Opinion of the European Committee of the Regions on enhancing Cohesion Policy support for regions with geographic and demographic handicaps (Article 174 TFEU)
Date: 2022-12-01
Institutions: Commission for Territorial Cohesion Policy and EU Budget, European Committee of the Regions
Subjects: EU regional policy, cross-border cooperation, economic and social cohesion, frontier region, island region, less-favoured region, regional cooperation, regional development, rural region








C_2023079EN.01003601.xml










2.3.2023   


EN


Official Journal of the European Union


C 79/36






Opinion of the European Committee of the Regions on enhancing Cohesion Policy support for regions with geographic and demographic handicaps (Article 174 TFEU)
(2023/C 79/07)












Rapporteur:


Marie-Antoinette MAUPERTUIS (FR/EA), President of the Corsica Assembly









POLICY RECOMMENDATIONS

THE EUROPEAN COMMITTEE OF THE REGIONS (CoR)








1.


points out that Article 174 TFEU instructs the EU and its Member States to guarantee that the EU objective of economic, social and territorial cohesion (Article 3(3) TEU) is particularly enforced in rural areas, areas affected by industrial transition, regions which suffer from severe and permanent natural or demographic handicaps, such as the northernmost regions and regions with very low population density, islands, cross-border and mountain regions. This should also apply to regions with much older populations;












2.


insists that, though EU Cohesion Policy has a key role to play in enforcing Article 174 TFEU, this mandate is binding on all other EU policies (in particular the European Green Deal and the Digital Agenda), which must not undermine the goal of territorial cohesion between these territories;












3.


stresses that respecting the principles of shared management of Cohesion Policy, and indeed the principle of subsidiarity (Article 5(3) TEU), can never be used as an argument to undermine the application of Article 174 TFEU at national level;












4.


welcomes the fact that the new round of Cohesion Policy introduces a new policy objective (PO5) ‘Europe closer to EU citizens’, which can be used by the Member States to better target support to Article 174 areas;












5.


notes that, currently, the 2021-2027 Partnership Agreements and programmes are finally being finalised;












6.


believes that the new Territorial Agenda 2030, together with the new Long-Term Vision for Rural Areas, the Rural Pact and the recently proposed Islands Pact (1), are together providing Article 174 areas with a strong, new political momentum;












7.


considers that the many new EU funds that explicitly or implicitly have a territorial dimension (EU Structural and Investment Funds, including the Just Transition Fund, the European Agricultural Fund for Rural Development, as well as the Recovery and Resilience Facility) are mostly being programmed in isolation. In reality, what all Article 174 TFEU territories need, both those sharing the same structural handicaps within a Member State, as well as those between Member States, is a truly integrated approach to all of these interventions;












8.


is concerned, however, that this is not sufficient, as the recent 8th Cohesion Report shows an increase in disparities, particularly within the Member States, which disproportionately affect Article 174 regions because their structural handicaps entail additional costs;












9.


believes that other EU policies, particularly transport, energy, the single market and competition, need to reassess their impact when it comes to protecting and promoting Article 174 regions. Very often the needs of these regions are considered at the end-stages of the policy design process, for instance when identifying regional state aid maps, rather than from the outset, such as when defining the regional aid guidelines;












10.


stresses that the EU and its Member States must comply with Chapter 1, Article 3 as well as with Chapter 3, Article 20 of the European Social Pillar, as well as with Article 34(3) (social and housing assistance), Article 35 (healthcare), and Article 36 (access to services of general economic interest) of the Charter of Fundamental Rights of the EU when ensuring access to basic welfare and a basic level of wellbeing through the provision of basic public services, particularly in Article 174 areas;












11.


proposes that each Member State provide basic public services in Article 174 areas, in line with the European Social Pillar and the Charter of Fundamental Rights. The provisions of the Protocol on services of general interest (2) should be taken into account in particular in this regard, for example the broad discretion of national, regional and local authorities in organising services, the promotion of universal access, and so on. The provision of effective and sustainable cross-border public services should be systematically explored (3). Conversely, the Commission must ensure, when reviewing the National Reform Programmes, the Partnership Agreement, the CAP Strategic Plans, the National Recovery and Resilience Plans and the delivery of the corresponding EU funds in the Member States, that these support the maintenance and development of such basic services. Additionally, EU and national support for Article 174 territories must be specifically reflected in the Cohesion Report (Article 175 TFEU);












12.


believes that the new Interregional Innovation Investments (I3) instrument, in whose development the CoR played a key role (4), along with regional networks such as the Vanguard Initiative, EARTO, ERRIN and the CPMR, among others, should be the template through which funds from the RePowerEU initiative and the National Plans under the Recovery and Resilience Facility are used to tie together areas sharing the same or similar challenges in order to test new innovative solutions that can then be replicated EU-wide;












13.


believes that rural proofing, island proofing and, more widely, territorial impact assessment (incl. cross-border impact assessment) must not be a just an option, as recognised in the 2021 Better Regulation package, but a core element of EU policy formulation in order to respect the ‘do not harm cohesion’ principle. This will ensure that new EU policies enhance territorial cohesion across all policy areas, hence the need for these assessments to be coordinated by the Secretariat-General of the Commission and the need to make full use of the Fit for Future platform, RegHub and the CoR itself, in order to ensure that the Commission has detailed evidence of the potential impacts on the ground;












14.


welcomes, in this respect, the newly developed first EU guide on rural proofing (5) and the Territorial Agenda pilot actions (6) on issues such as territorial impact assessment and depopulation, which had active CoR contributions (7); commits to fostering ownership and use by national governments of these key tools;












15.


stresses that developing the present limited application in practice of Article 174 TFEU must not effect, in any way, either Article 349 of the Treaty, which provides special protection for outermost regions, or the specific treatment of the northernmost sparsely populated areas protected by the respective Accession Treaties;





EU funding to support regions with specific territorial features









16.


regrets that, unlike the other four policy objectives, PO5 does not include any form of territorial earmarking outside the 8 % of the ERDF earmarked for sustainable urban development (which may be used for ITI and CLLD). This favours a thematic approach and penalises territories with specific handicaps protected by Article 174 TFEU;












17.


sees the need to include a comprehensive budgetary response to the demographic challenge, allocating additional funds, in all relevant EU programmes and policies, in particular in all the Structural Funds, so as to better combat the social, economic and territorial divide affecting EU regions experiencing depopulation;












18.


urges the Commission, which at this very moment is holding negotiations with the Member States on the Partnership Agreement, the CAP Strategic Plans and the programmes, to challenge the relevant Member States to demonstrate that they are providing specific support for those Article 174 areas under the Structural and Rural Development Funds;












19.


encourages the relevant Member States to apply specific earmarking to Article 174 territories in these National Plans, in order to act as a strong signal for managing authorities to take these regions into consideration more effectively in their programmes;












20.


encourages the Member States, in particular, to create one-stop-shops at regional or sub-regional level for EU Cohesion Policy funds (ERDF, ESF+, JTF, etc.) and EARFD, in order to facilitate the understanding of and access to these funds for the beneficiaries in the territories covered by Article 174 TFEU;












21.


recommends making increased use of territorial tools such as Integrated Territorial Investments (ITI) and Community-Led Local Development (CLLD) in order to invest EU and national funds in overcoming territorial handicaps in an integrated way using a bottom-up approach, however, urges the Commission to increase the co-financing rate for territorial programming tools implemented in territories with geographical and demographic handicaps covered by Article 174, and to design implementation and result indicators that are more in line with the nature of the measures implemented in these territories;












22.


considers it essential that the Structural Funds be implemented more flexibly in the rural areas that are more severely affected by population decline, so as to allow them to be used jointly in the same project, with provision for advances and in a way that is complimentary with the financial instruments;












23.


considers that the Recovery and Resilience Facility has an equally important role to play in Article 174 areas as most National Recovery and Resilience Plans will support structural reforms, modernisation of public services, green transition and support for SMEs. Therefore, it is incumbent on the Member States to ensure, and the Commission to verify, that National Recovery and Resilience Plan investments do factor in the specific needs and handicaps of those areas;












24.


Asks the European Commission to develop new indicators in order to better assess and measure the severity of the geographical and demographic handicaps in regions mentioned in Article 174 of the TFEU. Considers that, once such solid indicators are available, they should be used to adapt the distribution of European structural and investment funds for the next period to go beyond the sole GDP indicator in order to compensate for the overall growth difficulties faced by these regions mentioned in Article 174 of the TFEU;












25.


calls for post-2027 Cohesion Policy to include specific EU-level regional targeting and earmarking for regions with areas mentioned in Article 174, with a minimum aid threshold in Partnership Agreements. Potentially, this should also comprise other policies in the EU budget that have a territorial dimension, including any successor to Next Generation EU;





Rural areas









26.


insists that EU policies should promote the attractiveness of these territories and protect their quality of life and the rural population by ensuring equal access to basic services and opportunities. This concerns not just Cohesion Policy but also EU agricultural, single market, competition, environmental and energy policies;












27.


believes that as plans oriented towards recovery, the Structural Funds and NextGenerationEU should serve to give a socioeconomic boost to rural areas affected by depopulation, given that the negative impact of the pandemic can exacerbate territorial imbalances. From a digitalisation perspective, they should serve to ensure quality digital connectivity for the whole population. With regard to the green transition, they should serve to make these rural areas places for investment and innovation in the green economy, renewable energy, sustainable tourism and the circular economy;












28.


draws the Commission’s attention to the urgent need to go beyond the new Territorial Agenda 2030 and the new Long-Term Vision for Rural Areas in order to put in place a European Rural Agenda that can mobilise specific indicators to verify the use of structural funds in Article 174 regions (with specific data on mountain ranges, islands, rural areas, areas experiencing demographic and industrial decline, etc.). These indicators should be defined at sub-regional level (such as NUTS 3 and LAU), where the greatest disparities in development are to be found, and should be used when rural proofing all EU policies;












29.


considers that rural residents have to travel further than their urban counterparts to reach many public and private services and rely on cars or buses to reach most services; as highlighted by the 8th Cohesion Report, highlights the role of smaller cities and, in particular, of towns and villages, which act as ‘regional centres’ for people living in the surrounding rural areas who come to these places for services;












30.


regrets, however, that across many parts of Europe, towns and medium-sized cities are suffering a process of structural decay to the benefit of large metropolitan areas, which in turn doubly affects rural areas and areas where rural-urban links are not sufficiently addressed;












31.


stresses that the new Long-Term Vision for the EU’s rural areas up to 2040, (LTVRA) together with the Rural Pact and an EU Rural Action Plan, must set out, with the Member States and regions, clearly defined proposals for immediate action, specific targets, and investment towards stronger, connected, resilient and prosperous rural areas and communities;












32.


is concerned that this growing rural-urban divide is contributing to political polarisation, a feeling people are being denied their democratic rights, and a lack of trust in national institutions, and in particular in the EU, as increasingly demonstrated by scientific studies;












33.


calls for the Member States to include Structural Fund earmarking for CLLD and ITI to be invested in rural areas, and to ensure consistency with investments from the EARDF and the Structural Funds in the same territories;












34.


believes that the Rural Revitalisation Platform should act as a one-stop shop for rural communities, project owners and authorities to work together, including at a technical and political level between rural and urban authorities;












35.


strongly argues that rural proofing can be neither a tokenistic nor a technocratic exercise, but that it must be embedded in the development of all EU territorially-sensitive legislation, and must include a participatory element in order to consider the potential impacts and implications for rural areas;












36.


stresses that the long-term vision for rural areas should support broader data collection, monitoring and foresight on rural-urban partnerships at EU level, through the new rural observatory or by means of support provided by ESPON. This observatory should collect data and analysis on rural areas to support policy-making;





Areas affected by industrial transition









37.


believes that the EU Industrial Strategy and COVID-19 have demonstrated that it is necessary to put industry and industrial communities at the top of the EU policy agenda so that the GDP share of industry is drastically increased in the future;












38.


points out that the rurality of the insular areas, due to their territorial discontinuity, complex demography, limited territory, and fragmentation, entails certain particularities and challenges that must be taken into account and addressed in a long-term vision for rural areas;












39.


considers that not only must the Just Transition Fund interventions be properly embedded within Cohesion Policy smart specialisation strategies, but that, more importantly, reinvigorating Europe’s declining industrial areas must go beyond cohesion to become a central part of the Recovery and Resilience Facility and its successor programmes; these programmes should be also embedded in cohesion policy or at least implemented in better synergy with cohesion policy;












40.


is convinced that this represents an opportunity for regions undergoing industrial transition, as the priority must no longer be simply to compensate for past restructuring, but to use the undervalued know-how and assets of these regions in order to rapidly relaunch the European industrial base;












41.


believes that the priorities of these old and new EU funds must be to support competitiveness, upskilling and environmental restoration, to promote the role of SMEs, ‘science-to-industry’ and ‘university to market’ (i.e. bringing ideas to the market), and to boost industrial culture;












42.


stresses that the rehabilitation of areas affected by the industrial transition could be an excellent way to combat urban sprawl, preserve rural land and biodiversity, and achieve the ecological transition;












43.


is convinced that these funds and interventions must not operate in isolation but within clearly defined integrated territorial plans that in turn allow for cooperation with similar areas from the same Member State and the rest of the EU, for example mirroring the template of the recently launched EU Mission: Climate-Neutral and Smart Cities initiative (8);





Regions which suffer from severe natural and permanent demographic handicaps









44.


is concerned by the findings of the 8th Cohesion Report, which confirms that the share of the EU population living in a shrinking region is projected to reach 50 % by 2040, which will affect the availability of public services, employment opportunities, and the democratic legitimacy of national and EU institutions;












45.


welcomes the fact that the Commission is giving more pre-eminence to demographic issues in the 8th Cohesion Report, the report on the ‘Impact of the demographic change in Europe’, and subsequent mapping exercises;












46.


believes that the ‘brain drain’ proposals (9), which were requested by the CoR (10) and that are currently in preparation to address population decline, need to regard this issue not only as a human capital issue of migration to other Member States but to focus primarily on the territorial consequences of population decline within Member States;












47.


stresses that the first ever EU-wide definition of a demographically declining area for the purposes of EU Structural and Investment Funds, originally put forward by the CoR (11) and included in the ERDF Regulation (EU) 2021/1058 of the European Parliament and of the Council (12), should be used to better spatially target other relevant funds beyond Cohesion Policy, particularly for the Just Transition Fund and the National Recovery and Resilience Plans, as all these funds shall contribute towards integrated and place-based actions;












48.


also believes that this definition should be reviewed regularly in order to take into account and effectively address the problems these areas face; therefore encourages exploring the possibility of using territorial classifications more suited to the actual problem in each territory, whether these be NUTS3-level territories or, below that level, local administrative units, which are in some cases adjacent to them;












49.


is concerned that only a small minority of Member States, regions and groups of regions are developing integrated strategies against depopulation that provide integrated responses to this problem, including spatially targeted national and EU funds, fiscal/state aid incentives and the provision of basic services;












50.


wishes, however, to point out that densely populated areas or areas with much older populations may also have demographic handicaps, particularly if they are also affected by other factors mentioned in Article 174, such as their island status, seasonal economic activities and the need to provide basic services throughout the year, hence the need for better data at sub-regional levels (NUTS3 and LAU);












51.


believes that the Commission should go beyond the guidance that it has been preparing for managing authorities and make this a key element of its country-specific recommendations, in particular in order to ensure that the Member States use EU funds in a way that tackles this challenge rather than reinforcing existing dynamics;





Islands









52.


regards insularity as a permanent and unchangeable geographical feature which involves additional costs (transport, energy, waste management, public services, necessity goods and services) that hamper the development and competitiveness of these territories, while particularly exposing them to biodiversity loss and climate change;












53.


finds it therefore regrettable that the 8th Cohesion Report did not really consider the specific situation of islands in the EU;












54.


fully agrees with the Council conclusions presented by the French presidency of the Council of the EU, according to which ‘islands, peripheral and remote territories, including outermost regions, are facing particularly serious challenges, also due to increased transport costs’ and there is a ‘need for an inclusive and specific approach towards them, in order to support them in their transitions’;












55.


strongly welcomes the European Parliament’s proposal asking the European Commission to draw up an ‘EU Strategy for Islands’ with an action plan to encourage growth and innovation in a sustainable way, protecting the environment and people living on islands, as well as an ‘Islands Pact’ to involve all actors via a multilevel, cross-sectoral approach;












56.


believes that, unlike the Pact of Amsterdam and the macro-regional strategies, the Islands Pact, as well as the Rural Pact, which is also in development, must have new legislation, new funds and new policy approaches specific to those areas: the rule of the three ‘no’s’ should be made more flexible as regards macro-regional strategies;












57.


calls for special fiscal/state aid status for islands to be included in this Pact in order to help overcome the ‘insular tax’, i.e. the overhead costs associated with insularity;












58.


stresses that the energy transition can unwillingly penalise island citizens as they have less flexibility when it comes to adapting rapidly to the ambitious EU move towards climate neutrality and investment in alternative energy sources on islands, and thus the Pact must include tailor-made support from the EU and the national level;












59.


calls for this Pact to include European island regions within the Connecting Europe Facility/Trans-European Networks for Transport, Energy and Digital;












60.


reiterates that digital territorial continuity and digital cohesion are key tools to overcome physical isolation of islands, and to tackle one of the biggest challenges islands face, namely the demographic challenge;












61.


proposes that the Commission identify additional strategies and specific financial support measures for islands and outermost regions, especially given the disproportionate impact of the pandemic on island tourism;












62.


calls on the Commission and the Member States to introduce digital operational resilience policies on EU islands, in order to ensure that citizens and entrepreneurs can operate on EU markets while based on an island;












63.


urges the EU and the Member States to work with the CoR and local and regional authorities on the European Year of Islands 2024 in other to promote islands’ unique socioeconomic, natural and cultural capital;





Cross-borders region









64.


regrets the significant cuts the European Territorial Cooperation programmes have suffered for the 2021-2027 programming period. This is not in accordance with the fact that 1/3 of EU citizens live in border regions and Interreg has proved to have a true EU added value in promoting cross-border cooperation as a suitable tool for the development of EU border regions;












65.


highlights the prevalence of administrative, legal and linguistic barriers (cross-border healthcare, worker mobility, and accessibility to services, as evidenced by COVID-19), between Member States (land and marine borders) and within them, which hamper growth, socioeconomic development and cohesion among and within border regions;












66.


stresses that the added value of Interreg is not only the development of (often peripheral) border regions but also building trust among people on the different sides of the border. The role of people-to-people projects is key and should be further supported (13);












67.


urges the Council to unblock the European cross-border mechanism (ECBM) as it is a much more effective tool than the EGTC and would remove 50 % of the barriers that hamper border-regions’ development, particularly around cross-border healthcare, preventing a repeat of the so-called ‘covidfencing’ that so greatly undermined the four EU freedoms during the height of the pandemic;












68.


calls for a ‘European framework for cross-border workers’ that would lead to more efficacy in cross-border labour markets across Europe;












69.


agrees with the Commission’s commissioned research whereby border regions would gain 2 % in GDP if just 20 % of the present border-related obstacles were removed (14);





Mountain regions









70.


believes that mountain areas (29 % of the EU’s surface area and 13 % of its population) face permanent and structural handicaps, such as hypersensitivity to climate change, the impact of slopes, remoteness and accessibility issues, lack of digitalisation (25 % of rural areas still do not have internet access), outmigration (particularly of young people) and sparseness of population, and loss of businesses;












71.


considers that mountain regions need a placed-based approach within the Long-Term Vision for Rural Areas, taking into account their specific features and needs;












72.


suggests to reconsider the non-controversial principles of ECBM and start designing a tool for the systematic removal of cross-border obstacles as it is necessary for increasing the quality of life in border regions;












73.


believes that Cohesion Policy, particularly the Interreg programmes, represents a huge opportunity for mountain regions to meet their challenges as well as to improve innovation, climate action, tourism, youth, employment and mobility in mountain regions;












74.


reminds of its recommendations concerning further development of cross-border public services in Europe (15), such as an EU legal framework, better coordination of EU directives’ implementation, creation of national contact points and better promotion of Cross-border Public Services;












75.


is concerned, however, that insufficient attention is being paid in terms of EU-funded investments and in the provision of public goods to mountain ranges within the Member States, particularly if they cut across regional boundaries;












76.


while reiterating that macro-regional strategies help meet common challenges for specific areas, improve the complementarity of various political strategies and make a significant contribution to achieving territorial cohesion between countries and regions, notes that there is scope to more effectively embed them in EU policies and to have a more consistent approach between the different national and regional policies;












77.


reminds that the Alpine strategy remains the newest macro-regional strategy, but new strategies for mountainous regions may follow, in particular the one for the Carpathians. The Alpine strategy, building on a dense institutional framework and encompassing a number of initiatives, could be used as a model example for developing new strategies for mountainous regions;












78.


points out that research funded by the Commission shows that there is still a gap between cohesion policy programming and its implementation, which does not take sufficient account of the specific characteristics of mountain areas;












79.


considers that, in the new programming period, policy objective 5 ‘Europe closer to citizens’ is particularly adapted to sub-regional strategies addressing specific territorial needs, such as those of mountain areas. However, as for the rest of the territories covered by Article 174 TFEU, the absence of a European budget allocation for PO5, even by way of an indication, disproportionately penalises mountain areas. Nevertheless, mountain areas should not be excluded from PO1 and PO2, for which at least 60 % of cohesion policy funds have been earmarked, but as things stand this remains entirely a question of the political willingness of central and regional governments;












80.


notes that managing authorities have the possibility to support sub-regional levels with geographical specificities, such as mountain ranges, either through ‘interregional sections’ in operational programmes, or through specific calls for these areas under wider operational programmes or at least by awarding additional points for projects in mountain areas.





Brussels, 1 December 2022.


The President of the European Committee of the Regions

Vasco ALVES CORDEIRO




(1)  European Parliament Resolution 2021/2079(INI).

(2)  OJ C 306, 17.12.2007, p. 158.

(3)  https://cor.europa.eu/en/our-work/Pages/OpinionTimeline.aspx?opId=CDR-2615-2020

(4)  CDR 3595/2018.

(5)  enrd_report_tg_rp_a_framework_of_rural_proofing_actions.pdf

(6)  https://territorialagenda.eu/pilot-actions/

(7)  Rural proofing — a foresight framework for resilient rural communities.

(8)  EU Mission: Climate-Neutral and Smart Cities | European Commission.

(9)  Brain drain — mitigating challenges associated with population decline (communication).

(10)  CDR 4645/2019.

(11)  CDR 3594/2018.

(12)  Regulation (EU) 2021/1058 of the European Parliament and of the Council of 24 June 2021 on the European Regional Development Fund and on the Cohesion Fund (OJ L 231, 30.6.2021, p. 60).

(13)  https://cor.europa.eu/en/our-work/Pages/OpinionTimeline.aspx?opId=CDR-1527-2017

(14)  https://ec.europa.eu/regional_policy/sources/reports/KN-08-22-344-EN-N.pdf

(15)  https://cor.europa.eu/en/our-work/Pages/OpinionTimeline.aspx?opId=CDR-2615-2020