COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT Accompanying the document Proposals for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the European Regional Development Fund and on the Cohesion Fund on a mechanism to resolve legal and administrative obstacles in a cross-border context on specific provisions for the European territorial cooperation goal (Interreg) supported by the European Regional Development Fund and external financing instruments
Date: 2018-05-29
Institutions: Directorate-General for Regional and Urban Policy, European Commission
Subjects: Cohesion Fund, European Regional Development Fund, European territorial cooperation, administrative cooperation, cross-border cooperation, legal cooperation, regional aid, regional cooperation, regional development, regional disparity

EN 

  EN 

   EUROPEAN COMMISSION  Strasbourg, 29.5.2018  SWD(2018) 282 final  COMMISSION STAFF WORKING DOCUMENT  IMPACT ASSESSMENT  Accompanying the document Proposals for a   REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL  on the European Regional Development Fund and on the Cohesion Fund  on a mechanism to resolve legal and administrative obstacles in a cross-border context  on specific provisions for the European territorial cooperation goal (Interreg) supported by the European Regional Development Fund and external financing instruments  {COM(2018) 372 final} - {SEC(2018) 268 final} - {SWD(2018) 283 final}  
 
 
Table of Contents 

1. 

INTRODUCTION: POLITICAL AND LEGAL CONTEXT ............................................................... 4 

1.1.  Scope and context .............................................................................................. 4 
1.2.  Lessons learned from previous programmes ................................................... 10 

2. 

THE OBJECTIVES ............................................................................................................................ 14 

2.1.  Challenges for the programmes of the next MFF ............................................ 14 
2.2.  Objectives ........................................................................................................ 21 

3. 

PROGRAMME STRUCTURE AND PRIORITIES ........................................................................... 24 

3.1.  Subsidiarity and added value of the ERDF and CF ......................................... 24 
3.2. Policy options ..................................................................................................... 29 
3.3. Simplifying and consolidating the priority objectives ....................................... 39 
3.4. Coherence and synergies with other policies ..................................................... 52 

4.  DELIVERY MECHANISMS OF THE INTENDED FUNDING ...................................................... 59 

4.1.  Programming: flexibility for emerging needs, return to "n+2" ....................... 59 
4.2.  Enabling conditions and governance ............................................................... 60 
4.3.  Simplification .................................................................................................. 62 
4.4.  Financial instruments ("FIs"): simplification and streamlining ...................... 66 
4.5.  Performance,  flexibility  and  simplification:  conclusions  on  the  new 

system of priorities and delivery ..................................................................... 68 

5.  HOW WILL PERFORMANCE BE MONITORED AND EVALUATED?....................................... 69 

5.1.  Monitoring ....................................................................................................... 69 
5.2.  Evaluation ........................................................................................................ 74 

1. 

LEAD DG(S), DECIDE PLANNING/CWP REFERENCES ............................................................. 76 

2.  ORGANISATION AND TIMING ...................................................................................................... 76 

3. 

4. 

CONSULTATION OF THE REGULATORY SCRUTINY BOARD (RSB) .................................... 76 

EVIDENCE, SOURCES AND QUALITY ......................................................................................... 78 

1 

 
 
 
 
Figures, maps and tables 

Figure 1 - ERDF planned spending by key priorities 2014-20 (EUR bn) .......................... 7 
Figure 2 - CF Planned spending, 2014-20 (EUR bn) ......................................................... 8 
Figure 3 - Impact of 2021-2027 ERDF and CF programmes on GDP, 2030 ................... 18 
Figure 4 - ERDF and CF as % of public investment, 2015-2017..................................... 24 
Figure 5 - Thematic concentration increases under the preferred option ......................... 30 
Figure 6 – Impact of the options on EU GDP .................................................................. 31 
Figure 7 - GDP impact of the preferred option 3, 2030 and 2040.................................... 32 
Figure 8 - Impact of 2020-2027 RTD programmes on EU-27 GDP, 2020-2035 ............. 52 
Figure 9 - What do you see as the main benefit of the performance framework? ........... 70 

Map 1 - ERDF eligibility 2014-20 ..................................................................................... 6 
Map 2 - Cohesion Fund eligibility 2014-20 ....................................................................... 9 
Map 3 - Impact of 2020-2027 regional policy programmes on GDP, 2030 ..................... 20 
Map 5 - Risk factors linked to globalisation and technological change ........................... 34 
Map 6 - Regional distribution of FP7 expenditure ........................................................... 52 
Map 7 – RTD component of 2020-2027 ERDF: impact on regional GDP, 2030 ............ 54 

Table 1 – ERDF and CF envelope for 2021-27 .................................................................. 5 
Table 2 - EU and national contributions to the ERDF, 2014-20 (euro billion) .................. 5 
Table 3 - EU and national contributions to the CF and ERDF, 2014-20 (euro billion) ..... 8 
Table 4 - Evaluation lessons: what was addressed in 2014-20, what remains? ............... 13 
Table 5 - Links between challenges and policy proposals ............................................... 22 
Table 6 - Firms supported and jobs created 2014-20 ....................................................... 28 
Table 7 – Comparison of key features of baseline and options ........................................ 30 
Table 9 - % impact on GDP 2030 and 2040 ..................................................................... 31 
Table 10 - Thematic concentration thresholds ................................................................. 36 
Table 11 - EU and national contributions to the ERDF and CF, 2014-20 (euro billion) . 37 
Table 12 - Proposed priorities in the new period with target indicators .......................... 43 
Table 13 - The complementary roles of FP9, COSME and ERDF .................................. 51 
Table 14 - Main monitoring data collected for ERDF and CF 2014-2020 ...................... 68 
Table 15 - Evaluations planned by Member States 2014-2020 ........................................ 73 

2 

 
 
 
 
 
 
 
 
 
Glossary 

Term or acronym 

Meaning or definition 

AMIF 

CEF 

CF 

Asylum and Migration Fund 

Connecting Europe Facility 

Cohesion Fund 

Cohesion Policy 

CF, ERDF and ESF 

COSME 

CPR 

DEP 

DG REGIO 

EAFRD 

EMFF 

ERDF 

ESF 

ESI Funds 

ETC 

EU 

EU-13 

FI 

FP7 and 9 

GDP 

GNI 

IA 

ICT 

MFF 

OPs 

QUEST 

RIS3 

RSB 

Rhomolo 

EU programme for competitiveness of SMEs 

Common Provisions Regulation. Will provide common regulations 
for all shared management funds (including ESI Funds and AMIF) 

Digital Europe Programme 

Directorate General for Regional and Urban Policy  

European Agricultural Fund for Rural Development 

European Maritime and Fisheries Fund 

European Regional Development Fund 

European Social Fund 

European Structural and Investment Funds – the collective name for 
CF, EAFRD, EMFF, ERDF and ESF 

European Territorial Cooperation  ("Interreg") 

European Union 

All Member States that joined the EU since 2004 

Financial Instrument. In the context of ERDF and CF this will 
typically be loan, equity or guarantee. 
7th and 9th EU Framework Programmes for Research and Innovation  
Gross Domestic Product 

Gross National Income 

Impact Assessment 

Information and communication technology 

Multi-annual Financial Framework 

Operational Programmes – individual regional or national 
programmes for the ERDF. 

Macroeconomic model, used to model impact of ERDF and CF 

Research and Innovation Strategies for Smart Specialisation 

Regulatory Scrutiny Board 

Macroeconomic model, used to model impact of ERDF and CF 

TEN-E, TEN-T 

Trans-European Energy and Transport Networks 

TO 

Thematic Objective 

3 

 
 
1. 

INTRODUCTION: POLITICAL AND LEGAL CONTEXT  

1.1. 

Scope and context 

"What  should  the  future  EU  budget  focus  on?  First,  reducing  economic  and  social 
divergences  between  and  within  Member  States  is  crucial  for  a  Union  that  aims  for  a 
highly competitive social market economy" (Reflection paper on EU finances1) 

On 2 May 2018, the European Commission adopted its proposals for a new Multiannual 
Financial  Framework  (MFF)  for  2021-2027.  Under  these  proposals,  the  European 
Regional  Development  Fund  (ERDF)  and  Cohesion  Fund  (CF)  will  have  a  budget  of 
EUR 273 billion over the period. This impact assessment report reflects the decisions of 
the MFF proposals and focuses on the changes and policy choices which are specific to 
the ERDF and CF. 

The mission of the ERDF and CF is laid down in the treaties (see box below): economic, 
social  and  territorial  cohesion.  This  means2  reducing  regional  and  national  disparities 
across  a  broad  range  of  themes:  innovation,  competitiveness,  jobs,  environment, 
transport,  education  and  health  infrastructure.  It  also  means  cross-border  co-operation 
and sustainable urban development. 

The ERDF and CF are key investment policies in the EU Budget, equivalent in the 2014-
20 programme period to 8.5% of government capital investment in the EU, rising to 41% 
for the EU-133. Both funds contribute to achieving EU objectives, including jobs, growth 
and investment, digital single market and Energy Union. 

The Treaty basis 

Article 174 of The Treaty on the Functioning of the European Union: "The Union shall 
develop  and pursue its actions leading  to  the strengthening of  its economic, social and 
territorial  cohesion.  In  particular,  the  Union  shall  aim  at  reducing  disparities  between 
the  levels  of  development  of  the  various  regions  and  the  backwardness  of  the  least 
favoured regions". 

Article 176: The European Regional Development Fund is intended to help to redress the 
main  regional  imbalances  in  the  Union  through  participation  in  the  development  and 
structural  adjustment  of  regions  whose  development  is  lagging  behind  and  in  the 
conversion of declining industrial regions. 

Article  177:  A  Cohesion  Fund  set  up  in  accordance  with  the  same  procedure  shall 
provide  a  financial  contribution  to  projects  in  the  fields  of  environment  and  trans-
European networks in the area of transport infrastructure. 

1 European Commission (2018) "Reflection paper on the future of EU finances" p22 
2 European Commission  (2017)  "7th Report on Economic, Social and Territorial Cohesion" (for links to this and other 

reports see Annex 1 

3 All Member States that joined the EU since 2004 

4 

 
 
 
 
 
 
 
 
                                                            
There  will  be  common  rules  for  shared  management  funds  –  the  Common  Provisions 
Regulation  (CPR).  This  convergence  of  rules  will  enhance  coherence  and  synergies 
among the Funds. The CPR will therefore cover the following funds: 

  ERDF and CF – the subject of the current impact assessment 
  ESF+:    European Social Fund + 
  EMFF:   European Maritime and Fisheries Fund 
  AMIF:   Asylum and Migration Fund 
 
  BMVI:   Border Management and Visa Instrument 

Internal Security Fund 

ISF:  

The other funds have their own impact assessments. This impact assessment satisfies the 
requirements of the Financial Regulation in respect of preparing an ex-ante evaluation. 

Table 1 – ERDF and CF envelope for 2021-27 

ERDF and CF total 

European Regional Development Fund (ERDF) 

 

Investment for growth and jobs  

  European territorial cooperation  

  Outermost regions and sparsely populated areas  

Cohesion Fund (CF) 

  of which contribution to CEF Transport  

273 000  

226 308  

215 172  

9 500  

1 637  

46 692  

11 285  

ERDF – regional development, economic transformation, territorial co-operation 

The ERDF was set up in 1975 and provides financial support for regional development, 
economic  change  and  transformation,  and  territorial  cooperation.  All  EU  regions  are 
eligible (see Map 1). Resources are distributed so that the highest aid intensity is in the 
less developed regions (see Table 2). 

Table 2 - EU and national contributions to the ERDF, 2014-20 (euro billion) 

EU amount  National 

total funding  % EU 

cofinancing 

amount 

 36.2  
 29.6  
1.0  

130.3  
 32.3  
1.6  

 166.5  
 61.9  
2.5  

Less developed 
More developed 
Northern sparsely populated 
and outermost regions 
Transition 
Interreg 
Total ERDF 
Less developed regions: those with GDP/head < 75% of the EU 27 average 
Transition region: GDP/head between 75% and 90% of the EU 27 average 
Eligibility for this period was calculated with UK but without Croatia 
Source: ESI fund Open Data Platform - https://cohesiondata.ec.europa.eu/ (February 2018) 

 36.3  
 13.1  
 280.3  

 25.4  
9.8  
 199.4  

 10.9  
3.3  
 80.9  

78% 
52% 
62% 

70% 
75% 
71% 

5 

 
 
 
 
 
Map 1 - ERDF eligibility 2014-20 

6 

 
 
 
 
 
 
Figure 1 - ERDF planned spending by key priorities 2014-20 (EUR bn) 

Employment, 
social and 
educational 
infrastructure,  
21.5  

Other;  7,4  

Research & 
Innovation;  41,1  

Transport and 
Energy, 25.8 

Environment & 
Resource 
Efficiency;  18,2  

Climate Change & 
risk;  4,2  

Low-Carbon 
Economy;  31,6  

ICT;  13,3  

SMEs;  33,2  

Source: ESI fund Open Data Platform - https://cohesiondata.ec.europa.eu/ (September 20174) 

In  line  with  its  broad  overall  mission  (see  treaties,  above),  the  ERDF  tackles  a  wide 
variety of investment priorities, covering the full range of economic, social and territorial 
cohesion  (see  Figure  1).  But  in  line  with  the  priority  for  structural  adjustment  and 
economic  conversion,  nearly  half  of  the  money  (45%)  is  invested  in  smart  growth  – 
research  and  innovation,  ICT  and  SME  support.  A  further  quarter  (28%)  is  invested  in 
various environmental measures, notably the transition to the low carbon economy. 

Three  noteworthy  priorities  are  cross-border,  transnational  and  inter-regional  co-
operation, the outermost regions and Northern sparsely populated regions. 

CF – transport and environmental infrastructure in poorer countries 

Since  1994,  the  Cohesion  Fund  has  supported  environmental  measures  and  trans-
European transport and energy networks – particularly high-priority projects of European 
interest.  The  Cohesion  Fund  may  also  be  used  to  finance  the  priorities  of  the  EU's 
environmental  protection  policy.  Investment  is  divided  relatively  evenly  between 
transport  and  energy  projects  on  the  one  hand  and  environmental  projects  (including 
energy projects) on the other (see Figure 2). 

4 All expenditure data to be updated before publication of the IA. Thematic split will not change significantly, though 

implementation obviously will. 

7 

 
 
 
 
 
 
                                                            
Eligible countries are referred to in this report as Cohesion Countries (see Map 2). These 
are Member States with a Gross National Income (GNI) per inhabitant below 90 % of the 
EU average, i.e. the 13 Member States that have joined the EU since 2004, as well as in 
Greece and Portugal.  

Figure 2 - CF Planned spending, 2014-20 (EUR bn) 

Technical 
Assistance,  
2,1  

Low-Carbon 
Economy,  8,0  

Climate 
Change & 
Risk,  3,7  

Transport and 
Energy,  32,6  

Environment 
& Resource 
Efficiency,  
16,9  

Source: ESI fund Open Data Platform - https://cohesiondata.ec.europa.eu/ (September 2017) 

Table 3 - EU and national contributions to the CF and ERDF, 2014-20 (euro billion) 

EU amount 

National 
cofinancing 

total funding  % EU amount 

CF 
ERDF 
total 
Source: ESI fund Open Data Platform - https://cohesiondata.ec.europa.eu/ (February 2018) 

63.3 
 199.4  
262.7 

75.4 
 280.3  
355.7 

12.1 
   80.9  
93.1 

84% 
71% 
74% 

Shared management – a key feature in assessing added value and delivery reforms  

The  ERDF  and  CF  are  delivered  under  shared  management.  Programmes  are  not  run 
directly  by  the  Commission,  instead  they  are  implemented  in  partnership  with  the 
Member States. The  principles and priorities of Cohesion Policy are distilled through a 
process  of  discussion  between  the  Commission  and  Member  States.  But  day  to  day 
management is in the hands of managing authorities appointed by the Member States. 

A managing authority may be a national ministry, a regional authority, a local council, or 
another public or private body that has been nominated and approved by a Member State. 
They are responsible for efficient management and implementation of a programme.   

8 

 
 
  
 
 
 
Map 2 - Cohesion Fund eligibility 2014-20 

9 

 
 
 
1.2.  Lessons learned from previous programmes5 

The  ex  post  evaluation  of  the  ERDF  and  CF6  for  2007-13  found  a  wide  range  of 
achievements across the fields of economic, social and territorial cohesion, including: 

  400  000  SMEs  were  financially  supported  and  this  support  led  directly  to  the 
creation of 1.1 million jobs. Although this is only 2% of firms in the EU, support 
focussed on strategic enterprises – in the manufacturing sector, an estimated 15% 
of small firms and over a third of medium sized firms received financial support. 

  Transport  bottlenecks  were  removed,  travel  times  reduced  and  urban  trams  and 
metros supported, often with substantial environmental benefits such as reduced 
local  air  pollution.  This  included  the  construction  of  4900  km  of  roads,  mostly 
motorways (of which 2400 km on the TEN-T). It also included the construction 
or upgrading to necessary standards of 2600 km of TEN-T railway.  

  The  ERDF  and  CF  also  made  a  significant  contribution  to  the  environment:  a 
substantial number of landfill sites which did not comply with EU standards were 
closed  down  while  in  the  Czech  Republic,  Hungary,  Lithuania,  Poland  and 
Slovenia,  as  well  as  Croatia,  the  proportion  of  waste  which  was  recycled  was 
increased by over 10 percentage points. 

 

Investment  in  social  infrastructure  led  to  the  modernisation  of  schools  and 
colleges in Portugal, benefiting 300 000 children and young people as well as the 
upgrading of schools and healthcare facilities in Poland for 1.9 million people. 

  Despite 

the  relatively  small  funding 

intensity  of  Interreg  cross-border 
programmes (EUR 20 per head of population), by end 2013 they had funded over 
6800 projects in policy areas which are EU priorities. These included the creation 
and  expansion  of  economic  clusters,  centres  of  excellence,  high  education  and 
training centres, cooperation networks between research centres and cross-border 
advisory  services  for  enterprises  and  business  start-ups  and  joint  management 
across borders of natural resources, including sea and river basins. 

Economic transformation and flexibility 

Economic transformation is a treaty mandate of the ERDF (see section 1) and has been a 
key mission since its inception. The evaluation noted that the 2007-13 programmes were 
implemented in the context of a deep global economic and financial crisis. This strongly 
influenced  business  opportunities  and  the  private  investment  climate.  It  also  influenced 
public finances and the capacity of governments to invest. 

5 This section considers lessons learned from the ex post evaluation. Reflections from Council and Parliament, as well 
as the 2018 public consultation arguably cover the current period more than the previous period. 

6 Ex Post Evaluation of the ERDF and Cohesion Fund 2007-2013 

http://ec.europa.eu/regional_policy/en/policy/evaluations/ec/2007-2013/  

10 

 
 
 
                                                            
It  was  crucial  for  the  ERDF  to  respond  to  the  crisis.  Programmes  were  adapted,  EU 
cofinancing rates increased and eligibility rules changed to finance working capital – this 
last change enabled firms to remain in business and to maintain employment. 

The need for economic transformation and a move up the value chain was a key theme in 
SME support. A major result of support was helping SMEs withstand the effects of the 
crisis by providing credit when other sources of finance had dried up. It enabled SMEs to 
invest in modernising or expanding plant and equipment. Moreover, many  programmes 
used ERDF support not just to survive the crisis, but to experiment and innovate. 

Lessons for the content of the policy 

Some of the key lessons were linked to the importance of the local business environment 
and innovation ecosystem, helping regions move up the value chain. For example:  

  Support  to  large  enterprises  needs  to  be  very  selective,  targeting  firms  which 
match  the  structure  of  the  regional  economy  and  can  make  links  to  local 
enterprises,  research  centres  and  universities.  The  most  effective  strategy  to 
attract  large  enterprises  is  not  financial  incentives  but  improving  local 
conditions such as the local business environment, transport and communication 
networks, the skills of the local workforce, the social amenities available and so 
on. This avoids a wasteful subsidy race. 

  Support to SMEs should focus  more on helping dynamic  SMEs grow, on smart 
specialisation  strategies  and  facilitating  regions  to  move  up  the  economic 
chain,  rather  than  trying  to  maintain  the  economy  of  the  past  (see  box  on 
economic transformation). 

Other lessons for scope and content included: 

  Past ERDF  and  CF investments in  the waste and water sectors  mean  that fewer 

Member States still need work to achieve the acquis requirements.  

 

It  is  questionable  whether  the  ERDF  should  continue  to  finance  road  building, 
except in the EU13. Similarly airport investments have tended to perform poorly 
– only in the outermost regions can a strong case be made. 

  Conversely,  there  is  a  strong  case  for  investing  in  local  and  urban  transport 

networks, even when they are not part of the TEN-T.  

Lessons for delivery 

1.  The  need  to  have  the  flexibility  to  respond  to  emerging  needs.  The  adaptation  of 
programmes  to  the  economic  crisis  was  one  of  the  success  stories  in  2007-13  (see  box 
above) and should be built upon. 

11 

 
 
 
 
2. Simplification: the need to reduce the administrative burden. This was a key and 
repeated  finding.  A  narrow  majority  of  stakeholders7  (55%)  thought  the  administrative 
burden  of  project  application  and  implementation  too  high  in  relation  to  funding,  with 
overcomplex  management,  control  and  audits  systems.  This  was  the  source  of 
administrative  uncertainty,  as  well  as  project  delays  –  62%  of  those  interviewed 
considered  that  the  complexity  of  internal  administrative  rules  and  procedures  caused 
delays in project selection, especially in the EU12 countries. 

Complexity  was  a  particular  issue  in  EU15  countries  where  the  funding  was  relatively 
smaller, suggesting a need for proportionality.  

3. The need for a greater focus on results, not just spending. There was a strong focus 
on investing the money, delivering projects and generating outputs. However, very few 
2007-13  programmes  had  a  "focus  on  results"  –  setting  clear  goals  for  changes  at  the 
level  of  the  region,  selecting  projects  accordingly  and  tracking  progress  towards  those 
goals. Examples included: 

  A  lack  of  monitoring  of  the  results  sought.  For  example,  all  9  of  the  financial 
instrument  case  study  programmes  had  a  rationale  of  promoting  productivity, 
innovation  and  other  aspects  of  business  quality,  but  only  1 programme  (the  NE  of 
England) actually  monitored  this  –  the  others  monitored  spending  and jobs  created. 
This lack of strategic tracking meant that projects were often selected more for ability 
to absorb funding in a given year than for their contribution to the objectives of the 
programme. 

  Evaluations  which  focus  on  process,  not  results.  The  evaluation  of  the  delivery 
system  found  that,  in  the  evaluations  conducted  by  Members  States  and  Managing 
Authorities, there was a predominance of process evaluations (44%) and monitoring-
type evaluations (44%) over impact evaluations (22%)8. Although the lack of impact 
evaluations  was  partly  explained  by  early  delays  in  implementation,  this  is  still 
imbalanced. 

4.  The  potential  of  financial  instruments.  The  evaluation  found  that  these  have  the 
potential to be a more efficient means of funding investment in some policy areas, but the 
inexperience  of  many  implementing  bodies  led  to  delays  in  implementation.  A  further 
challenge is spreading financial instruments beyond enterprise support, where over 90% 
of 2007-13 financial instrument funding was concentrated. 

Addressing the lessons learned 

The ex post evaluation of 2007-13 was completed in 2016, while the 2014-20 period was 
prepared  from  2011  onwards.  It  was  therefore  not  possible  to  directly  feed  evaluation 
results into the 2014 reform. 

7  

8  

The evaluation of the delivery system included a large survey with responses from 2500 stakeholders, 
including 1100 programme and intermediate managers, as well as 1400 beneficiaries at the project level 
Some evaluations covered more than one topic, so figures add to more than 100% 

12 

 
 
 
                                                            
Many of the lessons were already clear in implementation and have to some extent been 
addressed  (Table  4).  However,  in  most  cases,  while  something  has  been  done,  the 
situation  continues  to  evolve  and  there  is  a  need  to  build  on  previous  work.  Two  clear 
particularly clear  cases where  the  challenge is  ongoing: the  need  to  respond  flexibly  to 
the  challenge  of  economic  transition  and  the  need  to  simplify  and  reduce  the 
administrative burden.  

Table 4 - Evaluation lessons: what was addressed in 2014-20, what remains? 

Lesson 
Priorities, e.g. economic 
transition (moving SMEs 
up the value chain), local 
and urban transport  
Negative priorities, such 
as support for large 
enterprises, airports. 

Flexible programming 
for emerging needs 
(including economic 
transition) 

Simplification: reducing 
the administrative 
burden 

A focus on results, not 
just spending 

Broadening the use of 
financial instruments  

Addressed in 2014-20? 
Partially. E.g. smart specialisation strategies provide a focus 
on moving up the value chain. Focus on high value added 
sectors and interregional cooperation will be reinforced post-
2020 (see section 3.3 and Table 11). 
Partially. Large enterprise support was restricted to 
innovation themes in 2014-20. These issues are further 
addressed post-2020 with a list of negative priorities and 
exclusions (section 3.3). 
The ad hoc system of reprogramming worked reasonable well 
in 2007-13, so this issue was not formally addressed. But 
post-2020, the challenges of globalisation and migration will 
be addressed in the thematic priorities (see section 3.3 and 
Table 11). Flexibility more generally will be addressed by 
proposals for post-2020 (see section 4.1). 
Partly addressed via a range of elements (including single 
audit principle and simplified cost options), estimated to have 
reduced the administrative burden on final beneficiaries by 9-
14%. Further simplification is however necessary. These 
issues are discussed in detail in section 4.3. 
These issues were addressed through the result orientation 
and performance framework of 2014-20. This will be 
developed further post-2020 by a common set of result 
indicators (see section 5). 
Addressed. The use of financial instruments was broadened 
in 2014-20 and more guidance given. However more remains 
to be done to make these instruments accessible, simpler to 
administer and with more legal certainty (see 4.4). 

13 

 
 
 
 
 
2.  THE OBJECTIVES  

2.1.  Challenges for the programmes of the next MFF 

In this section we summarize the main challenges and problems for post-2020 ERDF and 
CF  based  on  recent  Council,  Parliament  and  Commission  reflections,  as  well  as 
stakeholder  feedback  from  the  public  consultation.  While  the  comments  cover  many 
issues,  the  twin  ongoing  challenges  identified  in  the  evaluation  lessons  –  responding 
flexibly  and  innovatively  to  the  challenge  of  economic  transition,  simplification  and 
reduction of the administrative burden – are a recurrent theme. 

Challenges related to scope, priorities and coherence with other policies   

In the recent public consultation9, respondents identified reduction of regional disparities 
as  the  most  important  challenge  (94%  of  respondents  considered  it  as  very  or  rather 
important), followed by reducing unemployment (92%). Promoting economic growth in 
the EU, transition to low-carbon economy, fostering research and innovation and social 
inclusion  were  also  regarded  as  key  challenges.  The  respondents  considered  these 
challenges to be successfully addressed by Cohesion Policy. 

On  the  other  hand,  there  are  some  other  challenges  which  respondent  considered  to  be 
only  to  some  extent  or  not  at  all  addressed  by  Cohesion  Policy,  such  as  globalisation, 
common values and sound economic governance and reforms.   

The  Council  set  out  a  view  of  Cohesion  Policy  which  is  forward  looking,  flexible  and 
innovative10: "Cohesion Policy post-2020 must therefore be a proactive, forward looking 
policy,  which  is  sufficiently  flexible  to  address  new  challenges  and  facilitate  the 
development  of  innovative  solutions  throughout  the  EU,  while  continuing  to  provide  a 
stable  and  predictable  investment  and  cooperation  framework  to  reduce  the  disparities 
between the levels of development of the various regions." 

Likewise,  the  European  Parliament  stresses  that  Cohesion  Policy  post-2020  should 
remain  the  main  investment  policy  of  the  European  Union  covering  all  EU  regions,  in 
order to tackle complex socio-economic challenges. It underlined that beyond the goal of 
reducing  the  disparities  between  levels  of  development  and  enhancing  convergence  as 
enshrined  in  the  Treaty,  Cohesion  Policy  should  focus  on  the  achievement  of  the  EU’s 
broad EU political objectives11.  

The Reflection Paper on EU finances12 details this as:  

  Addressing a broad range of economic and social disparities. Reducing economic 
and social divergences between and within Member States is crucial for a Union that 
aims for a highly competitive social market economy. 

9 See Annex 2 
10 Council of the European Union "Making Cohesion Policy more effective, relevant and visible to our citizens" 25 

April 2017, paragraph 18 

11 European Parliament, Resolution of 14 March 2018 on the next MFF: Preparing the Parliament’s position on the 

MFF post-2020, paragraph 89 

12 https://ec.europa.eu/commission/publications/reflection-paper-future-eu-finances_en  

14 

 
 
                                                            
  Geographic  targeting  of  funding  which  goes  beyond  GDP:  "the  current  system  of 
allocation  of  the  funds  could  be  revised.  New  criteria  could  be  added,  for  instance 
linked  to  the  challenges  Europe  faces,  from  demographics  and  unemployment  to 
social inclusion and migration, from innovation to climate change." 

  Tackling the impact of globalisation. While the benefits of globalisation are widely 
spread,  the  costs  are  often  localised.  Recent  evidence  suggests  that  many  regions 
across Europe are much more likely than others to be exposed to sudden shocks;  

  The  low  carbon  economy:  Shift  towards  new,  sustainable  growth  models  that 
combine  economic,  social  and  environmental  considerations  in  a  holistic  and 
integrated  way.    This  includes  investment  in  low  carbon  energy  generation, 
transmission and distribution, in energy efficiency, climate resilience, environmental 
protection and will help the EU contribute to the sustainable development goals.    

Further key challenges identified in other EU recent documents include:  

  Boosting  the  research,  innovation  and  competitiveness  potential  of  European 

regions, as a this is the only sound basis for sustainable growth13; 
Increasing  interregional  cooperation  and  overcoming  obstacles  to  cross-border 
interactions of people and firms14;  

 

  The challenges of urban areas where congestion, unemployment, poverty, inflow of 
migrants  are  concentrated;  these  challenges  require  an  integrated,  tailor-made 
approach (“Pact of Amsterdam”15);  

  Challenges faced by EU outermost regions16 (see box).  

13 Communication “Strengthening Innovation in Europe's Regions: Strategies for resilient, inclusive and sustainable 

growth”, COM(2017) 376 

14 Communication “Boosting growth and cohesion in EU border regions”, COM(2017) 534 
15 Urban Agenda for the EU - “Pact of Amsterdam”,  http://ec.europa.eu/regional_policy/sources/policy/themes/urban-

development/agenda/pact-of-amsterdam.pdf  

16 The EU outermost regions are Guadeloupe, French Guiana, Martinique, Mayotte, Reunion Island and Saint-Martin 

(France), Canary Islands (Spain), the Azores and Madeira (Portugal) 

15 

 
 
                                                            
Box: the outermost regions of the EU 

Article 349 of the TFEU Treaty acknowledges the special characteristics of the outermost 
regions  and  affords  them  a  special  status.  In  October  2017,  the  President  of  the 
Commission launched a new strategy for these regions17. 

The  outermost  regions  face  serious  challenges.  Their  remoteness,  small  size, 
vulnerability  to  climate  change  and  (for  most  of  them)  insularity  represent  permanent 
constraints on development. Most of them need to invest in basic infrastructure - such as 
roads,  water  and  waste  management  facilities  -  and  their  economy  depends  largely  on 
imports. All this brings additional costs to their companies, which are primarily SMEs. 
As  a  result, GDP  per  capita is  much  lower than the  EU  average,  and  unemployment  is 
critically high, above 40% in the young population.  

The new strategy aims at better tackling these challenges, developing smart specialisation 
strategies  to  build  on  areas  such  as  the  blue  economy,  renewable  energy,  cooperation 
with neighbours and innovation in traditional sectors such as fisheries and agri-food, as 
well  as  supporting  the  young  people.  Better  air  and  maritime  transport  links  and  better 
digital connectivity are crucial. 

In order to overcome these challenges, the main issue is prioritisation of the resources of 
the ERDF and CF on the right geographic and thematic objectives (see section 3).  The 
Council stated that "thematic concentration" on innovation, SMEs and green growth 
while  essential,  must  be  balanced  against  other  needs  in  the  Member  States  or 
region18:  "Thematic concentration … contributing the most to reaching the targets of the 
Europe 2020 Strategy… however, a balance must be maintained between the predefined 
requirements for concentration on a limited number of thematic areas and the needs of 
Member  States,  including  the  flexibility  to  respond  during  the  programming  period  to 
specific national and regional development challenges". 

Another challenge is policy coherence among EU instruments. The European Parliament 
underlines the need to ensure better synergies and communication between and about the 
ESI Funds and other Union funds and programmes, including EFSI, and to facilitate the 
implementation of multi-fund operations19.  The Reflection Paper stressed that coherence 
between EU funds is needed to ensure that they all support EU objectives and facilitate 
reforms  in  Member  States….  Rules  and  conditions  applying  in  the  same  policy  area 
should  be  aligned.  There  is  also  evidence  of  competition  and  crowding  out  effects 
between EU programmes20.  

17 Communication “A stronger and renewed strategic partnership with the EU's outermost regions”, COM(2017) 623 
18 Council of the European Union "Results and New Elements of Cohesion Policy and the European Structural and 

Investment Funds" 15 November 2016, paragraphs 19 and 20 

19 European Parliament, Committee on Regional Development, Report on building blocks for a post-2020 EU cohesion 

policy (2016/2326(INI), May 2017, paragraph 21 

20 Reflection Paper on EU finances, p.23 

16 

 
 
 
 
                                                            
Challenges related to the delivery system 

In the public consultation, stakeholders were asked about the main obstacles to achieving 
the objectives of Cohesion Policy. Complex procedures were considered by far the most 
important obstacle, followed by heavy audit and control requirements, lack of flexibility, 
difficulty to ensure financial sustainability and late disbursements/delays in payments21.  
In other words, several issues related to complexity and administrative burden, as well 
as the need for flexibility and for sustained funding. 

The  Council,  Parliament  and  the  Reflection  Paper  on  EU  finances  identified  the 
following main challenges regarding delivery:   

1)    Flexibility:  the  challenge  is  to  make  ERDF  and  CF  "more  flexible  to  face  new 
challenges, for example through an unallocated capacity22".  The recent migration crisis 
has shown the need for rapid reaction in the face of a new pan-European challenge.  

2)  Simplification:  the  Council  considers  that  “the  amount  and  complexity  of  rules 
introduced for the 2014-2020 programming period remain a challenge for beneficiaries 
and Member States. Complex and extensive rules are one of the main causes for errors 
and contribute to delays under cohesion policy” 23.   The European Parliament highlights  
the need to simplify the Cohesion Policy’s overall management system at all governance 
levels,  facilitating  the  programming,  management  and  evaluation  of  operational 
programmes, in order to make it more accessible, flexible and effective.24;.  

3)  Governance:  the  European  Parliament  considers  that  there  must  be  a  balanced  link 
between Cohesion Policy and economic governance processes in the European Semester 
and that this link should be reciprocal; is of the opinion that a greater recognition of the 
territorial dimension would be beneficial for the European Semester25. According to the 
Council, "While the fulfilment of ex-ante conditionalities sometimes requires significant 
time  and  resources  to  implement  legislative  changes  or  complex  reforms,  they  have  a 
positive effect on the overall investment environment, the strengthening of administrative 
capacity and good governance in many Member States." 26 

4) The use of financial instruments: the Council called on the Commission to “create 
better conditions for the combination of grants and financial instruments and simplify the 
implementation  of  financial  instruments  by  bringing  the  rules  closer  to  usual  financial 
market practices”27.  

21 See annex 2 for more details on the public consultation.  
22 Reflection Paper on EU finances, p.24 
23 Council of the European Union "Synergies and simplification of Cohesion Policy" 15 November 2017, paragraph 10 
24 European Parliament, Committee on Regional Development, Report on building blocks for a post-2020 EU cohesion 

policy, paragraph 16. 

25 Ibidem, paragraph 13. 
26 Council of the European Union "Making Cohesion Policy more effective, relevant and visible to our citizens" 25 

April 2017, paragraph 7 

27  Council of the European Union "Synergies and simplification of Cohesion Policy" 15 November 2017, paragraph 14  

17 

 
 
 
 
                                                            
Expected impacts 

If  the  ERDF  and  CF  continue  as  at  present28,  GDP  in  the  EU  is  expected  to  be  almost 
0.4% higher in 2030 as a result of the interventions. The impact is the highest in the main 
beneficiaries of the policy. For example, at the end of the implementation period, GDP in 
Croatia  and  Poland  is  expected  to  be  3.2%  higher  thanks  to  the  ERDF  and  CF 
investments while in Lithuania and Slovakia, it is around 3.0% higher. On average, the 
impact in the EU-13 is around 2.7% in 2030. 

The  impact  of  cohesion  policy  is  particularly  high  in  the  regions  which  are  the  main 
beneficiaries  (see  Map  3).  By  the  end  of  programme  implementation  (2030),  GDP  in 
Észak-Magyarország and Észak-Alföld (Hungary) is expected to be more than 8% higher 
than in a scenario without regional policy.  

In  the  non-cohesion  countries  ("EU-14"  in  Figure  3),  the  impact  of  ERDF  and  CF  is 
smaller but positive for all Member States. This is because the effect of higher taxes to 
finance the investment29 concerned is more than compensated by the long term boost in 
trade with (now richer) net recipient countries. At the regional level, all regions benefit, 
with  the  smallest  impact  in  2030  found  in  Nordjylland  (Denmark)  and  corresponds  to 
around 0.01% of GDP. 

Figure 3 - Impact of 2021-2027 ERDF and CF programmes on GDP, 2030 

Source: QUEST 

28 Macroeconomic impacts modelled with QUEST and Rhomolo (see Annex). The modelling assumes the status quo, 
ie national allocations remain unchanged, as well as the distribution among the various fields of 
interventions, but without the UK. 

29 The largest element of the EU budget is “GNI based contributions”, which is not straightforward to capture in the 

model. Therefore we model an implicit tax on consumption, which mirrors VAT + duties, the second largest 
element. 

18 

 
 
 
 
                                                            
A useful measure is the impact per euro spent – the ratio between the cumulated impact 
on GDP up to a given year and the cumulated amounts spent up to the same year. Five 
years after the end of the programming period, the impact per euro spent is expected to 
be around 2.9 euros in the EU-27. Since this impact occurs over a period of 17 years, it 
corresponds  to  an  annual  average  return  of  around  7%.  This  represents  good  value  for 
money in the public sector but a little below returns on private investments – only to be 
expected  when  a  policy  has  other  goals  (redistributive,  social  or  environmental)  than 
simply the highest return. 

The above results are in line with impacts of previous modelling work, which suggested 
similar  impacts  (an extra  3%  on  the  GDP  of  cohesion  countries  for each  period).  They 
are  also  in  line  with  counterfactual  econometric  models  which,  by  comparing  regions 
with  different  rates  of  assistance  (notably  the  richest  less  developed  regions  with  the 
poorest  more  developed  regions,  since  these  are  similar)  have  tended  to  produce 
estimates of between ½ and 1 % extra on growth per year, therefore 3.5%-7% extra GDP 
over the period30. 

30 For instance, a paper of Pellegrini et al., Measuring the effects of European Regional Policy on economic growth: A 
regression discontinuity approach. Papers in Regional Science, 92, 2013 found an annual per capita difference of 
0.6-0.9 percentage points in favour of regions receiving Cohesion Policy support over 1995-2006 period. A paper of 
D. Bondonio The impact of varying per capita intensities of EU Funds on regional growth: Estimating dose response 
treatment effects through statistical matching, Ex post evaluation of Cohesion Policy programmes 2007-2013, Work 
package 14d,  came to similar results using propensity score matching. 

19 

 
 
 
                                                            
Map 3 - Impact of 2020-2027 regional policy programmes on GDP, 2030 

20 

 
 
 
2.2.  Objectives  

The general objective remains that defined in the Treaty: economic, social and territorial 
cohesion, reducing disparities between the levels of development of the various regions.  

This general objective will comprise 5 policy objectives (see section 3.2 and Table 11): 

1.  A smarter Europe - innovative and smart industrial transformation 
2.  A greener, low carbon Europe  - clean and fair energy transition, green and blue 

investment, circular economy, climate adaptation and risk prevention 

3.  A more connected Europe - mobility and regional ICT connectivity 
4.  A more social Europe - implementing the European Pillar of Social Rights 
5.  Europe closer to citizens – sustainable and integrated development of urban, rural 

and coastal areas through local initiatives 

Progress towards these policy objectives will be measured: 

  On a 3 yearly basis though the Cohesion Report, which examines a broad range 
of  economic,  social  and  territorial  indicators  at  the  national,  regional  and  other 
levels, as well as by regular progress reports. 

  By  a  series  of  common  output  and  (for  the  first  time  in  the  ERDF  and  CF) 
common  result  indicators.  These  will  be  established  at  the  level  of  the 
programmes and aggregated to the European level.  The indicators are set out in 
Table 11, and further details on monitoring and evaluation in section 5. 

To  rise  to  the  challenges  set  in  the  previous  chapters,  we  are  proposing  a  number  of 
policy responses falling into two categories (see  

21 

 
 
  
 
Table 5): 

1.  For the content and priorities of the ERDF and CF. A key proposal to reinforce 
economic transition – smart growth and a transition to the digital and low carbon 
economy.  These  proposals  will  be  tackled  in  section  3  on  the  programme 
structure and priorities. 

2.  For  the  delivery  systems  of  the  policy.  Arguably  the  majority  of  our  proposals, 
including  more  flexible  programming,  better  links  with  governance  and  an 
increased use of financial instruments. These proposals will be tackled in section 
4 on the delivery system. 

22 

 
 
 
 
 
Table 5 - Links between challenges and policy proposals 

Challenges (section 2.2) 

Policy response 

Regional disparities remain in terms of a 
broad range of economic, social and 
territorial themes. Moreover, sustained and 
sustainable growth requires a transition to 
an innovative and low carbon economy – 
this is a challenge for most regions. While 
smart growth and a transition to the low 
carbon economy should be the main focus, 
other themes should still be addressed. 
In addition to the challenges faced by 
lagging regions, there are specific 
challenges and opportunities for the 
outermost regions, sustainable urban 
development and cooperation. 

There should be better co-ordination and 
synergies between different EU policies. 

A reinforced focus on the thematic 
priorities of smart growth (including a 
transition to the digital economy) and the 
transition to the low carbon economy, 
while maintaining  investment in other 
sectors in less developed countries 
(section 3.3) 

Geographic coverage which continues for 
all regions, including specific provisions 
for outermost regions, sustainable urban 
development and European territorial 
cooperation  (3.2) 

Clearer demarcation of roles with other 
policies, better alignment of rules, 
notably within the ESI Fund family (3.4) 

Globalisation, economic transition, 
migration and other emerging needs mean 
that programmes need to respond quickly 

More flexible programming, including a 
"5+2" system where the last 2 years are 
only programmed at the end (4.1) 

Shortcomings in administrative capacity and 
institutional quality are often key obstacles 
to economic, social and territorial progress. 

A strengthened and streamlined process 
of ex ante conditionalities, better links to 
the European Semester (4.2) 

Excessive  complexity, high administrative 
costs/burdens, delays in implementation 

High complexity and low take up of 
financial instruments 

Various simplification measures, 
including simpler payment systems and 
more proportionality in audit (4.3) 

Promoting financial instruments by 
simplifying their use, possibility to use 
budgetary guarantees via InvestEU (4.4)  

23 

 
 
 
 
3.  PROGRAMME STRUCTURE AND PRIORITIES 

3.1. 

Subsidiarity and added value of the ERDF and CF 

An  important  point  in  assessing  subsidiarity:  the  funds  are  delivered  through  shared 
management  (see  section  1).  This  means  that  the  European  Commission  is  a  partner  at 
the strategic level, including programming and financing. But day to day management is 
vested in national and regional managing authorities. 

In other words, for elements where there is high EU added value (this will be developed 
further below) the EU level retains a key role. But in other areas (day to day running, the 
selection  and  management  of  projects,  first  level  audit,  etc)  the  regional  and  national 
levels  run  the  programmes.  There  is  already  an  element  of  subsidiarity  baked  into  the 
very nature of the ERDF and CF. 

The framework we are using to assess subsidiarity and EU added value  

Subsidiarity and EU added value are complementary principles: 

  Subsidiarity is the principle that "The EU should not take action unless it is more 

effective than action taken at national, regional or local level"31. 

  EU added value is the criterion for determining exceptions to this rule "There is a 
clear value added when action at European level goes further than national efforts 
could"32 

EU added value "requires consideration of the value and improvements which are caused 
by the EU rather than another party taking action" (our emphasis)33. In other words, it 
is not primarily a judgement of the absolute value of ERDF and CF actions (for this, see 
the  elements  on  evaluation),  but  rather  on  the  relative  value  of  action  at  the  European 
level.  

The better regulations guidelines34 identify 3 potential sources of EU added value: 

  Effectiveness:  where  EU  action  is  the  only  way  to  get  results  to  create  missing 
links, avoid fragmentation, and realise the potential of a border-free Europe. 

  Efficiency: where the EU offers better value for money because externalities can 
be  addressed,  resources  or  expertise  can  be  pooled,  an  action  can  be  better 
coordinated. 

  Synergy:  where  EU  action  is  necessary  to  complement,  stimulate,  and  leverage 
action  to  reduce  disparities,  raise  standards,  and  create  synergies.  This  can 
notably include the promotion of EU goals and policy priorities. 

31 Reflection paper on the future of EU finances, p11 
32 Reflection paper on the future of EU finances, p12 
33 Better Regulations Guidelines tool #42 "identifying the evaluation criteria and questions" 
34 Better Regulations Guidelines tool #42 "identifying the evaluation criteria and questions" 

24 

 
 
                                                            
Effectiveness: where EU action goes further in getting results 

That  ERDF  and  CF  activities  can  only  be  delivered  by  EU  action  is  relatively  easy  to 
demonstrate  for  poorer  countries  and  regions.  In  many  countries,  Cohesion  Policy 
represents around 50% (or more) of public investment – these member states would not 
have the financial capacity to carry out such investments otherwise (Figure 4). Even in 
the  poorer  regions  of  richer  countries,  Cohesion  Policy  can  represent  a  significant 
fraction of public investment. 

Figure 4 - ERDF and CF as % of public investment, 2015-2017 

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Note: Government capital expenditure is the sum of General Government gross fixed capital 
formation plus capital transfers, adjusted for any abnormal transfers to banks and other 
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Source: Open data platform, Eurostat - Government statistics 

Moreover, and as the EU finance paper notes, the nature of the policy is "a redistribution 
(coupled  with  the  financing  and  provision  of  public  goods)  through  cohesion  policy, 
which promotes economic convergence as well as social and territorial cohesion"35. In a 
Europe where the more and less developed regions are so unevenly distributed between 
countries, such a redistribution has to be organised at a level higher than the national one. 

However, there is also evidence of EU added value in more developed member states 
and regions. There are effects in terms of innovation and SME support which would not 
happen  without  the  ERDF.  That  added  value  can  be  demonstrated  in  these  sectors  is 

35 Reflection paper on the future of EU finances (p14) 

25 

 
 
 
                                                            
 
 
noteworthy  since,  as  was  noted  in  section  2  above,  this  is  where  most  of  the  ERDF 
money is invested in more developed regions. 

For example, smart specialisation strategies (RIS3) would not exist in most regions, 
whether more or less developed, nor would they be maintained, without the ERDF:  

  RIS3  hardly  existed  before  they  were  promoted  within  Cohesion  Policy,  and  in 
60%36  of  cases  the  programmes  had  an  ex  ante  conditionality  to  develop  or 
improve  the  plan  in  2014.    As  the  7th  Cohesion  Report  notes37  "Since  smart 
specialisation became one of the ex-ante conditionalities for the ESI Funds, over 
120  smart  specialisation  strategies  have  been  formulated  through  partnership, 
multi-level governance and a bottom-up approach. EUR 65.8 billion are available 
to support these strategies from the ERDF (and EAFRD), in addition to national 
and regional funding." 

  70%  of  managing  authorities  and  regional  actors  believe38  that  these  are  "a 
paradigm  shift  in  innovation  policy  governance"  and  about  50%  of  respondents 
indicate  that  recent  launches  of  new  policy  programmes  and  measures  can  be 
attributed  to  RIS3  (only  10%  feel  there  is  no  influence  of  RIS3  on  new  policy 
measures). 

  Significantly in terms of establishing EU added value, the benefits are seen to be 
highest  in  the  Nordic  countries,  Austria,  Germany,  Benelux  and  France.  In  fact 
the highest satisfaction was found in Denmark, Sweden and Finland where 80% 
are  sure  that  the  benefits  outweigh  the  costs  (and  none  feel  costs  outweigh 
benefits) and 85% believe the process is still gaining momentum. 

Furthermore, there is a stabilisation effect at the SME level which has been noted in 
all regions. The ex post evaluation of the ERDF and CF39 found that a major result of 
support  was  helping  SMEs  withstand  the  effects  of  the  crisis,  providing  credit  when 
other sources of finance had dried up: 

The  ERDF  "played  a  role  in  helping  firms  survive  the  crisis."  "The  evaluation 
found that a major result of support was helping SMEs withstand the effects of the 
crisis  by  providing  credit  when  other  sources  of  finance  had  dried  up…  this 
enabled  firms  to  remain  in  business  and  to  maintain  employment…  a  deep 
recession may force too much restructuring, too quickly and that the evaluation 
does show that support prevented significant job losses in the medium term."  

Finally, as the ex post evaluation noted "Interreg is the only policy instrument in its 
field.  It  is  therefore  crucial  for  ensuring  continuity  and  linkages  of  common  projects 
across  borders  and  (for  transnational  and  EU  wide  programmes)  across  the  EU"40.  The 
reflection  paper  on  EU  finances  further  noted  "Cross-border  programmes  have 

36 insert reference 
37 7th Cohesion Report, chapter 6.2.4 
38 Fraunhofer ISI RIS3 Survey (2017 Results) 
39 Commission Staff Working Document "Ex post evaluation of the ERDF and Cohesion Fund" pp4 and 20 
40 Commission Staff Working Document "Ex post evaluation of the ERDF and Cohesion Fund", section 7.12 on EU 

added value 

26 

 
 
                                                            
transformed border areas, helping to remove sources of conflict and create new economic 
opportunities."41 

Added value and the public consultation  

In the public consultation, three quarters of respondents considered that Cohesion Policy 
programmes effectively add value to a large or a fairly large extent in comparison to what 
Member  States  could  achieve  alone.  The  elements  of  added  value  most  frequently 
identified  were  cross-border  cooperation,  higher  financial  support  than  from  national 
resources,  contribution  to  reducing  regional  disparities,  policy  innovativeness,  high 
institutional standards of this policy.  See Annex 2 for further details. 

Efficiency: where the EU offers better value for money 

For  Cohesion  Policy,  this  is  notably  when  resources  or  expertise  can  be  pooled  or  an 
action can be better coordinated. The ex post evaluation of the ERDF and CF42 found a 
variety of examples of this: 

 

In various fields, the multi-annual programming and strategic approach of ERDF 
provided  a  focus  for  interventions  over  a  medium  term  period.  ERDF  support 
proved  decisive 
financial  planning  and 
complementarity of projects. In particular, the evaluation of transport found that 
Cohesion Policy pushed Member States towards long term strategic planning.  

identification,  better 

for  early 

  This  stable  framework  led  to  institutional  learning  and  increased  professional 
capacity  of  actors  involved  in  planning  and  implementing  the  interventions  in 
several sectors. 

  The  various  learning  platforms  such  as  INTERACT  (support  for  co-operation), 
URBACT  (for  urban  programmes)  and  ESPON  (spatial  planning)  provide  a 
possibility of pooling expertise. Transnational programmes under Interreg tackle 
specific  common  problems  through  collaboration,  joint  research  or  exchange  of 
experience and best practice.  

  The  development  of  monitoring  and  evaluation  systems.  The  exchange  of 
experience and quality control function of the European level (more in section 5) 
represents a key source of EU added value. 

Moreover,  as  the  Cohesion  Report  found43,  there  are  significant  potential  spillovers 
across national and regional boundaries: investments in innovation and SMEs in one 

41 Reflection paper on the future of EU finances, p12 
42 Commission Staff Working Document "Ex post evaluation of the ERDF and Cohesion Fund", various 

27 

 
 
 
 
 
                                                            
region or country can (but do not always) spill over borders. There is a role for the EU 
level  to  ensure  that  such  spillovers  do  not  lead  to  underinvestment44  and  indeed  that 
investments are designed in such a way as to maximise spillovers. This latter point is a 
rationale for regional co-operation on smart specialisation strategies. 

Synergy and the promotion of EU goals and policy priorities 

The ERDF and CF contribute to broader EU policy priorities and goals. This is firstly in 
terms  of  growth  –  and  cushioning  the  adverse  economic  and  social  effects  of 
economic  downturns.  The  reflection  paper  on  EU  finances  recognised  this  by  saying 
"Investments made under Cohesion Policy in one region or Member State contribute to 
macroeconomic stability and increase the growth potential of the Union as a whole."45 

The 7th Cohesion Report found46 that in the long-run, these spill-over benefits represent a 
substantial  share  of  the  total  impact  of  the  policy  on  the  non-cohesion  counties 
economies. By 2030, the impact of the 2007-2013 programmes is estimated to be around 
0.36%  of  GDP  in  non-cohesion  countries,  of  which  around  a  third  (0.11%)  is  due  to 
spillovers from spending in cohesion countries. This effect is particularly pronounced for 
Austria and Germany because of trading links. In Austria, more than half the impact of 
the policy is due to investment in the cohesion countries. 

It also serves as a stabilising factor over the macroeconomic cycle: "The EU budget has 
some stabilising effects for some Member States, notably due to its stability over 7 years, 
which provides a constant level of investment independent of the economic cycle"47 

Secondly, the ERDF and CF contribute to other EU priorities. The ex post evaluation 
found that "Cohesion Policy enabled budget limited public authorities to meet EU policy 
goals even during the financial crisis. For example it funded infrastructure for water and 
waste management to ensure timely compliance with the relevant EU Directives. Further, 
it provided incentives for significant shifts in the EU13 and Convergence regions in the 
South of EU15 in the disposal of waste away from landfills and towards recycling in line 
with the EU policy." 

Thirdly,  the  ERDF  and  CF  address  important  structural  challenges.  The  ex  ante 
conditionalities for reform and other links to structural reform will be further outlined in 
section  4  below,  but  60%  of  the  respondents  to  the  public  consultation  on  the  ex  post 
evaluation  of  the  ERDF  and  CF  said  that  the  ERDF  and  CF  "have  provided  crucial 
support to structural reforms of labour market, transport, environment, energy, education 
and social policies and programmes". 

43 7th Cohesion Report, p xvii 
44 In line with the economic literature on externalities and sub-optimal investment 
45 Reflection paper on the future of EU finances, p12 
46 7th Cohesion Report, chapter 6.3 on the macroeconomic impact of the policy 
47 Reflection paper on the future of EU finances, p14 

28 

 
 
 
 
                                                                                                                                                                                 
Fourth, the ERDF and CF encourage  modernisation of administration.  This includes 
peer  to  peer  and  integrity  pacts  on  fair  public  procurement  as  well  as  ex-ante 
conditionalities on public procurement and state aid (including training plans). 

Finally, they deliver tangible results in areas which matter to European citizens. The 
opening lines of the reflection paper say "The EU budget helps to deliver on the things 
that  matter  for  Europeans"48.  Helping  regions  adapt  to  the  challenge  of  globalisation, 
supporting 1.1  million SMEs  in  the  2014-20  period  with  420  000  new  jobs  as  a  result, 
tackling urban poverty – all these are priorities for citizens. It should be noted (see Table 
6) that many of these results are particularly evident outside the cohesion countries. 

Moreover, the delivery system via local partnerships – and especially for community led 
local development  – represents a crucial form of outreach to local people and the local 
level which is unusual at the European level. 

Table 6 - Firms supported and jobs created 2014-20 

FIRMS: All firms 

Direct jobs created 

150 000 
Cohesion countries 
270 000 
Other Member States 
420 000 
Total EU 
For context, cohesion country programmes focus on a wide range of actions, whereas 
programmes outside these countries focus far more on SMEs and jobs 
Source: open data platform 

260 000 
840 000 
1 100 000 

3.2. Policy options 

The budget of 273 billion represents a real term reduction of around 10%.  For making 
this reduction there are essentially 3 broad options: 

1.  A  more  or  less  equal  cut  across  the  board  –  all  themes,  regions  and  Member 

States face similar reductions.  

2.  A  cut  which  focusses  geographically  (e.g.  support  is  maintained  in  the  less 

developed, "cohesion" countries, but cut elsewhere). 

3.  A scenario which focusses on those themes with the highest EU added value and 
evidence  for  impact  (e.g.  innovation)  and  reduces  funding  for  those  of  lower 
priority (e.g. transport). 

For this reason, four detailed scenarios are considered. A baseline (the current situation) 
plus one representing each of the three choices above: 

  Baseline.  The  "status  quo",  i.e.  a  continuation  of  the  current  regional  and 
thematic allocations (the only change being the removal of the UK). This scenario 
is  not  realistic  for  a  variety  of  reasons,  including:  the  reduced  cohesion  policy 
envelope; the relative GDP of different countries has changed (and therefore the 

48 Reflection paper on the future of EU finances, p6 

29 

 
 
 
 
 
                                                            
distribution  between  them  has  changed).  Nevertheless,  it  is  useful  as  a  baseline 
and for comparison purposes. 

  Option 1: Reductions  across the board, both thematically and geographically. 
The  reduction  is  applied  in  the  same  proportion  everywhere.  This  option  also 
includes  (of  course)  an  updating  of  the  regional  and  national  allocations  in  line 
with changes in GDP/head. In other words, the same method (see box on Berlin 
method) for allocation, but using the latest data and a smaller budget. 

  Option  2:  Geographic  concentration  –  current  levels  of  expenditure  are 
maintained in cohesion countries, the reduction falls entirely on more developed 
countries. Within  each category of country  (more or  less developed),  funding is 
distributed according to the usual method, using the latest data. This scenario is a 
development  of  scenarios  presented  for  reflection  by  the  Commission  in 
February49. 

  Option  3:  Thematic  concentration  –  this  is  the  same  geographic  allocation  as 
option  1,  but  the  thematic  focus  on  innovation,  SMEs  and  the  environment  is 
increased. This will preserve a critical mass of spending in these areas, while the 
cut will tend to focus on infrastructure (notably transport). This is the preferred 
option. 

Box: The Berlin method and financial allocation 

The  1999  Berlin  council  set  a  method  for  financial  allocation  of  cohesion  policy, 
including  ERDF  and  CF.  The  method  is  based  mostly  on  regional  GDP/head,  with 
input  from  other  indicators  such  as  national  GNI  and  population.  While  the  exact 
application  has  evolved,  the  basic  method  has  remained  the  same  for  nearly  two 
decades. 

The Berlin method is familiar to – and understood by – key stakeholders. Retaining 
the  method  brings  stability  in  a  time  of  change.  It  also  responds  to  the  requests  of 
various stakeholders – including Council and respondents to the public consultation – 
to  maintain  the  principles  of  distribution  of  funding  (see  section  2.1  and  annex  on 
public consultation). 

49 See COM(2018) 98, Communication "A new, modern Multiannual Financial Framework for a European Union that 

delivers efficiently on its priorities post-2020". Option 3 here is based on scenario 3 from the 
communication, except that instead of reducing support in non-cohesion countries to zero, it is reduced by 
enough to accommodate the overall envelope reduction. 

30 

 
 
 
 
                                                            
Table 7 – Comparison of key features of baseline and options 

ERDF and 
CF envelope 

Geographic 
allocation … 

Baseline 

Option 1 

Option 2 

Current 

-10% 

-10% 

Current 
method, 
updated data 

Current 
method, using 
data available 
when the 
allocation was 
made 

Expenditure maintained in 
EU-13, cut in more 
developed countries. 
Within categories, 
distribution by current 
method, updated data. 

Thematic 
allocation 

Current 

Current 

Current 

Includes the 
UK? 

Neither as 
contributor nor 
beneficiary 

Neither as 
contributor nor 
beneficiary 

See text for more explanations 

Neither as contributor nor 
beneficiary 

Option 3 

-10% 

Current method, 
updated data 

Concentration 
on innovation, 
SMEs and 
environment 
Neither as 
contributor nor 
beneficiary 

The distinctive feature of option 3 is the increased focus on innovation, broadband and 
SME  support  (i.e.  the  new  priority  objective  1  –  see  section  3.3)  in  option  3.  The 
thematic  concentration  criteria  of  this  option  mean  that  spending  in  these  fields  goes 
from around 30% of total ERDF and CF to around 46% at the EU level. 

Figure 5 - Thematic concentration increases under the preferred option 

90,0%

80,0%

70,0%

60,0%

50,0%

40,0%

30,0%

20,0%

10,0%

0,0%

Baseline

Option 3

O
R

G
B

T
M

L
E

L
P

Z
C

T
L

K
S

R
H

V
L

U
H

Y
C

E
E

T
I

R
F

I

U S
L

E
I

S
E

T
P

E
D

E
B

E
S

T
A

L
N

I

K F
D

7
2
-
U
E

Percentage of spending in the new PO1, former TOs 1-3: innovation, broadband, SME support 
Source: DG Regional and urban policy, based on reporting by Member States 

The impact of the various options on EU GDP is similar – and positive – over time. The 
baseline scenario (not unexpectedly) has the initial advantage in terms of impact, since it 

31 

 
 
 
 
 
 
represents roughly 10% more money. Interestingly however, in the long term, option 3 of 
thematic  concentration  has  greater  impact  –  investment  in  innovation  and  SMEs  has  a 
greater long term impact.  

Figure 6 – Impact of the options on EU GDP 

0,5

0,4

0,3

0,2

0,1

0,0

Baseline

Option 1

Option 2

Option 3

9
1
0
2

0
2
0
2

1
2
0
2

2
2
0
2

3
2
0
2

4
2
0
2

5
2
0
2

6
2
0
2

7
2
0
2

8
2
0
2

9
2
0
2

0
3
0
2

1
3
0
2

2
3
0
2

3
3
0
2

4
3
0
2

5
3
0
2

6
3
0
2

7
3
0
2

Source: Quest.  

The impact by country depends on factors such as the volume of funding, as well as its 
thematic  distribution. In  2030  (i.e. just  after the  end  of  spending),  the scenarios  have  a 
roughly  equal  impact  for  the  EU27  as  a  group:  the  cohesion  countries  do  best  under 
option 2, while the more developed countries do best under options 1 and 3. However, in 
the long term, there is a tendency for cohesion and non-cohesion countries to do better 
under option 3, because of the greater long term impact of this option. 

Table 8 - % impact on GDP 2030 and 2040 

Baseline 

Option 1 

Option 2 

Option 3 

2030 

EU-27 

Cohesion countries 

Non-cohesion countries 

2040 

EU-27 

Cohesion countries 

0.37 

2.01 

0.14 

0.42 

2.14 

0.34 

1.69 

0.15 

0.39 

1.81 

0.34 

2.01 

0.10 

0.37 

2.15 

0.34 

1.74 

0.14 

0.46 

2.35 

Non-cohesion countries 
0.19 
Source: Quest – highlight indicates the option (other than baseline) with the highest impact for 
those countries 

0.17 

0.18 

0.12 

32 

 
 
 
 
Figure 7 - GDP impact of the preferred option 3, 2030 and 2040 

4,00

3,50

3,00

2,50

2,00

1,50

1,00

0,50

0,00

K
D

L
N

I
F

E
S

T
A

E
D

E
I

U
L

E
B

R
F

 Source: Quest 

2030

2040

S
E

T
P

T
M

R
H

U
H

G
B

Z
C

Y
C

E
E

V
L

T
L

L
P

L
E

K
S

O
R

7
2
-
U
E

I

T S

I

Pros and cons of the various options 

Option  1  (similar  cuts  across  the  board)  has  two  key  advantages:  simplicity  and  a 
sense of fairness. It is relatively easy to apply and does not disturb the balance between 
various  sectors  and  different  partners.  Moreover,  it  also  recognises  that  all  regions 
continue to have needs in a changing economy, and that these needs cover a broad range 
of sectors. 

However, in the context of a significant reduction in real budget, it can hardly be said to 
represent  a  strategic  decision.  Moreover,  experience  shows  the  importance  of  targeting 
and critical mass – both evaluations and experience have tended to drive a certain amount 
of  thematic  concentration,  especially  in  smaller  programmes.  For  these  programmes  in 
particular, in order to be effective with a smaller budget it is necessary to have some kind 
of concentration, whether geographic or thematic. 

Finally,  the  world  has  changed  over  the  years  since  the  last  period  was  prepared.  The 
challenges  of  globalisation  and  technology,  migration  and  the  environment  have 
intensified – it would be odd to maintain the same geographic and thematic focus. 

Option 2 (geographic concentration) has several clear advantages: 

  The  mission  of  the  ERDF  and  CF  is  to  support  regions  and  countries  with  the 
greatest  economic, social  and territorial  needs  –  this  option has  a  tight  focus on 
cohesion countries where these needs are greatest. 

33 

 
 
 
 
  Demonstrable EU added value (see section 3.1). This focusses on Member States 
which can least afford to pay for such measures (the effectiveness argument), who 
have the lowest institutional capacity and therefore the most potential to learn (the 
efficiency  argument)  and  where  regions  tend  to  be  furthest  from  EU  goals  and 
priorities, such as in environmental standards (synergy argument). 

  Redistribution of resources from the most to least developed regions. EU policy 
stimulates growth in the latter ones (at least in the short term, through multiplier 
effects), which fosters regional convergence.   

However,  while  all  of  the  above  arguments  demonstrate  the  need  to  focus  support  on 
cohesion countries, none of them is an argument against some support in non-cohesion 
countries.  And  in  fact,  in  all  the  scenarios  the  bulk  of  the  investment  would  remain  in 
cohesion countries. 

Moreover,  there  are  also  strong  arguments  for  continued  support  outside  of  cohesion 
countries, including: 

  The  needs  of  these  regions,  including  emerging  needs such  as  globalisation  and 
economic transition, including to the low carbon economy (for more details, see 
arguments for option 3 below).  

  Added  value  arguments.  This  includes  innovation  and  SME  support  and  smart 
specialisation strategies, much of which would not happen without the ERDF. It 
also  includes  cross-border  spill-over  effects,  as  well  as  the  linkages  and 
knowledge exchange between lagging and leading regions (for more details, see 
arguments for option 3 below and added value section 3.1).  

Finally,  in  the  public  consultation  and  elsewhere,  very  few  stakeholders  expressed 
support for reducing the proportion of spending outside cohesion countries – there seems 
to  be  a  strong  consensus  in  favour  of  the  current  balance,  with  a  focus  on  cohesion 
countries  but  significant  spending  elsewhere.    Even  the  less  developed  Member  States 
themselves are not in favour of this option (“Cohesion Policy should remain the policy 
for all EU regions with special attention to the less developed ones”50).  

50 Joint Paper of the Visegrad Group, Bulgaria, Croatia, Romania and Slovenia on Cohesion Policy after 2020, March 

2017 

34 

 
 
 
                                                            
Map 4 - Risk factors linked to globalisation and technological change 

35 

 
 
 
 
 
Option 3 (thematic concentration) – the preferred option 

In this scenario, support is maintained in those themes and sectors which have the highest 
added value and where evidence of impacts are strongest. For less developed regions, a 
case  can  be  made  for  public  investments  across  the  board  and  administrative 
modernisation. But for more developed regions, it makes sense to concentrate funds on 
research  and  innovation,  digitalisation,  smart  transformation  and  transition  to  a  low 
carbon economy – indeed arguments for continuing support to all regions apply mostly to 
these  themes  of  intervention,  as  well  as  to  cooperation  and  sustainable  urban 
development: 

  The challenges of globalisation and economic transformation increasingly affect 
many  regions  across  the  EU,  including  both  richer  and  less  developed  ones.  In 
today's  fast  moving  economy,  few  regions  can  be  said  to  be  beyond  risk  (and 
indeed, most regions have at least one of the key risk factors – see Map 4). This 
requires constant investments in the productive base to keep up the pace. 

  ERDF  support  is  a  key  factor  behind  the  development  of  smart  specialisation 
strategies  in  the  EU;  the  added  value  of  these  strategies  is  considered  to  be 
highest in the Nordic countries, Austria, Germany, Benelux and France. 

  The contribution to EU priorities, such as structural reforms, climate change, low-
carbon economy and  the creation of jobs:  2/3 of the jobs created by the  ERDF 
and CF, and 3/4 of the SMEs supported, are outside of the cohesion countries.  

  Environmental  challenges  such  as  air  and  marine  pollution,  climate  adaptation 
and  disaster  risk  management  challenges  are  still  present  throughout  the  EU,  in 
both developed and poorer regions, and often have a cross-border element. 

  Urban  deprivation  and  sub-regional  pockets  of  poverty  are  often  found  in  more 
developed  regions  (and  are  in  fact  more  concentrated  in  rich  metropolitan 
regions). 

  Migration is another European challenge, with its impacts concentrated in some, 
usually more developed, regions.  EU support to the integration of migrants and 
refuges is necessary as a sign of European solidarity in all regions.  

This is in line with academic literature51 which underlines that various groups of regions 
face different challenges and require dedicated policy support. For the most advanced EU 
regions and countries, regional policy funds must sustain Europe’s world-class regions in 
the  face  of  global  competition  and  support  them  in  moving  up  the  technology-quality 
ladder. For the medium level regions, regional policy must help overcome their “middle 
income trap”, which involves being too expensive for some activities but not innovative 
or productive enough for others, including investments to reinforce the knowledge base 

51 S. Iammarino, A. Rodríguez-Pose, M. Storper,  Why Regional Development matters for Europe's Economic Future,  

DG REGIO Working Paper 7/2017 provides a good overview of recent literature 

36 

 
 
                                                            
as well as knowledge transfer. For the less developed EU regions, investment support is 
needed to overcome their manifold existing barriers to productivity52.  

This option is also in line with requests from stakeholders, including the Council which 
supported  greater  thematic  concentration  on  innovation,  SMEs  and  green  growth  while 
retaining a place for other needs53:  "Thematic concentration … contributing the most to 
reaching  the  targets  of  the  Europe  2020  Strategy…  however,  a  balance  must  be 
maintained between the predefined requirements for concentration on a limited number 
of  thematic  areas  and…  the  flexibility  to  respond  during  the  programming  period  to 
specific national and regional development challenges". 

This  flexibility  will  be  provided  by  a  change  to  the  current  system,  determined  at  the 
regional  level.  The  calculation  will  be  simplified  and  thresholds  established  at  the 
national  level  (see  Table  9)  –  this  makes  sense  since  fiscal  capacity  (and  therefore 
considerations  of  added  value  in  policy  objectives  3-5)  is  mostly  determined  at  the 
national level. As can be seen in  Figure 6, these thresholds affect many member states, 
and the proportion of spending on smart growth will go from around 30% at present to 
46% of ERDF and CF in the future. 

Table 9 - Thematic concentration thresholds  

Type of region 

Smart growth 

GNI/head in PPS < 75% of EU average 
GNI/head in PPS 75% - 100%  
GNI/head > 100% of EU average 
Smart growth corresponds to the new PO1, green and low carbon to the new PO2 
See section 3.3 for more details 

40% 
50% 
60% 

Green and low carbon 
growth 
60% 
70% 
80% 

Reducing cofinancing rates 

EU cofinancing rates increased – and national cofinancing rates decreased – in the 2007-
13 period. This was a response to the financial crisis, to maintain essential investments in 
a time of tight public budgets (see  

52 Ibidem. 

53 Council of the European Union "Results and New Elements of Cohesion Policy and the European Structural and 

Investment Funds" 15 November 2016, paragraphs 19 and 20 

37 

 
 
 
 
                                                            
Table 10). Historic levels of EU cofinancing were lower – 50% for the more developed 
regions, and less than 75% for the less developed ones. 

38 

 
 
 
 
Table  10  -  EU  and  national  contributions  to  the  ERDF  and  CF,  2014-20  (euro 
billion) 

EU 
amount 

National 
cofinancing 

total 
funding 

% EU 
amount 

CF 

ERDF less developed regions 

ERDF transition regions 

63.3 

130.3  

 25.4  

12.1 

 36.2  

 10.9  

75.4 

 166.5  

 36.3  

84% 

78% 

70% 

9.8  
1.6  

ERDF Interreg 
Northern sparsely populated 
and outermost regions 
ERDF more developed 
Less developed regions: those with GDP/head < 75% of the EU 27 average 
Transition region: GDP/head between 75% and 90% of the EU 27 average 
Source: ESI fund Open Data Platform - https://cohesiondata.ec.europa.eu/ (February 2018) 

 13.1  
2.5  

75% 
62% 

3.3  
1.0  

 29.6  

 61.9  

 32.3  

52% 

EU cofinancing will return to at least historic levels. This is to promote "ownership" as 
well  as  to  make  the  reduced  EU  contribution  go  further.  Cofinancing  rates  would  be 
determined at national level, rather than by region or fund – this makes sense since it is at 
the national level that fiscal capacity is determined. It also enables financing flexibility 
within a country. 

3.3. Simplifying and consolidating the priority objectives 

There will be a consolidation of the 11 thematic objectives of 2014-2020 programming 
period into 5 objectives (see Table 11 for the objectives and indicators and the box below 
for  excluded  activities).  The  strength  of  the  current  division  is  that,  because  of  the  11 
way  split,  it  is  analytical  and  provides  a  good  level  of  detail  on  financial  allocations. 
However,  there  have  been  various  signs  that  a  lower  level  of  disaggregation  would  be 
more practical: 

  The  ex  post  evaluation  noted  that  the  distinction  between  innovation  and  SME 
support is often artificial and sometimes caused confusion at the programme level 
for those tasked with classifying spending. 

  Many  measures  are  natural  complements  –  SME  support,  R&D  and  IT  is  an 
obvious example, but so are various forms of social spending. Being able to put 
them into one priority axis as one objective would make it easier for programmes 
to  (1)  put  complementary  measures  together,  exploiting  synergies and  (2)  move 
funding flexibly between measures in a given priority, according to needs.  

  For reporting, the distinction between various forms of social spending is not easy 
to  communicate.  The  same  is  also  true  for  the  various  forms  of  environmental 
support and business/innovation support. 

The last point is particularly telling, since fine grained reporting is the main advantage of 
the 11 way division. But in practice, reporting (eg in the ex post evaluation or cohesion 

39 

 
 
 
 
report)  often  merged  the  thematic  objectives  into  broader  categories,  thus  negating  this 
main advantage. 

The 5 way division therefore represents a simplification in classification and reporting, as 
well  as  the  opportunity  to  be  flexible  and  exploit  policy  synergies  within  the  new 
objectives.  The  objectives  are  expected  to  be  common  across  the  CPR,  but  here  we 
discuss them in the context of the ERDF and CF.  

Excluded activities 

The list of thematic priorities includes a list of "negative priorities" or excluded activities. 
These fall into 2 broad categories: 

1.  Activities which have been evaluated as having low impact or a low cost benefit 
ratio  or  return  on  investment.  Notable  examples  are  support  to  large  enterprises 
and  to  regional  airports  (except  those  in  the  outermost  regions).  For  further 
information, see section 1.2 on evaluations and lessons learned.  

2.  Activities which are not in line with EU priorities. Notable examples are landfill 
and fossil fuels (for their negative impact on the environment) and tobacco (fore 
the negative impact on health). 

The first policy objective is “A Smarter Europe. ERDF support in this field is currently 
divided  between  three  thematic  objectives:  strengthening  research  and  innovation,  ICT 
and  SME  competitiveness.  This  breakdown  is  artificial  as  the  three  are  closely  related: 
post-2020 they will be combined in one priority. 

The “Smarter Europe” priority objective will reinforce and expand smart specialisation, 
digitalisation, regional and local innovation and entrepreneurial ecosystems. It will also 
incorporate  the  human  capital  aspects  of  innovation  and  entrepreneurship  and  be  based 
on smart specialisation strategies. 

Since 2014, the ERDF programmes have been based on a smart specialisation approach. 
Member  States  and  regions  have  developed  over  120  smart  specialisation  strategies 
which enable, through a bottom-up and partnership approach, to prioritise public research 
and  innovation  investments  for  the  economic  transformation  of  regions.  A  recent 
communication  on  this  topic54  confirms  the  contribution  of  smart  specialisation  to 
promoting  innovation-oriented  growth  at  regional  level.  It  also  identifies  directions  for 
future, including the need to scale-up interregional innovation projects. 

The promotion of interregional innovation projects via smart specialisation platforms is a 
key tool in promoting EU-wide value chains as well as the diffusion of innovation across 
borders. Since 2015, three Thematic Smart Specialisation Platforms have been set up to 

54 SWD(2017)264, Strengthening Innovation in Europe's Regions: Strategies for resilient, inclusive and sustainable 

growth 

40 

 
 
 
 
                                                            
foster  inter-regional  cooperation  in  the  field  of  energy,  agri-food  and  industrial 
modernisation. Around 100 regions take part in 20 partnerships covering issues ranging 
from smart  sensor  systems in  agri-food to  innovative textile, from industry 4.0 to  solar 
energy. Building on these experiences, the Commission is testing approaches for scaling-
up post-2020. 

The  approach  in  "Smarter  Europe"  is  complementary  to  other  EU  instruments  such  as 
FP9 since it focusses on regional relevance, i.e. local capacity, local ecosystems and local 
uptake,  while  FP9  focusses  on  European  excellence  (for  more,  see  section  3.4  on 
coherence and synergies below).  

The second priority objective is “A green and low carbon Europe” covering support to 
the  low  carbon  and  climate  resilient  economy,  including  energy  efficiency,  renewable 
energy,  smart  grids  and  reinforced  efforts  to  engage  citizens  and  communities  in  the 
energy transition. ERDF and CF support in this area is important for achieving goals of 
the  new  2030  policy  framework  on  energy  and  climate.  Transition  to  clean  energy 
provides  new  business  opportunities,  cleaner  environment  and  health  benefits  for 
citizens. At the same time, it also requires significant changes in Europe's economies. It 
comes with a social cost linked to the move away from traditional sectors (e.g. coal) and 
a  need  for  significant  investment  in  electricity  generation,  networks  and  energy 
efficiency, estimated at some EUR 200 billion annually in the next decade55. Due to the 
existing market failures, support from the EU budget remains necessary for a part of this 
investment. In particular, EU support is frequently needed to untapped energy efficiency 
potentials.  

The effects of energy transition and climate change are unevenly dispersed in the EU. A 
number  of  regions  in  Poland,  Czech  Republic  and  Germany  face  challenges  in  their 
energy  transition,  due  to  large  volumes  of  solid  fuel  production  and  the  high  share  of 
solid fuels (primarily hard coal and lignite) in their electricity generation mix56. Climate 
change  affects  all  EU  regions  but  to  varying  degrees,  with  the  south  of  Europe  most 
severely affected. The potential for wind and ocean energies is higher in coastal regions 
and for solar energy in the southern regions. They also represent  a sustainable solution 
for  energy-self-sufficiency  in  many  island  and  outermost  regions.  For  these  reasons, 
targeted measures from the ERDF will be needed post-2020 in all regions. Different local 
circumstances  often  do  not  allow  for  one-size-fits-all  solutions.  Cohesion  policy  offers 
placed-based  solutions  and  is  particularly  well  suited  to  mobilise  the  relevant  energy 
transition actors on the ground.  

A  greener  Europe  also  covers  investment  in  environmental  infrastructure,  circular 
economy, blue economy and climate change adaptation. Environment is one of the two 
CF fields of intervention set in the Treaty. There remain gaps to comply with the acquis 
in  the  waste,  water,  seawater,  air  quality  and  nature  areas,  especially  in  less  developed 
Member States and regions. For instance, total needs for sewerage collection systems and 
treatment  plants  under  the  Urban  Waste  Water  Treatment  directive57  are  estimated  at 

55   COM(2015) 80, SWD(2016) 394 

56 Eurostat, January 2018 
57 Council Directive 91/271/EEC of 21 May 1991 

41 

 
 
                                                            
EUR  49  billion.  And  Member  States  will  have  to  invest  in  the  transition  towards  a 
circular  economy as  outlined in  the Circular Economy Action Plan58 (and in  its  related 
initiatives for example the Communication Waste to Energy59, the European Strategy for 
Plastics  in  the  Circular  economy60,  etc.)  and  to  reach  the  more  ambitious  recycling 
targets set by the newly EU waste legislation. 

In  fact,  it  is  important  that  any  future  investments  under  all  priority  objectives,  but 
notably in infrastructure with lifecycles of significantly over 20 years, must be resilient to 
protect  assets  and  infrastructure  from  climate  risks  (including  sea-rise  levels  or  heavy 
storm events) if we are to avoid damage to infrastructure or lock-ins. This could build on 
strengthened  climate-proofing  guidance  for  major  projects,  covering  both  climate 
resilience  and  greenhouse  gas  emission  reductions,  applied  also  to  other  relevant 
programmes and financial instruments.  

The  third  policy  objective  is  “A  more  Connected  Europe”  covering  investment  in 
European, national and regional transport networks and digital connectivity. Investment 
in trans-European transport networks (TEN-T) is one of two fields of intervention of the 
Cohesion Fund. However, support from the ERDF for regional transport infrastructure is 
also  needed,  especially in  less  developed  regions,  in  order  to  fulfil  the existing  gaps  in 
regional networks, improve links to the TEN-T and TEN-E network, and to deploy low-
carbon transport systems and technologies.  

Digital connectivity has become one of the decisive factors for closing economic, social 
and territorial divides. The digitisation of European industry but also the modernisation 
of  sectors  like  healthcare,  education  and  public  administration  depend  on  networks.  
Connectivity  creates  new  markets  and  a  growth  environment  for  SMEs,  supports  the 
modernisation of local economies and increases the capacity of labour market to adapt to 
new  challenges  even  in  disadvantaged  areas.  Digital  solutions  like  e-health  and  smart 
mobility not only improve lives of citizens but also significantly reduce the costs of such 
services, depending however on the universal access to high capacity digital networks.  

The  fourth  policy  objective is  “A more  social  Europe”.  While  this  policy  objective  is 
covered mainly by ESF investment, the ERDF will continue providing support to social, 
health  and  educational  infrastructure  and  to  integration  of  migrants  (see  section  3.4  for 
complementarities with other EU policies in this field). 

The fifth new policy objective is “Europe closer to citizens”. This new policy objective 
will  cover  sustainable  and  integrated  development  of  urban,  rural  and  coastal  areas 
through local initiatives. This would give enhanced visibility to urban issues and deliver 
on  the  Amsterdam  pact61.  Previously  spread  (somewhat  artificially)  across  various 

58 COM(2015) 614 final 

59 COM(2017) 34 final 

60 COM(2018) 28 final 

61 Agreed in 2016, the Amsterdam Pact outlines the Urban Agenda for the EU and lays out its key principles 

http://ec.europa.eu/regional_policy/sources/policy/themes/urban-development/agenda/pact-of-amsterdam.pdf 

42 

 
 
                                                            
 
themes,  this  consolidation  places  citizens'  needs  at  the  heart  of  the  investments.  It  also 
enables integrated approaches, influenced by local and urban authorities. 

Interreg post-2020 

Building on the success of previous Interreg programmes (see above), we are proposing 
an evolution along the following lines: 

  Crossborder  programmes  should  change 

from  primarily  managing  and 
distributing  funds  toward  acting  as  institutions  of  exchange,  facilitating  cross-
border activity and being a centre for strategic planning.62 

  The  addition  of  co-operation  outside  the  EU.  This  will  take  the  form  of  (1)  a 
specific  strand  for  outermost  regions  (2)  the  incorporation  of  current  IPA/ENI 
funding to support enlargement and cooperation with neighbourhood countries. 

Interreg  will  continue  to  be  able  to  draw  on  all  of  the  priority  objectives  (where 
appropriate) and although funded by ERDF will be covered in an ETC regulation. 

European cross-border mechanisms 

The impact and European added value of Interreg programmes are well recognised (see 
main text). However, in many cases cross-border barriers (especially in relation to health 
services, labour regulation, local public transport and business development) stem from 
differences in administrative practices and national legal frameworks. In fact, it has been 
estimated  that  if  20%  of  existing  legal  and  administrative  obstacles  across  internal  EU 
borders were addressed, border regions would gain 2% in GDP63. 

These  administrative  obstacles  are  difficult  for  programmes  to  address  alone,  requiring 
decisions beyond programme structures. Therefore in 2015 the Luxembourg Presidency 
and several Member States explored the use of one Member State's rules in a neighouring 
Member State64. 

The  Commission  proposes  to  facilitate  such  solutions  with  an  "off-the-shelf"  legal 
instrument. Since the action is voluntary and optional, being used (or not) at the initiative 
of  Member  States  concerned,  it  respects  subsidiarity  and  proportionality.  It also  has  no 

62 Territorial impact assessment of 14 March 2018. The full report will be available at: 

63  

64 

http://cor.europa.eu/en/activities/Pages/tia-documents.aspx. 
European Commission (2017) "Boosting growth and cohesion in EU border regions" 
http://ec.europa.eu/regional_policy/en/information/publications/communications/2017/boosting-growth-and-
cohesion-in-eu-border-regions  
Input paper for the Informal Ministerial Meeting on Territorial Cohesion under the Luxembourg Presidency, 
see: http://www.amenagement-territoire.public.lu/fr/eu-presidency/Informal-Ministerial-Meetings-on-
Territorial-Cohesion-and-Urban-Policy-_26-27-November-2015_-Luxembourg-City_.html# ; see also 
SWD(2017) 307, Point 3.9, p. 49-50. 

43 

 
 
 
                                                            
cost incidence for the EU budget. 

The  instrument  offers  two  options:  a  European  Cross-Border  Commitment  ("ECBC") 
(which  itself  enables  derogation  from  normal  rules65)  or  a  European  Cross-Border 
Statement  ("ECBS")  (signatories  undertake  formally  to  legislate  to  amend  normal 
rules66). The mechanism will: 

  Remain voluntary: Member States have the option to select the mechanism or use 

other effective mechanisms to resolve legal border barriers. 

  Focus on intra-EU land borders, while allowing Member States to also apply the 

mechanism to maritime and external borders. 

Cover joint projects for any item of infrastructure with impact in a cross-border region or 
any service of general economic interest provided in a cross-border region. 

Under each objective, it is possible to invest in administrative capacity to deliver that 
policy objective. As noted in the ex post evaluation and 7th Cohesion Report, ERDF and 
CF is not only about money, but also about know-how and good governance. This is a 
long term investment and should be a priority for cohesion policy post-2020, including 
such actions as: 

  Peer to peer learning, exchange of good practices. 
  Professionalization of fund management, development of competencies. 
  Public  procurement:  guidance,  studies,  exchange  of  good  governance  practices, 

strategic procurement. 

  State aid: training, seminars, expert support. 
  Anti-fraud and anti-corruption, including integrity pacts. 

65 

66 

For reasons of parliamentary primacy, legal certainty and transparency, most Member States will need to 
adopt up-front a formal Parliamentary act to empower the executive authorities to sign an ECBC. 
Where a Member State decides not to adopt up-front the formal Parliamentary act set out above. 

44 

 
 
 
                                                            
Table 11 - Proposed priorities in the new period with target indicators 

  These are common priorities across the CPR – in some cases (notably 4.1 and 4.2) other funds will lead, with ERDF or CF as support only. 
  Within each specific objective, it is possible to support operations in favour of (a) improving institutions and governance and (b) cooperation with 

partners outside the programme area. 
In the context of shared management, targets will be set by managing authorities 

 

Specific Objective 
1.1 Enhancing innovation 
capacity 

Policy Objective 
1. A smarter 
Europe - 
innovative and 
smart industrial 
transformation 

1.2 Reaping the benefits 
of digitalisation for 
citizens, companies and 
governments 

Common output indicators 
RCO 01 - Enterprises supported (of which: micro, small, 
medium, large) 
RCO 02 - Enterprises supported by grants 
RCO 03 - Enterprises supported by FIs 
RCO 04 - Enterprises with non-financial support 
RCO 05 - Start-ups supported 
RCO 06 - Researchers working in supported research 
facilities  
RCO 07 - Research institutions participating in joint 
research projects 
RCO 08 - Nominal value of research and innovation 
equipment 
RCO 10 - Enterprises cooperating with research 
institutions 
RCO 12 - Enterprises supported to digitise their products 
and services 
RCO 13 - Digital services and products developed for 
enterprises 
RCO 14 - Public institutions supported to develop digital 
services and applications 

Common result indicators 
RCR 01 - Jobs created in supported entities  
RCR 02 - Private investments matching public 
support (of which: grants, FIs) 
RCR 03 - SMEs introducing product or process 
innovation 
RCR 04 - SMEs introducing marketing or 
organisational innovation 
RCR 05 - SMEs innovating in-house 
RCR 06 - Patent applications submitted to EPO  
RCR 07 - Trademark and design applications  
RCR 08 - Public-private co-publications 

RCR 11 - Users of new public digital services and 
applications 
RCR 12 - Users of new digital products, services 
and applications developed by enterprises 
RCR 13 - Enterprises reaching high digital intensity 
RCR 14 - Enterprises using public digital services 

45 

 
 
 
2. Low carbon 
and greener 
Europe - clean 
and fair energy 
transition, green 
and blue 
investments, 
circular economy, 
climate 
adaptation and 
risk prevention 

1.3 Enhancing growth and 
competitiveness of SMEs 

RCO 15 - Capacity of incubation created  

1.4 Developing skills for 
smart specialisation, 
industrial transition and 
entrepreneurship 

RCO 16 - Stakeholders participating in entrepreneurial 
discovery process 
RCO 17 - Acquisition of know-how for smart 
specialisation and industrial transition (million euro) 

2.1 Promoting energy 
efficiency measures 

RCO 18 - Households supported to improve energy 
performance of their dwelling 
RCO 19 - Public buildings supported to improve energy 
performance 
RCO 20 - District heating network lines newly 
constructed or improved 

2.2 Renewable energy 
through investments in 
generation capacity 

2.3 Smart energy systems 
- smart grids low and 
medium voltage and 
related storage 

RCO 22 - Additional production capacity for renewable 
energy  (of which: electricity, thermal) 

RCO 23 - Digital management systems for smart grids 

46 

RCR 16 - High growth enterprises supported 
RCR 17 - 3-year old enterprises surviving in the 
market 
RCR 18 - SMEs using incubator services one year 
after the incubator creation 
RCR 19 - Enterprises with higher turnover 
RCR 24 - Staff supported to gain know how for 
smart specialisation and industrial transition  
RCR 25 - Value added per employee in supported 
SMEs 

RCR 26 - Annual final energy consumption (of 
which: residential, private non-residential, public 
non-residential) 
RCR 27 - Households with improved energy 
performance of their dwellings 
RCR 28 - Buildings with improved energy 
classification (number) (of which: residential, 
private non-residential, public non-residential) 
RCR 29 - Estimated GHG emissions 
RCR 30 - Enterprises with improved energy 
performance 

RCR 31 - Total renewable energy produced (of 
which: electricity, thermal) 
RCR 32 - Capacity for renewable energy connected 
to the grid/ operational  

RCR 33 - Users connected to smart grids 
RCR 34 - Roll-out of projects for smart grids 

 
 
2.4 Climate change 
adaptation, risk 
prevention and disaster 
resilience 

2.5 Water efficiency 

2.6 Circular economy - 
investments in waste and 
resource efficiency 

2.7 Green infrastructure 
in urban environment and 
reduced pollution 

RCO 24 - New or upgraded disaster monitoring, warning 
and response systems  
RCO 25 - Coastal strip, river banks and lakeshores, and 
landslide protection newly built or consolidated to protect 
people and property  
RCO 26 - Green infrastructure built for adaptation to 
climate change 
RCO 27 - National/ regional/ local strategies addressing 
climate change adaptation  
RCO 28 - Areas covered by protection measures against 
forest fires 

RCR 35 - Population benefiting from flood 
protection measures 
RCR 36 - Population benefiting from forest fires 
protection measures 
RCR 37 - Population benefiting from protection 
measures against natural disasters (other than floods 
and forest fires) 
RCR 38 - Estimated average response time to 
disaster situations 

RCO 30 - Length of new or consolidated pipes for  
household water connections 
RCO 31 - Length of sewage collection newtorks newly 
constructed or consolidated  
RCO 32 - New or upgraded capacity for waste water 
treatment 

RCR 41 - Population connected to improved water 
supply  
RCR 42 - Additional population connected to at 
least secondary waste water treatment 
RCR 43 - Water losses 
RCR 44 - Waste water properly treated  

RCO 34 - Additional capacity for waste recycling  

RCR 46 - Population served by waste recycling 
facilities and small waste management systems  
RCR 47 - Waste recycled 
RCR 48 - Recycled waste used as raw materials  
RCR 49 - Waste recovered 

RCO 36 - Surface of green infrastructure in urban areas 
RCO 37 - Surface area of habitats supported to attain a 
better conservation status  (of which: NATURA 2000, 
other) 
RCO 38 - Surface area of rehabilitated land 
RCO 39 - Systems for monitoring air pollution installed 

RCR 50 - Population benefiting from measures for 
air quality 
RCR 51 - Population benefiting from measures for 
noise reduction 
RCR 52 - Rehabilitated land used for green areas, 
social housing, economic or community activities 

47 

 
 
3. A more 
connected Europe 
- Mobility and 
regional ICT 
connectivity 

3.1 Digital connectivity 

RCO 41 - Additional households with broadband access 
of very high capacity 
RCO 42 - Additional enterprises with broadband access of 
very high capacity 

RCR 53 - Households with broadband subscriptions 
of at least 100 Mbps 
RCR 54 - Enterprises with broadband subscription 
of at least 100 Mbps 

3.2 Road TEN-T and 
regional and local 
mobility 

3.3 Rail TEN-T (and 
inland waterways?), 
intermodal regional 

RCO 43 - Length of new roads supported - TEN-T 
RCO 44 - Length of new roads supported - other 
RCO 45 - Length of roads reconstructed or upgraded - 
TEN-T 
RCO 46 - Length of roads reconstructed or upgraded - 
other 
RCO 47 - Length of new rails supported - TEN-T 
RCO 48 - Length of new rails supported - other  
RCO 49 - Length of rails reconstructed or upgraded - 
TEN-T  
RCO 50 - Length of rails reconstructed or upgraded - 
other  
RCO 51 - Length of new or upgraded inland waterways - 
TEN-T  
RCO 52 - Length of new or upgraded inland waterways - 
other 
RCO 53 - Railways stations and facilities - new or 
upgraded  
RCO 54 - Intermodal connections - new or upgraded 

RCR 55 - Users served by improved road traffic  
RCR 56 - Time savings due to improved road traffic  

RCR 57 - Length of ERTMS equipped railways in 
operation  
RCR 58 - Annual number of passengers on 
supported railways 
RCR 59 - Freight transport on rail 
RCR 60 - Freight transport on inland waterways  

48 

 
 
3.4 Sustainable 
multimodal urban 
mobility 

RCO 55 - Length of tram and metro lines- new 
RCO 56 - Length of tram and metro lines- reconstructed/ 
upgraded 
RCO 57 - Environmentally friendly rolling stock for 
public transport  
RCO 58 - Dedicated cycling infrastructure 
RCO 59 - Alternative fuels infrastructure (refuelling/ 
recharging points)  
RCO 60 - Cities and towns with new or upgraded 
digitised urban transport systems 

RCR 62 - Annual passengers of public transport  
RCR 63 - Annual users of new/ upgraded tram and 
metro lines 
RCR 64 - Annual users of dedicated cycling 
infrastructure 

4. A more social 
Europe - 
European Pillar 
of Social Rights 

4.1. Well-functioning 
labour markets and 
welfare systems 

RCO 61 - Annual unemployed persons served by 
enhanced facilities for employment services 

RCR 65 - Job seekers using annually the services of 
the employment services supported 

4.2 Socio-economic 
integration and 
marginalised 
communities, migrants 
and disadvantaged groups 

RCO 63 - Capacity of temporary reception infrastructure 
created 
RCO 64 - Capacity of rehabilitated housing - migrants and 
refugees  
RCO 65 - Capacity of rehabilitated housing - other  

4.3 Reducing inequalities 
- access to education and 
training 

RCO 66 - Classroom capacity of supported childcare 
infrastructure (new or upgraded) 
RCO 67 - Classroom capacity of supported education 
infrastructure (new or upgraded) 

RCR 66 - Occupancy of temporary reception 
infrastructure built or renovated  
RCR 67 - Occupancy of rehabilitated housing - 
migrants and refugees  
RCR 68 - Occupancy of rehabilitated housing - 
other  
RCR 70 - Annual number of children using 
childcare infrastructure supported 
RCR 71 - Annual number of students using 
education infrastructure supported 

49 

 
 
4.4 Equal opportunities - 
health care and social 
services 

RCO 69 - Capacity of supported health care infrastructure 
RCO 70 - Capacity of supported social infrastructure 
(other than housing) 

5. Europe closer 
to citizens - 
integrated urban 
and territorial 
development 

5.1 Integrated social, 
economic, cultural and 
environmental 
development and security 
in urban areas 

RCO 74 - Population covered by strategies for integrated 
urban development 
RCO 75 - Integrated strategies for urban development 
RCO 76 - Collaborative projects 
RCO 77 - Capacity of cultural infrastructure supported 

RCO 80 - CLLD strategies for local development 

5.2 Integrated social, 
economic, cultural and 
environmental 
development, including 
for rural and coastal areas 

Horizontal - 
Implementation 

Administrative capacity 
and efficiency 

RCO 95 - Staff financed by ERDF and Cohesion Fund 

RCR 72 - People with access to improved health 
care services  
RCR 73 - Annual number of persons using the 
health care facilities supported 
RCR 74 - Annual number of persons using the social 
care facilities supported  
RCR 75 - Average response time for medical 
emergencies in the area supported  

RCR 76 - Stakeholders involved in the preparation 
and implementation of strategies of urban 
development  
RCR 77 - Tourists/ visits to supported sites  
RCR 78 - Users benefiting from cultural 
infrastructure supported 

RCR 91 - Average time for launch of calls, selection 
of projects and signature of contracts 
RCR 92 - Average time for tendering (from launch 
of procurement until signature of contracts) 
RCR 93 - Average time for project implementation 
(from signature of contract to last payment)  
RCR 94 - Single bidding for ERDF and Cohesion 
Fund interventions 

50 

 
 
  
Horizontal - ETC 

ETC indicators 

RCO 81 - Participants in cross-border mobility initiatives 
RCO 82 - Participants in joint actions promoting gender 
equality, equal opportunities and social inclusion 
RCO 83 - Joint strategies/ action plans developed or 
implemented 
RCO 84 - Joint pilot activities implemented in projects 
RCO 85 - Participants in joint training schemes 
RCO 86 - Joint administrative or legal agreements signed 
RCO 87 - Organisations cooperating across borders 
RCO 88 - Projects across national borders for peer-
learning to enhance cooperation activities 
RCO 89 - Projects across borders to improve multilevel 
governance  
RCO 90 - Projects across national borders leading to 
networks/clusters 

RCR 79 - Joint strategies/ action plans taken up by 
organisations at/after project completion 
RCR 80 - Joint pilot activities taken up or up-scaled 
by organisations at/after project completion 
RCR 81 - Participants completing joint training 
schemes 
RCR 82 - Legal or administrative obstacles 
addressed or alleviated 
RCR 83 - Persons covered by joint agreements 
signed 
RCR 84 - Organisations cooperating across borders 
6-12 months after project completion 
RCR 85 - Participants in joint actions 6-12 months 
after project completion  
RCR 86 - Stakeholders/ institutions with enhanced 
cooperation capacity beyond national borders 

51 

 
 
3.4. Coherence and synergies with other policies67 

The common provisions regulation (CPR) covering the ESI Funds family has created a 
convergence of rules which has already borne fruit. However, a recent study68 shows that 
the stakeholders still see many overlaps in EU funding of various policy areas, especially 
between  ESI  funds  and  other  EU  instruments.  The  study  also  notes  a  high  degree  of 
(perceived)  complexity  of  the  funding  portfolio  of  EU  instruments  and  differences  of 
rules and processes between funds. The study recommendations include:  

  Further alignment of rules with other ESI funds.  
  Clearer  demarcation  of  roles  with  related  thematic  areas  such  as  FP9,  COSME, 

CEF, Digital Europe, LIFE and AMF. 

There will be a common set of rules for ESI Funds,  in a defined set of areas such as 
programming and financial management (in a successor to the CPR, "common provisions 
regulation").  This  will  include  many  of  the  general  proposals  for  delivery  set  out  in 
chapter  4,  notably  as  regards  simplification.  Common  rules  should  continue  to  allow 
investments  combining  complementary  aspects  such  as  investment  in  people  (financed 
by the ESF+) and in social infrastructure (financed by the ERDF). 

Overlaps within the ESI Funds family create a situation of competition between funds 
("double guichet") and represent a source of additional complexity for final beneficiaries. 
The following demarcation lines have been agreed: 

 

Investments  in  large  infrastructures,  including  for  broadband,  could  be  solely 
supported  by  ERDF,  while  the  EAFRD  and  EMFF  would  still  support  small 
infrastructures with a clear local relevance. 

  Business development in rural and coastal areas will move to the ERDF, except 
where  it  is  linked  to  agricultural  and  forestry  production  or  farm  household 
income  (for  the  EAFRD)  or  to  complementary  activities  related  to  fishing  or 
aquaculture (EMFF). 

 

In  rural  areas,  nature  conservation  action  (Natura  2000)  will  be  dealt  with 
exclusively  by  EAFRD.  However,  to  avoid  gaps  the  ERDF  will  still  be  able  to 
finance this outside rural areas (and notably in peri-urban areas).  

A  key  challenge,  given  the  focus  on  smart  specialisation,  is  coherence  with  the  FP9 
programme  and  COSME.  In  the  current  2014-20  period,  Horizon  2020  is  investing 
EUR 77 billion on research and innovation, and the ERDF some 41 billion. COSME is 
the  EU  programme  for  competitiveness  of  SMEs,  with  a  budget  of    EUR  2.3  billion. 
While  many  initiatives  have  been  implemented  in  the  current  period  at  all  levels 
(strategic,  programming,  operational)  to  improve  synergies  and  complementarities,  for 
the post-2020 period there is still much un-exploited and under-exploited R&I potential 

67 InvestEU is covered in section 4.4 on Financial Instruments 
68 KPMG and Prognos, Coherence, complementarity and coordination between policy objectives and implementation 

mechanisms in the context of ESI Funds, study for DG REGIO  

52 

 
 
 
                                                            
across  the  EU.    The  differentiation  will  be  "European  excellence"  (the  goal  of  FP9), 
"competitiveness" (COSME) and "regional relevance” (the goal of the ERDF)69. 

Table 12 - The complementary roles of FP9, COSME and ERDF 

FP9 

European  excellence  –  the  generation  and 
exploitation  of  new  knowledge.  This  is 
usually  in  a  few  key  regions  –  although  the 
situation is evolving, just 4 regions70 received 
20%  of  FP7  in  2007-13  and  50%  of  the 
money was spent in regions representing just 
one-sixth of the population. 

COSME  Competitiveness,  promoting  the  uptake  of 
specific solutions for larger groups of SMEs. 

ERDF 

Regional  relevance  –  diffusion  of  existing 
knowledge  and  technology  to  places  that 
need  it,  embedding  it  locally  via  smart 
specialization strategies. The Rhomolo model 
estimates that ERDF investment in RTD will 
have  a  similar  impact  to  FP9  (both  around 
0.15%  of  EU  GDP  in  2030  –  see  chart  and 
FP9 IA) but precisely in those regions where 
FP7 had the least impact (see Map 5 and Map 
6). 

edge 

FP9  will  continue 
research 
leading 
innovation, 
strengthening 
European  Research  Area 
reforms 
research 
the 
innovation system. 

to  focus  on 
and 
the 
and 
and 

to 

will 

focus 

COSME 
on 
competitiveness  of  enterprises,  of 
SMEs, making strategic use of SME 
intermediaries such as clusters. 

and 

in 
adaptation 

invest  via 
strategies 

smart 
ERDF  will 
the 
specialization 
of 
diffusion 
knowledge  and  technology  to  all 
regions  in  Europe.  These  broader 
strategies, 
smart 
local 
including 
innovation  systems,  will  become  an 
ex  ante  conditionality  in  the  new 
period. 

improvement  of 

specialization 

All  3  funds  will  work  together  to  enable  the  flow  of  knowledge,  facilitating  transnational  co-
operation, partnership in international research and innovation networks. Complementarities will 
also be reinforced through an alignment of relevant rules. 
The "seal of excellence" (SOE) concept will be reinforced and projects which cannot, due to lack 
of  budget  be  funded  by  FP9,  may  be  picked  up  by  ESIF  funds  and  funded  under  the  same 
conditions (including for state aids) as FP9. 

69 "From Rivalry to Synergy: R&I Policy and Cohesion Policy" insert reference 

70 Île de France, Oberbayern, London and Comunidad de Madrid 

53 

 
 
 
                                                            
Figure 8 - Impact of 2020-2027 RTD programmes on EU-27 GDP, 2020-2035 

Source: RHOMOLO 

Map 5 - Regional distribution of FP7 expenditure71 

71 We will update to an initial mapping of 2014-20 once figures are released in May  

54 

 
 
 
 
 
                                                            
 
55 

 
 
 
Map 6 – RTD component of 2020-2027 ERDF: impact on regional GDP, 2030 

56 

 
 
 
Trans-European  transport  networks  projects  will  continue  to  be  financed  from  the 
Cohesion Fund via both shared management and the direct implementation mode under 
the Connecting Europe Facility (CEF). EUR 11 billion of the Cohesion Fund will be 
transferred to the CEF for this purpose. Co-ordination with the CEF will include:  

  A simple demarcation, where the CEF will focus in particular on the core network 
and  the  ERDF  and  CF  on  ensuring  that  the  comprehensive  network,  including 
ensuring regional and local access to the network. 

  Alignment  of  approaches,  including  alignment  of  eligibility  criteria,  coherent 
conditionality  and  a  clear  view  on  the  project  pipeline  across  multiple 
instruments. 

 

  Maximising synergies between transport, energy and telecommunications sectors, 
to  promote  smart,  low-emission  and  safe  mobility  (e.g.  energy  infrastructure, 
alternative-fuels, connected and autonomous vehicles) which should be deployed 
in pan-European way. 
In the area of broadband, reinforced ERDF support to ensure the rollout of digital 
networks  in  view  of  covering  all  territories  throughout  the  EU,  including  rural, 
isolated,  and  sparsely  populated  areas.  The  ERDF  would  focus  on  areas  where 
more  severe  market  failures  are  observed  and  where  higher  intensity  grants  are 
required to render the network deployment viable.  CEF would cover areas where 
milder  market  failures  are  encountered  to  render  a  network  deployment  viable. 
CEF would also support strategic digital projects, for example the deployment of 
5G corridors. 

The  new  Digital  Europe  Programme  focuses on  deployment  and  capacity  building  in 
key digital areas at European level, in order to promote global competitiveness through 
digital  transformation.  All  five  areas  covered  (cybersecurity,  digital  transformation  of 
industry,  digital  transformation  of  Services  of  Public  Interest,  high  performance 
computing and advanced digital skills) have a clear regional impact.  An alignment will 
be  made  with  EU  initiatives  in  this  field,  such  as  the  Digitising  European  Industry 
initiative72,  necessary  to  complete  the  digital  single  market;  and  with  eGovernment 
Action  Plan  and  Tallinn  Ministerial  Declaration  on  eGovernment73,  both  related  to  the 
modernisation of public administration and digital transformation. 

Synergies  will  be  ensured  with  the  LIFE  programme  for  Environmental  and  Climate 
Action, in particular through LIFE strategic integrated projects, to optimise the uptake of 
funds  supporting  environmental  investments.  ERDF  and  CF  may  fund  activities  that 
complement LIFE projects, as well as by promoting the wider use of solutions, methods 
and  approaches  validated  under  LIFE  (inter  alia,  including  investments  in  green 
infrastructure,  energy  efficiency,  eco-innovation,  ecosystem-based  solutions,  and  the 
adoption of related innovative technologies). 

Regarding migration-related challenges, all Cohesion Policy Funds will address long-
term  needs  linked  to  integration,  while  the  Asylum  and  Migration  Fund  will  focus  on 

72 https://ec.europa.eu/digital-single-market/en/policies/digitising-european-industry  

73 https://ec.europa.eu/digital-single-market/en/news/ministerial-declaration-egovernment-tallinn-declaration  

57 

 
 
                                                            
shorter  term  needs.  AMIF  will  mainly  support  actions  in  the  early  stage  of  integration 
and  with  a  focus  on  3rd  country  nationals,  while  the  ERDF  will  target  more  general 
longer  term  measures,  notably  development  of  infrastructures,  social  housing  and 
measures  touching  entrepreneurship.  The  ESF  will  complement  these  investments  with 
softer long term integration measures. 

On security, synergies will be sought on the protection and securisation of public spaces, 
transport  hubs  and  other  critical  infrastructure,  cybercrime  and  the  prevention  of 
radicalisation.  The  Internal  Security  Fund  (ISF)  will  mainly  focus  on  supporting 
information exchange and operational cooperation between law enforcement authorities. 
In relation to infrastructure, the ISF will support immediate security needs and innovative 
actions  which  do  not  require  heavy  investments.  The  ERDF  may  invest  in  security 
infrastructure  in  regeneration  of  deprived  communities.  The  ERDF  may  complement 
border management interventions under the integrated border management fund (IBMF) 
with infrastructure for border crossing points (eg transport facilities including roads). 

Finally, EU macro-regional and sea basin strategies, which aim at better coordination 
of  policies  and  funds  in  a  specific  geographical  area,  represent  an  effective  tool  for 
increasing coherence and synergies with other policies. 

58 

 
 
 
 
4.  DELIVERY MECHANISMS OF THE INTENDED FUNDING 

4.1. 

Programming: flexibility for emerging needs, return to "n+2" 

The shared management system of the ERDF and CF is  based on a programme agreed 
between  the  Member  State  and  the  Commission  at  the  beginning  of  the  period.  In  the 
current 2014-20 period, this programme allocates funding by priority for the full 7 years.  

There  is  a  trade-off  between  stable  long  term  planning  (a  foundation  of  ERDF  and  CF 
success,  smart  specialisation  strategies  being  a  notable  example)  and  the  flexibility  to 
respond to new developments and emerging needs. Although there is some flexibility in 
the  current  system  –  for  example  the  ability  to  transfer  up  to  10%  of  funding  between 
priorities towards the end of the period – circumstances have proved that more flexibility 
is needed.  

The economic crisis in the 2007-13 period, migration events and the ongoing challenge 
of technical changes – all of these challenges require the ability to respond flexibility and 
effectively.  

In  future  there  will  therefore  be  a  5+2  programming  system:  only  the  first  5  years' 
funding  will  be  programmed.  The  remaining  2  years  will  be  assigned  to  the  national 
envelope and programmed in a midterm review. 

Performance framework targets will be set for 2024, for the last 2 years new targets will 
be  set  in  the  context  of  the  reprogramming  exercise.  There  will  be  no  performance 
reserve. Instead, the programming of the last 2 years' allocation will take into account: 

1.  Whether  the  weight  of  the  priorities  (or  their  existence)  still  holds  after  the  4th 
year  of  implementation.  Priorities  will  be  confirm  or  adjusted  in  the  light  of 
emerging needs, changing circumstances and relevant CSRs (see below). 

2.  Progress towards performance targets. 

In the current period, spending is  subject to an n+3 rule. These rules mean that 3 years 
after the year money is allocated, if it is not spent it will be decommitted. While a certain 
"grace  period"  is  necessary  to  programme  and  implement  complex  programmes,  it  was 
noted in earlier chapters that there is considerable delay at the beginning of programmes, 
as well as "overhang" of previous programmes. 

In order to correct this issue, we are proposing programming which  catches up to n+2 
by  the  end  of  the  period.  This  catch  up  should  be  possible  because  of  administrative 
simplifications in programming and payments proposed below. 

59 

 
 
 
4.2.  Enabling conditions74 and governance 

The effectiveness of public investments and the durability of results depend on suitable 
conditions.  Unsound  policy  frameworks  and  regulatory,  administrative  and  institutional 
weaknesses  are  major  systemic  obstacles  hindering  effective  and  efficient  public 
spending. It is therefore of the utmost importance that such weaknesses are identified and 
addressed at the beginning of the programming period75.  

This is why a key reform of the ESI Funds for the 2014-2020 programming period was 
the introduction of ex ante conditionalities (ExAC). These are sector-specific or general 
preconditions that needed to be met at an early stage of programme implementation and 
by the end of 2016 at the latest (see box).  

What are enabling conditions and ex ante conditionalities? 

A precondition for programmes. In the current round of the ERDF and CF they are called 
"ex ante conditionalities" (ExACs) and fall into five broad categories76: 

1.  Improving  the  investment  environment  in  the  EU.  Many  ExACs  address 

horizontal and sector-specific barriers that hinder investment. 

2.  Supporting  structural  changes  and 

implementation  of  country  specific 

recommendations (CSRs) under the European Semester process. 

3.  Accelerating the transposition and implementation of the EU acquis, e.g. in public 
procurement, state aid, environment, non-discrimination, gender and disability. 
4.  Better targeting of support from ESI funds and other public funds. For example, 

via a needs analysis or strategic policy documents. 
5.  Improving administrative capacity and coordination.  

Around  75%  of  all  applicable  ex  ante  conditionalities  were  fulfilled  at  the  time  of 
adoption  of  the  2014-20  ESI  Fund  programmes.  For  the  non-fulfilled  ones,  over  800 
distinct action plans were included in the programmes77. 

Post-2020, ExACs will be simplified, streamlined and renamed "enabling conditions". 

A  review  of  the  ex  ante  conditionalities78  found  that  they  helped  set  the  conditions  for 
programme success. In their absence, reforms might not have happened or happened at a 
much slower pace. However several lessons were learned: 

74 Building on "Ex ante conditionalities" in the 2014-20 period 
75  See for example OECD Recommendation on Effective Public Investment Across Levels of Government adopted on 

March 12, 2014.  

76 Commission Staff Working Document (2017) 127 final "The Value Added of Ex ante Conditionalities in the 

European Structural and Investment Funds"  

77  The final deadline for reporting by Member States is end June 2017 in the framework of the Annual 

Implementation Report for 2016 and end August 2017 in the framework of the Progress Report.  The Commission 
assesses completion of the ExAC action plans on the basis of reporting by Member States. 

60 

 
 
 
                                                            
  There  were  too  many  of  them.  There  will  therefore  be  far  fewer  enabling 
conditions. One key tool to reduce their number is to tightly focus on those that 
have the most impact on the effectiveness of ERDF and CF support. These would 
usually  be  strategies  or  framework  tools  directly  related  to  ERDF  and  CF 
interventions (for example a smart specialisation strategy). The other key tool is 
to avoid enabling conditions: 

o  Which repeat existing legal obligations. 

o  Which Require Member States to revise recently submitted documents. 

o  Where  other  tools  are  more  appropriate,  such  as  programming  priorities, 

project eligibility criteria or administrative capacity measures. 

  There  were  too  complex.  In  future,  fulfilment  criteria  shall  be  few,  clear, 
tangible  and  measurable  –  and  with  a  clear  link  to  programme  success.  This 
means no more administrative capacity elements (such as training).  

  They  were  set  at  the  beginning  of  the  programme  and  not  revisited  –  the 
assessment  was  a  one  off  exercise.  There  will  be  follow-up  across  the  period. 
For example, strategic documents should be reflected in project selection criteria, 
enabling  conditions  could  be  monitored  on  the  ground  or  the  subject  of 
evaluations. 

Governance 

The ERDF and CF will be more closely aligned with the European Semester of economic 
policy  coordination,  which  will  also  reinforce  its  regional  dimension.  The  detailed 
analysis of Member States' challenges in the context of the European Semester will serve 
as  a  basis  for  the  programming  of  the  funds  at  the  start  and  at  mid-term  of  the  next 
period.  This  will  serve  as  the  roadmap  for  the  short,  mid-  and  long-term  planning  and 
monitoring of the funds. 

In  supporting  the  country  specific  recommendations  (CSRs)  stemming  from  the 
European semester process, it is important to ensure better alignment – currently there 
are few investment related CSRs and those which do fall into this category tend to be too 
vague to be operational. Alignment will be promoted: 

  At the programming stage: Member States will identify relevant CSRs from the 

latest two years (2019 and 2020), to include in the programmes. 

  At annual review meetings: CSR progress will be discussed between Commission 
and Member State (and at monitoring committee meetings) as part of the annual 
policy dialogue. 

78 Commission Staff Working Document (2017) 127 final "The Value Added of Ex ante Conditionalities in the 

European Structural and Investment Funds"  

61 

 
 
 
                                                                                                                                                                                 
  At  the  5+2  review  stage:  as  outlined  above,  this  will  take  account  of  CSRs  of 

years 2023 and 2024 at the performance review in year 5. 

  Member States will estimate upfront the % funding addressing CSRs per specific 
priority and this could be tracked via payment claims. This will enable estimation 
of how much funding is going to various CSRs. 

This will lead to transparency and accountability in addressing CSRs through ERDF and 
CF. Moreover, through the European Semester process the Commission and the Member 
States (notably through their National Reform Programmes) will ensure coordination and 
complementarity of financing from cohesion policy funds and the new Reform Support 
Programme with regard to the support to structural reforms. 

Conditionality  linked  to  the  rule  of  law  (i.e.  justice  system)  will  be  dealt  with  in  a 
separate  regulation  concerning  various  EU  policies  and  instruments  (and  not  only 
Cohesion Policy). The issue of rule of law goes beyond Cohesion Policy and a separate, 
cross-cutting regulation enables a common approach across the various relevant policies 
and instruments. 

Macroeconomic  conditionality  (i.e.  linked  to  the  Stability  and  Growth  Pact)  is 
maintained but will be streamlined. They will also be refined and made smarter, to avoid 
aggravating the economic situation by cutting investments in time of crisis. 

4.3. 

Simplification 

The  2014-2020  programmes  have  already  seen  various  simplification  measures, 
including: 

  Common principles  for ESI Funds in  terms of strategic planning,  eligibility and 

 

durability, complemented with fund specific rules; 
Introduction of e-Cohesion principle, ensuring exchanges of information between 
beneficiaries and programme by electronic data exchange systems;  
  Proportional control and audit procedures, with a single-audit principle;  
  Extended use of simplified cost options (SCO) to reimburse eligible expenditure:  

flat-rate financing, standard scales of unit costs and lump sums.  
  Simpler rules for revenue-generating projects, including flat rates.  

These measures brought a reduction of ERDF and CF administrative costs for managing 
authorities by 4-8% and a reduction of administrative burden on final beneficiaries by 9-
14%79.   

However, further simplification is necessary: 

79  t33 & Spatial Foresight, Use of new provisions on simplification during the early implementation phase of ESIF, 

Final Report, June 2017 

62 

 
 
 
                                                            
  There is evidence of substantial administrative costs, estimated in a recent study80 
at 3%  of average  programme costs for the ERDF and 2.2%  for Cohesion  Fund.  
The administrative burdens on beneficiaries are even higher. Complex procedures 
also lead to delays – and a focus on procedure at the expense of results.   

 

In  the  public  consultation  linked  to  this  proposal,  some  80%  of  respondents 
considered  complex  procedures  as  an  obstacle  preventing  funds  from  achieving 
their objectives.  

  The  High  Level  Group  on  Simplification  of  Cohesion  Policy  (see  box)  found  a 

number of elements which could be improved.   

Key recommendations of High Level Group on Simplification of Cohesion Policy81 

  Alignment  of  rules  between  EU  Funds:  Cohesion  Policy  funds  should  not  receive 

more restrictive treatment than similar projects under central EU management.  

  Fewer,  clearer,  shorter  rules:    replacing  current  600  pages  of  regulations  and  5000+ 

pages of guidelines. Shorter, more strategic texts of programmes.  

  Genuine  subsidiarity  and  proportionality:  reliance  on  national  public  expenditure 

procedures to a much larger extent.    

  A  stable  yet  flexible  framework:    no  need  to  re-appoint  institutions  for  the  next 

programming period. Programmes should also be modified more easily.   

  Single  audit  principle:  extension  of  the  single  audit  principle,  each  level  of  control 
builds  on  the  preceding  one.    Additional  checks  needed  if  Member  State  or  regions 
have serious deficiencies.  

There  is  however  a  trade-off:  the  current  delivery  mechanism  is  strong  in  assuring 
legality  and  regularity:  detailed  rules  ensure  compliance  with  applicable  legislation, 
fiduciary  risk,  fraud  detection,  financial  control,  risk  monitoring  etc82.    The  focus  on 
regularity  is  the  main  driver  of  rules,  procedures  and  controls  –  regularity  can  only  be 
ensured if the rule is sufficiently clear. 

The  following  measures  will  promote  simplification  while  still  maintaining  a  sufficient 
focus on legality and regularity. 

A key simplification is moving further away from payments based on expenditure – 
the  classic  payment  method  of  the  ERDF  and  CF.  This  method  can  impose  a  heavy 
burden,  since  expenditure  "often  consists  of  a  multiplicity  of  small  items  incurred  by 
small  beneficiaries.  As  a  result,  national  administrations  complain  about  the  resources 
needed to verify boxes of documents and timesheets, while beneficiaries are at a loss to 
understand why they must reimburse money to the EU for participants’ bus tickets long 

80 Spatial Foresight & t33, New assessment of administrative costs and burden in ESI Funds, preliminary results.    
81 Full text of the High Level Group recommendations: 

http://ec.europa.eu/regional_policy/sources/newsroom/pdf/simplification_proposals_key.pdf  

82 EY,  Effective and efficient delivery of European Structural and Investment Funds investments – Exploring 

alternative delivery mechanisms, to be published in 2018Link to ADM study 

63 

 
 
 
                                                            
after the ink has faded on those tickets. Failure to ensure that the necessary verifications 
take place can lead to unacceptably high rates of error and, consequently, the necessity 
to  interrupt  and  suspend  payments  to  the  Member  States.  Implementation  of  the 
necessary corrective actions, ensuring legal, regular and eligible spending of the funds, 
can lead to Operational Programmes being blocked for up to several years"83. 

To reduce this burden, the regulations will: 

1.  To extend the scope of simplified cost options ("SCOs"). 

In this system, instead of reimbursing actual expenditure item by item, payment is based 
on  flat-rate  reimbursement,  standard  scales  of  unit  costs  or  lump  sums.  Such  measures 
are being already being used for around 4% of the budget in the 2014-20 programmes. 
Managing  authorities84  appreciate  SCOs  for 
their  simplicity  and  reduction  of 
administrative burden, but are apprehensive about the risk and uncertainty of moving to 
this new system. They also request further support. 

SCOs will be encouraged by simplifying rules and calculation methods, providing more 
off-the-shelf options and making them compulsory for small amounts. Extending the use 
of  simplified  cost  options  for 
total 
administrative  costs,  even  by  20-25%  in  an  ambitious  scenario85.    Other  advantages 
related to the use of SCO include a reduced rate of errors and irregularities. 

the  ERDF/CF  could  substantially  reduce 

2.  To introduce a new option: payments based on conditions. 

This makes payment conditional on results/outputs or even policy actions or processes. It 
represents a radical simplification, moving completely away from checking invoices. A 
study  undertaken  for  the  Commission86  recommended  testing  this  system  in  the  ERDF 
and  CF,  since  it  has  the  potential  to  reduce  the  administrative  burden,  especially  on 
beneficiaries. It also changes the focus from costs and reimbursement to tracking results 
and  as  such  represents  good  practice  elsewhere  (such  as  the  World  Bank’s  Programme 
for Results87). 

However, the study also noted that this approach has potential pitfalls: 

 

 

It  is  crucially  dependent  on  having  clear  and  trackable  indicators  for  the 
conditions, and on the monitoring system more generally. While the monitoring 
and evaluation system of the ERDF and CF is already good and is being further 
improved (see section 5), this means that the system would only apply in sectors 
where appropriate indicators could be found. 
It  depends  on  national  audit  and  assurance  systems  to  make  it  work  (see  4.3 
below on proportionality). 

83 DG EMPL (2015) Simplified Cost Options in the European Social Fund, Promoting simplification and result 
orientation.  
84 Source: DG Regio survey of managing authority views on SCOs.  Replies were received from 208 of 295 OPs, 

representing 77% of the total ERDF-CF budget. 

85  Spatial Foresight & t33, op.cit. preliminary results 
86 See budget support study in sources 
87  EY,  op.cit. 

64 

 
 
                                                            
 

It may make EU contributions and actions less visible. 

To  gather  more  information,  the  approach  is  being  tested  in  the  framework  of  the 
omnibus for some types of ERDF investment, such as energy efficiency (see box). It will 
then be offered as an option to programmes in the new period, and their proposals will be 
discussed with the Commission in the preparation of programmes. 

Box: Payment based on conditions – case of energy efficiency 

The  Commission  is  developing  together  with  Member  States  a  pilot  scheme  of 
payments based on the fulfilment of conditions in the field of energy efficiency. Under 
this scheme, the conditions for payments would be the calculated savings in energy use 
or in CO2 emissions resulting from the improved energy performance.  The financing 
conditions would  be  proposed  by Member  States; the  Commission  would  assess them 
and  modify  operational  programmes  to  include  the  payments  based  on  conditions 
schemes; payment by the Commission would occur once the financing conditions have 
been fulfilled, or intermediate steps ("milestones") reached.     

The advantage of such an approach is twofold: on the one hand reduced administrative 
cost, on the other a much keener focus on results. 

In addition to simplified cost options and payments based on conditions, there will be a 
series of simplification measures including: 

1.  Simplified  programming  at  the  start  of  the  programme:  The  main  strategic 
document  for  ESI  Funds  at  national  level,  Partnership  Agreement,  will  be  much 
shorter. Similarly, the text of operational programmes will be “lighter”, focusing on 
achievement  of  objectives  and  funds  allocations.  The  intervention  logic  is  also 
expected to be simplified, focused on broad policy objectives and European specific 
objectives.  There  will  be  no  performance  reserve.  The  number  of  ex-ante 
conditionalities will be lower. These changes are expected to shorten substantially the 
start-up phase.   

2.  Simplified  designation  of  authorities.  The  CPR  for  2014-2020  period  includes  a 
complex  procedure  of  designation  of  managing,  certifying  and  audit  authorities88.  
Designation  was  meant  to  obtain  assurance  regarding  the  adequate  setup  of 
management and control systems, prior to first payments. This process has proven to 
be heavy and time consuming, especially for audit authorities. For post-2020, systems 
would largely be "rolled over" to the next programming period, without requirement 
for programmes to undergo a new full-fledged designation process. Assurance would 
still  be  obtained  by  early  systems  audits.  Roll  over  is  expected  to  contribute  to  a 
speedier start of the next programming period.   

88 Art.123-124 of the CPR.  

65 

 
 
 
                                                            
3.  No  specific  rules  for  revenue  generating  programmes:  Currently  the  CPR  has 
rules  for  projects  which  generate  revenue89.  These  rules  are in  addition  to  State  aid 
rules and aim to avoid over-financing, but are cumbersome in application: a study of 
implementation  in  2014-2090  found  that  even  small  simplifications  of  rules  for 
revenue-generating  projects  bring  greater  administrative  cost  reductions  than 
expected.  The main advantage of these rules is to avoid over-financing, but this can 
be  achieved  more  simply  and  easily  by  a  decrease  in  EU  co-financing  rates  (see 
chapter  3).    Specific  rules  on  revenue  generating  investments  will  therefore  be 
eliminated,  though  of  course,  state  aid  rules  will  continue  to  apply.  The  measure  is 
expected to reduce total administrative costs by some 1%91.  

4.  No  specific  rules  for  major  projects.  Following  intensive  work  by  JASPERS  and 
Commission in the 2014-2020 period, the quality of major project administration has 
increased substantially92 in many countries. The main challenge now is to extend the 
analysis  to  flagship  projects  in  sectors  such  as  R&D/innovation  which,  while 
strategically  important,  often  fall  below  cost  thresholds.  The  process  is  replaced  by 
"projects  of  strategic  importance"  –  the  monitoring  committee  themselves  will  be 
responsible for identifying and following flagship projects, reporting on progress and 
results. More upstream work will be encouraged and Jaspers will remain available to 
national and regional administrations who want to improve the project pipeline. 

5.  Reducing  the  number  of  verifications:    Currently  100%  of  payment  claims  are 
covered  by  administrative  verifications,  while  on-the-spot  verifications  are  sample 
based.    Possible  changes  include  making  management  verifications  risk-based, 
instead of covering 100%. This more proportionate approach to audits would imply 
an important reduction of the audit burden for “low risk” programmes, reducing total 
administrative costs of the ERDF and CF by 2-3%93.  

6.  A  more  proportionate  approach  to  audits:    As  regards  audits,  reduction  of  the 
administrative  cost  could  come  in  particular  from  the  application  of  a  more 
proportionate approach with lower audit requirements for programmes with low risk. 
This could mean carrying out only a limited number of audits of operations would be 
carried  out.  The  selection  of  “low  risk”  programmes  should  be  based  on  objective 
criteria,  such  as  good  track  record  and/or  low  co-financing  rates.    In  addition,  the 
number  of  audits  covering  territorial  cooperation  programmes  could  be  drastically 
reduced, by introducing a common audit sample for ETC programmes.  

4.4. 

Financial instruments ("FIs"): simplification and streamlining 

The  use  of  financial  instruments  in  ERDF  and  CF  has  increased  significantly  in  recent 
years. In 2007-2013 around EUR 12 billion of Structural Funds was invested in this way, 

89 Art. 61 and 65(8) of the CPR.  
90 Use of new provisions on simplification during the early implementation phase of ESIF (2017) complete reference 
91 Spatial Foresight & t33, op.cit. preliminary results 
92 Reference IAS study 
93 Ibidem 

66 

 
 
 
                                                            
while in 2014-2020 this is over EUR 21 billion, of which over 95% through the ERDF 
and  CF.  SMEs  account  for  just  over  half  of  planned  investment  –  together  with 
innovation and the low carbon economy, they represent the bulk.  

Financial instruments are acknowledged to be a successful and useful tool in the ERDF 
and  CF.  The  ex  post  evaluation  noted  their  "potential  to  be  a  more  efficient  means  of 
funding investment"94, based on (among other things) their revolving nature. A study of 
the implementation of FIs found them to be financially sustainable and cost-effective95. 

In addition the ex post evaluation96 found that FIs: 

  Assisted in the development of private financial markets in a number of regions. 
  Played a crucial role in providing funding to SMEs during the credit crunch. 
  Promoted investment in new technology and improving production processes. 

However, FIs are not a goal in themselves. They are a means to an end  – and there are 
cases  where  grants  are preferable  or  more  effective.  This  means  that  there  will  not  be 
binding targets for their use, or an obligation to use them in certain areas. 

Instead  FIs  will  be  promoted  by  removing  obstacles  to  implementation.  One  third  of 
managing  authorities  find  FIs  too  administratively  complex  and  a  further  third  lack 
knowledge of these instruments97. Although there is perception of improvement in 2014-
20,  most  managing  authorities  still  want  more  administrative  and  legal  certainty, 
especially for audit.  

To  tackle  these  twin  problems  of  complexity  and  lack  of  certainty,  management  and 
control  systems  will  be  consolidated  into  one  assurance  system  for  both  grants  and 
FIs.  Checks  and  verifications  will  usually  be  at  the  fund  level,  not  the  individual 
operation. This will simplify the overall audit system and increase legal certainty for FIs 
for managing authorities. It will also reduce the burden for final beneficiaries. 

Similarly, FI-specific reporting98 will be incorporated in the general reporting cycle. 
Such  alignment  will  reduce  the  widespread  perception  that  FIs  entail  a  lot  of  extra 
reporting.  

The ex-ante assessment will be streamlined and shortened: 

  The  market  gap  and  needs  assessment  will  be  consolidated  into  the  needs 
assessment  section  of  the  programme.  This  enhances  the  role  of  the  monitoring 
committee in identifying needs – and whether a grant or FI is most appropriate to 
meet them. 

94 SWD, page 5 
95 Implementation and take up study reference 
96 SWD, pages 25-26 
97 Reference to study. This is based on an online survey of all Managing Authorities of ERDF, CF, ESF and EMFF 
programmes, plus 110 follow up interviews divided evenly between Managing Authorities and financial 
intermediaries, including authors of ex ante assessments – results reported here are for ERDF and CF 
managers. 

98 Reference to article 46 

67 

 
 
                                                            
  Elements with genuine added value (e.g. implementation arrangements, products, 
final recipients targeted) will be addressed in a shortened ex ante assessment. 

  Relevant elements of a previous ex ante assessment can be rolled over to the new 

one. 

Provisions  on  eligibility  will  be  simplified  and  thresholds  for  management  fees 
rationalised.  These  have  generated  a  lot  of  need  for  guidance,  as  well  as  some 
confusion.  In  future:  only  minimum  eligibility  rules  will  to  be  set  at  EU  level,  leaving 
more detailed provisions to the Member State. 

Factors  which  disrupt  the  flow  from  one  programming  period  to  the  next  will  be 
smoothed  out.  Regulations  which  lead  to  questions  after  the  end  of  the  programming 
period (eg use of funds, reflows…) will be simplified to only define minimum standards. 
This will facilitate a smooth start to implementation and payments from day one of the 
new period. 

A Single Investment Fund at the European level 

Currently  there  are  multiple  EU-level  FI  instruments,  with  the  potential  to  cause 
confusion among beneficiaries. These will be simplified and delivered through one single 
investment  fund  -  the  Invest  EU  Fund.  There  will  also  be  provisions  to  ensure  better 
complementarity between the InvestEU Fund and FIs under shared management. 

Member States will have an option to channel a part their ERDF and CF resources via a 
Budgetary Guarantee  under the InvestEU Fund. To do so, the Member  State would set 
out  their  intention  in  the  Partnership  Agreement,  explaining  the  goals  of  the  transfer, 
which of the thematic windows they wish to use (SMEs, innovation etc.) and geographic 
earmarking. The InvestEU Fund impact assessment report includes further details.   

4.5. 

Performance, flexibility and simplification: conclusions on the new system of 
priorities and delivery 

The  new  system  of  priorities  and  delivery  of  ERDF  and  CF  promotes  performance, 
flexibility and simplification. 

Performance, including in terms of: 

  A  stronger  concentration  on  smart  and  green  growth  -  the  areas  with  greatest 

impact and highest EU added value (see section 3.3). 

  A clearer division of labour and more coherence with other relevant EU funding 

streams, especially the other ESI funds and Horizon2020 (3.4). 

  Scheduled  reprogramming  which  explicitly  refocuses  on  performance  and  on 

emerging needs (4.1). 

  Accelerating  the  programming  process,  returning  to  the  "n+2"  standard  (4.1), 

enabled by the various simplifications (e.g. 4.3 and 4.4). 

68 

 
 
 
  A  greater  focus  on  the  preconditions  of  success,  setting  the  enabling  conditions 

and making explicit links with economic governance (4.2). 
  Opening the possibility of payments based on conditions (4.3). 
  Removing  the  obstacles  to,  and  promoting,  Financial  Instruments.  These  can  be 

more cost-effective than grants (4.4). 

Flexibility in programming, including: 

  More  broadly  drawn  priorities  which  enable  easy  transfer  of  funding  and 
synergies between related themes now included in one priority (eg innovation and 
SME support)(3.3). 

  More flexibility in reprogramming, notably a "5+2" programming system where 

the last 2 years are not programmed until closer to the time (4.1). 

Simplification and reduction of the administrative burden on managers and beneficiaries: 

  A simpler set of priority objectives (3.3) 
  Simpler  relationships  between  various  EU  funds,  including  the  elimination  of 

several "double guichet"s (3.4). 

  Simpler reprogramming (4.1) 
  A  simpler  set  of  "enabling  conditions"  and  simpler  links  to  the  European 

Semester (4.2) 

  A systematic series of simplifications to reimbursement, audit, management and 

control (4.3). 

  Simplification  of  management,  audit  and  reporting  of  financial  instruments, 
aligning the system as far as possible with that for other forms of support (4.4). 

5.  HOW WILL PERFORMANCE BE MONITORED AND EVALUATED? 

5.1.  Monitoring 

The  ERDF  and  CF  monitoring  system  has  been  developed  and  refined  over  successive 
programme periods. In the current period, key elements include (Table 13): 

  Financial data such as allocations, project selection and expenditure declared and 
certified. Some of the data are disaggregated along several dimensions, including 
intervention fields (e.g. rail), territorial dimension (e.g. urban), and finance (e.g. 
grants).  

  EU  payments  to  the  programmes,  recorded  in  real  time  in  the  Commission's  IT 

system. 

  Output indicators: 46 common output indicators and various programme specific 
outputs.  These  are  collected  through  monitoring  systems  –  achieved  values  are 
reported  by  Member  States  in  annual  implementation  reports  ("AIRs").  The 
common indicators can be aggregated at EU level and are tracked publicly on the 
ESI Funds Open Data Platform (see box). 

69 

 
 
 
  Policy  results,  akin  to  impact  indicators  (as  defined  in  the  Better  Regulation 
Guidelines),  and  measured  by  statistical  data  at  regional  or  national  levels. 
Annual  values  are  reported  in  the  AIRs  during  the  implementation  period.  The 
main sources of data for these result indicators are national and regional statistical 
systems, as well as by Eurostat. 

Table 13 - Main monitoring data collected for ERDF and CF 2014-2020 

Type of data 
Various financial data 
EU payments 
Output indicators 
Policy results 

Frequency 
Who collects 
Jan, June, July, October  Managing authority  Programme data 
Continuous 
Payments system 
Annual (in June) 
Annual (in June) 

EU level 
Managing authority  Monitoring systems 
Managing authority  Monitoring, national 
statistics or Eurostat 

Source 

Because  of  shared  management,  most  output  and  result  indicators  are  collected  by 
Member States.  But there is a clear structure at EU level for (1) selection of indicators 
and targets (2) quality checks and reporting.  

The  2014-20  programmes  had  a  clear  process  for  selection  of  indicators  and  setting  of 
targets: 

  Managing  authorities  proposed  output  and  policy  result  indicators  in  the 
programmes. For output indicators, the starting point was the 46 common output 
indicators  which  were  all  used  where  appropriate99.  Programmes  then  added 
programme specific output indicators, as well as policy result indicator – at least 
one per investment priority, which captured the main goal of that priority. Output 
and result indicators were examined as part of discussion with the Commission. 

  Targets  were  set  using  unit  costs  derived  from  experience  in  the  programme 
itself,  elsewhere  in  that  Member  State  or  elsewhere  in  the  EU.  The  process  of 
setting targets  was  part of  programme  discussion  with  the Commission,  and  the 
calculation  methods  were  documented  either  in  the  programme  itself,  or  (more 
usually) in a working document accompanying the programme. 

A  study  of  the  2014-20  performance  framework100  found  that  Member  States  made 
significant  efforts  to  establish  the  performance  framework  on  a  solid  basis.  Setting 
milestones and indicators was mainly straightforward – only 20% of programmes had a 
lot of difficulty in doing this. 

Quality  checks  and  structured  electronic  reporting  are  essential  features,  built  into  the 
system: 

  The  monitoring  systems  for  2014-2020  benefit  from  reinforced  scrutiny.  The 
programming rules require a declaration of assurance of the Managing Authority 

99 For example, a programme only reports km of rail constructed if this is one of their investments. 
100 Sweco, ÖIR, Spatial Foresight (2015) "Implementation of the performance frameworks in the 2014-2020 European 

Structural and Investment (ESI) Funds" 
http://ec.europa.eu/regional_policy/sources/policy/how/studies_integration/impl_pf_esif_report_en.pdf 

70 

 
 
 
                                                            
on the reliability of data101, while the audit strategy established by Member State 
Audit authorities includes systems audits to ensure performance data reliability102. 
An  audit  trail  on  performance  data  is  required103,  and  reliability  of  performance 
data is part of the audits on operations104. 

 

Indicators are transmitted electronically to the Commission in a structured format 
via  an  information  system,  SFC.105  This  structured  data  has  enabled  swift 
reporting on ESI Fund investments for a variety of audiences106.  

  A Monitoring Helpdesk has been established so that REGIO can digest the data 
presented,  internally  analyse  performance  of  the  operational  programmes  and 
identify  possible  outliers  through  the  use  of  automated  systems.  Weaknesses  or 
apparent implausibility in the data are commented by the Commission and where 
necessary corrections sought. 

 

In addition, the Open Data Platform tracks the achievement values as reported by 
the  Member  States  and  is  publicly  available.    This  offers  unprecedented 
transparency and encourages “peer pressure” in reporting reliable data. 

  This is an iterative, annual process. Managing authorities gain in experience and 
accuracy  –  there  has  been  a  noticeable  year  on  year  improvement,  with  fewer 
errors detected in the plausibility checks. 

The open data platform 

The  European  Structural  and  Investment  Funds  Open  Data  Platform  presents  data  and 
graphs for five funds, 28 countries, and more than 530 programmes, covering 42% of the 
EU budget. The platform is regularly updated and is an important communication tool for 
the general public, the media, analysts, and researchers. For more specialised audiences, 
the platform offers open access to detailed data at programme level, including time-series 
of  planed  and  implemented  resources  and  achievements,  thus  facilitating  in-depth 
analysis of the funds.  

The  platform  meets  several  objectives:  transparency  and  communication;  promoting 
excellence among Member States by providing a comparison tool; and enabling analysis 
and research. In March 2017, the platform received the first EU Ombudsman Award for 
Excellence in Open Administration. 

Commission Implementing Regulation (EU) 2015/207, Annex VI - management declaration template. 
Commission Implementing Regulation (EU) 2015/207 Point 3.2 of Annex VII. 
Commission Delegated Regulation (EU) 480/2014, Article 25.1(i). 
Commission Delegated Regulation (EU) 480/2014, Article 27.2 c). 

101  
102  
103  
104  
105 SFC stands for System for Fund Management in the EU. SFC is the information system for the programming period 
used by Managing Authorities of the programmes to report electronically to the Commission, enabling the 
shared management between the Member States and the Commission.  

106 A detailed presentation of the types of reports and their frequency for 14-20 is presented in Annex I.  

71 

 
 
 
 
                                                            
The  2014-20  performance  framework  was  highly  appreciated  by  programme 
stakeholders, who noted that it helped focus the programme from the outset, served as a 
guide  for  implementation  and  defined  realistic  targets  and  expectations  (see  Figure  9). 
Only  10%  of  respondents  saw  no  benefit.  Moreover,  there  is  evidence  that  the 
development  of  performance  frameworks  generated  considerable  and  useful  debate 
within Member States and between Member States and the Commission107. 

Figure 9 - What do you see as the main benefit of the performance framework? 

Source:  Sweco,  ÖIR,  Spatial  Foresight  (2015)  "Implementation  of  the  performance  frameworks  in  the 
2014-2020  European  Structural  and  Investment  (ESI)  Funds".  Respondents  were  asked  to  select  one 
answer only. 

107 Sweco, ÖIR, Spatial Foresight (2015) "Implementation of the performance frameworks in the 2014-2020 European 

Structural and Investment (ESI) Funds" 
http://ec.europa.eu/regional_policy/sources/policy/how/studies_integration/impl_pf_esif_report_en.pdf 

72 

0% 5% 10% 15% 20% 25% 30% 35% 40% It will help to better guide the programme during implementation It helped define realistic targets&expectations It helped focus the programme No benefit Other Main benefits of performance framework  
 
 
 
 
                                                            
Monitoring post-2020 

The  post  2020  system  will  therefore  build  on  the  strengths  of  the  2014-20  system, 
retaining  the  shared  management  system,  quality  checks,  structured  reporting  and  open 
data platform. But experience shows the need for several improvements. 

1.  Introducing  direct  result  indicators,  in  line  with  best  practice  elsewhere.  The 
2014-20  system  of  indicators  for  ERDF  and  CF  includes  currently  only  two  levels: 
outputs and "policy results" (which correspond to "impact indicators" in other systems). 
The study on the performance framework noted the sharp dichotomy between outputs on 
the one hand and impacts on the other. Post-2020, an intermediate layer of direct results 
will be created, in line with the Commission's "Better Regulation Guidelines". 

2. Extending the common indicator set – from outputs only to results and impacts. 
Common  output  indicators  based  on  agreed  definitions  have  proven  a  success.  Of  all 
instances  of  indicator  use  in  the  2014-20  ERDF  and  CF  programmes,  the  46  common 
output indicators account for 60% by number and 60-70% by financial allocation.  These 
common  indicators  can  be  aggregated  across  programmes  and  countries  (in  contrast  to 
programme  specific 
in  accountability, 
transparency and communication.  

indicators)  and  are 

therefore  key 

tools 

Post-2020, there will be a menu of common indicators at all three levels: outputs, direct 
results  and policy result/impact  indicators  (see  Table  11  earlier  for initial  proposals  for 
outputs and direct results). Programmes will still be able to propose programme specific 
indicators, but will be encouraged to use common indicators where possible. There will 
be  stronger  methodological  support  in  terms  of  detailed  definitions  and  methods  of 
calculation  for  outputs  and  results.  Having  common  indicator  sets  will  mean  we  can 
communicate result and impact indicators at the EU level. 

3.  More  electronic  transmission  of  data,  lighter  annual  reports,  more  debate  on 
results.  The  electronic  exchange  of  information  between  Managing  Authorities  and 
Commission via SFC has reduced administrative burden and increased the scope of data 
transmitted.  Conversely,  the  added  value  of  annual  reports  is  questionable.  The 
quantitative and the qualitative information included in them is outdated by at least half a 
year when they are submitted and by 9 months or more by the time the review process is 
finished and the data published.  

Post-2020, there will therefore be: 

  More frequent transmission of all quantitative data (notably outputs and results) 
by electronic means six times a year (instead of once via the annual report). It will 
be published rapidly via the open data platform, rather than 9-12 months later. 

  A  revamped  annual  review  meeting  between  the  Commission  and  the  Member 
State. Instead of discussion on the basis of a document representing the state of 
play  from  9  (or  more)  months  previous,  the  meeting  will  be  focus  on  policy 
dialogue  on  current  issues.  The  qualitative  side  of  the  annual  report  will  be 
replaced by a short public record of the outcome of the meeting. 

73 

 
 
5.2.  Evaluation 

The  2014-2020  period  saw  the  introduction  of  a  regulatory  requirement  for  impact 
evaluations by programmes108. This has borne fruit and we expect nearly 1000 evidence-
based impact evaluations to be completed by 2024 (Table 14). 

To build on this post-2020, there will be measures for: 

1. Improved evaluation design. To align with evaluations carried out by the European 
Commission, there will be a regulatory requirement for Member States to address in their 
evaluations the five main evaluation criteria (EU added value, effectiveness, efficiency, 
coherence  and  relevance)  from  the  EC  Better  Regulations  Guidelines.  This  would  put 
impact  evaluations  on  a  more  coherent  basis  and  feed  into  evaluation  and  reporting 
carried out at the Commission level.  

Member States will continue to be required to carry out evaluation plans and submit them 
to the Commission. This will enable the Commission to assess the quality of the plans – 
and ask Member States to correct potential gaps in their evaluation strategy.  

DG REGIO will continue to promote a full toolbox of methods, depending on the topic. 
The  2007-13  ex-post  evaluations  include  counterfactual  analysis,  theory–based  impact 
evaluation,  network  analysis,  case  studies,  as  well  as  modelling  (with  QUEST  and 
RHOMOLO).109  

2.  Better  data  availability.  The  systematic  collection  of  indicator  data  outlined  above 
will provide a better basis for evaluation. In addition, there will be:  

  Clearer reflection in Member State evaluation plans on data needs. Notably in the 
case of counterfactual analyses, which requires data on non-beneficiaries as well 
as beneficiaries. 

  Systematic collection of data at operation level.  One of the major challenges of 
evaluations for Cohesion Policy has traditionally been data at the operation level 
–  Commission  evaluations  usually  start  by  collecting  such  data.  The  new 
provisions will require managing authorities to collect and publish basic operation 
data  on  a  consistent  basis,  notably  start  and  end  date,  Fund,  specific  objective, 
total financing, public and private, EU contribution, and intervention field(s). 

  Supporting Member States in the use of "big data solutions", including the cross-
linking  of  various  forms  of  administrative  and  firm-level  data.  It  may  be 
advantageous to involve in the evaluations the bodies responsible for this data. 

3. Continued support to Member States to enhance their evaluation capacity. In the 
2014-20  period,  DG  REGIO  established  an  Evaluation  Helpdesk  which  provides  a 

108 Previously, there was an obligation for evaluation during the period, but a large majority focussed on process and 

delivery, not impacts. 

109 http://ec.europa.eu/regional_policy/en/policy/evaluations/ec/2007-2013/  

74 

 
 
 
                                                            
number  of  support  services  as  follows:  feedback  on  evaluations  plans  received  from 
Member States,  organization  of annual summer schools on evaluation issues, syntheses 
of  the  results  of  evaluation  from  Member  States,  peer  review  analyses  of  selected 
evaluations  upon  demand  from  Member  States,  methodological  support  tailored  to  the 
needs  expressed  by  Managing  Authorities,  as  well  as  an  online  library  of  evaluation 
studies  from  Member  States,  with  extended  abstracts  in  English  for  selected  studies. 
Additional  support  activities  include  exchange  of  information  on  evaluation  results, 
consultations,  and  promotion  of  good  practices,  as  well  as  REGIO-led  Evaluation 
Network meetings, organised 2-3 times a year.  

4. Collection and synthesis of interim evaluations. The above requirements will lead to 
a higher proportion and higher quality of impact evaluations. These evaluations will be 
collected,  summarised  and  the  lessons  drawn  together.  In  the  light  of  gaps  and 
outstanding  questions,  the  Commission  may  also  launch  complementary  ad  hoc 
evaluations on specific topics. This will enable interim evaluation findings by 2024/5 to 
feed into the last two years of programming, as well as preparations for the next MFF. 

5.  Ex-post  evaluations.  The  Commission  will  conduct  a  systematic  ex  post  evaluation 
for the end of the period. Member States  will also  be required to conduct retrospective 
evaluations to assess the impact of their programmes.  Moreover, the ex post evaluation 
of  2014-2020  will  be  launched  in  2022  and  the  related  findings  will  be  available  in 
2024/5,  in  time  for  the  revision  of  the  last  two  years  of  programming  and  for  the 
preparation of the next MFF. The design of the ex-post evaluation will take into account 
primarily the results available from the evaluations carried out by the Member States and 
the  findings  of  a  gap  analysis  of  the  areas  of  investments  not  sufficiently  covered  by 
these evaluations. 

Table 14 - Evaluations planned by Member States 2014-2020 

ERDF+CF  multi-Fund 
No.  %  No.  %  No.  % 

Total 

38 

294 

Impact-oriented 
Impact and procedure/implementation and/or 
monitoring/progress-oriented 
Procedure/implementation-oriented 
Monitoring/progress-oriented 
Procedure/implementation and 
monitoring/progress-oriented 
Other 
Total 
SWD(2017)452 Strategic report on the implementation of the ESI Funds 
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=SWD:2017:452:FIN 

184 
120 
91 

24 
16 
12 

4 
6 

344 

150 
107 
84 

30 
4 
4 
46 
765  100  740  100  1,505  100 

36 
19 

66 
65 

5 
3 

47 

638 

43 

20 
14 
11 

334 
227 
175 

22 
15 
12 

75 

 
 
  
  
 
 
 
 
Annex 1: Procedural information 

1.  LEAD DG(S), DeCIDE PLANNING/CWP REFERENCES 

DG for Regional and Urban Policy (DG REGIO) 

2.  ORGANISATION AND TIMING 

This  impact  assessment  accompanies  the  legislative  proposals  for  the  ERDF  and  the 
Cohesion Fund, prepared in the context of the post-2020 MFF. It has been drafted by the 
staff of DG REGIO.  

The work on the Impact Assessment was supervised by the Inter-Service Steering Group 
(ISSG), which met twice in February and March 2018.  21 DGs participated in the ISSG 
meetings110.   

An  internet-based  public  consultation  took  place  took  place  between  the  10th  January 
and 9th March 2018. The results are presented in annex 2.  

3.  CONSULTATION OF THE REGULATORY SCRUTINY BOARD (RSB) 

  An informal upstream meeting was held on 31 January with RSB representatives and 
the participation of SG, DG BUDG and JRC. During this discussion Board members 
and representatives of the horizontal Services provided early feedback and advice on 
the  basis  of  the  inception  impact  assessment.  Board  members'  feedback  did  not 
prejudge in any way the subsequent formal deliberations of the RSB.  

  A formal hearing with the RSB was held on 18 April 2018 and a negative opinion 

delivered on 20 April. 

  These comments were taken on board (see table below) and the document 

resubmitted to the RSB on 3 May. A positive opinion with reservations was delivered 
on 7 May. These comments were taken on board as in the table below. 

110  

AGRI, BUDG, CLIMA, CNECT, COMP, ECFIN, ECHO, EMPL, ENER, ENV, GROW, HOME, JRC, 
JUST, MARE, MOVE, REGIO, RTD, SG, SJ, SRSS.  

76 

 
 
 
 
                                                            
RSB opinion 

How addressed 

Round 1: Negative opinion 

(1) The report does not consider 
implications of reducing ERDF and CF 
funding capacities.  

(2) The report does not explain how 
changed objectives and allocation criteria 
would redirect the programme.  

(3) It does not consider possible (sub-) 
options for geographic coverage, regional 
eligibility and means for financial 
allocations under the ERDF/CF.  

(4) The report does not sufficiently explore 
implications of changes to the delivery 
mechanisms.   

Round 2: positive opinion, with the 
following reservations: 

(1) The content and the implications of the 
preferred option (thematic concentration) 
are not sufficiently clear. The revised 
report does not provide sufficient evidence 
that thematic concentration will contribute 
to reducing regional and national 
disparities. 

(2) The report does not spell out future 
modalities for the implementation of the 
'Berlin method' for financial allocation and 
reasons for not considering alternative 
options. 

(3) The report does not describe the scope 
and the potential impacts of a European 
cross-border mechanism. 

(4) The report does not clarify the 
consistency/complementarity between the 
ERDF/CF and the new Reform Support 
Programme. 

(1) A 10% cut in funding is now modelled 
in section 3.2, using three different options. 

(2) The text and graphs of section 3.2 show 
how the programme would be redirected 
under the various options. 

(3) Three options for geographic and 
thematic allocations are outlined in section 
3.2, with indications of the main line of 
redirection. 

(4) The chapter on delivery mechanisms 
has been developed along the lines 
requested by the RSB (see section on 
comment 8 below). 

(1) The content of all options is now 
spelled out on pages 28-29 and compared 
in tabular form in table 7. Figure 5 
considers the thematic impact of the 
preferred option by Member State. The 
impacts of the various options on regional 
and national growth rates are examined and 
compared by the QUEST macroeconomic 
model in the text on pages 30-31 as well as 
in the numbers in table 9 and figures 6 and 
7. 

(2) The key features of the Berlin method 
are now outlined in a box on page 29, 
along with the reasons for retaining this 
method and not considering alternative 
options. 

(3) The cross-border mechanism is 
described on pages 41-42. A report on 
potential impacts is quoted and the source 
footnoted. 

(4) The relationship with the Reform 
Support Programme is now explained on 
page 60. 

77 

 
 
 
 
 
 
4.  EVIDENCE, SOURCES AND QUALITY 

Evaluations carried for the Commission (DG REGIO) 
Ex Post Evaluation of the ERDF and Cohesion Fund 2007-2013 – including the Commission’s summary 
and 14 thematic work packages prepared by external evaluators for DG REGIO:  
http://ec.europa.eu/regional_policy/en/policy/evaluations/ec/2007-2013/ 

Cohesion Report 
The  7th  Report on  Economic,  Social  and  Territorial  Cohesion,  published  by  the  Commission  in  October 
2017, analysed the state of the EU's economic, social and territorial cohesion and set the scene for cohesion 
policy after 2020. 
http://ec.europa.eu/regional_policy/sources/docoffic/official/reports/cohesion7/7cr.pdf  

Studies carried out for DG REGIO in preparation for post-2020 EU funds: 
 Study  “The  use  of  new  provisions  during  the  programming  phase  of  the  European  Structural  and 

Investment Funds” 
http://ec.europa.eu/regional_policy/en/information/publications/studies/2016/the-use-of-new-
provisions-during-the-programming-phase-of-the-european-structural-and-investment-funds  

Study  “The  implementation  of  the  provisions  in  relation  to  the  ex  ante  conditionalities  during  the 

programming phase of the European Structural and Investment (ESI) Funds” 
http://ec.europa.eu/regional_policy/en/information/publications/studies/2016/the-implementation-of-
the-provisions-in-relation-to-the-ex-ante-conditionalities-during-the-programming-phase-of-the-
european-structural-and-investment-esi-funds  

Study "Implementation of the performance frameworks in the 2014-2020 European Structural and 

Investment (ESI) Funds" 
http://ec.europa.eu/regional_policy/sources/policy/how/studies_integration/impl_pf_esif_report_en.pdf  

Study “Implementation of the partnership principle and multi-level governance during the 2014-2020 ESI 
Funds” 

http://ec.europa.eu/regional_policy/en/information/publications/studies/2016/implementation-of-the-
partnership-principle-and-multi-level-governance-during-the-2014-2020-esi-funds  

Study “Setting up a database to assess impacts and effects of certain thresholds and limits  in Regulation 
(EU) No 1303/2013 (CPR)” 

http://ec.europa.eu/regional_policy/en/information/publications/studies/2016/setting-up-a-database-to-
assess-impacts-and-effects-of-certain-thresholds-and-limits-in-regulation-no-1303-2013-cpr  

Study “Use of new provisions on simplification during the early implementation phase of ESIF” 
http://ec.europa.eu/regional_policy/en/information/publications/studies/2017/use-of-new-provisions-on-

simplification-during-the-early-implementation-phase-of-esif  

Study “Improving the take-up and effectiveness of financial instruments” 
http://ec.europa.eu/regional_policy/en/information/publications/studies/2017/improving-the-take-up-and-

effectiveness-of-financial-instruments  

Studies for DG REGIO to be published in 2018 

Study on the coordination and harmonisation of ESI Funds and other EU instruments 
Feasibility study for a potential use of Budget Support to deliver ESI Funds 
Study “Effective and efficient delivery of ESI Funds - Exploring alternative delivery mechanisms” 
Study “New assessment of administrative costs and burdens in ESI Funds” 

Other relevant documents 

Report “Competitiveness in low-income and low-growth regions” 

78 

 
 
 
 
http://ec.europa.eu/regional_policy/sources/docgener/studies/pdf/lagging_regions%20report_en.pdf  

Communication “Strengthening Innovation in Europe's Regions: Strategies for resilient, inclusive and 
sustainable growth 

 http://ec.europa.eu/regional_policy/sources/docoffic/2014/com_2017_376_2_en.pdf  

Communication “A stronger and renewed strategic partnership with the EU's outermost regions” 

http://ec.europa.eu/regional_policy/en/information/publications/communications/2017/un-partenariat-
privilegie-renouvele-et-renforce-avec-les-regions-ultraperipheriques  

Communication “Boosting growth and cohesion in EU border regions” 

http://ec.europa.eu/regional_policy/en/information/publications/communications/2017/boosting-
growth-and-cohesion-in-eu-border-regions  

Summary of the LSE – DG REGIO  academic conference “Reassessing economic development policies for 
regions and cities” 

http://ec.europa.eu/regional_policy/en/information/publications/brochures/2016/reassessing-economic-
development-policies-for-regions-and-cities-growth-and-equity-institutions-and-governance-people-
and-places  

Report from the OECD- DG REGIO seminars “Rethinking Regional Development Policy Making” 

http://www.oecd.org/governance/rethinking-regional-development-policy-making-9789264293014-
en.htm  

79 

 
 
 
 
Annex 2: Stakeholder consultation – synopsis report 

The  stakeholder  consultation  on  post-2020  regional  policy  proposals  included  several 
elements:  

-  Cohesion  Forum,  held  in  June  2017  -  a  large  scale  high-level  political  event  (700+ 
participants) to discuss cohesion policy responses to the main EU economic and social 
challenges;  

-  Cohesion  Report  (7th  report  on  economic,  social  and  territorial  cohesion),  October 
2017  which  analysed  the  state  of  the  EU's  economic,  social  and  territorial  cohesion 
and  set  the  scene  for  cohesion  policy  after  2020.    The  adoption  of  the  report  was 
followed by numerous presentations and discussions with various stakeholders.  

-  Debates and exchanges on post-2020 with the Council, Parliament and the Committee 
of Regions.  Meetings of the Structured Dialogue with ESIF partners at EU level.  

-  Conferences and workshops with the academics (with the European Regional Studies 
Association – ERSA and the Regional Studies Association – RSA) and international 
organisations (OECD).  

The main element of the consultation process was online public consultation on cohesion 
policy, which took place between the 10th January and 9th March 2018. The questionnaire 
used  the  EU  survey  site:  https://ec.europa.eu/info/consultations/public-consultation-eu-
funds-area-cohesion_en. Intensive communication was carried out in order to encourage 
a high level of participation across the EU.  

The scope of the public consultation was broader than the scope of the impact assessment 
and  covered  not  only  the  ERDF  and  the  Cohesion  Fund,  but  also  the  ESF  (European 
Social  Fund),  the  FEAD  (European  Aid  to  the  Most  Deprived),  the  EGF  (European 
Globalisation  Fund)  and  the  EaSI  (European  Programme  for  Employment  and  Social 
Innovation). 

The  questions  covered  both  the  assessment  of  the  performance  of  the  current  policy  as 
well  as  the views  on  key  aspects  of  future  policy  design.  The  questionnaire  included  5 
sets  of  closed  questions  (multiple  choice)  and  4  open  questions.  There  was  also  a 
possibility to upload concise documents, such as position papers. 

Altogether  4395  replies  were  received  in  the  public  consultation  and  676  documents 
(mainly  position  papers)  were  uploaded.  The  analysis  was  made  in  line  with  Better 
Regulation Guidelines and Toolbox (Tool 54), with a support of external consultants111. 
The  methodology  included,  first,  elimination  of  duplicates  and  identification  of  the 
responses being part of a campaign, which were separated from the rest with only one set 
of  replies  being  included  in  the  main  analysis.  After  in  this  way,  the  number  of 
questionnaires  was  reduced  from  4334  to  3958.  The  analysis  of  replies  combined  the 
reading of the text with computer-assisted text analysis.  

111 Applica and Ismeri Europe.  

80 

 
 
                                                            
Out of 3958 questionnaires analysed, 47% of replies were submitted by individuals and 
53% by organisations including regional or local authorities (18%), NGOs (8%), national 
authorities  (4%),  enterprises,  business  associations,  consultancies  and  academia  (3% 
each),  churches  and  religious  communities  (2%).    Responses  to  the  consultation  were 
submitted  from  all  Member  States.  The  largest  number  of  responses  came  from  Italy 
(21%),  followed  by  Poland  (14%),  France,  Germany  and  Spain.  Some  74%  of 
respondents reported having experience with the ERDF and/or the Cohesion Fund, while 
57% with ESF; 10% of respondents did not indicate experience of any of the funds. 

Replies to multiple-choice questions  

Closed questions concerned:  

1) the importance of main policy challenges;  

2) the extent to which current programmes address these challenges;  

3) added value of EU funds; 

4) main obstacles preventing current programmes from achieving objectives; 

5) actions needed to further simplify the delivery of funds.   

1) Question on the importance of selected challenges to Cohesion Policy.  

Among  14  challenges  pre-identified  and  included  in  the  questionnaire,  the  results 
indicate  that  the  respondents  consider  reduction  of  regional  disparities  as  the  most 
important  challenge  (94%  of  respondents  considered  it  as  very  or  rather  important), 
followed  by  reducing  unemployment  (92%).  Promoting  social  inclusion,  promoting 
economic  growth  in  the  EU,  fostering  research  and  innovation  and  transition  to  low 
carbon  economy  were  also  among  the  most  important  challenges.  The  smallest 
proportion saw addressing the adverse side-effects of globalisation (72%) and promoting 
sound economic governance and reforms (68%) as important.  

Figure 1:  Share of replies to the question about the importance of policy challenges 

81 

 
 
 
Respondents with experience of the ERDF/CF and those with experience of the ESF had 
much  the  same  view  of  the  relative  importance  of  the  different  challenges.  There  was 
also little difference between countries in the relative importance attached to the different 
challenges,  despite  differences  in  national  circumstances,  which  might  suggest  a 
tendency for respondents to take an EU-wide perspective on the challenges. On the other 
hand,  organisations  tend  to  assign  higher  importance  to  challenges  in  the  area  of  their 
specific  interest;  for  example  regional  and local  authorities  -  to  territorial  cohesion and 
reducing regional disparities. 

Apart from the challenges listed in the questionnaire, other challenges mentioned by the 
respondents  included  security,  the  cultural  heritage,  demographic  change,  combating 
corruption and migration (less than 1% of responses each). 

2) Question on the extent to which current programmes address already these challenges.  

The  challenges  which,  according  to  respondents,  are  addressed  most  successfully  are: 
research and innovation (61% of respondents considered them as successfully addressed 
to a large or fairly large extent), territorial cooperation (59%) and education and long-
term learning (56%).  

On the other hand, there are some other challenges which are only to some extent or not 
at  all  addresses  by  funds,  such  as  globalisation,  sound  economic  governance  and 
reforms,  quality  of  institutions  and  promotion  of  common  values.  The  challenges 
considered  the  least  successful  in  addressing  challenges  were  the  also  perceived  as  the 
least  important  for  Cohesion  Policy  in  the  previous  question.  This  may  reflect  the 
perception  of  the  respondents  that  that  funds  covered  by  the  public  consultation  (apart 
from the EGF) are not directly targeted at these challenges. 

Figure  2: 

  Share  of  replies  to  the  question  to  what  extent  the  current 

programmes/funds successfully address these challenges  

Respondents  with  experience  of  a  given  fund  tended  to  have  a  more  likely  to  have 
favourable view of its success.  In general, respondents with experience in the ERDF/CF 

82 

 
 
 
 
tended to view the Funds as being more successful in addressing most of the challenges 
than  ESF  ones.  There  are  also  some  differences  between  countries  and  categories  of 
respondents  in  the  perception  of  success  of  policy  in  addressing  various  challenges. 
Those  from  Italy,  Slovakia,  Hungary  and  Bulgaria  regarded  policy  as  being  less 
successful than the respondents from the other countries, while those from Luxembourg, 
Romania,  Malta, Finland and Denmark  considered it more successful. Among different 
categories of respondents, regional and national authorities had the most favourable view 
of the policy’s success.  

3)  Question  to  what  extent  Cohesion  Policy  programmes  add  value  to  what  Member 
States could achieve at national, regional and/or local levels without such funds.   

Three quarters of the respondents consider that the current Cohesion Policy programmes 
effectively  add  value  to  a  large  or  a  fairly  large  extent  to  what  Member  States  could 
achieve. Some 20% replied that they add value to some extent only, and 2% - that not at 
all.  

Figure  3:  Share  of  replies  to  the  question  to  what  extent  the  current 
programmes/funds  add  value  compared  to  what  Member  States  could 
achieve without EU funds? 

To a large extent

To a fairly large
extent

To some extent
only

Don't know

Not at all

0

10

Total

20
ERDF+CF

EMPL

30

40

50

Public authorities at all level had a more favourable of the added-value of the Funds than 
the  other  respondents.  Respondents  from  Denmark,  Lithuania,  Luxembourg,  the  UK, 
Greece,  Poland  and  Slovenia  had  the  most  positive  opinion  of  the  added-value  of  the 
Funds (over 85% responded that they added value to a large or fairly large extent), while 
Austria, Croatia, Romania and Italy had the least positive opinion.  

4)  Question  about  the  obstacles  preventing  Cohesion  Policy  funds  /  programmes  from 

successfully achieving their objectives.   

Complex  procedures  were  considered  as  a  by  far  the  most  important  obstacle:  86%  of 
respondents consider it as an obstacle to a large or to a fairly large extent.  Heavy audit 
and  control  procedures  were  regarded  as  the  second  most  important  obstacle  (68% 

83 

 
 
 
 
 
 
 
indicating  this),  followed  by  lack  of  flexibility  to  react  to  unforeseen  circumstances 
(60%).  Insufficient  ownership  of  projects  was  considered  the  least  important  obstacle, 
followed  by  co-financing  rates  and  insufficient  information  about  funding  and  project 
selection.  The  opinions  of  ERDF  and  EMPL  respondents  do  not  differ  much  in  this 
respect.  

Other  obstacles  in  addition  to  those  listed in  the  questionnaire,  indicated  in  the  replies, 
included  corruption,  lack  of  transparency  in  managing  the  Funds,  lack  of  strategy  and 
priority setting in their allocation and insufficient integration with other EU funds. 

84 

 
 
 
 
Figure  4:  Share  of  replies  to  the  question  on  the  obstacles  preventing  funds  from 

achieving objectives 

5)  Question  about  the  actions  which  would  best  help  further  simplify  and  reduce 

administrative burdens for beneficiaries.  

 The most frequent choice was fewer, clearer, shorter rules, with 92% of the respondents 
indicating that this would help to simplify and reduce administrative burdens to a large or 
a fairly large extent.  It was followed by alignment of rules between EU funds and more 
flexibility  once  funding  is  available.    The  least  frequent  choice  was  More  freedom  for 
national  authorities  to  set  rules’,  as  more  than  half  of  respondents  considered  that  it 
would not help simplify and reduce burden at all, or only to some extent.  

Figure  5:  Share  of  replies  to  the  question  about  the  steps  to  further  simplify  and 

reduce administrative burden  

85 

 
 
 
Replies to open questions  

Four open questions were included in the consultation questionnaire:   

1) the added value of cohesion policy in comparison to national policies;  

2) principal objectives of Cohesion Policy;  

3) synergies between programmes or funds;  

4) a general question for respondents to add any further points they wished. 

There  were  2170  usable  and  relevant  replies  to  the  first  question,  1647  to  the  second, 
1441 to the third and 602 to the open question. 

Question 1: Added-value of cohesion policy 

The  points  made  in  reply  to  this  question  can  be  grouped  under  a  number  of  themes 
summarised below, ordered below in terms of the number of replies focusing on them: 

Territorial cooperation. Transnational and cross-border cooperation initiatives are a clear 
example of the added-value of the Cohesion Policy, facilitating the transfer of knowledge 
and exchange of good practice as well as investment which has strong cross-border spill-
over  effects.  They  also  help  lagging  regions  to  tap  into  measures  applied  in  more 
developed ones and enable joint initiatives to be undertaken to tackle common challenges 
(energy  security,  climate  change  adaptation  and  mitigation,  water  management  and 
safeguarding biodiversity. 

A  more  social  and  inclusive  society.  The  contribution  to  social  integration  and  a  more 
inclusive Europe is an important aspect of cohesion policy added-value. Cohesion policy, 
together  with  the  additional  resources  it  provides,  have  made  it  possible  to  carry  out 
social  initiatives  across  the  EU,  so  helping  to  combat  poverty  and  to  support  the 
disadvantaged.  It  has  also  helped  to  spread  common  values,  such  as  equality  and  non-
discrimination. 

Policy innovation. An essential feature of EU added-value is related to the support given 
to policy experimentation and innovation. 

Adoption  of  higher  standards.  An  important  element  of  the  added-value  of  Cohesion 
policy  lies  in  the  set  of  common  objectives  and  rules  that  requires  high  institutional 
standards  (transparency,  evidence-based  policies)  and  which  leads  to  the  investment 
financed being more efficient and effective than for national or regional policies. It has 
also strengthened institutional capacity. 

Financial  support.  Added-value  is  seen  in  the  financial  support  that  cohesion  policy 
gives to regional and national policies and the fact that the funding for national policies 
would have been much smaller in many cases without the support provided. 

Economic and territorial cohesion.   Added-value stems from Cohesion policy reducing 
regional  disparities  and  facilitating  convergence.  It  is  also  seen  in  the  contribution  that 
the  EU  funding  made  to  mitigate  the  negative  effects  of  the  global  economic  and 
financial crisis, which would have been significantly more serious without EU support. 

86 

 
 
Networking  and  exchanges  within  countries.  Added-value  arises  not  only  from  ETC 
programmes  but  also  from  the  opportunities  for  cooperation  and  partnership  between 
MAs within countries. 

Question 2: Necessary changes in objectives of Cohesion Policy funds/programmes 

The replies to this question focused mainly on changing the priority given to particular 
objectives rather than on suggesting how existing ones might be extended or modified.  

Environment, energy, sustainable urban development.  Cohesion policy in future should 
put  more  emphasis  on  objectives  such  as  climate  change  mitigation  and  adaptation, 
energy  transition,  biodiversity,  sustainable  use  of  natural  resources  and  environmental 
protection and remediation. 

Transregional cooperation. Since cross-border cooperation programmes have significant 
added-value,  they  should  have  greater  strategic  and  financial  importance  in  the  next 
programming  period.  However,  such  programmes  should  not  focus  on  specific  themes 
(such as innovation) but need to be more flexible so as to be able to respond to emerging 
transregional challenges (e.g. common public services, clean transport, energy transition 
and climate change). 

Territorial  competitiveness:  SMEs  and  tourism.  Tourism  is  one  of  the  main  levers  for 
achieving  economic  growth,  employment  and  social  development  at  local  level.  In 
consequence,  more  emphasis  should  be  put  on  supporting  tourism  in  the  future 
programming period, along with innovation in SMEs. 

Administrative  simplification.  Many  responses  under  this  theme  focused  on  the  need  to 
overcome  the  administrative  and  management  issues  that  limit  the  effectiveness  and 
efficiency  of  cohesion  policy  funds  rather  than  on  providing  suggestions  relating  to 
objectives. They called for simplification in this regard so that efforts can be focused on 
the real objectives of policy.  

Education  and  employment.  According  to  respondents,  ESF  support  should  be  multi-
stage  and  comprehensive  and  be  able  to  extend  beyond  the  timeframe  of  a  single 
programming period. A number of ESF initiative (such as the Youth Guarantee), should 
be  reviewed  to  make  them  less  restrictive  and  open  to  more  broadly-defined  target 
groups (such as in terms of age). 

Combating poverty and promoting social inclusion. ESF and FEAD support for creating 
a more inclusive society in the next programming period should be increased.  

Question 3: Strengthening synergies between programmes/funds.   

Most  of  the  replies  under  this  theme  suggested  merging  funds,  harmonising  their 
regulations  or  ensuring  more  coordination  between  programmes  in  terms  of  their 
objectives and implementation.  

The need for simplification was again stressed either as a potential outcome of merging 
funds  or  as  a  major  objective  in  itself  which  was  more  important  than  increasing 
synergies or reducing overlaps, which many regarded as not being important. A number 

87 

 
 
of  respondents  called  for  funds  to  be  merged  so  long  as  it  led  to  simplification  and  a 
reduction in administrative burdens. 

Question 4: Further points raised by the respondents 

Need  for  streamlining  and  simplifying  administrative  requirements.  Cohesion  Policy 
procedures involve excessive complexity and bureaucracy, which limits the effectiveness 
of programmes. The regulations need to be simplified and made more flexible. Excessive 
auditing and too many controls are a particular problem in respect of a small projects or 
small OPs. The focus should be more on results and less on administrative aspects. 

Doing  more  to  address  local,  social  and  territorial  challenges.    Cohesion  policy  is 
important  in  building  more  democratic,  prosperous,  inclusive  and  resilient  societies 
throughout  the  EU  and  not  only  in  the  less  developed  regions.  Cohesion  policy  should 
maintain  its  current  strategic  focus  and  framework  and  continue  to  be  the  main  public 
investment policy in the next programming period. The current configuration of Funds, 
geographical  coverage  and  the  core  principles  should  be  maintained,  but  the  share  of 
cohesion policy in the future EU Budget needs to be increased or at least kept unchanged. 
Information,  and  publicity,  on  the  projects  supported  should  improve  to  ensure  more 
transparency and make people more aware of the EU added-value which is generated.  

The  place-based  dimension  of  development  policies  should  be  strengthened  and  there 
should be greater flexibility in priority setting and resource allocation in order to promote 
‘smart strategies’ targeted at tackling different territorial needs. 

Smart and sustainable urban development.  The urban dimension is of major importance 
in  local  and  regional  development.  After  2020,  cohesion  policy  should  pay  greater 
attention to urban planning and aspects which can increase the attractiveness of cities as 
well as their economic potential. However, cities and metropolitan areas cannot prosper 
at  the  expense  of  surrounding  rural  areas,  so  particular  attention  should  be  given  to 
infrastructure connecting urban and rural areas if balanced development is to be achieved 
and depopulation avoided. 

Position papers  

Overall 676 documents were uploaded by 582 different respondents –around 15% of all 
those  who  participated  in  the  consultation.  Over  half  of  all  papers  were  uploaded  by 
respondents from four countries: Germany, Belgium, France and Italy. The vast majority 
- nearly 90% - of the papers were uploaded by organisations or individuals responding in 
a professional capacity, mainly by regional or local authorities and NGOs. 

In  general  the  papers had a clear link with  the main issues  covered by the consultation 
and  which  were  developed  in  some  detail  in  the  reflection  papers  published  by  the 
Commission,  particularly  the  reflection  paper  on  the  Future  of  EU  Finance.  In  many 
cases,  they  reiterated  the  points  made  in  the  replies  to  the  open  questions  summarised 
above. The main points to come out of the positions papers are outlined below. 

The  most  frequently  quoted  objective  of  cohesion  policy  should  continue  in  the  post-
2020 period to be to reduce disparities between regions and to promote economic, social 
and territorial cohesion across the EU.  

88 

 
 
In terms of eligibility, while some respondents emphasised that all EU regions should be 
supported, the consensus was that the focus should continue to be on the less developed 
ones.  

There were a number of proposals to broaden the set of indicators used beyond GDP (or 
GNP)  per  head  to  determine  the  allocation  of  funding.  These  indicators  should  cover 
employment, education, demography and the environment, though a note of caution was 
expressed that any extension should not reduce the concentration of support on the less 
developed regions.  

Bottom-up approaches, shared management structures and multi-level governance were 
considered by virtually all respondents as more suitable for addressing local needs than 
centralised structures. Some expressed the need for a more meaningful application of the 
partnership principle.  

Result-orientation  should  continue  to  be  the  Leitmotif  of  cohesion  policy  in  the  post-
2020 period according to all respondents who expressed a view on this issue. An efficient 
monitoring system, appropriate indicators and independent evaluations are recognised as 
essential pillars of a result-oriented policy. 

Most respondents agree that thematic concentration is helping to achieve larger impacts 
and more significant results. It should continue to be a principle in the next period. Some 
consider in addition that ex ante conditionality has helped to avoid dispersion of funding 
and  to  ensure  stronger  links  between  cohesion  policy  objectives  and  national  strategies 
and structural reforms. 

A  number  of  investment  priorities  were  advocated,  in  particular  i)  research,  innovation 
and  SMEs  support;  ii)  digital  infrastructure  and  ITC;  iii)  urban  development  based  on 
digitalisation  (i.e.  smart  city  development);  iv)  environment  and  energy  efficiency;  v) 
combating poverty and social exclusion.  

Cooperation between regions should be strongly supported not only in the form of cross-
border cooperation but also across regions all over Europe. This is essential for making 
smart specialisation happen. Innovation in high tech sectors often depends on knowledge 
exchanges and spill-overs from cooperation between clusters or knowledge hubs across 
Europe.  

Very  different  positions  were  expressed  in  respect  of  the  organisation  and  the 
management  of  the  funds  in  the  future.  Proposals  range  from  harmonising  rules  and 
regulations to creating a unique fund merging all the current ones together. The objective 
is better coordination and integration of the instruments. 

Better coordination and streamlining is not only needed between the different ESI funds 
but also with the other EU funding instruments. Regulations should be harmonised and 
horizontal rules, such as state aid rules, should be the same everywhere. 

There  is  a  strong  call  for  simplification  of  procedures  and  rules,  less  control  and  more 
trust.  Controls  and  audits  are  perceived  as  excessive  and  working  against  the  effective 
application  of  the  subsidiarity,  proportionality  and  partnership  principles.  Excessive 
control  causes  delay  in  programme  implementation.  Proposals  for  improvement  range 
from the ‘single audit principle’ to ‘performance-based approaches’. 

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Simplification  of  regulations  and  procedures  was  called  for  by  national  and  local 
authorities  in  particular.  Regulations  should  define  the  essential  structural  elements  but 
Member  States  should  be  given  flexibility  to  adapt  the  framework  to  their  specific 
national  and  regional  needs.  The  simplified  cost  option  is  seen  as  an  effective  tool  for 
simplifying and accelerating payment procedures.  

Many  of the respondents urge better  communication in respect of EU policy objectives 
and outcomes and the role of Europe in people’s daily lives. 

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Annex 3: Relevant Evaluations 

The ex post evaluation of the ERDF and Cohesion Fund 2007-13 was completed in 2016.  
The results include the Commission’s summary112, a synthesis report113 and 14 thematic 
work packages. They are available on website:  
http://ec.europa.eu/regional_policy/en/policy/evaluations/ec/2007-2013/   

The Commission’s summary was discussed with the Regulatory Scrutiny Board in June 
2016 and revised following its opinion114.  

To ensure independence, the ex post evaluation was tendered to independent evaluation 
companies  or  consortia,  split  into  14  lots  (with  63  programme  and  20  project  case 
studies) to enable each to be given to a specialist in the field. Over 3000 beneficiaries and 
1000 Managing authority employees were interviewed, 530 stakeholders participated in 
10 seminars to discuss the results.  For each thematic contract, scientific experts external 
to the companies commented on each main deliverable.  

Here is the summary of the evaluation.  

Ex post evaluation of the ERDF and Cohesion Fund 2007-13: summary115 

Cohesion  Policy  is  the  key  investment  policy  at  the  European  level,  delivering  EUR 
346.5 billion of European money in the 2007-2013 programming period. This evaluation 
examines  the  impact  of  two  of  the  three  funds  which  make  up  Cohesion  Policy  –  the 
European Regional Development Fund and Cohesion Fund (total EUR 269.9 billion).  

The  ERDF  and  Cohesion  Fund  supported  a  wide  range  of  projects  –  from  enterprise 
support to infrastructure, from urban regeneration to culture and social infrastructure. For 
almost all the Cohesion Countries, the sum of these two funds was equivalent to between 
20%  and  60%  of  government  capital  investment  –  a  crucial  contribution  in  a  period 
including the economic and financial crisis.  

The  goals  of  Cohesion  Policy  are  the  reduction  of  disparities  in  regional  development 
and the promotion of economic, social and territorial cohesion. The evaluation examined 
outcomes in terms of overall development (e.g. in terms of GDP/head) as well as at the 
level of the various individual policy themes which are major constituents of economic, 
social and territorial cohesion. 

Impact on regional income and GDP/head 

For the aggregate level, the ex post evaluation estimated that 1 euro of Cohesion Policy 
investment in the period 2007-13 will generate 2.74 euros of additional GDP by 2023. In 
other words, Cohesion Policy will be responsible for nearly EUR 1 trillion of additional 
GDP  (at  EUR  950  billion,  equivalent  to  almost  the  entire  EUR  975.8  billion  of  EU 

112 SWD(2016) 318   
113 http://ec.europa.eu/regional_policy/sources/docgener/evaluation/pdf/expost2013/wp1_synth_report_en.pdf  
114 RSB opinion:  https://ec.europa.eu/info/sites/info/files/rsb_opinion_on_regio_swd22_july_2016.pdf  
115 SWD(2016) 318, section 1: Executive Summary 

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budget for 2007-13 – a strong return on investment). 

Every region and country in the European Union benefits from Cohesion Policy, even the 
net payers. The positive effect takes account of the financing of Cohesion Policy via the 
EU budget and is the sum of direct effects (via the investment) and indirect effects (via 
increased trade) minus the contribution. The impact averages 4.2% of GDP in cohesion 
countries and is small but always positive in non-cohesion countries, averaging 0.4% of 
GDP by 2023. 

In  previous  programming  periods  (notably  1994-99  and  2000-2006),  Cohesion  Policy 
contributed  to  a  steady  process  of  convergence  (a  reduction  in  regional  disparities  in 
GDP/head)  in  the  EU,  in  a  context  where  other  developed  countries  generally 
experienced  no  convergence  (or  even  divergence).  The  financial  crisis  of  2007-2008 
came  at  the  beginning  of  the  programming  period  examined  in  this  document,  and 
created  a  poor  climate  for  investment  and  convergence.  The  result  is  that  regional 
convergence  over  the  period  was  very  small,  with  the  strong  suggestion  from 
econometric work that there would have been divergence without Cohesion Policy. 

Regional GDP/head is just one indicator of impact. A more detailed and complete picture 
can be seen by examining the contribution to various individual policy themes across the 
fields of economic, social and territorial cohesion. 

Impact across various fields of economic, social and territorial cohesion 

Estimates  based  on  available  monitoring  data  indicate  that  400  000  SMEs  were 
financially supported. Although this is only 2% of firms in the EU, support focussed on 
strategic enterprises – in the manufacturing sector, an estimated 15% of small firms and 
over a third of medium sized firms received direct financial support. Monitoring data also 
indicates that this support led directly to the creation of 1 million jobs – to put this into 
perspective, a net total of 3 million jobs were created in the EU economy over the 2007-
13 period. 

A  major  result  of  support  was  helping  SMEs  withstand  the  effects  of  the  crisis  by 
providing  credit  when  other  sources  of  finance  had  dried  up.  Moreover,  some  of  the 
programmes used  ERDF support as a test-bed  for  experimental and innovative policy  - 
research and innovation in Denmark, Sweden and Finland, the ‘Living Labs’ experiment 
in Puglia (Italy) or the Inno-voucher scheme in Lithuania. 

3700  large  enterprises  were  also  supported,  bringing  new  technology  and  improved 
productivity  to  the  region  as  well  as  generating  spillovers  to  SMEs,  the  human  capital 
base and social infrastructure. 

Transport  bottlenecks  have  been  removed,  travel  times  reduced  and  urban  trams  and 
to 
metros  supported.  Vital 
environmental  quality,  this  includes  the  construction  of  4900  km  of  roads,  mostly 
motorways  (of  which  2400  km  on  the  TEN-T).  It  also  includes  the  construction  or 
upgrading to necessary standards of 2600 km of TEN-T railway. 

to  economic  development  and  often  contributing 

Cohesion  Policy  has  also  made  a  significant  contribution  to  the  environment:  a 
substantial number of landfill sites which did not comply with EU standards were closed 
down while in the Czech Republic, Hungary, Lithuania, Poland and Slovenia, as well as 

92 

 
 
Croatia, the proportion of waste which was recycled was increased by over 10 percentage 
points.  Moreover,  in  Lithuania,  energy  efficiency  measures  in  864  public  buildings 
reduced consumption 236 GWh a year by end 2014, which implies a cut of almost 3% in 
overall annual energy consumption in the country. 

Investment  in  social  infrastructure  led  to  the  modernisation  of  schools  and  colleges  in 
Portugal, benefiting over 300 000 children and young people as well as the upgrading of 
schools and healthcare facilities in Poland for 1.9 million people. 

Lessons for the future 

The  evaluation  found  many  lessons  specific  to  individual  policy  themes.  However  two 
particular cross-cutting lessons for the future emerged: 

-  The monitoring of Cohesion Policy improved from the previous 2000-2006 period, and 
there  was  a  strong  focus  on  investing  the  money,  delivering  projects  and  generating 
outputs. However very few 2007-13 programmes had a "focus on results", setting clear 
goals for changes at the level of the region, selecting projects accordingly and tracking 
progress towards those goals. This was addressed in the 2014-20 regulations through the 
result orientation, but systematic delivery through the period will require a cultural shift 
in many cases. 

-  An  important  feature  of  the  2007-13  period  was  the  increased  use  of  financial 
instruments3 (EUR 11.5 billion, up from 1 billion in the previous period). These have the 
potential to be a more efficient means of funding investment across many policy  areas, 
but the legal provisions were not detailed enough in 2007-2013. This, together with the 
inexperience  of  many  implementing  bodies,  led  to  delays  in  implementation.  A  further 
challenge is spreading financial instruments beyond enterprise support, where over 90% 
of 2007-13 financial instrument funding was concentrated. 

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Annex 4: the macro-economic models 

Quest 

QUEST has been developed by DG Economic and Financial Affairs (DG ECFIN) of the 
European  Commission.  The  model  is  regularly  used  for  the  analysis  of  key  fiscal  and 
monetary policy scenarios, for assessing the impact of the structural reforms, or else for 
contributing to the economic projections of DG ECFIN. For the analysis of the Cohesion 
and Regional Funds, we adopted the R&D version of QUEST III (see Roeger, W. et al., 
2008116) which is a semi-endogenous growth framework based on Jones (2005)117. 

The model belongs to the class of New-Keynesian dynamic general equilibrium (DGE) 
models  that  are  now  widely  used  in  economic  policy  institutions.  It  provides  a  fully 
micro-founded, integrated and optimization-based representation of the economies of the 
Member States.  

QUEST  is  structured  around  building  blocks  which  represent  the  behaviour  of 
fundamental economic agents and interactions. The model describes fully the dynamics 
of the system in a general equilibrium framework where changes in the conditions for a 
particular block are transmitted to the other blocks though various market interactions.  

The  model  allows  also  considering  a  wide  range  of  policy  interventions  being  closely 
related  to  the  EU  Regional  Policy,  from  support  to  R&D  to  the  provision  of  public 
infrastructure. The model covers the 27 Member States and their trade links among each 
other,  and  with  the  rest  of  the  world.  The  model  also  allows  for  international  R&D 
spillovers in order  to  capture the fact that technology  is  not fully appropriable and that 
innovation can also be absorbed by non-innovative agents (e.g. through imitation). In this 
respect,  the  model  takes  into  account  the  fact  that  programmes  implemented  in  a 
particular  Member  States  produce  an  impact  in  the  other  countries  by  affecting  the 
intensity of trade and/or knowledge flows.  

In  general,  the  analysis  is  conducted  by  simulating  and  comparing  two  scenarios.  The 
baseline  scenario  relies  on  the  natural  trend  in  the  economy,  excluding  any  policy 
intervention. The second scenario features the policy interventions for cohesion and rural 
development  and,  by  comparison  with  the  baseline,  it  allows  for  the  analysis  of  the 
impacts  of  the  policy  on  the  economy.  For  a  given  variable  the  difference  between  the 
values  obtained  under  the  two  scenarios  is  interpreted  as  the  impact  attributable  to  the 
policy, and it is expressed as a percentage deviation from the baseline118.  

Further reading 

116 Roeger W., Varga J. and J. in ’t Veld (2008), "Structural reforms in the EU: a simulation based analysis using the QUEST model with endogenous growth", European 

Economy Economic Paper N° 351. http://ec.europa.eu/economy_finance/publications/pages/publication_summary13529_en.htm  

117 Jones, C. (1995), "R&D-based models of economic growth", Journal of Political Economy, 103(4):759-84. 

118 The baseline is established on the basis of assumptions concerning the trends of key variables which is common practice in modelling exercise. The results, which correspond 

to the difference between the baseline and the 'with-policy' scenarios, are relatively independent from the baseline. 

94 

 
 
                                                            
Varga  J.  and  J.  in  't  Veld  (2014),  "A  model-based  analysis  of  the  impact  of  Cohesion 
Policy  expenditure  2000-05:  Simulations  with  the  Quest  III  endogenous  R&D  model," 
Economic Modelling 28: 647-663;  
http://ec.europa.eu/economy_finance/publications/pages/publication16016_en.pdf 

Rhomolo 

RHOMOLO is a dynamic and spatial computable general equilibrium model developed 
jointly by the DG REGIO and the Joint Research Centre of the European Commission. 
The  model  simulates  the  impact  of  policy  interventions  on  the  economies  of  267  EU 
NUTS-2 regions, taking into account the spatial spill-overs that are most relevant for the 
policy.  

The  model  heavily  borrows  from  New  Economic  Geography  and  endogenizes  the 
distribution  of  economic  activity  across  the  regions  concerned,  therefore  allowing  to 
capture the impact of the policy on location choices and spatial organization of economic 
activities in the EU. 

The model distinguishes investment in transport infrastructure from the other investment 
in  infrastructure.  Such  investments  are  indeed  assumed  to  reduce  transport  costs  inside 
and  between  the  regions  concerned  which  makes  the  model  capable  of  simulating  the 
specific  impact  of  this  type  of  interventions.  Improvement  in  transport  infrastructure 
implies  that  regions  have  a  better  access  to  the  EU  markets  and  hence  which  allows 
increasing  their  exports  and  hence  boosts  the  level  of  economic  activity.  Enhanced 
accessibility also means a reduction in the price of imported intermediate goods and of 
consumption  which  contributes  to  reduce  firms'  production  costs  and  increase  real 
income of households119.  

119 Detailed documentation on the model is available at https://ec.europa.eu/jrc/en/rhomolo. 

95