Opinion of the European Economic and Social Committee – Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on the 9th Cohesion Report (COM(2024) 149 final)
Date: 2024-05-31
Institutions: European Economic and Social Committee
Subjects: EU employment policy, EU regional policy, climate change policy, digital transformation, economic and social cohesion, economic convergence, economic recovery, investment policy, regional development, sustainable development








C_202404668EN.000101.fmx.xml












Official Journal of the European Union


EN
C series













C/2024/4668


9.8.2024






Opinion of the European Economic and Social Committee

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on the 9th Cohesion Report


(COM(2024) 149 final)

(C/2024/4668)


Rapporteur: 
Matteo Carlo BORSANI






Advisor


Eleonora TRENTO, for the rapporteur




Referral


European Commission, 29.5.2024




Legal basis


Article 304 of the Treaty on the Functioning of the European Union




Section responsible


Economic and Monetary Union and Economic and Social Cohesion




Adopted in section


17.5.2024




Adopted at plenary session


31.5.2024




Plenary session No


588




Outcome of vote
(for/against/abstentions)


179/1/2




1.   Conclusions and recommendations









1.1.


The European Economic and Social Committee (EESC) welcomes the presentation of the 9th Cohesion Report and regards the description of its results as comprehensive, as well as a useful starting point to take stock of the lessons learned and to draft some reflections about the future of the cohesion policy and its possible shape ahead of the envisaged EU enlargements.












1.2.


The EESC recommends focusing investments and policies on boosting the manufacturing base in order to enhance upward territorial cohesion, stressing that a positive correlation between productivity growth and an increase in GDP per head has proved to be the only similarity between growth in all types of regions.












1.3.


The EESC emphasises the importance of competitiveness in boosting economic cohesion and of productive investments in stimulating competitiveness and economic growth, which in turn has a positive spill-over effect on territorial and social cohesion. In this context, the EESC also underlines the importance of expanding access to cohesion policy funds for productive investments to big companies which are part of the SME ecosystem, under certain conditions related to its cascading effect over territory and society. Economic cohesion results should not be measured only in terms of the amount of economic investments in a certain area, but also in terms of territorial and social results, which are the main drivers for sustainable and fair growth.












1.4.


The EESC stresses the importance of a functioning and inclusive labour market in increasing social cohesion, through measures aimed at empowering EU citizens and workers with the right set of skills to enter and move within the labour market. In this context, the EESC recommends pairing policies to promote employment with policies to stimulate employability, including by targeting the share of society which risks being left behind and promoting the inclusion of people who are currently not part of the labour market. Special attention should be paid to the most vulnerable groups for which special employment policies are needed. Cohesion policy should be flexible enough to be able to tackle these gaps.












1.5.


The EESC recommends promoting strategic investments in local and regional administration, in order to strengthen the system that plays a central role in implementing programmes. In fact, social, economic and territorial cohesion cannot be achieved without firstly achieving cohesion in public administrations’ capacity. In the same way, social partners and civil society capacity should be strengthened because their cooperation in the field is crucial in order to achieve the cohesion social goals.












1.6.


The EESC recommends ensuring the involvement of regional and local authorities, fulfilling the partnership principle and involving social partners and civil society organisations during any reflection on the future of the cohesion policy.












1.7.


The EESC calls for the co-legislators to make the overall multiannual financial framework (MFF) budget more ambitious and to ensure adequate funding for the cohesion policy, including in view of the future need for EU investment in defence and of a 27+ European Union. For these reasons, the EESC points out that investing in the EU and in its economic, social and territorial cohesion, wealth and competitiveness cannot be done with just 1 % of EU GNI.












1.8.


In this context, the EESC recommends considering future enlargements envisaged by the European Union, which will require an effective and well-functioning cohesion policy, in order to guarantee the smooth integration of future Member States, without compromising investments in the current developing regions (1).












1.9.


The EESC emphasises that the weakened situation of the EU’s eastern external border regions, and especially the regions bordering Russia, must be taken into account in the future cohesion policy. The EU’s cohesion policy can mitigate the harmful effects of the changed geopolitical situation in these regions.












1.10.


Finally, the EESC recommends using automatic and easy-to-implement investment tools for the transition towards a smarter and greener Europe. The challenges posed by the fair green and digital transitions and their ambitious targets require speed and readiness. Ensuring social cohesion and avoiding competitive asymmetries within the internal market, and consequently within territories and society, also means achieving cohesion and uniformity in the capacity of individual Member States to invest in these sectors. For these goals, climate and transition EU funds should be more ambitious and cover the current deficit of investments.




2.   General comments









2.1.


The EESC welcomes the presentation of the 9th Cohesion Report and regards the description of its results as comprehensive, and facts and figures-based.












2.2.


The 9th Cohesion Report comes at an unprecedented time. The last few years have proven highly consequential for the EU economy, society and legislative activity, and the cohesion policy had to focus not only on the EU’s structural challenges, such as the demographic decline, the twin transitions and the need for more strategic autonomy, but also on the short-term needs in terms of recovery from the pandemic and the energy crisis.












2.3.


In fact, the cohesion policy has more than once served as an instrument to overcome the most immediate consequences of a crisis, as for example with Regulation (EU) 2020/0101 (REACT-EU) and Regulation (EU) 2023/435 (2) (REPowerEU), through which Member States were allowed to draw from the unspent and uncommitted Structural Funds of the 2014-2020 programming period.












2.4.


Based on the results of the Report, it is possible to take stock of the lessons learned, and to draft some reflections about the future of the cohesion policy.




3.   Key findings and lessons learned

3.1.   The importance of the manufacturing base in enhancing territorial cohesion









3.1.1.


Territorial cohesion means ensuring a harmonious development of the wide diversity of places in the EU and guaranteeing that, in every corner of Europe, the inequalities that prevent economic and social upward cohesion from being achieved disappear at all levels. The Report shows that economic disparities remain large across the continent and not all territories benefit from the same growth dynamics, including within Member States (e.g. development traps). Broadly speaking, urban areas reported better performance in almost all indicators for every thematic area: cities are ahead in economic development, employment, education, they are better connected, and this enhances opportunities and social life and, in general, leads to higher living standards. However, the report underlines the need for more balanced territorial development in response to the strong polarisation of growth drivers between capital regions and large metropolitan centres on the one hand, and regions with lower population density on the other.












3.1.2.


In the context of territorial cohesion, the EESC considers particularly important one of the key findings highlighted in the Report, namely the correlation between productivity and economic growth. In fact, if there is one element of similarity between growth of all types of regions, it is that the increase in GDP per head in the EU over the 2001-2021 period was largely associated with productivity growth. The latter should therefore be enhanced through tailor-made policies, which provide stimulus for productive investments, either by SMEs or large companies, under certain conditions enabling a cascading effect across the entire territory. When this cascading effect happens, in fact, the development and growth of an economic centre generates employment, wealth, increases the value of the territory, educational opportunities and, in general, living standards. Policies linked to territorial cohesion should therefore be designed and implemented to promote this process and help reduce inequalities linked to the territory between and within regions.




3.2.   The importance of competitiveness in boosting economic cohesion









3.2.1.


In recent years, cohesion policy has played a dual role in ensuring harmonious economic development in all EU regions, by not only increasing long-term economic development and resilience, but also preserving the EU economy from the most immediate consequences of the multiple crises, which risked affecting it in the long term.












3.2.2.


In fact, the Report shows a huge difference between the consequences that the pandemic and the energy crisis had on the EU economy and the consequences of the 2009 financial crisis. This is related to the responses to them, and the measures undertaken to face them: in the first two cases, there was prompt EU action, while during the 2009 crisis, the most immediate measures adopted by the Member States were individual and uncoordinated, causing asymmetrical effects between and within territories and society and did not take into account the state of society and the increase in poverty through policies to contain social spending. This is exactly the opposite of what has been done during the pandemic, boosting social spending through the recovery and resilience mechanism to ensure that no one is left behind, as was the case in 2009.












3.2.3.


Therefore, cohesion policy’s flexibility has proved effective and essential in safeguarding economic development and overcoming short-term economic shocks. However, in order to decrease vulnerability to these same economic shocks, economic and social resilience must be enhanced, and this can only be done by increasing economic and social cohesion, with the upward convergence of EU regions remaining at the heart of this. In this process, special attention must be given to regions in the development trap. In fact, current cohesion policy does not have the right tools to address or avoid such situations. The new cohesion policy should take this element into account and ensure, through a proactive approach, the resources and tools capable of avoiding development traps.












3.2.4.


The 9th Report underlines the importance of harmonious levels of competitiveness as a means of achieving full economic integration and cohesion. Having different levels of competitiveness, in the context of a single market with free movement of people and goods, leads to an increase in territorial disparities, resulting in fragmentation within the single market. Regions whose manufacturing base is less competitive also lack adequate investment in infrastructure, innovation, education, social security and other key areas.












3.2.5.


This highlights the importance of productive investments in stimulating competitiveness and economic growth, which in turn has a positive spill-over effect on territorial and social cohesion. In this context, the EESC stresses the importance of expanding access to cohesion policy funds for productive investments, in line with social goals of cohesion policy and taking into account specially the most vulnerable groups, to big companies which are part of the SME ecosystem. After all, the growth of a big company in a region has a cascade effect throughout its whole supply chain, generating growth for the SMEs in its ecosystem too.




3.3.   The importance of a functioning and inclusive labour market in increasing social cohesion









3.3.1.


Social cohesion can be measured through three main indicators: employment, skill development and poverty reduction. These three elements are strongly interconnected and consequential and have to be read together with some other variables which, if properly addressed, have positive effects, namely equal opportunities, gender equality and inclusion of migrants and other minorities.












3.3.2.


The EESC points out that European social cohesion is strongly linked with the functioning of its labour market, whose prosperity generates wealth and inclusion and reduces disparities among regions. Ensuring social cohesion also means safeguarding each European’s ‘right to stay’, creating opportunities and development in every corner of Europe. On the contrary, demographic challenges, including ‘brain drain’ and a shrinking working-age population, may exacerbate tensions on the labour market, including skills and labour shortage phenomena such as NEETs (not in education, employment or training), which risk exacerbating the unbalances that already exist and creating new ones.












3.3.3.


Access to the labour market has therefore proven to be pivotal and must be stimulated through ad hoc policies to empower EU citizens and workers with the right set of skills to enter and move within the labour market. In this context, the EESC stresses the need to pair policies to promote employment with policies to stimulate employability, including by targeting the share of society which risks being left behind and promoting the inclusion of people who are currently not part of the labour market, through special active policies, such as reskilling. Cohesion policy should be enough flexible to tackle these gaps, adapting to reality, also through active involvement of social partners and civil society organisations. Also we need to take into account the most vulnerable groups for whom employment policies do not work as they need special active policies.












3.3.3.1.


Special attention should be paid to the most vulnerable groups for which special employment policies are needed. Cohesion policy should be flexible enough to be able to tackle these gaps adapting to this reality.












3.3.4.


In addition, the EESC recommends considering measuring social cohesion not only between but also within regions and societies. This means focusing on initiatives to ensure fair access to the labour market for women, migrants and minorities too, in order to give everyone the means to reduce inequalities and imbalances. Reduced poverty, decent jobs and quality education ensure higher living standards and generate positive effects in growing economic centres. Special active employment policies are needed for vulnerable groups and the effective involvement of social partners and civil society organisations, fundamental agents in the field to achieve their integration.












3.3.5.


Finally, the EESC considers it particularly important that not only investments but also social and economic results are considered when evaluating the effectiveness of the cohesion policy’s projects. It also stresses the need to improve the involvement of the social partners and civil society organisations at all levels in order to make cohesion policy more effective.




4.   Multi-level governance, and administrative and civil capacity









4.1.


Member States’ public administrations differ in terms of performance and capacity. This is evident in one of the biggest paradoxes of the cohesion policy: the regions which need and receive more funds are also the ones that face more difficulties in spending the resources allocated during the programming periods. This reveals the need for more efficiency in the administrative structures in charge of the cohesion funds’ governance, which most of the times lack human resources and expertise.












4.2.


This process is, in some cases, already under way as part of the reforms supported by the Recovery and Resilience Facility (RRF). However, other significant actions are needed with a view to stepping up the process of training and digital up-skilling of the public administration. In light of this, the EESC stresses that social, economic and territorial cohesion cannot be achieved without firstly achieving cohesion in public administrations’ capacity.












4.3.


In addition, it is also necessary to strengthen the role and capacity of social partners and civil society organisations at all levels, through a multi-level governance approach, as they are key players with knowledge of the reality on the ground. To this end, it is also pivotal to create and improve the capacity of social partners and civil society organisations.












4.4.


Finally, the coordination between objectives of the national and European policies is crucial to achieve the social goals of the cohesion policy. Promoting cohesion is not the exclusive responsibility of the cohesion policy, especially in cases where the planned and implemented European interventions need further support to be completed. Harnessing the economic potential of all EU regions, while reducing socio-economic inequalities, requires a joint effort and should be a shared objective of investment policies, at national and EU level, for example in the field of social, environmental, tax and competition policies in general, and in the scope of the European Pillar of Social Rights and the European Green Deal.




5.   The experiment of the RRF and new ways towards cohesion









5.1.


In recent years, a comparison of the 2021-2027 cohesion funds programming period with the RRF mechanism, has provoked a re-thinking of some of the established approaches to the EU’s regional policies.












5.2.


Even if a systemic comparison of the RRF model with the cohesion policy based on results will be possible only after the mid-term review of the former, the EESC underscores the importance of preserving some cornerstones of the cohesion policy during any reflection on the future of the cohesion policy.












5.3.


In this context, the EESC highlights the importance of preserving the involvement of regional and local authorities, fulfilling the partnership principle and involving social partners and civil society organisations. The EESC recognises the need for stronger linkages with tailored reforms aimed at overcoming obstacles to growth as well as the potential to make the delivery mode more effective and simpler, building on the experience of other Union instruments and simplification measures already adopted under cohesion policy.




6.   The milestones of the future cohesion policy









6.1.


The Report of the High-level Group on the Future of Cohesion Policy provides a comprehensive list of recommendations as a basis for discussion about the next programming period and the future of cohesion. The EESC highlights some of them in particular, and enriches the discussion with specific comments and further points of reflection:






—


Cohesion should ensure that no one is left behind.










—


Cohesion should evolve into a systemic and dynamic policy that taps into the EU’s untapped economic potential, especially in less developed and vulnerable areas, enhancing development and competitiveness throughout the continent and encouraging the generation and spread of economic activity.










—


Cohesion policy should address the main structural challenges of the EU: low development, long-term economic stagnation, and lack of opportunities across all regions and disparities between and within regions and society.










—


Cohesion policy should change the way it works, to streamline its administrative procedures, reduce paperwork and adopt more efficient approaches to simplify processes and make them more user-friendly.










—


Preserving and boosting the key role of territories, social partners and civil society organisations during cohesion fund negotiations and implementation, by strengthening the role of partnerships. In addition, the European code of conduct on partnership and monitoring committees need to be strengthened to ensure that civil society is properly involved.










—


Cohesion policy has to be specialised to be applied to the most vulnerable people or groups, and this specialisation must also be reflected at a financial level.










—


Cohesion policy and its targets should be integrated into the European Semester. Moreover, the new economic governance framework suggests that expenditures incurred as part of the national co-financing of EU programmes will not be restricted by the expenditure rule.










—


The future cohesion policy should be ready for the new challenges of a 27+ Union, in view of future action.










—


The EESC emphasises that the weakened situation of the EU’s eastern external border regions, and especially the regions bordering Russia, must be taken into account in the future cohesion policy. The EU’s cohesion policy can mitigate the harmful effects of the changed geopolitical situation in these regions.








7.   Cohesion in the next MFF









7.1.


The cohesion policy’s future is strictly linked to its funding, which is going to be renewed under the next MFF. In this regard, the EESC recommends making the overall MFF budget more ambitious, including in view of the future need for EU investment in defence, and of a 27+ European Union. For these reasons, the EESC points out that investing in the EU and in its cohesion, wealth and competitiveness cannot be done with just 1 % of EU GNI.












7.2.


In addition, discussions will also have to cover two new elements: a cohesion policy ready for the new challenges of a 27+ Union, and how to enhance accessibility of instruments as part of a fair green and digital transition.




7.3.   A cohesion policy ready for the new challenges of a 27+ Union









7.3.1.


The future enlargements envisaged by the European Union will require an effective and well-functioning cohesion policy, to guarantee a smooth integration of future Member States, without compromising investments in the current regions. This requires a detailed analysis of the financial and policy implications of future enlargements.












7.3.2.


In addition, this means bringing in new actors in the fair green and digital transitions, and accelerating a process of digitalisation and decarbonisation whose roadmap is already ambitious for the countries which proposed it and have been getting ready for it for more than five years now.












7.3.3.


In the light of all these present and future challenges, it is clear that not only the amount of resources allocated to the cohesion funds needs to be maintained, but also that it should be increased during the next MFF negotiations, including discussing new own resources.




7.4.   Enhancing accessibility of instruments as part of the twin transitions









7.4.1.


The process of the transition towards a smarter and greener Europe will require enormous efforts by the whole of society and an unprecedented amount of investment.












7.4.2.


Ensuring that no one is left behind and avoiding competitive asymmetries within the internal market also means achieving cohesion and uniformity in the capacity of individual Member States to invest in these sectors. In addition, cohesion policy should enhance climate resilience, since some regions will be affected more than others by the unavoidable effects of climate change, at socio-economic level. Even if these objectives are already part of the current cohesion policy, slow bureaucratic procedures and a lack of efficiency in public administrations currently undermine the uniformity and cohesion of the transition process.












7.4.3.


The challenges posed by the twin transitions and their ambitious targets require speed and readiness and, for this reason, it is essential to make it easier to access these instruments. As pointed out in a previous EESC opinion (3), this could be achieved by focussing on automatic and easy-to-implement instruments to meet the costs of the economic restructuring connected to the green and digital transitions, including pairing them with measures to identify and prevent misuse and fraud.












7.4.4.


In addition, the EESC underlines the importance of considering regional differences in order to achieve ‘easy-to-implement’ solutions and underlines the role of partnerships in tailoring the best solutions to each region, such as country border territories, which need special attention, because the disparities there are most difficult to tackle.






Brussels, 31 May 2024.


The President


of the European Economic and Social Committee

Oliver RÖPKE
               





(1)  Opinion of the European Economic and Social Committee – The role of cohesion policy in upcoming rounds of EU enlargement (exploratory opinion) (OJ C, C/2024/4660, 9.8.2024, ELI: https://data.europa.eu/eli/C/2024/4660/oj).

(2)  Regulation (EU) 2023/435 of the European Parliament and of the Council of 27 February 2023 amending Regulation (EU) 2021/241 as regards REPowerEU chapters in recovery and resilience plans and amending Regulations (EU) No 1303/2013, (EU) 2021/1060 and (EU) 2021/1755, and Directive 2003/87/EC (OJ L 63, 28.2.2023, p. 1).

(3)  Opinion of the European Economic and Social Committee on Proposal for a Regulation of the European Parliament and of the Council establishing the Strategic Technologies for Europe Platform (‘STEP’) and amending Directive 2003/87/EC, Regulations (EU) 2021/1058, (EU) 2021/1056, (EU) 2021/1057, (EU) No 1303/2013, (EU) No 223/2014, (EU) 2021/1060, (EU) 2021/523, (EU) 2021/695, (EU) 2021/697 and (EU) 2021/241 (COM(2023) 335 final — 2023/0199 (COD)) (OJ C, C/2023/866, 8.12.2023, ELI: http://data.europa.eu/eli/C/2023/866/oj).


ELI: http://data.europa.eu/eli/C/2024/4668/oj
ISSN 1977-091X (electronic edition)