  of  5-10% 
could be attained by simplification on national rules and procedures to implement EU regulations 
and by reduction of national gold plating (adding national requirements on top of EU rules). 

3.3.2.  Coordination between cohesion policy instruments 

3.3.2.1.  Option 1 – No policy change 

The programming of  ERDF  and  the  ESF takes the  form  of  mono-fund  programmes.  Delimitation 
between the funds is essentially done on the basis of the type of investment. At operational level, 
"cross-financing" of certain investments is allowed thanks to a flexibility clause.  

3.3.2.2.  Option 2 – Facilitating integrated programming 

Under  this  option,  Member  States  would  be  encouraged  to  use  multi-fund  programmes  with 
common  processes  for  preparation,  negotiation,  management  and  implementation.  Where 
appropriate, a "lead fund" would be established, linked to the policy domain(s) of the programme. 
The  lead  fund's  interventions  would  be  complemented  by  interventions  from  the  other  structural 
funds so to ensure coherent support for the different thematic objectives under cohesion policy.  

3.3.2.3.  Option 3 – One policy, one fund approach 

Under  this  option,  the  programming  of  ERDF  and  the  ESF  could  take  the  form  of  mono-fund 
programmes or multi fund programmes and creating strict delimitation between funds.  

Option  2  provides  for  the  highest  efficiency  gains  as  well  as  for  the  highest  degree  of  flexibility. 
Option  1  places  an  additional  administrative  burden  (because  of  cross  financing  provisions),  and 
option 3 would create rigid demarcations.  

4.  MONITORING AND EVALUATION 

The  options  presented  in  this  Impact  Assessment  set  out  how  the  policy  objectives  and  design 
would be reformulated to address three particular issues. In this respect, monitoring and evaluation 
plays  an  important  role.  Under  all  change  options,  the  monitoring  and  evaluation  systems  will  be 
reinforced  in  comparison  to  the  current  situation.  The  proposed  changes  to  the  monitoring  and 
evaluation  systems  would  improve  the  focus  on  results  and  alignment  with  the  Europe  2020 
strategy.  

•  All  programmes  will  have  a  clearer  intervention  logic,  clearly  outlining  how  spending 

resources (inputs) on particular interventions (outputs) will contribute to the results. 

A set of common indicators, aligned with EU2020 objectives, will be used in all programmes where 
relevant. These indicators will include mainly outputs but also some intermediate results. 

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